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Feds call off highway funding cuts

$11 billion Band-Aid will tide over Highway Trust Fund to May 2015.


The federal government is calling off plans to cut payments to states and communities for construction projects in the wake of a transportation funding patch passed by Congress last week.

The Department of Transportation previously said it would have to begin reducing the frequency of payments from its Highway Trust Fund if Congress had not acted to prevent a bankruptcy. 

Transportation Secretary Anthony Foxx said Thursday that the cutbacks will no longer be necessary, even though he wished Congress had approved a longer transportation funding bill.

"As a result of the short-term fix for the Highway Trust Fund that Congress passed on July 31, I am writing to let you know that we will not need to implement these cash management procedures at this time," Foxx wrote in a letter to state transportation officials.

After a lengthy and fractious debate, Congress passed a law to pour nearly $11 billion into the transportation funding, using money from other areas of the federal budget, like so-called “pension smoothing” and increases in U.S. customs fees. The money is only scheduled to last until May 2015, however.

“While I am pleased that Congress took action to avoid the immediate insolvency of the Highway Account this summer, I am disappointed that they merely kicked the can down the road again,” Foxx wrote. “This is the tenth surface transportation extension — on top of eighteen short term budget measures — in the last 6 years. There is still no long-term certainty.” 

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Source: TheHill

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