Analysis

Funneling Funds Through the Highway Trust Fund

Budget & Tax, Transportation & Infrastructure, | Analysis

May 29, 2025 | 5 min read | Print Article

Title 10 – Committee on Transportation and Infrastructure

House Resolution Instruction = Deficit reduction of at least $10 billion

CBO Estimated Net Effect = Deficit reduction of $36.55 billion

Summary Analysis

The bill increases federal spending on the Coast Guard and Federal Aviation Administration by approximately $34 billion. The bill includes $5.2 billion in spending cuts. It also is projected to generate more than $64 billion in new revenue.

This new revenue, however, is earmarked for the Highway Trust Fund (HTF). Highway Trust Fund dollars, including the revenue generated in this bill, will be spent in future years on highway and mass transit projects. So counting the new revenue generated by provisions in this title of the bill as an offset for this bill is a form of double-counting.

Sec. 100001 Coast Guard assets necessary to secure the maritime border and interdict migrants and drugs | CBO Score = +$21.2 billion

Funding for aircraft intended for border security

$571 million to purchase fixed wing aircraft, spare parts, and support equipment
$1.283 billion to purchase rotary wing aircraft, spare parts, and support equipment
$140 million for unmanned aircraft systems

Funding for Coast Guard vessels

$4.3 billion for Offshore Patrol Cutters
$1 billion for Fast Response Cutters
$4.3 billion for Polar Security Cutters
$4.978 billion for Arctic Security Cutters and icebreakers

Funding for infrastructure to house these new assets, repair facilities, and training.

$400 million for hangars and maintenance facilities for fixed wing and rotary aircraft
$2.3295 billion for homeports of the Cutters receiving appropriations in this bill as well as facilities serving National Security Cutters, and other Fast Response Cutters.
$425 million for enlisted boot camp barracks, multi-use training centers, and other related facilities
$1.3 billion for shoreside depot maintenance including $500 million to construct and maintain a floating drydock to serve Cutters.

Funding for equipment and services related to monitoring of coasts and oceans (maritime domain awareness)

$180 million, $75 million of earmarked for autonomous maritime systems

Sec. 100002 Vessel Tonnage Duties | CBO Score = -$343 million

Increases fees charged to ships that enter U.S. ports, including recreational vessels, U.S. vessels, and foreign ships. Effectively doubles the tax rate from current rates.

Sec. 100003 Registration of motor vehicles | CBO Score = -$64 billion

Compels states to establish an annual fee for registration of an electric vehicle ($250) or hybrid vehicle ($100). Fee increases annually based on inflation. Fee applies FY26-34. The original draft of the bill included a $20 charge for gasoline powered vehicles starting in FY31. This was dropped in committee over opposition from committee members.
Funds generated by this fee would be deposited in the Highway Trust Fund (HTF) and not the General Treasury. Funds in the HTF are used to construct federally funded roads and mass transit. The HTF is primarily funded through an 18.4 cent per gallon tax on gasoline and a 24.4 cent per gallon tax on diesel fuel. These rates, which have not increased since 1993, have failed to adequately fund highway and mass transit needs, leading to lawmakers bailing out the trust fund with more than $275 billion in general revenue since 2008. This new revenue would thus not offset increased spending or revenue lost by other provisions in the bill, but would reduce future General Fund transfers to the Highway Trust Fund by whatever amount of revenue is generated.

Reconnoitering Budget Reconciliation

Statement on Budget Reconciliation Passed by Ways and Means

Sec. 100006. IRA rescissions. | CBO Score = -$5.2 billion

The bill rescinds unspent funds for a number of programs that received funding in the Inflation Reduction Act.