Highway Trust Fund Runs Dry in 2028, CBO Says, as the House's $580 Billion Highway Bill Stalls Short of the Floor

CBO projects the Highway Trust Fund’s highway account will run out of money in fiscal 2028 and its transit account in 2027. Congress hasn’t passed a bill to replace the 2021 infrastructure law, which expired on 30 September.

Federal highway and transit programmes are running on the stopgap signed on 2 September, Public Law 119-103, which also funds the government. It extends trust fund programmes to 11 December at prorated 2026 levels. It doesn’t continue the infrastructure law’s advance appropriations, the extra general fund money that sat on top of the trust fund. The National League of Cities puts the cut at $36.8 billion, spread across BUILD grants, Safe Streets and Roads for All, the bridge formula programme, rail grants and others, 35 programmes in all, which lost that money on 1 October. The effect on transit agencies is covered in our post on transit fiscal cliffs.

The arithmetic CBO keeps repeating

The trust fund lives mostly on fuel taxes of 18.4 cents a gallon on gasoline and 24.4 cents on diesel, unchanged since 1993. Cars got more efficient, inflation ate the rates, and spending kept rising.

CBO’s June 2026 baseline shows the highway account taking in $41.6 billion in fiscal 2026 and spending $62.2 billion. Its balance falls to about $36 billion by the end of the year and $13 billion by the end of 2027, then hits zero in 2028. The transit account goes first, in 2027. By 2036 the combined shortfall reaches about $318 billion.

Congress has covered the gap before. Since 2008 it has moved about $271.5 billion from the general fund into the trust fund, CRS calculates, including $118 billion in the 2021 law. A five-year bill now would need about $166 billion more on CBO’s numbers, or about $33 billion a year.

What the House bill does

The House Transportation and Infrastructure Committee approved H.R. 8870, the BUILD America 250 Act, by 62 votes to 2 on 22 May. It authorises about $580 billion over fiscal 2027 to 2031: $474.4 billion of trust fund contract authority and about $106 billion that depends on annual appropriations. Highways get $376 billion, transit $87.6 billion and rail $64.7 billion, including $31.1 billion for Amtrak. There are no advance appropriations, so anything outside the trust fund has to win money each year.

The bill also changes what the money is for. It ends the PROTECT resilience formula and the carbon reduction programme and replaces the national EV charging formula with a set-aside for truck charging and fuelling in the CMAQ programme. Most transit formula money would flow through a new state block grant.

It hasn’t reached the House floor. The Senate committees with jurisdiction, Environment and Public Works, Commerce, Banking and Finance, have released no text. Shelley Moore Capito, who chairs Environment and Public Works, chose instead to put a December extension on the stopgap.

The EV fee and its limits

The bill’s one new revenue source is an annual federal registration fee: $130 for an electric vehicle and $35 for a plug-in hybrid, rising every two years to $150 and $50. States would collect it and forward it to the Federal Highway Administration, with 125% of any shortfall withheld from their highway money. Holland & Knight estimates it would raise less than $10 billion in its first five years and about $29 billion over ten. Set against CBO’s $166 billion five-year gap, that’s about 6%.

There’s a catch. Tax law belongs to Ways and Means, which hasn’t released a title, so the committee text doesn’t deposit the fee in the trust fund. It only says the money “should” go there. Transit agencies want 20% of it in the transit account, the split used for fuel tax increases since 1982.

The idea has been tried before. The House version of the 2025 reconciliation bill had a $250 EV fee and a $100 hybrid fee. Both were dropped from the enacted law. At least 41 states already charge EV registration fees of their own.

What 11 December decides

The lame-duck Congress has three options when the extension runs out: another extension, probably into 2027; a full bill, which needs Senate text that doesn’t exist yet; or a lapse. Each extension so far has carried the trust fund’s current revenue forward without fixing it. CBO’s dates don’t move unless Congress raises the fuel tax, adds a new fee that reaches the trust fund, or writes another general fund cheque.