July 11 (Bloomberg) -- Lawmakers in Congress are uniting behind a plan to replenish the U.S. fund for road and mass-transit projects through May 2015 as they delay a debate over raising taxes for long-term infrastructure financing.
Separate bills approved by the House Ways and Means and Senate Finance committees yesterday would provide almost $11 billion to avoid a shortfall in the Highway Trust Fund next month that would slow construction.
While the measures have some differences, both would be financed by higher customs fees and by letting companies delay contributions to employee pension plans.
Republicans and Democrats expressed confidence they can agree on the short-term plan before Congress’s August break.
“We’ve reached an agreement that can work for both Republicans and Democrats which, given the state of the Senate these days, is quite an accomplishment,” said Senator Orrin Hatch of Utah, the top Republican on the Finance Committee.
Lawmakers made clear that any appetite to pass a multi-year highway financing measure this year is evaporating.
House Speaker John Boehner said yesterday there’s little prospect that Congress would pass such a plan any time soon and reiterated his opposition to raising the nation’s 18.4 cents-per-gallon gas tax that funds highway projects.
“We’re not going to get a long-term highway bill here over the next couple of months,” Boehner told reporters.
Congress has just weeks to complete a short-term deal, as the existing two-year funding measure expires Sept. 30.
The main divide in Congress is over how to boost long-term transportation funding. The current methods for financing the trust fund rely on gasoline and diesel-fuel taxes that haven’t kept up with the pace of new projects.
Transportation Secretary Anthony Foxx has said that without an agreement in Congress, federal payments to states will begin to slow as soon as Aug. 1, at the height of the construction season.
In both committees yesterday, lawmakers rejected Democratic amendments that would have provided funds through Dec. 31 rather than into 2015.
Representative Sander Levin of Michigan, the Ways and Means panel’s top Democrat, said a year-end deadline is the only way to keep enough pressure on lawmakers in both parties to agree to a broader way to finance infrastructure.
Republican Chairman Dave Camp, also from Michigan, argued for his longer-term approach to forestall another trust fund solvency crisis just after the November election.
“A funding package that just goes to the end of 2014 would only create a larger crisis in December,” he said. Shortly after he spoke, the committee voted 16-23 to reject the proposal by Representative Earl Blumenauer, an Oregon Democrat, to boost the fund only to the end of the year.
The Senate committee turned back a similar proposal by Senator Tom Carper, a Delaware Democrat, voting 10-14.
The biggest difference between the proposals is the Senate plan’s inclusion of two tax-compliance changes projected to generate $3.4 billion over the next decade, according to a summary released yesterday by the Joint Committee on Taxation.
The Senate version also doesn’t set an expiration date, and Finance Committee Chairman Ron Wyden, an Oregon Democrat, said the Congressional Budget Office hadn’t estimated how long the money would last.
A coalition that includes the U.S. Chamber of Commerce, the AFL-CIO and state governments wants Congress to enact a long-term highway bill in its lame-duck session after the election. They say that would provide more certainty for infrastructure projects.
“In the chamber’s view, the longer the patch, the easier it will be for Congress to kick the can down the road and avoid the tough question: How will we maintain federal investment in highways, public transportation and highway safety?” Bruce Josten, the Chamber of Commerce’s top lobbyist, wrote in a letter to lawmakers on the Ways and Means Committee yesterday.
The House and Senate proposals both generate nearly $11 billion, according to the JCT summaries. They include customs fees, changes to pensions that lower companies’ short-term contributions, and revenue from a leaking underground storage tank fund.
The Senate proposal would require banks to give the Internal Revenue Service more information about mortgages, including the unpaid balance and property address. That would provide the IRS with additional tools in auditing taxpayers’ mortgage-interest deductions.
Another tax-compliance provision would give the IRS more time to pursue taxpayers who overstate their basis in certain transactions and thus underreport capital gains.
Wyden called Camp’s proposal a partisan exercise.
“The House bill doesn’t do anything about tax cheats,” he said, adding that 40 percent of the Senate bill “is about cracking down on tax abuses to pay for transportation.”
The Senate proposal omits an earlier proposal to require people who inherit individual retirement accounts to take taxable distributions within five years, rather than over an extended period linked to the heirs’ life expectancy.
It also doesn’t include language from prior versions that would have let U.S. officials revoke the passports of people with significant tax debts.
Some lawmakers said yesterday they don’t rule out work on a longer-term measure after the election, although prospects look weak.
“It doesn’t fix the long-term problem, which ultimately we have to deal with,” Senator John Thune, a South Dakota Republican and Finance panel member, said of the Senate measure. “But it’s probably for now the best we can do.”