The Fixing America’s Surface Transportation Act, or the FAST Act was approved by the Senate 83-16, the House on a 359-65 vote and formally signed by the president. The bill reauthorizes the collection of the 18.4 cents per gallon gas tax that is typically used to pay for transportation projects, and also includes $70 billion in “pay-fors” to close a $16 billion deficit in annual transportation funding that has developed as U.S. cars have become more fuel-efficient.
The new law, paid for with gas tax revenue and a package of $70 billion in offsets from other areas of the federal budget, calls for spending approximately $205 billion on highways and $48 billion on transit projects over the next five years. It also reauthorizes the controversial Export-Import Bank’s expired charter until 2019. The bill is paid for by:
- Raising revenue by selling oil from the nation’s emergency stockpile.
- Taking money from a Federal Reserve surplus account that works as a sort of cushion to help the bank pay for potential losses.
- Cutting the dividend paid to banks with assets of at least $10 billion, reinstating a controversial offset that had been eliminated by the House, but narrowing the set of banks to which the cut would apply.
- Preserving a measure intended to raise money by hiring outside debt collectors to collect unpaid taxes.
- Increasing the fees paid by travelers who go through customs.
- Directing to the Highway Trust Fund penalties paid for motor-vehicle safety violations.
However, the bill was rushed and failed to address several key problems with the Highway Trust Fund and the federal gas tax. The federal gas tax clearly requires major reforms to work efficiently again. Some proposed reforms include:
- Eliminating the Mass Transit Fund and all other non highway funding through the Department of Transportation, saving $16 billion annually that could be used for additional highway funding.
- Raising the federal gas tax to compensate for inflation since it was last raised in 1993, and adjusting for future inflation, which would bring in 40 percent more, or $10 billion a year.
- Repealing the Davis-Bacon Act, saving $11 billion annually in construction costs.
The Fixing America’s Surface Transportation Act, or the FAST Act was rushed and gave a five year extension to a partially funded federal highway system, while missing out on key Highway Trust Fund and federal gas tax collection reform elements.