July 28, 2009 / 11:00 PM / 8 years ago

US House could act on $5 bln highway extension

* Capital injection would carry states through Sept. 30

* House bill would boost FHA programs, jobless benefits

* Congress would act before August 7 recess

By John Crawley

WASHINGTON, July 28 (Reuters) - The U.S. House of Representatives could vote as early as Wednesday on a $5 billion stop-gap to shore up a depleted trust account that funds road and bridge repairs.

House Democratic Leader Steny Hoyer told reporters the proposal is part of a larger spending package that would help states finance additional unemployment insurance and boost the loan authority of the Federal Housing Administration or FHA.

“They’re all running out of money and we have to do something before we leave in August,” Hoyer said.

The House is due to leave town on Friday for a month-long break, while the Senate is expected to follow on August 7.

The Obama administration has proposed an emergency injection of $20 billion into the federal trust fund that helps states pay for road upgrades and transit projects. Transportation planners say that figure would continue to fund states’ needs through early 2011, giving Congress more time to act on a long-term transportation financing plan.

The Highway Trust Fund, filled by gasoline taxes, has been running dangerously low on cash as motorists use less fuel amid recession and drive more efficient cars.

Pump price increases also threaten to further hurt the trust fund balance. U.S. retail price for regular unleaded gasoline jumped 4 cents over the past week to $2.50 per gallon, according to the Energy Department. For more, see [ID:nN27274636]

The U.S. Transportation Department says the $5 billion stop-gap is the minimum needed to carry highway programs through the end of the fiscal year on Sept. 30. A second extension then would be required.

States have been told to prepare for stretched-out reimbursements. Payments currently made on a daily basis could be pushed to weekly or twice a month, the Transportation Department said.

“Unless we shore up the trust fund, we will have no other choice than to pay the states less frequently for road and bridge repairs,” Federal Highway Administrator Victor Mendez said in a conference call on Tuesday with officials from 38 states and the District of Columbia, according to a Transportation Department statement.

The trust fund gives states about $40 billion each year. (Reporting by John Crawley, Lisa Lambert and Rick Cowan; Editing by Jan Paschal)

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