Standoff over highway bill imperils crucial transportation fund

Senators voted to end the Highway Trust Fund patch in December, which would force Congress to tackle the issue again during the lame duck session.
By Gabrielle Levy  |  July 30, 2014 at 12:47 PM
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WASHINGTON, July 30 (UPI) -- With less than two days left to strike a deal to replenish a critical funding stream for highway projects across the country, the Senate threw a twist in the process, voting Tuesday to make a short-term fix even shorter.

Earlier this month, the House approved a $10.9 billion package that would float the Highway Trust Fund through May. But Tuesday, the Senate stripped the bill of its House language and replaced it with similar language that included several amendments before voting 79-18 to pass it.

The trust fund, which channels federal money to state infrastructure projects, is set to run out in late August, forcing Congress to scramble for the fifth short-term patch since 2008. The repeated shortfalls come as a consequence of the program's primary funding stream -- taxes of 18.4 cents on gas and 24.4 cents on diesel -- have not been increased in more than two decades, while improved vehicle fuel efficiency and people spending less time on the road have both meant lower gas consumption. Senators objected to paying for the measure with "pension smoothing," which allows companies to defer making contributions to pension plans and paying increased taxes on them later, a trick they said would ultimately cost the government money. Instead, the Senate bill called for raising revenue through cracking down on unqualified claims of tax deductions.

The bill also included a sunset provision that will wind down the funding on December 19, cutting it to $8.1 billion, rather than providing money through May of 2015. The move would force Congress to take up the issue again in the lame duck session after midterms.

"I remain deeply concerned that if we kick this can into next year that the next Congress -- like so many Congresses before it -- will be unable to summon the courage necessary to write a long-term plan for our nation's infrastructure," said Sen. Tom Carper, D-Del., one of the sponsors of the amendments.

The thinking goes that Congress could more likely pass a long-term fix after the partisan furor of elections have passed and before the new session begins. But Republicans, hoping to take control of the Senate, object to lame-duck legislation that would reflex Democrats' higher-tax, higher-federal involvement priorities.

Ahead of the Senate vote, House Speaker John Boehner, R-Ohio, threatened to reverse whatever changes the upper house made.

"If the Senate sends the highway bill over here with those provisions in it, we're going to strip it out and put the House-passed provisions back in and send them back to the Senate," Boehner said Tuesday after a GOP caucus meeting, even as transportation groups have called on the House to pass the Senate legislation.

President Obama will almost certainly sign whatever version of the bill comes to his desk -- if it makes it there -- in order to stave off the funding shortfall that would immediately halt thousands of projects across the country and put hundreds of thousands of jobs into peril just weeks before elections.

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