McConnell: ‘We clearly have to do an extension on highways’

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Senate Majority Leader Mitch McConnellMitch McConnellCongress fails on promises to restore regular order and stop funding by crisis Overnight Healthcare: Dems dig in over Zika funding Business groups ramp up pressure to fill Ex-Im board MORE (R-Ky.) included passing an extension of federal transportation funding that is scheduled to expire this month on a list of “must-do items before Memorial Day" on Tuesday.  

“We clearly have to do an extensions on highways and FISA before we leave for Memorial Day," he said after ticking of a list of legislative priorities that included bills dealing with a proposal nuclear deal with Iran and a controversial trade agreement.

"So that's the agenda that lies ahead for us,” McConnell continued. 

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The transportation funding deadline has dominated talk in Washington for most of the year, but lawmakers have been unable to reach an agreement on an extension. 

Transportation advocates have pushed for a long-term extension of the funding, but lawmakers have indicated that it is increasingly likely that they will only be able to pass a temporary extension. 

“As many of you here know, at the end of this month, authorization for surface transportation programs will expire. A short-term extension is highly likely," Sen. Deb Fischer (R-Neb.) said during Senate hearing on Tuesday that was dedicated to the looming deadline.

"According to the latest projections, by August, the highway trust fund will run out of money," Fischer continued. "The time for action is now." 

The Department of Transportation has said that it will have to begin cutting back on payments to state governments for construction projects that are already underway in late July or early August if Congress does not reach a deal to extend the infrastructure funding. 

Lawmakers in both parties have expressed a desire to prevent such an interruption in the road and transit spending, but they have been struggling to come up with a way to pay for an extension.

The traditional source of transportation funding has been revenue that is collected by the 18.4 cents-per-gallon federal gas tax. The tax has not been increased since 1993, however, and its buying power has been sapped by improvements in car fuel efficiency in recent years. 

The federal government typically spends about $50 billion per year on transportation projects, but the gas tax only brings in $34 billion. 

Lawmakers have turned to other areas of the federal budget to close the $16 billion gap in infrastructure funding in recent years, but transportation advocates have complained the temporary patches are making it too difficult for state and local governments to plan long-term construction projects. 

Transportation advocates have suggested that raising the tax or at least indexing it to inflation would be the easiest way to close the infrastructure funding shortfall, but lawmakers have been reluctant to ask drivers to pay more at the pump.