By Keith Laing and Bernie Becker - 07/10/14 09:39 AM EDT
The Senate Finance Committee on Thursday is planning to mark up a transportation funding stopgap that would punt a decision on a broader spending measure until after the midterm elections.
The new package, from Finance Committee Chairman Ron Wyden (D-Ore.), would drop some of the previously proposed offsets that Republicans had derided as tax increases, including a provision that would affect certain retirement accounts.
Instead, it relies on similar proposals to House Ways and Means Committee Chairman Dave Camp's (R-Mich.) highway measure, suggesting the two chambers could be closer to a deal that would avert shutting down construction projects next month.
Like Camp, Wyden now relies on so-called "pension smoothing" and increased customs user fees. On top of that, Wyden also seeks to squeeze new revenues out of tax cheats in a package that raises $9.8 billion in all.
Senate Democrats and House Republicans have been arguing about how long the temporary patch should be as the clock ticks down on a projected bankruptcy in federal transportation funding predicted to occur in August.
GOP leaders have pushed for a longer extension, until May, to avoid efforts by Democrats to push an increase in the federal gas tax during the lame-duck session that will follow the November elections. Democrats have said that negotiations during the lame duck would be the best chance to hash out a longer six-year transportation agreement.
The Ways and Means panel is also scheduled to mark up its eight-month, $10.5 billion version of the transportation funding bill on Thursday morning. The Senate began holding its markup last month, but the meeting was postponed to give Democrats and Republicans more time to negotiate a potential bipartisan compromise.
The tax, which is currently priced at 18.4 cents per gallon, brings in approximately $34 billion per year. However, the current transportation measure that is scheduled to expire in September included about $54 billion per year in road and transit spending before the 2013 sequester kicked in.
The lower chamber’s package relies mostly on revenue from pension changes and customs fees to offset the bulk of the cash infusion in the Department of Transportation’s Highway Trust Fund.
The Transportation Department has said that it will have to begin cutting payments to state and local government on Aug. 1 if the beleaguered trust fund is not replenished quickly by Congress.
Obama administration officials have said a bankruptcy in the Highway Trust Fund would result in a 28 percent cut in transportation funding to states and cost the U.S. 700,000 jobs. But conservative groups like the Heritage Action foundation have argued that the Obama administration is overstating the impact of federal transportation funding on state and local projects.
—This post was updated at 10:06 a.m.