Congress passed and President Barack Obama signed a two-month transportation spending extension, delaying decisions regarding long-term transportation funding until the Highway Trust Fund runs out in July, reports Reuters.
According to Reuters, the two-month extension resulted from lawmakers’ inability to agree on funding for a six-year transportation bill that would cost nearly a half trillion dollars.
The House’s transportation spending extension relies on money still in the Highway Trust Fund, says Reuters, requiring no offsetting savings and avoiding disruptions to job sites and road construction if approved by the Senate and President Barack Obama.
Because of rising vehicle fuel economy, fewer miles driven and construction cost inflation, the fund has experienced a number of shortfalls, reports Reuters. In addition, lawmakers have ruled out implementing a gas tax increase despite support from the trucking and industry groups.
State transportation officials and lawmakers have expressed that short-term solutions may keep existing projects going, but they will not be able to fund the launch of major new projects.
Also, the short-term solutions may lessen the demand for major construction materials, equipment and engineering suppliers, says Reuters, and negatively impact companies such as Cemex, Caterpillar and Granite Construction.