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[Page: S4292]  GPO's PDF
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   Mr. THOMAS. Mr. President, I wish to speak about a different issue that is very important to all of us, certainly in Wyoming where we have long distances to travel. As we say, we have low population and small towns with very long streets.

   Transportation and highways are very important to us. Highways , of course, have generally been funded by a combination of Federal funds and State funds, Federal funds being very important and continuing to be even more important as time goes by. What we do with State highways and State highway funding becomes one of the principal issues with which we have to deal.

   Several years ago, we had the 21st century TEA-21, which was an appropriation and a plan for highway funding . Last week, the Finance Committee held a hearing regarding the status of the highway trust fund. This highway trust fund, it seems to me, is terribly important because as a member of the Environment and Public Works Committee, I helped craft this Transportation Equity Act, or TEA-21, as it is called, which provides more dollars for the States than in the past and has a very good distribution system which basically allocates money to the States and lets them decide how those dollars are going to be spent.

   As we all know, TEA-21 most significantly funded the Federal highway needs. As a result, people across the country had opportunities to improve the surface transportation system to make it safer and more efficient and to keep up with the times.

   More importantly, as I mentioned, TEA-21 provided States and local governments more flexibility in controlling the use of those Federal funds which, frankly, is one of the issues we should deal with constantly; that is, in the distribution of Federal assistance, how we best do that so there is accountability on one hand and on the other hand recognize the difference that exists in various places. I am certain highway moneys are used for different needs in Wyoming than in Delaware. We need to have the flexibility to recognize those differences.

   The panelists who testified at this hearing on the funding mechanisms--that is their job; funding of the highway trust fund is what we rely upon. This hearing addressed a $4.4 billion shortfall in the highway trust fund which is due to the negative revenue alignment budget. Economies are somewhat lower, and these dollars are lower under the formula. We are in the process of trying to replace the $4.4 billion so we do not have that loss and hopefully at least most of that can be done.

   In addition, however, the panelists detailed the tax disparity between gasoline and ethanol blend, gasohol. Currently, gasohol is taxed at 13.1 cents and gasoline is taxed at 18.4 cents. This disparity is something that has to be reviewed. That is where the money comes from for highway funds. When we have less money coming in, obviously we are going to have less to spend.

   The discrepancy between the fuels is causing a great debate not only in the context of the highway trust fund but in terms of our national energy policy as well. Pending before the conference committee is the energy bill which has substantial increases and requirements for increases in ethanol, which has merit. On the other hand, if that is going to reduce the availability of highway funding , then we have to take a look at a system that allows that to happen.

   The General Accounting Office estimates the tax disparity between gasohol and gasoline will cost approximately $21 billion over the next 11 years, and this is a pretty serious issue in terms, again, of funding our national highway program.

   As my colleagues know, the Senate passed the energy bill that mandates 5 billion gallons of ethanol by 2012.

   As a result of this, of course, we will have an increased reliance on gasohol. So we need to take a look at this. I am not suggesting any particular bias one way or the other, other than the fact that by making this change in the use of fuel, we have a change in the revenue that will be available if we continue to have the same formula for doing that.

   Gasohol, which of course is the ethanol, is taxed at 13.1 cents a gallon; gas fuel is 18.4 cents. As to the trust fund, under the gas arrangements we have now, 15 cents of it goes into the highway fund; under the gasohol-ethanol, it is only 7 cents.

   So we find ourselves with a substantial change, a substantial differential, in terms of how we will be funding our highways . I hope that in the course of the committee activities we can take a long look at it.

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