Congress looking for an off-ramp as highway fund bleeds cash

Greg Nash

The House and Senate struggled Tuesday to find ways to shore up the Highway Trust Fund just a few weeks before it is expected to run dry.

With days slipping away on the congressional calendar, the most top lawmakers could agree on was that they would have to strike some deal quickly to avert catastrophe.

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“It’s all about being an adult,” Senate Finance Committee Chairman Ron Wyden (D-Ore.) told reporters. “Failure is not an option.”

On Tuesday, House GOP leaders pitched using savings from limiting Saturday mail delivery to their rank and file as the best option for replenishing the Highway Trust Fund into next year.

But Speaker John Boehner (Ohio) and other top Republicans faced pockets of skepticism from GOP lawmakers who see the plan as budget gimmickry and from others who would like to keep six-day delivery. 

Transportation Secretary Anthony Foxx suggested the GOP plan was a gimmick after meeting with House Democrats, while also stopping short of saying the Obama administration would oppose the idea.

In the Senate, Majority Leader Harry Reid (D-Nev.) said he would defer to Wyden on propping up the trust fund, calling into question his earlier idea to use revenue from a corporate tax holiday to finance highway projects. 

Even President Obama weighed in on the trust fund’s looming shortfall, underscoring the election-year pressure that Washington is under to tackle a problem that affects every district and state. 

Obama cast a new infrastructure bill he signed Tuesday, which had bipartisan support in Congress, as a potential template for the Highway Trust Fund. “World-class infrastructure is one of the reasons America became a global superpower in the first place,” the president said.

Unless Congress acts, the fund could run dry as soon as August. The gas tax, which has stayed at 18.4 cents per gallon for more than two decades, is its primary source of revenue.

But the gas tax falls well short of funding all of the country’s highway projects, providing about $34 billion per year for transportation spending that totals around $50 billion.

Boehner, in making his pitch to use the Postal Service savings for highway projects, said Congress had already found and used the easiest savings in the budget in previous fiscal battles, Republican lawmakers said.

Someone else in the closed-door meeting of Republicans said Boehner told the rank and file they needed to find spending cuts that could pass the House to counter the Senate Democrats’ preference for raising taxes.

Boehner also defended the $10.7 billion over a decade that House leaders say could be squeezed from limiting Saturday postal delivery as real savings and good policy. 

House Majority Leader Eric Cantor (R-Va.) hinted in a memo to lawmakers that he wanted a June vote on the proposal, but aides say the soonest it could hit the floor would be next week. House Democrats have generally said they oppose the plan.

House Republicans have an ally in Postmaster General Patrick Donahoe, who has said repeatedly that the Postal Service supports the push to limit most delivery to five days a week. 

Some conservative lawmakers who have previously balked at leadership proposals, such as Rep. Thomas Massie (R-Ky.), said they could reluctantly support the postal measure. Other lawmakers who support six-day delivery, such as Rep. Tim Griffin (R-Ark.), suggested their stance could be trumped by the need to ensure that highway projects are funded.

“I am not impressed with the accounting that’s going on,” Massie said at an event sponsored by the Heritage Foundation.  But he added, “I do not think that stopping transportation projects this summer is an option.”

Still, conservative groups like Heritage Action blasted the idea, and leadership aides acknowledge they have far from unanimous support. Rep. Mark Meadows (R-N.C.) said he could possibly swallow limiting Saturday delivery, but he did not want to link postal reform and transportation projects.

“Do we need postal reform? Yes. Do we need to work on the highway trust fund? Yes,” Meadows said. “Do the two go together in my book? No.”

In the Senate, Reid seemed to back off of his idea to use revenue from giving corporations a short-term tax break on offshore income to help prop up the trust fund, a plan also backed by Sen. Rand Paul (R-Ky.). 

The Joint Committee on Taxation has said such an idea would bring in about $20 billion worth of revenue the first two years but would eventually cost around $96 billion after a decade.

Reid’s aides said a repatriation plan could be structured to raise about $3 billion over a decade.

“I’m just willing to talk to anybody,” Reid told reporters. “The ultimate decider on this, however, is going to be Ron Wyden and the Finance Committee.”

Both Wyden and Sen. Orrin Hatch (Utah), the top Republican on the Finance Committee, have said they believe repatriation should be addressed in a broader rewrite of the tax code. 

But Wyden refused to totally shut the door on a tax holiday Tuesday, saying he hopes to get suggestions from his fellow tax writers on how to shore up the trust fund by Wednesday.

The Finance Committee chairman, who says he wants to consider a funding plan by the end of June, also wouldn’t rule out a long-term proposal to prop up the trust fund. But given that time squeeze, aides have said a short-term plan would likely be needed.

In any event, House Republicans have said they’re not fans of the repatriation proposal previously floated by Reid and Paul, or the idea from Sen. Patty Murray (D-Wash.) to use revenue from ending tax breaks.

Senate Democrats and even Hatch have said they have doubts about the House postal plan, illustrating how far Congress has to go to find a deal.

“There are no quick, easy answers,” Hatch said. “So we’ll see what we can do.”

Russell Berman, Keith Laing, Mike Lillis and Justin Sink contributed.

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