Highway, bridge money at risk: Senate to vote

FILE - This April 14, 2014 file photo shows a section of the I-75 Phase II modernization project under way in Dayton, Ohio. The Senate is set to take up legislation to keep federal highway money flowing to states, with just three days left before the government plans to start slowing down payments. The House passed a $10.8 billion bill last week that would pay for highway and transit aid through the end of May 2015 if transportation spending is maintained at current levels. Under a schedule outlined by Senate Majority Leader Harry Reid of Nev., the Senate would take up that bill Tuesday. (AP Photo/Skip Peterson, File)

WASHINGTON (AP) — Racing to adjourn for the summer, the Senate scheduled major votes Tuesday to keep federal highway funds flowing across the nation — billions of dollars to avert layoffs for construction workers and shutdowns of road and bridge projects just before the November elections.

A smooth trip through Congress was anything but guaranteed. Senators in the afternoon started tinkering with a $10.8 billion bill the House passed last week that would pay for highway and transit aid to states through next May at current spending levels. Any changes would send the bill back to the House rather than to President Barack Obama for his signature enacting it into law.

House Speaker John Boehner, R-Ohio, declared his chamber would not accept Senate changes to the bill's financing. "I just want to make clear, if the Senate sends a highway bill over here with those provisions, we're going to strip it out and put the House-passed provisions back in and send it back to the Senate," he said.

By Aug. 1 — this Friday — the federal Highway Trust Fund will no longer have enough money to cover promised aid to states, the Transportation Department says, and the government will begin to stretch out payments. Congress has kept the trust fund teetering on the edge of bankruptcy since 2008 through a series of temporary fixes because lawmakers have been unable to find a politically acceptable, long-term funding plan. States have been warned to expect an average reduction of 28 percent in aid payments.

Without action from Congress, the balance in the fund is expected to drop to zero by late August or early September. And, separately, the government's authority to spend money on transportation programs expires on Oct. 1. Some states already have cut back on construction projects because of uncertainty over federal funding, and Obama and state and local officials have complained that the uncertainty over funding is costing jobs.

Federal aid pays for about 52 percent of the cost of road and bridge capital projects undertaken every year, said Dave Bauer, a lobbyist for the American Road and Transportation Builders Association.

"So if you have 52 percent of your market that on an almost annual or every-other-year basis is subject to Congress not shutting everything down when there isn't a great track record on doing that, would you be making long-term investments and hiring people?" he said.

One Senate amendment would change the way the money for the highway funding would be raised. It would reduce the House's reliance on letting companies defer required contributions to their pension plans — thus increasing the taxes those companies pay — to help fund highways. Some lawmakers have complained such "pension smoothing" will cost the government money in the long run and undermine the financial stability of pension funds. In its place, senators promised to raise equivalent revenue by making it harder for people to claim tax deductions and credits they don't qualify for.

Another amendment sponsored by Democratic Sens. Tom Carper of Delaware and Barbara Boxer of California and GOP Sen. Bob Corker of Tennessee would provide only $8.1 billion, just enough to keep highway programs going through Dec. 19. They say their aim is to force Congress to come up with a long-term solution on how to pay for transportation programs after the election when partisan fervor supposedly will have cooled.

"I remain deeply concerned that if we kick this can into next year that the next Congress — like so many Congresses before it — will be unable to summon the courage necessary to write a long-term plan for our nation's infrastructure," Carper said.

The trust fund is in its current straits because the federal 18.4-cent-a-gallon gas tax and the 24.4-cent-a-gallon diesel tax— the fund's chief source of revenue — haven't been increased in more than 20 years, while the cost of maintaining and expanding the nation's aging infrastructure has gone up. The fuel-efficiency of cars and trucks is also increasing while people are driving less per capita.

One solution would be to raise fuel taxes, but lawmakers are reluctant to do that in an election year — especially Republicans for whom a vote in favor of any tax increase could trigger a backlash from their party's base.

"I haven't heard of a single person that doesn't realize this issue has got to be dealt with, and the way we've been dealing with it is totally irresponsible," said Corker, who has bucked his party by introducing a bill to raise the gas tax.

Under an agreement worked out between Reid and Senate Minority Leader Mitch McConnell, R-Ky., any amendments require 60 votes for passage — a high hurdle.


Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy