Clock ticks down on highway funding

Congress has just weeks to sift through several options for short-term highway funding, as Republicans scramble to ensure that a shutdown of infrastructure projects doesn’t occur this summer.

There’s little doubt among lawmakers that some sort of highway funding extension will materialize before the May 31 deadline, be it through July, September or the end of the year.

{mosads}But the debate over how long of a patch to offer for roads, along with Senate Minority Leader Harry Reid’s (D-Nev.) recent protests that Republicans are giving the issue short shrift, underscore how difficult it will be for Congress and the White House to craft a long-term infrastructure package.

“There’ll be something done,” Sen. John Thune (S.D.), the No. 3 Republican in the Senate, told reporters this week about the May 31 deadline. “I’m not saying it’s going to be the solution that we’re all ultimately hoping will happen.”

Lawmakers have brushed up against deadlines for highway funding repeatedly, most recently last summer. Congress hasn’t raised the gas tax, the Highway Trust Fund’s primary revenue source, in more than two decades. That’s left a roughly $16 billion hole in the fund, with the tax only covering about $34 billion of the $50 billion the federal government spends on roads in a given year.

While some lawmakers have floated a gas tax hike, senior Republicans have ruled it out. Business and labor groups both grumble that Washington’s inability to craft a long-term highway bill has made it difficult for state and local governments to plan construction projects.

Reid pressed Senate Majority Leader Mitch McConnell (R-Ky.) this week to put a major trade bill, a priority for the GOP and the White House, to the side so lawmakers could concentrate on highways and intelligence legislation.

The Nevada Democrat has suggested Congress could pass a fully funded long-term highway bill by the end of the month. But lawmakers in both parties say that seems like a stretch, leaving them to debate just how many months a short-term patch should last.

“Most everybody knows I’m sincere in trying to get this done,” said Senate Finance Committee Chairman Orrin Hatch (R-Utah), one of the lawmakers charged with finding the revenue for construction projects. “We’re so sick and tired of these doggone patches all the time. But there’s no quick answer to it.”

Hatch, who has been holding meetings with his committee on infrastructure, and House Ways and Means Committee Chairman Paul Ryan (R-Wis.) are among the lawmakers who have proposed finding enough highway funding, about $10 billion, to last through the end of the year. 

Sen. Chuck Grassley (R-Iowa) said Wednesday that Hatch had found about half the offsets he needed for that sort of extension.

Democrats are taking part in the negotiations over highway funding, but senior Democrats have also made clear that Republicans, now that they’re in full control on Capitol Hill, have to take more of the responsibility for shoring up highway funding. The Democrats indicate they’re unimpressed with what the GOP is proposing so far.

“This notion of two months, three months; let’s get back to it later; maybe it’ll be part of tax reform; we’ll see you later — I’m finished with it,” said Senate Minority Whip Dick Durbin (D-Ill.), who said he might oppose a short-term patch.

McConnell and Speaker John Boehner (R-Ohio), Durbin added, need “to man up and lead.”

Hatch and Ryan have maintained that a longer patch will give them the time they need to hash out the funding for a six-year bill, and other lawmakers have said it makes sense to throw highway funding into the mix with the string of other year-end issues Congress will likely tackle in December.

But not all senior Republicans feel that way. In fact, divisions over how long a short-term patch should last don’t break along party lines, with the disagreement more over what deadline lawmakers believe offers the best opportunity to strike a deal that would last as long as six years.

Sen. James Inhofe (R-Okla.), the chairman of the Environment and Public Works Committee, has pitched an extension of only a couple of months, which would essentially coordinate the deadlines for highway policy and funding.

Transportation Secretary Anthony Foxx has said in recent weeks that the trust fund could make it into at least July, as long as highway policy is reauthorized by the end of the month.

Business groups and labor officials have joined Inhofe in insisting that a seven-month extension is too long and that lawmakers would face more urgency to act with a deadline around July.

“Years of congressional inaction on a long-term surface transportation bill has harmed our economy,” Ed Wytkind, the president of the AFL-CIO Transportation Trades Department, said in a statement. Wytkind said Congress needs to “get to work on a robust long-term bill that expands investments and job creation, and is paid for with a sustainable revenue stream.”

Inhofe has added that he and Sen. Barbara Boxer (Calif), the top Democrat on the public works panel, are close to an agreement on an up-to-six-year highway plan. 

Congress could also push the funding deadline back to Sept. 30, the end of the fiscal year. But some lawmakers have expressed concern about putting highways on the same track as the appropriations process, given that the divide between the two parties over government spending is growing.

Foxx has said the Obama administration would accept a “purposeful” temporary extension, if lawmakers are serious about using the extra time to craft a broader infrastructure package.

President Obama has floated the idea of using revenue from a broader overhaul of the business tax code to help fund infrastructure projects. 

The revenue specifically would come from corporate profits currently being held overseas, which would be hit with a mandatory 14 percent tax rate.

Ryan has said he’s willing to work with the Obama administration on that sort of plan, but top officials on both sides acknowledge there are plenty of obstacles in the way.

Hatch hasn’t said much about the plan he’s working on to find highway funding. But he’s been clear that he doesn’t like a proposal from Boxer and Sen. Rand Paul (R-Ky.) that would allow corporations to bring back offshore profits at a lower rate outside of a wider tax overhaul.

“I believe I’ve got a way of doing it,” Hatch said. “But I’ve got to have some time to do it. I can’t be just shoved into doing something.”