Senate To Take Up Short-Term Highway Funding Bill

Martin J. Milita Jr. Esq., senior director at Duane Morris Government Strategies, comments on: Senate and Highway Funding Bill

Washington-based Duane Morris Government Strategies (DMGS) supports the growth of organizations, companies, communities and economies through a suite of government and business consulting services. The firm offers a range of government relations and public affairs services, including lobbying, grant writing; development finance consulting, media relations management, grassroots campaigning and community outreach. Milita works at the firm’s New Jersey offices.

Senate To Take Up Short-Term Highway Funding Bill

Senate Majority Leader Mitch McConnell, R-Ky., on Tuesday said that the Senate will take up a short-term highway funding extension to allow time for negotiations on a comprehensive bicameral bill, as the Senate continues debate on its long-term highway funding legislation.

The Senate intends to take up the $8 billion, three-month extension, extending authorization for highway funding through October, if and when it passes the House, allowing for a bicameral conference in September to develop a final long-term highway bill, McConnell told reporters.

The Senate is still set to vote on its own six-year highway funding bill, the Developing a Reliable and Innovative Vision for the Economy, or Drive, Act, on Thursday, but any final vote will now likely be academic.

McConnell had been scrambling to get the bill through the Senate so it can be considered by the House before lawmakers leave on their summer recess and Highway Trust Fund authorization expires on July 31. But House Majority Leader Kevin McCarthy, R-Calif., had at first been noncommittal and then bluntly against the bill, as senators adopted an amendment to reauthorize the Export-Import Bank of the United States.

Reauthorizing the bank’s charter, which expired at the end of June, has won strong support across both parties in the Senate, but has faced a more hostile reception in the House, amid claims that it supports “corporate welfare.” Instead, McCarthy and other senior House Republicans pushed the Senate to take up a five-month highway funding extension, then the three-month extension put forward late on Monday, to allow the House time to come up with its own long-term highway funding plan and go to conference with the Senate.

The three-month extension, H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act, is expected to get a vote in the House on Wednesday. In addition to $8 billion in funding for the Highway Trust Fund — the same amount that had been in the previous five-month extension — the short-term bill also includes more than $3 billion in emergency funding to prevent a shortfall that may have forced several U.S. Department of Veterans Affairs hospitals to shutter temporarily.

Negotiators will likely have a lot to discuss before coming up with a final bicameral bill, with the Senate bill having generated significant debate both within and outside Congress, both for some of its policy provisions and for its proposed methods of keeping the Highway Trust Fund full.

The bill is intended to provide six years of funding and authorization for the trust fund, used to reimburse state and local governments for highway and other surface transportation infrastructure spending.

Currently, the trust fund pulls in about $35 billion a year from the federal gasoline tax — a significant sum, but more than $10 billion a year short of the necessary funding, with gas tax revenue having been eaten into by increasing fuel economy standards and inflation. Efforts to raise the gas tax, last increased in 1993, have proven politically unpalatable, so McConnell and Senate Environment and Public Works Committee ranking member Barbara Boxer, D-Calif., instead sought to put together a $47 billion package of offsets in the Drive Act that would augment the fund for at least three years.

These would include tweaks to tax enforcement, extensions to Transportation Security Administration fees and government guarantee fees for mortgages underlying mortgage-backed securities, and the indexing of customs user fees to inflation, among other pay-fors.

But several of the proposed offsets have drawn criticism, including the two largest, a proposed sell-off of 100 million barrels of oil from the Strategic Petroleum Reserve and a cut to the interest rate paid by the Federal Reserve on stock that banks are required to purchase to participate in the Fed system, for banks with $1 billion or more in assets.

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, R-Alaska, has slammed the proposed Strategic Petroleum Reserve sell-off as the wrongful use of a strategic asset as a “slush fund,” and representatives from the banking industry have come out against the dividend cut, which would drop the rate paid from 6 percent to 1.5 percent. They argue, among other things, that the interest is needed to compensate for otherwise useful capital being tied up.


Republican Conference Chairman John Thune is floating the idea of using the budget reconciliation process to solve the highway bill funding impasse.

“Using the budget reconciliation process … from a timing standpoint enables us, I think, to address what are a couple of really big priorities, and that is reforming our business tax code, lowering the rates, making our country more competitive with those around the world, and dealing with what we know is going to be a crisis come May 31, and that’s funding highways,” old reporters Tuesday.

Thune said “there’ll be a lot of interest” among Republicans in using reconciliation, which produces a legislative vehicle that can reach President Barack Obama’s desk without facing a filibuster, to attack Obamacare.

The Budget Act places limits on the ability of lawmakers to use the fast-track budget process, but even that has proven to be fungible from time to time, with parliamentary rulings coming in conflict over the years. Under the most recently accepted construct, a trio of reconciliation bills may be created under a budget resolution: one each on revenues, debt and outlays. A reconciliation bill undercutting Obamacare for example would face a certain veto, but a tax code overhaul that provided for significant infrastructure spending might be an entirely different matter, especially if crafted with Democrats on Capitol Hill and in the White House. Both the highway bill and the Affordable Care Act are revenue bills.

Thune, the chairman of the Commerce, Science and Transportation Committee, one of several authorizing committees with a slice of the transportation bill, said the current law would still need an extension, even under his expedited process proposal.

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