Congress clears temporary fix for Highway Trust Fund
The U.S. Congress ended a legislative game of ping-pong over highway and transit funding when the Senate late Thursday cleared a short-term extension of the current surface transportation act.
The vote forestalls what was shaping up to be a crisis for states that depend on federal money to help pay for maintenance and upgrades of major highways, especially since lawmakers are scheduled to adjourn Friday for a month-long recess. The Highway Trust Fund is expected to go into the red this month because of a systemic downturn in fuel tax collections and requires stop-gap action to supply extra money or else federal transportation officials will have to scale back reimbursements to states for projects.
The Senate voted 81-13 to maintain status-quo funding of transportation programs through May, transferring $11 billion from the General Fund to make up the projected shortfall, after the House passed the bill earlier in the day.
The situation appeared dire Thursday morning because of a beef between the House and Senate over the length of the bill and how to pay for it. The House two weeks ago cleared a nine-month extension paid for with increases in customs duties, a transfer of funds from another trust fund and deferring tax-free contributions for corporate pension reserves so the government ends up with more tax money. The Senate responded this week with a bill to extend transportation programs through Dec. 19 in an effort to force a decision on a multi-year bill that provides more long-term funding certainty for states that must plan projects well in advance. The Senate bill eliminated the pension accounting maneuver.
House leaders rejected the Senate version of the bill, and concern increased that highway projects would suffer, throwing thousands of construction workers out of their jobs. In the end, the Senate gave in and accepted the House version, thereby avoiding blame for cuts that could potentially hurt constituents.
Congress has not passed a long-term transportation authorization bill since 2005. The 2012 bill was only for two years, and it was preceeded by several extensions. The big sticking point is reluctance by leaders in Washington to raise the gas tax, which has remained at 18.4-cents per gallon since 1993, and an inability to reach consensus on other revenue enhancements.
American Road & Transportation Builders Association President Peter Ruane summed up the feelings of many transport interests, expressing mixed relief with the Highway Trust Fund rescue.
"We commend the House and Senate for preserving the continuity of federal highway and transit funding to the states with a short-term revenue patch. That, no doubt, temporarily saved many Americans their jobs. We want to be clear, however, that we find no reason for anyone to celebrate what amounts to a last minute first down pass," he said.
“It is incumbent on the Congress to now focus full-bore on the end zone — enacting a long-term, sustainable revenue solution for the Highway Trust Fund before the end of this year," he continued. "That will allow the Congress to then focus on developing and passing a long-term surface transportation program reauthorization bill before the eight-month May extension deadline that was just set expires. There is no reason why a funding solution needs to wait for a reauthorization bill. That’s putting the cart before the horse.
Ruane added, “Otherwise, we’ll no doubt see a repeat of this same process next spring with yet another package of budget gimmicks while the 2015 construction season hangs in the balance. Americans deserve better than this on a core responsibility of the federal government."
In a statement, Kurt Nagle, president and chief executive officer of the American Association of Port Authorities, said the bill's passage gives legislators more time to come up with a substantial, multi-year plan.
"Identification of, and funding for, critical freight infrastructure is
vital to America’s international competitiveness and sustainable job
growth. We look forward to working with Congress and the Administration
on a long-term highway bill that includes robust provisions for freight,
including ‘first and last mile’ projects, gateways and corridors that
connect with ports," he said in a statement.
Praise form the National League of Cities was also somewhat muted.
“Cities and towns across America are pleased that Congress worked
together to pass an extension to keep the Highway Trust Fund solvent," the organization said in a statement.
"This action will prevent cities from being forced to stop critical
transportation projects from going forward, and will allow Congress to
continue working on a long-term, comprehensive bill that will create
jobs, drive growth and help cities and towns compete in the global
The bill now goes to President Obama to sign into law.