DALLAS — A Senate proposal would keep federal transportation dollars flowing to states for two months past a scheduled expiration date while lawmakers work on a long-term solution to the chronically insolvent Highway Trust Fund.
The measure from Sen. Barbara Boxer, D-Calif., and Sen. Tom Carper, D-Del., would extend the Transportation Department's ability to reimburse states for highway and transit projects past the May 31 expiration of its authority to distribute the funding.
Cash balances and incoming collections are expected to keep the HTF functioning into late July or early August, so a 61-day extension would not require a transfer from the general fund.
Sponsors Boxer and Carper are the two top Democrats on the Senate Environment and Public Works Committee. Their plan also calls on the House and Senate to complete work this summer on a multi-year authorization of surface transportation programs and send the bill to the president for his signature as soon as possible.
Carper said the short extension would give lawmakers time to find a sustainable revenue source for the HTF, which has required $65 billion in general fund transfers due to inadequate gasoline tax collections.
The HTF's solvency was extended in 2014 with an $11 billion transfer from the general fund to provide additional time to reach a consensus on transportation funding, but that has not happened yet, Carper said.
A lengthier extension to the end of calendar 2015 would just delay a decision on funding, he said.
"It's clear to me that yet another long extension that patches the trust fund with an assortment of budget gimmicks only guarantees that we'll push this issue right to the back burner, as we've done over and over again, Carper said.
Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, favors a short extension and then a longer one through 2015 to resolve the funding quandary. The longer extension would require $11 billion from the general fund or some other source to keep up the current funding levels.
On the House side, Democrats on the Ways & Means Committee sent a letter to chairman Rep. Paul Ryan, R-Wis., asking for hearings on funding a multiyear transportation bill. The committee has not held a highway funding hearing since 2010.
Ryan and Rep. Bill Shuster, chairman of the House Transportation & Infrastructure Committee, said Friday they support Boxer and Carper's two-month extension but want to stretch it to the end of 2015.
"It was our preference to move an extension through the end of the year, but we will need more time to reach a bipartisan agreement on offsets," they said in a joint statement. "This legislation will allow transportation spending to continue through July, while we work towards a next step to close the trust fund's shortfall."
It is unlikely that Congress can pass a multi-year, fully funded transportation bill this summer, said Jack Schenendorf, of counsel with the Washington law firm Covington & Burling LLP.
"Congress would have to find $100 billion of new revenue to pass a six-year transportation bill," Schenendorf said. "I don't want to imply that $11 billion is not a lot of money, but it is easier to find $11 billion than $100 billion."
Comprehensive tax reform is the most likely source of the additional revenue needed to sustain the HTF over the next few years, he said.
"Whatever the solution is, it will be tied up with legislation coming up this fall, so an extension for 2015 makes sense," Schenendorf said.
The current extension was funded through $10.8 billion of revenue offsets such as pension smoothing and drawing on a dormant storage tank trust fund, but those relatively easy sources are no longer available, said David Bauer, senior vice president for government relations at the American Road & Transportation Builders Association.
"Finding that $10.8 billion was very difficult last year and rounding up $11 billion now is going to be much more difficult," Bauer said. "This extension is probably going to look like the last one, filled with accounting gimmicks and such."
A two-month extension is needed but a longer one could lead to even more short-term patches, said Jack Basso, a transportation funding consultant and former head of the American Association of State Highway and Transportation Officials.
"An extension through July would keep the pressure on Congress but I know what happens when Congress has a year-end deadline," he said. "Nothing gets done at the end of the year, and then you're into the election year and that's even worse."
