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The Federal Budget: Spending, Taxes, and Debt

CBO: OBBB’S CAFE Fix Helps Highway Trust Fund

The Federal Budget: Spending, Taxes, and Debt Op-Ed BlogFebruary 17, 2026 By David Ditch
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The Congressional Budget Office (CBO)’s updated budget baseline includes new projections about the state of the Highway Trust Fund (HTF). While CBO projects that the HTF will run a $340 billion deficit over the next 10 fiscal years (FYs), this is an improvement from a projected $410 billion 10-year deficit in the January 2025 baseline. CBO previously assumed that the use of internal combustion engines would decline rapidly and reduce tax revenue from motor vehicle fuels that finance the HTF. A significant factor in CBO’s prior calculation was that the Biden Administration put forward onerous changes to Corporate Average Fuel Economy (CAFE) standards as part of a whole-of-government effort to force the adoption of electric vehicles. The One Big Beautiful Bill Act (OBBB) defanged the CAFE rule by zeroing-out fines on vehicle manufacturers. In turn, CBO expects that fuel demand will now increase year-over-year rather than decrease, which improves tax revenues and the HTF’s solvency. For the FY 2026 to 2035 period, CBO’s revenue projection for the HTF is now $82 billion higher than the previous estimate thanks to the OBBB. HTF Deficit

Author

David A. Ditch

David A. Ditch

David A. Ditch is Senior Analyst in Fiscal Policy at the Economic Policy Innovation Center (EPIC). Ditch has over a decade of experience analyzing federal spending and fiscal policy, including appropriations, infrastructure, agriculture, and needed reforms for dozens of agencies and programs. He has appeared on radio stations across the country and has written for FoxNews.com , the Los Angeles Times , the Chicago Tribune , and many other publications. Prior to joining EPIC, Ditch was a Senior Policy Analyst at The Heritage Foundation, where he was a founding staffer for the Grover M. Hermann Center for the Federal Budget. He managed the Federal Budget in Pictures chart portfolio, was responsible for creating dozens of policy options for the Heritage Budget Blueprint, and produced several groundbreaking reports on federal spending and governance. Ditch was also previously an analyst for the Senate Budget Committee, where he oversaw budgetary enforcement for appropriations legislation. Ditch graduated from the University of Rochester with degrees in Economics and Political Science, and received a Master's in Political Management from George Washington University.

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