Mark Szakonyi, July 30, 2014, JOC.com
U.S. House and Senate leaders have less than a day to work out their differences in seeking a short-term patch for the main engine of federal highway construction.
The question is whether both sides will reach a consensus on replenishing the Highway Trust Fund before legislators take a month-long recess at the end of the week. Unless Congress replenishes the fund, states on average will see their construction dollars from the Federal government shrink by 28 percent on average, starting Aug. 1.
The Senate yesterday by a vote of 79-19 passed a bill to inject $8 billion into the fund, allowing federal dollars to states to keep flowing at their regular pace through Dec. 19. The bill is at odds with the House’s plan to replenish the trust fund with $10.9 billion, giving it a 10-month lease on life.
Both sides are struggling to reach an accord, largely because of their differing views on the pay-fors, or budget gimmicks, they propose to use to boost sagging surface transportation infrastructure revenue. Democratic Senators are opposed to the House’s plan to raise money via “pension smoothing,” or allowing companies to calculate pension contributions assuming higher interest rates, increasing the amount they owe to the government in the short term. The Senate bill would, instead, make tax deductions and credit scarcer, ultimately raising revenue via higher tax collection.
Sen. Barbara Boxer, D-Calif., also wants a shorter-term patch so Congress will be forced to solve the transportation crisis by the end of they year, instead of punting the deadline until next spring. House Republican leaders say they aren’t willing to budge on pension-smoothing language. The impasse sets up a virtual game of chicken in which thousands of construction jobs are the potential casualty, according to transportation infrastructure proponents. The squabbling over a short-term patch also illustrates how far Congress will have to go to create a long-term fix to bridge the gap between fuels tax revenue and spending plans.