House OKs short-term fix for road funds

President Barack Obama tries out a driving simulator Tuesday during a visit to the Turner-Fairbank Highway Research Center in McLean, Va. During the visit, he said he supports lawmakers’ efforts to keep highway money flowing temporarily but warned that “Congress shouldn’t pat itself on the back for averting disaster for a few months.”
President Barack Obama tries out a driving simulator Tuesday during a visit to the Turner-Fairbank Highway Research Center in McLean, Va. During the visit, he said he supports lawmakers’ efforts to keep highway money flowing temporarily but warned that “Congress shouldn’t pat itself on the back for averting disaster for a few months.”

WASHINGTON -- With an August deadline looming, the House voted Tuesday to temporarily patch over a multibillion-dollar pothole in federal highway and transit programs while ducking the issue of how to put them on a sound financial footing for the long term.

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The vote was 367-55. The four representatives from Arkansas -- all Republicans -- voted in favor of the measure.

The action cobbles together $10.8 billion by using pension tax changes, customs fees and money from a fund to repair leaking underground fuel storage tanks to keep the federal Highway Trust Fund, which pays for transportation programs nationwide, solvent through May. A similar bill is pending in the Senate.

Because the extension approved Tuesday funds the trust fund only through May, the Arkansas Highway and Transportation Department will have to weigh what projects it places out for bid in the next few months, spokesman Danny Straessle said.

"It would be a worst case scenario to start a project only to have to stop it in its tracks because there's no more funding for it," he said. "That's not good for us, that's not good for the motoring public."

Without congressional action, the U.S. Transportation Department says that by the first week in August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments. Congress has kept the Highway Trust Fund teetering on the edge of bankruptcy since 2008 through a series of temporary fixes because lawmakers have been unable to find a politically acceptable long-term funding plan.

One solution would be to raise the federal taxes of 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel fuel, which haven't been increased in more than 20 years. But lawmakers are reluctant to raise taxes in an election year.

As a result, Congress has had to look elsewhere for transportation money while not increasing the federal deficit. The bill by Ways and Means Committee Chairman Dave Camp, R-Mich., relies on tax changes that are forecast to generate revenue over 10 years, but provide only enough money to keep the highway and transit programs going for another 10 months.

The largest chunk of the money, $6.4 billion, results from allowing employers to defer payments to their employee pension plans. Funding pension plans normally results in a tax savings for companies, and deferring those payments means they will pay more in taxes and increase federal revenue. But several lawmakers suggested the revenue from the pension changes is illusory.

"Come on, really, it's pretty phony stuff," said Rep. Peter DeFazio, D-Ore. "Let's get real about how we're going to fund our transportation" programs.

House Speaker John Boehner, R-Ohio, defended the bill while acknowledging its limits. "Listen, these are difficult decisions in difficult times in an election year," he said. "The long-term problem is still there and needs to be addressed."

President Barack Obama, touring a transportation research center in Virginia, said he supports the House and Senate bills to keep aid flowing to states, but wants more.

"All this does is set us up for the same crisis a few months from now. So Congress shouldn't pat itself on the back for averting disaster for a few months," he said.

Earlier this year, Obama offered a $302 billion plan to increase transportation spending and keep programs going for another four years. The plan, which was paid for by closing some business tax exemptions, was received coolly by Republicans.

Democrats and some Republicans complained that it won't be any easier under the GOP bill to reach a compromise on sustainable, long-term means to pay for programs by pushing off a decision until next year when the presidential campaign is heating up.

Republicans are divided over transportation policy. A significant minority of the party's more conservative House members wants to slash federal gas and diesel taxes, scale back transportation aid and leave it to states to come up with the money to pay for roads, bridges, buses and trains.

The conservative Club for Growth and Heritage Action for America, which are influential with Tea Party Republicans, urged lawmakers to vote against the Camp bill.

House GOP leaders then allowed an amendment by Rep. Tom Graves, R-Ga., that says Congress should "increase the authority and responsibility of the states" to fund and manage their transportation systems.

But Democrats said greater federal spending is needed to repair and replace the nation's aging infrastructure, meet the needs of a growing population and keep pace with other nations such as China that are spending a greater share of their economies on transportation than the U.S.

States have been told to expect an average 28 percent reduction in aid if Congress doesn't act. The fund is expected to reach a zero balance by the end of August. Some states already have begun to delay or cancel construction projects because of the uncertainty of federal money.

Arkansas' lawmakers said they voted for the bill to avoid such delays.

"It's important that we don't let these federal projects back home stall," Rep. Rick Crawford said. "I don't particularly like doing one-year extensions like this as opposed to multiyear bills, but we've got to create a little bit of time and opportunity for us to deal with reforming the Highway Trust Fund."

Rep. Tim Griffin said the short-term funding is "far preferable to having our projects that are underway shutdown. We cannot allow that. We don't save money shutting things down and getting them going again. We need to keep these projects rolling."

Rep. Steve Womack said the funding system needs changes.

"But in the interim, we must give our state and local authorities the certainty they need to plan for critical maintenance and improvements of our highways," he said in a statement.

In a statement, Rep. Tom Cotton, who is running for the U.S. Senate against Democratic Sen. Mark Pryor, said the bill "will allow road projects to continue during the peak summer construction season. But in the long term we can't keep spending money we don't have on big-city projects that don't benefit Arkansas taxpayers."

Pryor spokesman Erik Dorey said the vote was out of character for Cotton because "Cotton has consistently opposed federal funds to build roads, bridges and schools in Arkansas, while supporting spending billions on infrastructure projects overseas in places like Afghanistan and Syria."

Information for this article was contributed by Joan Lowy, Andrew Taylor and Nedra Pickler of The Associated Press and by Sarah D. Wire of the Arkansas Democrat-Gazette.

A Section on 07/16/2014

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