The Highway Trust Fund (HTF) was founded by the 1956 Highway Revenue Act. Prior to the HTF, funds were directed from the General Fund of the U.S. Treasury. Originally, the fund was dedicated solely to highways. Yet, the Highway Revenue Act of 1982 mandated a separate account to support mass transit. Effective April 1, 1983, a Mass Transit Account was created to receive a portion of the motor fuel taxes and receives about 2.86 cents per gallon of gas.
Politicians later seized on fuel taxes as an area where taxes could be collected for deficit reduction. On November 5, 1990, in an effort to reduce the deficit, President George H. W. Bush approved the Omnibus Budget Reconciliation Act of 1990, which increased the gas tax another five cents - half going to the Highway Fund and half going to deficit reduction. President Clinton increased the gas tax by 4.3 cents when he signed the Omnibus Budget Reconciliation Act of 1993 on August 10, 1993. The total tax to 18.4 cents per gallon. However, the Taxpayer Relief Act of 1997 redirected the 4.3 cent hike to the HTF.
The general motor fuel tax still stands at 18.4 cents; however the Senate Committee on Commerce, Science and Transportation, formed in 2005 discussed raising the federal gas tax to 40 cents per gallon over five years. In its current form, the tax would be raised 5-8 cents annually for five years, then be indexed to inflation.
The federal tax on motor fuels yielded $28.2 billion in 2006.
The fuel tax became a prominent issue in April 2008 during the 2008 presidential election when Senator John McCain first proposed a 'gas holiday'- a suspension in the tax during the peak driving season in summer - and Senator Hillary Clinton did soon after in late April 2008. Senator Barack Obama opposed the suspension in fuel taxes. According to The New York Times, Clinton proposed a 'windfall tax' on oil companies, which "would cover all of the lost revenue from the federal tax on gasoline and diesel fuel. She also said no highway projects would suffer."
The Highway Trust Fund is unique in that it is funded by the users, namely those who travel on the highways. It is modeled on the Social Security Trust Fund, where money goes to the general treasury but is credited to the fund. In the original Highway Revenue Act, the crediting of user taxes to the HTF was set to expire at the end of fiscal year 1972.
The fund has been projected to run out in 2009.