Short-term extensions

On May 29, 2015 President Obama signed a 2-month extension to the Highway and Transportation Funding Act which will keep money in the Highway Transportation Fund through July 31.

However, no tax money (either through income taxes or increased fuel taxes) was allocated to support this funding. Instead, a method known as Pension Smoothing was used. Read our explanation of Pension Smoothing and you will see how it essentially is a loan to the federal government from the pension funds of employees who will have earned a pension when they retire. If the pension funds cannot be replenished, those future retirees either will be deprived of their pensions, or taxpayers will pay to keep them solvent.

To read more on the extensions to the Highway Trust Fund, click here.