What does the debt ceiling have to do with bailing out the Highway Trust Fund? Quite a lot, actually.

• Section 80103 of the Senate-passed bipartisan infrastructure bill “hereby” appropriates $118 billion from the general fund of the Treasury to the Highway Trust Fund ($90 billion to the Highway Account and $28 billion to the Mass Transit Account).
• “Hereby” means immediately, on the date of the enactment of the bill.
• 26 U.S.C. §9602 makes it “the duty of the Secretary of the Treasury to invest any such portion of any Trust Fund established by subchapter A as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States.”
• Those “interest-bearing obligations of the United States” are subject to the overall ceiling on the public debt.

Since the debt ceiling was reset on August 1, 2021, that statutory limit has been $28,401.463 billion. Table III-C of the Daily Treasury Statement shows how Treasury has been trying to maintain a total debt level $25 million below the ceiling every day since, using minor day-to-day variations in trust fund intragovermental debt to offset small changes in the publicly held debt subject to limit.

If the bipartisan infrastructure bill were signed into law today, the Secretary of the Treasury would be caught between two contradictory laws: 31 U.S.C. §3101, which states that “The face amount of obligations issued” shall not exceed the debt ceiling, and the aforementioned 26 U.S.C. §9602, which gives the Secretary the duty to invest the new $118 billion in Highway Trust Fund deposits into interest-bearing Treasury obligations.

If the Secretary obeys the Trust Fund law, the new deposit causes a $93 billion breach in the debt ceiling (the $118 billion transfer minus yesterday evening’s $25 million headroom).

A more likely option would be for the Secretary to delay the investment and just keep the $118 billion transfer as cash, not bearing any interest, until the debt ceiling is lifted.

As of July 31, the Highway Trust Fund had a $14.7 billion balance invested in Treasury securities, in addition to any cash being held at DOT itself in anticipation of immediate outlays. $9.2 billion was held by the Highway Account and $5.5 billion was held by the Mass Transit Account, so both accounts should be solvent for the next few months even if the large transfer from the infrastructure bill is delayed a few weeks.