Interest Rises for Patch of Highway Fund, Senators Say

Senate Finance Committee members say they are weighing a plan to fund a six-month infusion into the cash-strapped U.S. Highway Trust Fund that would prevent an election-year construction slowdown.

Three members of the panel, including committee Chairman Ron Wyden, told reporters today that lawmakers in both parties want to make sure the trust can meet its obligations through the end of this year as Congress pursues a longer-term measure that includes broader changes to transportation programs.

Wyden, an Oregon Democrat, and other lawmakers said there is still no consensus yet on how to finance the so-called “patch.” The U.S. Department of Transportation has said the Highway Trust Fund may run short of money as early as July because the gasoline and diesel-fuel taxes that finance the program haven’t kept up with the pace of new projects.

“I see growing interest among members in terms of taking care of the short term, which is essentially the six months, and then trying to find a way to use that six months as a spring board to a broader set of reforms,” Wyden said.

A six-month approach in the Senate would differ from a plan put forth by House Republican leaders last month. They detailed a $10.7 billion plan to finance a short-term general fund transfer through May 2015. They seek to do that largely by cutting most mail delivery to five days a week over a decade.

The idea of using the cash-strapped postal service as a solution to highway funding challenges already has been dismissed by senators in both parties, with Wyden calling the idea a “head-scratcher.”

Two Steps

Senator Tom Carper, a Delaware Democrat, said today the House Republican leadership’s proposed time frame for a short-term extension also isn’t getting a lot of takers in the Senate. Carper said financing the trust fund through late spring of 2015 takes too much pressure off a longer-term measure.

“I see two steps,” Carper said. “The first is to make sure we don’t shut down construction projects in August. And the second is that we don’t waste the opportunity after the election to fund a six-year transportation plan.”

A two-year law that authorizes federal highway and mass transit programs expires in September, and a Senate panel has approved a six-year measure. Groups including the U.S. Chamber of Commerce and the AFL-CIO are pushing both chambers to complete a six-year measure.

Senator Charles Schumer of New York, a panel member and the No. 3 Democratic leader, also said a six-month approach is most beneficial. He said both Wyden and Senator Orrin Hatch of Utah, the panel’s top Republican, are pressing for that.

“No one wants to let the trust fund run out,” Schumer said. “So I think Chairman Wyden and ranking member Hatch would look at a short-term patch with some hope that we could do something much longer term in six months.”

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net Elizabeth Wasserman

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