By Bernie Becker - 09/13/15 07:30 AM EDT
Key lawmakers insist that a later deadline for highway funding won't sap any of their urgency as they seek to link an infrastructure deal with international tax reform.
The Transportation Department said this week that highway funding could last well into 2016, potentially giving Congress an extra half of a year to strike the long-term infrastructure deal that has long eluded Washington.
Congress might frequently need a deadline to pass important legislation, those Republicans acknowledge. But lawmakers also have no interest in pushing a highway deadline deep into a presidential election year, and House Republicans say waiting that long would also allow the Highway Trust Fund to dip to dangerously low levels.
“The announcement on the Highway Trust Fund is, we think, misleading,” said Rep. Kevin BradyKevin BradyHouse leader promises vote on exempting Olympic medals from taxes GOP lawmakers call for overhaul of proposed corporate tax rules Tax reform in 2017—the basics MORE (Texas), a senior Republican on the tax-writing House Ways and Means Committee.
Brady also stressed this week that, if Congress doesn’t act, the spending on highway projects could start to slow as soon as December, an outcome he called “irresponsible.”
“That’s a red flag we ought to play real close attention to, because then you’re having impacts in states. So we think the time to act is now,” he said.
But even as they maintain that they want to strike a major deal in the next few months, House Republicans still face a number of obstacles in reaching an agreement with a skeptical Senate before the end of 2015.
Lawmakers currently have an Oct. 29 deadline for extending highway programs, and had been under the impression that the Highway Trust Fund could easily be replenished through mid-December.
If the House is unable to make progress on both its international tax plan and highway policy in the coming months, the chamber could be forced to accept a Senate highway bill passed this summer that House leaders have repeatedly said is riddled with deficiencies. The Senate bill authorizes six years worth of highway policy, but only includes funding for three years.
Already, the House Transportation Committee has had to put off its plans to consider a six-year highway bill, and have not announced a timeline for when it will take up a measure — raising the chances that the House will be unable to pass its own long-term bill and then hash out a compromise with the Senate by the October deadline.
Top House tax writers are also struggling to piece together a complicated package revamping how multinational corporations are taxed, including giving new incentives to companies for innovation and tapping current offshore corporate profits to pay for road improvements.
That’s all happening as lawmakers face a packed September, with more votes on President Obama’s Iran deal forthcoming, an upcoming visit from Pope Francis and a potential brawl over government funding ahead of a Sept. 30 deadline. The battle over government funding, in particular, could spill into October, when lawmakers face their highway deadline.
“The goal has always been: complete this by the end of the year. If we can get that accomplished before this first extension expires, good,” said Rep. Dave ReichertDavid ReichertExamining police-community issues with bipartisan working group Tax lawyers to GOP: Don't impeach IRS chief House GOP defense policy bill conferees named MORE (R-Wash.), the chairman of a Ways and Means subcommittee that oversees taxes.
House Ways and Means Chairman Paul RyanPaul RyanVA to ban large-scale display of Confederate flag in cemeteries Trump aide accused Catholics of backing immigration to boost church GOP is calling for IPAB repeal for the wrong reasons MORE (R-Wis.), Senate Finance Chairman Orrin HatchOrrin HatchGOP lawmakers call for overhaul of proposed corporate tax rules DEA decision against reclassifying marijuana ignores public opinion Trump op-ed counters Clinton’s pitch to Utah voters MORE (R-Utah) and Sen. Charles SchumerCharles SchumerRubio primary challenger loans campaign M Is Trump deliberately throwing the election to Clinton? Why Khizr Khan needs a Democrat in the White House MORE (N.Y.), perhaps the key Democratic negotiator over a combined highway-tax deal, all huddled this week, in a sign that all sides want to wrap up some sort of agreement sooner rather than later.
Hatch and Senate Majority Leader Mitch McConnellMitch McConnellGiffords-backed gun control group endorses Toomey, Kirk Republicans say party can’t afford to cut ties to Trump McConnell calls for ObamaCare money to be used for Zika MORE (R-Ky.) have said they’re deeply skeptical about the idea of using tax reform to pay for highway projects, with McConnell in particular questioning whether it’s worth the time to negotiate.
But Hatch insisted this week that he would try to keep an open mind about what his House colleagues are proposing, even if he’s not optimistic they’ll craft a plan to his liking. “I’d like to have them accept the Senate position,” Hatch said
“I’d rather get it done,” Hatch added. “If the House could agree, we’d have six years. We’d certainly have three.”
One of the central planks in a potential international tax reform deal is a so-called innovation box, which would give companies a lower rate on income stemming from copyrights, patents and other intellectual property.
Key Democrats such as Schumer and Rep. Richard Neal (Mass.) back that sort of proposal, with Neal joining Rep. Charles BoustanyCharles BoustanyTax extenders – prelude to December? David Duke will bank on racial tensions in Louisiana Senate bid Boeing tells lawmakers sale of planes to Iran well-known part of nuclear agreement MORE (R-La.) in releasing a draft proposal shortly before the August recess.
Boustany reportedly said this week that the current plan would cost around $280 billion over a decade, which would amount to just some of the costs that would likely need to be offset in any overhaul of international tax rules.
Ryan and his allies are also seeking to shield future offshore earnings from U.S. taxation, in addition to taxing current profits for highways. Such a plan would also require strengthening rules to ensure that multinational corporations don’t game the system or funnel profits to tax havens.
Boustany also told reporters he was just starting to sift through the feedback about his original innovation box draft. “It’s not finalized yet,” he said. “It’s just a draft.”
But both Boustany and Brady acknowledged that Ways and Means faces a tight deadline in trying to pull a package together by the end of next month. And unlike Reichert, Brady insisted that the committee very much wanted to get a longer-term solution in place by Halloween.
“I think unfortunately the highway bill remains very much unresolved,” said Rep. Sandy Levin (Mich.), the top Democrat at Ways and Means. “Very much unresolved.”