House and Senate in Different Lanes on Highway Trust Fund
"The House will not support billions of dollars in higher taxes to pay for more spending,” vows one chairman.
July 14, 2014 - 12:48 am
As with much of the president’s agenda, it was ignored by the Republican-controlled House. Lawmakers in the lower chamber have advanced several plans but none have thus far resulted in a consensus. House Speaker John Boehner (R-Ohio) initially proposed ending Saturday mail delivery and using the resulting savings to replenish the trust fund. That idea drew little support.
Calls to increase the gas tax earned a cold shoulder from Republicans. Sen. John Thune (R-S.D.), ranking member on the Senate Commerce, Science and Transportation Committee, voiced support for bolstering the fund, insisting that “maintaining and improving our nation’s infrastructure is absolutely vital to our country’s economic prosperity.”
“I am skeptical about the financing proposals the administration has put forward to fund its $302 billion plan, especially the administration’s reliance upon one-time revenues from so-called corporate tax reform,” Thune said. “This aspect of the plan is unlikely to secure broad support in Congress and fails to provide a longer-term funding solution for these vital programs.”
On Thursday the House Ways and Means Committee, by voice vote, adopted a plan to bolster the fund by $10.7 billion, which could carry it to May 31, 2015. The package employs a budget gimmick known as “pension smoothing” to pay the tab. Pensions smoothing permits employers to delay contributions to employee pension plans. Pension contributions are tax deductible. Postponing the contributions therefore theoretically raises a firm’s taxable income, increasing revenue for the Treasury.
The plan also will allow the Bureau of Customs and Border Protection to collect user fees in 2015 and transfer funds from the Leaking Underground Storage Tank Trust Fund. A floor vote could come this month. Camp expressed hope the Senate would simply adopt the House plan and avoid “brinksmanship.”
“There is no need to jeopardize critical road and transit projects, let alone the thousands of jobs they provide,” Camp said. “The House and Senate can easily pass this legislation.”
Meanwhile, the Senate Finance Committee has passed, with bipartisan support, a stopgap measure that pumps $7.8 billion into the Highway Trust Fund. Like the House bill, the version offered by the upper chamber also uses pension smoothing and customs fee extensions but to a lesser extent. It also employs smaller measures not contained in the House bill characterized as tax revenue boosters, including a plan to institute a new penalty on individuals who fail to comply with reporting requirements for child tax credit claims.
The House already has made it clear it will balk at the tax measures.
Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee who pieced the funding proposal together with Sen. Orin Hatch (R-Utah), characterized the House proposal as a “partisan bill” while his has support from Democrats and Republicans.
Most importantly, Wyden said, the Senate’s temporary measure provides a bridge to “a long-term bill that rebuilds America’s broken infrastructure, which needs $3.6 trillion dollars of repairs.”
“Every one of us knows the consequences of failing to act on both our short-term and long-term transportation needs,” Wyden said. “Short-term, hundreds of thousands of workers could lose their jobs – jobs that pay good wages, a living wage you can support a family on. Long-term, a little-league infrastructure harms our ability to compete with big-league competition from nations like India and China.”