CBO reports highway trust fund headed for bankruptcy in 2014

Transportation Secretary Ray LaHood said Tuesday that a Congressional Budget Office report that the highway trust fund would be empty by fiscal year 2014 shows President Obama has been right to call for increased funding for transportation projects.

The CBO predicted Tuesday that the deficit will rise to $1.08 trillion in 2012. Under the non-partisan agency's calculations, the highway trust fund, which funds road projects using collections from the federal gas tax, will be running on empty just two years after that.

Transportation Secretary Ray LaHood said Tuesday that the projection was not a surprise.

"We've known for a long time that people are driving less and they are driving more fuel efficient cars," LaHood told reporters after a speech to the Washington Aero Club. 

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"That's why the president talked about a transportation bill and a jobs bill, he talked about using some of the money from the two wars," he continued. "We were all concerned that we weren't talking about the pay-fors."

The CBO report projects the highway trust to have a $12 billion at the end of the current fiscal year, which began last October and a $3 billion balance in the 2013 budget year that will begin this fall.

The reports finds by 2014 the trust fund, which is at the center of the current debate over a new federal highway bill, will reach zero.

The federal gas tax, which is currently 18.4 cents per gallon, brings in approximately $100 million per day in revenue. But Lawmakers in Congress are discussing a new highway bill which in the Senate would spent between $13 and $14 billion per year more than the $36 billion the gas tax brings in annually.

Democrats and Republicans disagree sharply on how to generate the additional revenue for the highway bill. The House has suggested tying the transportation spending to increasing offshore oil drilling, while President Obama has called for using money saved from reduced defense spending.

The full CBO report can be read here.

-This post was corrected from an earlier version Feb. 1 at 4:58 p.m.