HTF Center of a Political Game of Chicken

DALLAS — The House and Senate seem to be playing a political game of chicken with the Highway Trust Fund, sending differing bills to extend its solvency back and forth just two days before federal officials have threatened to begin cutting back on federal transportation reimbursements to states if there is an impasse.

Transportation experts are not sure what will ultimately happen, but say time is running out.

The bill the Senate adopted late Tuesday and sent back to the House would provide for an $8 billion bailout of the HTF through Dec. 19. That compares to the nearly $11 billion that the House passed earlier that would extend the HTF through May 2015.

The Senate took up the House bill but changed the date and removed the proposed $2.7 billion of revenue that was to be obtained from pension smoothing. Instead, the Senate proposed the later date and would obtain $4.2 billion from enhanced enforcement of existing tax laws, which the House opposes.

House Speaker John Boehner, R-Ohio, said the House will not adopt the Senate plan because its funding includes revenue from the tax provisions. "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 Tuesday.

An extension of the almost-insolvent Highway Trust Fund must be put into place by the end of this week when Congress breaks Friday for a five-week August recess. The Transportation Department has warned states to expect a 28% cut in federal reimbursements if the HTF cash balance hits $4 billion. The curtailments and delays in payments for ongoing projects are set to begin Aug. 1.

Jack Schenendorf, of counsel at Covington & Burling, says the House will most likely reject the Senate version and send its original measure back to the upper chamber on Thursday for resolution before the recess. "I'll be stunned if Congress goes home without fixing this problem," he said. "The question is how to fix it."

The House could also amend the Senate plan, to remove the tax compliance provisions that Boehner objects to while retaining the December deadline to make the compromise palatable to Senate Democrats, he said. "There are a lot of differences between the proposals," Schenendorf said.

No action on the Senate's bill has yet been scheduled in the House.

House Minority Whip Steny Hoyer, D-Md., said House Democrats will oppose any move by Republicans to strip the Senate amendments from the measure. "We think the Senate bill is far better policy," he said.

Sen. Bob Corker, R-Tenn. who along with Sens. Barbara Boxer, D-Calif., and Tom Carper, D-Del., sponsored the amendment to shorten the time frame and remove pension smoothing revenues, said it is not clear what will happen to the Senate plan when it is considered by the House.

"What happens in the House? I was on the phone last night. I was on the phone this morning," Corker said Wednesday morning. "I don't know."

Time is short and the consequences of inaction are high, said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. Agreement on the Senate version would keep projects on track and ensure the immediate solvency of the HTF but a long-term bill is needed, he said.

"We appreciate that lawmakers in both the House and the Senate have made this a legislative priority, but the job is not yet done," Josten said. "The two chambers must reconcile the differences in this legislation. Kicking the can down the road is easy, but finishing the job is necessary."

In a letter sent Wednesday to Boehner and Minority Leader Nancy Pelosi, D-Calif., AAA president Bob Darbelnet called on the House to adopt the Senate plan as soon as possible.

"The best short-term remedy is one that extends funding until December and positions Congress to work toward passage of a long-term, fully funded transportation bill following the elections in November," Darbelnet said in the letter. Extending the deadline to May 2015 "jeopardizes Congress' ability to reach an agreement on a long-term transportation funding solution," he said.

Senate Finance Committee chairman Ron Wyden, D-Ore., said Congress will agree on a short-term extension before the trust fund goes broke. "I've said from the very beginning we aren't going to let the clock run out and we're gonna get this done and I plan to talk to the House leadership on both sides as soon as possible," he said.

Sen. Orrin Hatch, R-Utah, who co-sponsored the amendment substituting the Senate plan for the House proposal, said he expects the House bill will be passed. "I think the likelihood is that the [House] bill has got to be the final bill," Hatch said following the Senate vote. "I can live with that."

The Senate version of the HTF patch is the better choice, said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, because it does not include pension smoothing.

"There is no question that the Senate bill is the more responsible of the two highway bills," she said. "The House should reject efforts to resurrect phony offsets to cover the highway funding shortfall and either pass the Senate bill as written or work with the Senate to identify an alternative package of gimmick-free offsets."

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