WASHINGTON — The House Ways and Means Committee released a bipartisan plan Tuesday that would provide federal financing for transportation projects through May 15, 2015, and would be the first step in replenishing the Highway Trust Fund, which will run out of money next month unless Congress acts.
The proposal, which would be financed in several unusual ways, is expected to generate about $10 billion to keep the Highway Trust Fund from becoming insolvent Aug. 1 and to pay for projects the fund does not cover. The committee will begin work on the bill Thursday.
“While it doesn’t provide as much funding as I would like — enough to get through the end of next year — it does give Congress and the tax-writing committees ample time to consider a more long-term solution to the Highway Trust Fund,” the committee’s chairman, Rep. Dave Camp, R-Mich., said in a statement.
Senators announced separately Tuesday that they were close to a short-term deal to shore up the highway fund. That announcement could come as early as this morning.
The House plan would be financed through a financial maneuver known as pension smoothing, which increases tax revenues by allowing companies to delay tax-deductible pension contributions, and by unspecified user fees. Money would also be transferred from a fund that is used to clean up leaky underground storage tanks.
Fearing their projects will be left unfunded, states have been shifting money to the most urgent road and bridge repairs, holding off on awarding contracts for other projects and, in many cases, delaying work as they prepare for financing to dry up.
“The sad part is that people have been working these kind of things into their transportation budgets for a while because nobody expects Washington to get anything done,” said Marcia L. Hale, president of Building America’s Future, a Washington-based group that lobbies for more money for infrastructure projects.
The Highway Trust Fund was established in 1956 to finance the Interstate Highway System. It is financed by a gasoline tax, which is set at 18.4 cents per gallon and is not indexed to inflation. The tax has not been increased since 1993, and the rise of hybrid vehicles and more fuel-efficient cars and trucks has also caused the tax revenues to fall. But with little appetite for tax increases in the House, lawmakers have wrangled for years over the best way to finance the nation’s road, bridge, rail and aviation projects.
Time is running short. The House is 15 days from its five-week summer recess. If Congress is not able to reach an agreement before then, federal highway funding will be cut by 28 percent Aug. 1, about the time that construction season starts in most states.
Many state transportation officials said that even a short-term disruption in financing would have an impact on roadwork. Beyond the loss of jobs and the cost of restarting work after a delay, officials said, vendors’ contracts may force states to pay millions of dollars if work is stopped.
“There are severe penalties that are built into the agreements,” said Aubrey L. Layne Jr., Virginia‘s transportation secretary. “Vendors may have bought materials like concrete that they haven’t used, and we would be on the hook for that.”
The Obama administration warns that the trust fund’s insolvency could put 700,000 people out work just as it appears that the economy is starting to rebound. The administration wants a long-term solution.
U.S. Transportation Secretary Anthony Foxx has lobbied Congress for a four-year spending plan.United States - North America - United States government - United States Congress - North Carolina - Dave Lee Camp - Charlotte - Anthony Foxx