House Republicans Propose $10 Billion Highway Fund Boost

U.S. Representative Dave Camp
The plan to boost the U.S. Highway Trust Fund put forth by House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, would raise revenue to offset costs by allowing employers to delay contributions to their employee pension plans. Photographer: Andrew Harrer/Bloomberg

House Republican leaders are pressing ahead with a $10 billion infusion to the U.S. Highway Trust Fund, highlighting divisions in Congress over how to replenish the main source of federal money for state road, bridge and mass-transit projects.

The plan by House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, would offset its costs by letting employers delay contributions to their employee pension plans, which raises corporate taxable income in a boon for the U.S. Treasury. It also would boost customs user fees and transfer $1 billion from a federal leaking underground storage trust fund.

The proposal diverges from a plan in the Senate, complicating the ability to forestall a slowdown in disbursements from the highway trust to states next month.

House Speaker John Boehner today called the measure “a really solid bill” that he will put before the full House for a vote next week. House Democratic Leader Nancy Pelosi said late yesterday she’s reviewing Camp’s proposal and can’t say yet whether she’ll back it.

The authority to levy an 18.4-cents-per-gallon gas tax that largely funds $50 billion a year for highway, bridge and mass transit projects expires Sept. 30. Transportation Secretary Anthony Foxx has said federal payments to states will slow as soon as Aug. 1 and the fund is projected to run dry by the end of August.

Administration Pressure

The administration is stepping up the pressure on Congress.

At the White House today, Vice President Joe Biden urged business leaders to call on lawmakers to act, and said inaction to extend the life of the trust fund will force states to defer 112,000 highway projects and 5,600 transit projects, affecting a total of about 700,000 jobs.

“Since when did it become a bad investment?” Biden said in remarks to the White House Business Council, an advisory group of business and top government officials that included representatives of American Airlines Group, General Motors Co. and CVS Caremark Corp. “It means jobs up and down the supply line.”

Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, said late last month he was working on a bipartisan deal that the House could accept to bring a speedier end to the funding dilemma. He said yesterday that he’s still pursuing a bipartisan agreement with Republicans on his panel.

Uphill Battle

Senator Orrin Hatch of Utah, the top Republican on the Finance panel, said after a meeting with Camp yesterday that Wyden is clearly pursuing revenue increases that can’t win approval in the House and that he hasn’t yet decided whether he will agree with the Democrat on a Senate approach.

“Right now, I think it’s uphill,” Hatch said in an interview.

Wyden last month put on hold his competing proposal that would raise its biggest chunk of money by forcing people who inherit IRAs and other retirement plans to take required taxable distributions over five years. He didn’t indicate this week what changes he’s making in a bid to win Republican support.

The House and Senate also are pursuing different ideas for a short-term “patch” for the trust fund that both sides say would allow more time to negotiate a long-term infrastructure bill. Wyden has said he wants to boost the trust fund through Dec. 31, which the nonpartisan Congressional Budget Office estimates would cost about $8 billion.

Chamber, AFL-CIO

The House Republican plan would keep the trust fund solvent until the end of next May -- a move opponents say will take too much pressure off for a longer measure backed by groups like the U.S. Chamber of Commerce and the AFL-CIO.

Senators in both political parties already are lambasting a short-term proposal they say will simply “kick the can” into 2015. Senator Bob Corker, a Tennessee Republican, said Camp’s plan is “an embarrassment.” Senator Barbara Boxer, a California Democrat, also called for a shorter-term solution.

“Passing an eight-month patch is disastrous and it will bring the construction industry into despair,” Boxer said at a news conference.

There are increasing signs that the longer-term debate will get pushed into 2015. While a Senate panel in May approved a measure that reauthorizes highway and mass transit programs for six years, House Transportation and Infrastructure Committee Chairman Bill Shuster said today he may decide to wait until next year to introduce his own broad-based bill.

Short-Term Fix

Shuster said in an interview he will decide after Congress agrees on a short-term fix for the trust fund, and after there are further signs of consensus on financing a multiyear bill.

“We don’t know at this point,” Shuster said. “We want to make sure we get through this first and then decide in coming weeks.”

Senate Majority Leader Harry Reid said yesterday he’d prefer a multiyear measure that would reauthorize highway and mass transit programs, though he said lawmakers are pursuing a shorter-term fix to prevent the slowdown.

“We know that we have to do something on the highway bill before we leave here for the August recess,” the Nevada Democrat said.

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