Road-Work Halt Days Away as Congress Argues Funding Bill

Congress’s rhetoric ahead of the March 31 expiration of a law funding U.S. highway and transit projects resembles the dueling that led to last July’s impasse shutting down the Federal Aviation Administration for two weeks.

About 4,000 government workers were furloughed. The agency lost $468 million, according to data compiled by Bloomberg, when airlines for 16 days pocketed a ticket tax that would have been used for airport construction.

The consequences of a highway-program shutdown would start with construction workers being laid off after states stop getting U.S. reimbursements to pay them, said Pete Rahn, leader of HNTB Holdings Ltd.’s transportation practice in Kansas City, Missouri. As many as 1.87 million jobs may be at risk, according to a Senate fact sheet citing Transportation Department job- calculation models. The U.S. government couldn’t collect as much as $93 million a day in gasoline taxes, he said.

“This is by an order of magnitude bigger than the FAA bill,” said Joshua Schank, president and chief executive officer of the Eno Center for Transportation in Washington. “If it lasts any more than a few weeks, there would be serious damage.”

Senate Majority Leader Harry Reid, a Nevada Democrat, last week urged the House to take up the bill his chamber passed March 14. He wouldn’t discuss what would be the ninth extension of highway legislation that expired in 2009.

Representative Bill Shuster, a Pennsylvania Republican rounding up votes on the other side of the Capitol, said that stance may change by March 30.

Vote Scheduled

The House will vote on a 90-day extension today after 6:30 p.m. in Washington, according to the chamber’s daily schedule. The bill will be taken up under rules requiring a two-thirds majority to pass, meaning the 242 Republicans will need about 48 Democrats to advance the legislation.

Representative Nick Rahall, the House Transportation and Infrastructure Committee’s senior Democrat, urged a “no” vote in an e-mailed statement. House leaders should schedule a vote on the Senate bill, he said.

“Allowing Republicans another 12 weeks would do nothing but feed their dangerous addiction to serial extensions and damaging delays, which are causing uncertainty and chaos at the start of the construction season,” said Rahall, of West Virginia.

Insolvency Potential

Congress’s struggles to agree on a long-term bill have drawn out so long that the Highway Trust Fund, which pays for road and mass transit construction, is almost insolvent. Its highway account may be unable to meet its obligations as soon as October, the American Association of State Highway and Transportation Officials said Jan. 31 in a report analyzing Congressional Budget Office data.

The fund’s finances have declined as cars have become more efficient and Americans drive less because of higher gasoline prices, according to the U.S. Transportation Department.

If a shutdown forces gas-tax collections to stop, “these funds would be gone forever,” Rahn said. “There would be no way to make it up.”

The Senate’s two-year, $109 billion transportation plan passed March 14 includes about $14 billion from other accounts and general taxpayer money to shore up the trust fund. The trust fund collected $36.9 billion from all sources in 2011, according to the CBO.

When House leaders tried to bring a different bill to the floor last month, majority Republicans were so divided over how to pay for projects and whether mass transit should keep getting gasoline-tax money that it didn’t progress to a vote.

Jobs at Stake

House Transportation and Infrastructure Chairman John Mica, a Florida Republican, introduced a bill March 22 to extend current programs through June 30.

As with the FAA bill, a lapse in the government’s authority to collect gasoline taxes won’t necessarily lead to lower fuel prices for consumers, Schank said.

Senator Barbara Boxer, a California Democrat, held several news conferences last week calling for a vote on the approved bill she sponsored. Among the jobs at stake if highway funding lapses are 177,500 highway and transit positions in California, 120,300 in Texas and 113,300 in New York, according to fact sheet prepared by Senate Democrats.

The Senate bill may create another 1 million jobs by expanding private-sector financing for projects, according to the fact sheet.

House Speaker John Boehner, an Ohio Republican, backed off a pledge to act on the Senate bill if House members wouldn’t back Mica’s five-year, $260 billion plan. House Republicans want to bolster the Highway Trust Fund with revenue from opening up more federal land to oil and gas production, Boehner told reporters March 22.

‘Path to Bankruptcy’

“The problem with the Senate bill is it doesn’t address the issue of rising gas prices and energy,” Boehner said. “We believe if we are going to reauthorize the highway bill, American energy production ought to be a critical part of this.”

Boxer, chairman of the Senate Environment and Public Works, called a 90-day extension “a path to bankruptcy.” She wouldn’t say whether senators would support that plan.

House Minority Leader Nancy Pelosi, a California Democrat, indicated that Democrats were ready for a fight.

“We want all members of the House to go on record -- do they want to create jobs or do they want to destroy jobs?” Pelosi told reporters. “Republicans in the House have painted themselves into an extreme position.”

Union Pressure

The House plan would consolidate 130 U.S. highway programs into six, Mica said March 22 in remarks to the Ripon Society, a Republican policy group in Washington. It will speed up the process of approving construction projects and improve transportation options that will take traffic off the highways, he said.

“I don’t want to pass just a highway bill,” Mica said. The Senate, he said, “passed just a highway bill and that’s the wrong thing to do.”

Labor unions seeking to protect their members are trying to pressure House Republicans. After running radio ads in Boehner’s suburban Cincinnati district earlier in the month, the Laborers’ International Union of North America drove a 15-foot flatbed truck with a giant roll of duct tape to the city’s Brent Spence Bridge over the Ohio River.

Obsolete Bridges

The prop symbolized Congress’s short-term approach to fixing Ohio’s 6,400 structurally deficient or functionally obsolete bridges, the union, which represents 500,000 construction workers, said in a March 21 statement.

Short-term extensions don’t allow the kind of planning required for cities to plan construction projects, and Fresno, California, already has a backlog of projects that can’t be put out for bid because of the uncertainty, said Mayor Ashley Swearengin, a Republican.

“Any short-term extension would doom our chances of getting a long-term bill this year,” Swearengin told reporters March 23 on a U.S. Conference of Mayors conference call.

The Senate bill is S. 1813 and the House bills are H.R. 7 and H.R. 4239.

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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