WASHINGTON – Racing to adjourn for the summer, the Senate scheduled major votes Tuesday on proposals to keep federal highway funds flowing across the nation – billions of dollars to avert layoffs for construction workers and shutdowns of road and bridge projects just before the November elections.
A smooth trip through the Senate was anything but guaranteed, and votes were expected to last into the night.
The House passed a $10.8 billion bill last week that would pay for highway and transit aid to states through the end of May 2015 at current spending levels, and the Senate was taking up that legislation. But some senators, complaining that the House version depended on budgetary gimmicks and wanting to force action on a longer-term solution, were expected to offer amendments. And if any amendments passed, that would set up a showdown between the House and Senate on how to resolve the differences.
House Speaker John Boehner, R-Ohio, declared his chamber would not accept any changes in the way transportation programs are paid for in its bill.
“I just want to make clear, if the Senate sends a highway bill over here with those provisions, we’re going to strip it out and put the House-passed provisions back in and send it back to the Senate,” he said.
By Friday, the federal Highway Trust Fund will no longer have enough money to cover promised aid to states, the Transportation Department says, and the government will begin to stretch out payments. Congress has kept the trust fund teetering on the edge of bankruptcy since 2008 through a series of temporary fixes because lawmakers have been unable to find a politically acceptable, long-term funding plan. States have been warned to expect an average reduction of 28 percent in aid payments.
Without action from Congress, the balance in the fund is expected to drop to zero by late August or early September. And, separately, the government’s authority to spend money on transportation programs expires Oct. 1. Some states already have cut back on construction projects because of uncertainty over federal funding, and President Barack Obama and state and local officials have complained that the uncertainty over funding is costing jobs.
Federal aid pays for about 52 percent of the cost of road and bridge capital projects undertaken every year, said Dave Bauer, a lobbyist for the American Road and Transportation Builders Association.
“So if you have 52 percent of your market that on an almost annual or every-other-year basis is subject to Congress not shutting everything down when there isn’t a great track record on doing that, would you be making long-term investments and hiring people?” he said.
An amendment sponsored by Democratic Sens. Tom Carper of Delaware and Barbara Boxer of California and GOP Sen. Bob Corker of Tennessee would provide only $8.1 billion, just enough to keep highway programs going through Dec. 19. They say their aim is to force Congress to come up with a long-term solution on how to pay for transportation programs after the election when partisan fervor supposedly will have cooled.
“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,” Carper said.
The trust fund is in its current straits because the federal 18.4-cent-a-gallon gas tax and the 24.4-cent-a-gallon diesel tax— the fund’s chief source of revenue — haven’t been increased in more than 20 years, while the cost of maintaining and expanding the nation’s aging infrastructure has gone up. The fuel-efficiency of cars and trucks is also increasing while people are driving less per capita.
One solution would be to raise fuel taxes, but lawmakers are reluctant to do that in an election year — especially Republicans for whom a vote in favor of any tax increase could trigger a backlash from their party’s base.
“I haven’t heard of a single person that doesn’t realize this issue has got to be dealt with, and the way we’ve been dealing with it is totally irresponsible,” said Corker, who has bucked his party by introducing a bill to raise the gas tax.
Under an agreement worked out between Reid and Senate Minority Leader Mitch McConnell, R-Ky., any amendments require 60 votes for passage — a high hurdle.
Another amendment would replace the House bill with a nearly identical bill approved by the Senate Finance Committee. The key difference is the Finance Committee bill relies less on money raised by allowing companies to defer funding pension plans and more on steps to make sure certain tax credits are used only by people who qualify for them. Funding pensions plans normally results in a tax savings for companies, and deferring those payments means they will pay more in taxes and increase federal revenue.
Some lawmakers have complained such “pension smoothing” will cost the government money in the long and undermine the financial stability of pension funds.
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