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Old Posted Jul 5, 2014, 1:03 PM
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Why Everyone Is Starting To Freak Out About A 'Construction Shutdown'

Why Everyone Is Starting To Freak Out That We Might Be Headed For A 'Construction Shutdown'


July 4th, 2014

By Brett LoGiurato

Read More: http://finance.yahoo.com/news/why-ev...130000828.html

Quote:
Travelers aren't the only ones who should be worried about Congress' next big economic crisis. Political analysts and groups with an interest in the outcome are starting to become anxious about the battle brewing this summer over the Highway Trust Fund – and they're not convinced any of the likely solutions being floated on Capitol Hill will solve the problem one leading lawmaker has dubbed a potential "construction shutdown."

The Highway Trust Fund, which is financed by gasoline taxes and pays for transportation and infrastructure projects, is set to run out by the end of the summer. The federal highway money will begin to dissipate at the beginning of next month and stop altogether by Sept. 30. --- In a letter to state transportation officials sent Tuesday, Transportation Secretary Anthony Foxx said funding for transportation projects would begin to be affected Aug. 1 if Congress does not take action. Foxx also warned states should expect about a 28% cut in federal funding for construction projects.

The fund is headed towards insolvency because the government now spends more money on those transportation and infrastructure projects than it collects from the gas tax, which has not been raised in over two decades. If the fund dries up, it could have dire consequences for the economy and cost the country hundreds of thousands of jobs, according to some estimates. These consequences make the fund's expiration date one of a few deadlines, including the reauthorization of the Export-Import Bank's charter , that has analysts worried about the economic headwinds coming out of Washington this year. These fears intensified when House Majority Leader Eric Cantor stunningly lost his Republican primary battle to a Tea Party insurgent.

In an email to Business Insider, Guggenheim Securities analyst Chris Krueger indicated the so-called construction shutdown is one of the main potential economic headwinds coming out of Washington this year. He also described the climate on the Hill as the "new hysteria" and warned it could make a solution "difficult" to reach. --- "The new leadership slate has a difficult challenge in the ~140 days to the midterms, with many conservative/Tea Party groups pushing for a more aggressive/confrontational leadership style," Krueger wrote. "Thankfully for the markets, there are few fiscal fights on the horizon this year, though. However, the highway bill and the Export-Import Bank could well fall prey to this new hysteria, as both face expirations before the midterms."

Thus far, Congress has failed to agree on a solution, and the federal government has begun amping up its warnings to states. The Obama administration has estimated as many as 700,000 jobs could be lost and about 112,000 active construction projects could be affected by either being delayed, deferred, or halted. Sen. Patty Murray (D-Washington), who has been the Democratic leadership's point person on the issue, has warned of the potentially disastrous "construction shutdown." President Barack Obama, sounding rather exasperated on Tuesday, pushed the four-year, $302 billion plan his administration has advocated as a solution to the problem — which has no chance of passing through Congress.

"It’s not crazy, it’s not socialism," he said in remarks in front of the Georgetown waterfront with the Key Bridge in the background. " It’s not the imperial presidency — no laws are broken. We’re just building roads and bridges like we’ve been doing for the last, I don’t know, 50, 100 years."

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  #2  
Old Posted Jul 5, 2014, 4:30 PM
Jasonhouse Jasonhouse is offline
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The feds should have started cutting projects in areas populated with these "tea party" types at the beginning of the year, so that projects in the rest of the country can continue unfettered. These neoconfederate tea partiers, who have yet to find a facet of civilized society beyond the military that they consider worth paying for, have a vision for turning America into a 3rd world shithole. I say their places go first.
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Old Posted Jul 20, 2014, 2:34 PM
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Just raise the gas tax. Problem solved.

It will also reduce driving therefore reducing greenhouse emissions.

Edit; Is this specifically for roads/bridges? Is mass transit included?
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Old Posted Jul 21, 2014, 5:11 PM
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Quote:
Originally Posted by Eveningsong View Post
Just raise the gas tax. Problem solved.

It will also reduce driving therefore reducing greenhouse emissions.

Edit; Is this specifically for roads/bridges? Is mass transit included?
NO. God no. if the gas prices get any higher I will explode.
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Old Posted Aug 6, 2014, 6:01 PM
llamaorama llamaorama is offline
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NO. God no. if the gas prices get any higher I will explode.
Fine. We'll just erect safety glass barriers around you so nobody else is harmed when you self destruct.

I'd rather pay gas taxes than tolls to a private company that this increasingly terrible country will give away it's crown jewel interstate system to.
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Old Posted Aug 7, 2014, 11:04 PM
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Originally Posted by llamaorama View Post
Fine. We'll just erect safety glass barriers around you so nobody else is harmed when you self destruct.

I'd rather pay gas taxes than tolls to a private company that this increasingly terrible country will give away it's crown jewel interstate system to.
Never paid a toll to drive on a road in my life. It s people like you that think private companies are soooo bad that are ruining this country.
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Old Posted Aug 7, 2014, 11:24 PM
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Living here in Michigan, does this just mean the rest of the country will have roads like ours? That's very demotivating for wanting to leave the state.

Btw, a gas tax is the worse way to fund infrastructure. Cars are becoming more fuel efficient which means often less stops at the pump. So even with a hike in gas tax, the amount of revenue generated will always be decreasing as long as cars continue becoming more efficient.


And yes, 3 cents of the 18 cent tax goes towards mass transit.
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