TIME Congress

Congress Gears Up for Highway Funding Fight

Vice President Joe Biden speaks to government and business officials about transportation infrastructure and the Highway Trust Fund at a meeting hosted by the White House Business Council, Wednesday, July 9, 2014, in the Eisenhower Executive Office Building on the White House complex in Washington.
Charles Dharapak—AP Vice President Joe Biden speaks to government and business officials about transportation infrastructure and the Highway Trust Fund at a meeting hosted by the White House Business Council, Wednesday, July 9, 2014, in the Eisenhower Executive Office Building on the White House complex in Washington.

A split between House and Senate

Lawmakers advanced proposals Thursday to save the country’s main highway fund, but differences in plans from the House and Senate are likely to spur a congressional showdown in the coming weeks.

The Highway Trust Fund is the main source of funding for road, bridge and mass transit projects, and the Obama Administration expects it to run out of money next month. The bill approved by a House committee Thursday would raise almost $11 billion to keep the fund solvent through May 2015. It would generate the money through an accounting gimmick known as “pension smoothing”—which changes pension contributions—by extending customs fees on importers and by taking $1 billion from a fund to fix underground storage tanks.

The Senate proposal parts ways with the House’s on certain funding details. The top lawmakers on the Senate Finance Committee—Sens. Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah)—struck a deal Thursday that uses the same pension plan alterations and customs fee extensions as the House bill, but to a lesser extent. To make up the difference in revenue, the panel would rely on smaller measures, including a new penalty on those who do not comply with certain reporting requirements for child tax credit claims.

The Senate’s inclusion of these tax revenue boosters threatens to ignite a congressional clash over the fund. House Ways and Means Committee Chairman Dave Camp (R-Mich.) said Thursday that he will not support “billions of dollars in higher taxes to pay for more spending” in the Senate’s bill.

“And, I certainly do not support permanent tax increases to pay for just 10 months of highway programs,” Camp said in a statement.

Republican senators decried the “pension smoothing” in the House bill.

“I think it’s ugly,” said Texas Sen. John Cornyn, a member of his chamber’s Republican leadership team.

Still, lawmakers remain committed to replenishing the fund before it’s too late. “That’s a problem for Republicans,” Sen. Chuck Grassley (R-Iowa), who sits on the Finance Committee, told TIME about the House pension changes. “But also don’t forget that you’re not going to stop highway construction.”

“I’m not real happy about pension smoothing,” Hatch told TIME. “[But] I’m dedicated to getting it done.”

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