As Highway Fund Runs Out of Money, Congress Breaks For Recess

Some in Congress say a crisis is looming this summer with thousands of construction jobs threatened, yet recess will begin as scheduled Thursday.

Transit workers participate in a rally to urge Congress to replenish the Highway Trust Fund, on Capitol Hill, May 20, 2014 in Washington, DC. Workers say that the pending highway bill is about more about mass transit and jobs and not just highways. 
National Journal
Billy House
June 25, 2014, 6:30 p.m.

The na­tion’s High­way Trust Fund re­mains on the road to in­solv­ency this sum­mer, with a zero bal­ance ex­pec­ted by Sept. 30, be­cause fuel taxes that feed the fund haven’t kept pace with con­struc­tion needs.

It’s something the Trans­port­a­tion De­part­ment has been warn­ing law­makers about for months.

But no soon­er did Sen­ate Demo­crats this week de­scribe a $9 bil­lion “patch” plan to keep the fed­er­al spig­ot open for high­way and trans­it pro­jects through the end of the year, partly by rais­ing taxes on com­mer­cial trucks, than House Re­pub­lic­ans flatly re­jec­ted it.

House Re­pub­lic­an lead­ers had their own plan last month — which, oddly for some, in­volved cut­ting back Sat­urday postal de­liv­ery to find some money. But Sen­ate Demo­crats and out­side con­ser­vat­ive groups ri­diculed that idea. In fact, many of the Re­pub­lic­ans’ own rank-and-file mem­bers did not like it much either.

The White House also has put for­ward a res­cue plan. But that has not gained trac­tion in either the House or the Sen­ate, des­pite warn­ings that hun­dreds of in­fra­struc­ture pro­jects could soon grind to a halt and thou­sands of con­struc­tion jobs could be put on hold.

So what are law­makers now pre­par­ing to do? They are set to leave Wash­ing­ton on Thursday for their In­de­pend­ence Day re­cess and not plan­ning to re­turn un­til Ju­ly 8.

Is the na­tion fa­cing a real crisis then, or not?

“Today, we are fa­cing a may­day situ­ation, and I am here to send an SOS call to Con­gress and the Amer­ic­an people,” Sen. Bar­bara Box­er, chair of the En­vir­on­ment and Pub­lic Works Com­mit­tee, said Wed­nes­day. “We are on the verge of a trans­port­a­tion gov­ern­ment shut­down.”

That sounds hor­rible. But wait, House Speak­er John Boehner was giv­ing off a some­what less ur­gent tone across the Cap­it­ol.

“I know the House Ways and Means Com­mit­tee is work­ing on a pack­age, and I ex­pect that after the dis­trict work peri­od, over the Fourth of Ju­ly, we’ll see some activ­ity there,” said Boehner. Will that be something that both cham­bers can agree on, then? “We’ll let the Ways and Means Com­mit­tee do their work,” Boehner replied.

Mean­while, Ways and Means Chair­man Dave Camp said he was “dis­ap­poin­ted that the Sen­ate ap­pears to be head­ing down a par­tis­an road on high­way fund­ing.”

He was re­fer­ring to the new stop­gap plan un­veiled this week by Sen­ate Fin­ance Chair­man Ron Wyden, to be form­ally marked up by his com­mit­tee Thursday. Along with a high­er tax on com­mer­cial trucks, it in­cludes such things as a pro­vi­sion re­quir­ing people who in­her­it IR­As and oth­er re­tire­ment plans to take tax­able dis­tri­bu­tions over five years.

“Simply put, there is no way tax hikes to pay for more spend­ing will fly in the House,” Camp ad­ded.

This, then, is shap­ing up to be latest round of an all-too-fa­mil­i­ar le­gis­lat­ive dance.

On one hand, some con­ser­vat­ive groups and Re­pub­lic­an law­makers ap­pear to be seiz­ing on the fund­ing short­fall as an op­por­tun­ity to re­open a policy de­bate over what they see as an­oth­er broken pro­gram in Wash­ing­ton. At the same time they are down­play­ing the dire “may­day” warn­ings as they en­gage in that de­bate.

“We’ve been through real crises — this is not one of those,” said a seni­or House Re­pub­lic­an aide. “No high­ways are be­ing shut down; nobody’s go­ing to be stack­ing tires in the road. It just simply means that some pro­jects will not get fun­ded for a while.”

Many con­ser­vat­ives say it is time for Con­gress to con­sider “evolving” the fed­er­al gov­ern­ment out of some trans­port­a­tion de­cisions and giv­ing more au­thor­ity to the states. They point to le­gis­la­tion such as bills in­tro­duced by Sen. Mike Lee, R-Utah, and Rep. Tom Graves, R-Ga., that would phase out the fed­er­al gas­ol­ine tax and turn over most of the fed­er­al trans­port­a­tion pro­gram to the states.

“What sense does it make for [fuel] tax dol­lars to come up from Ten­ness­ee to Wash­ing­ton, then have Ten­ness­ee fight to have those tax dol­lars brought back home?” asked Barney Keller, a spokes­man for the con­ser­vat­ive group Club for Growth. Keller said the trust fund is an ex­ample of what’s wrong with Wash­ing­ton, where there is res­ist­ance to fix­ing a broken sys­tem.

Dan Holler, a spokes­man for Her­it­age Ac­tion, offered a sim­il­ar ar­gu­ment, say­ing the high­way fund is clearly spend­ing bey­ond its means. Like Keller, he said Her­it­age ap­plauds the ef­forts of some law­makers to con­sider oth­er solu­tions and cut through what he called the “hy­per­bole” of warn­ings that a crisis will oc­cur if Con­gress fails to act now.

But in the Sen­ate, Demo­crats such as Box­er and Budget Com­mit­tee Chair­wo­man Patty Mur­ray non­ethe­less in­sist that Con­gress does need to act.

“Re­pub­lic­an lead­ers are go­ing to have to find a way to come to the table and work with Demo­crats on a re­spons­ible solu­tion to this loom­ing con­struc­tion shut­down — and they should do so soon­er rather than later, be­cause the win­dow is clos­ing on reach­ing an agree­ment to avert this crisis,” Mur­ray said Wed­nes­day.

Box­er, in de­clar­ing an out­right “may­day situ­ation,” said Wed­nes­day that thou­sands of busi­nesses and mil­lions of jobs de­pend on the fund. She ad­ded that the im­pacts of “this un­cer­tainty” are already be­ing felt, as many states have an­nounced that they are post­pon­ing or can­celing crit­ic­al trans­port­a­tion pro­jects due to the fear that fed­er­al funds will be delayed or cut off.

“This will have a dom­ino ef­fect that will be felt throughout the eco­nomy,” she said, adding, “The House has done noth­ing thus far to mark up any le­gis­la­tion to save the trust fund.”

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