By Bernie Becker and Jordain Carney - 05/23/15 01:56 AM EDT
The Senate passed a two-month extension of highway funding by voice vote on Saturday, staving off an abrupt halt in infrastructure projects and pushing back a likely protracted debate over how to finance road construction in the long-term.
The vote sends the stopgap highway bill to President Obama, who’s expected to sign it before the May 31 deadline.
“Senate Democrats want to get on a with a long-term solution, because we understand that you cannot have big league economic growth with little league infrastructure,” Sen. Ron WydenRon WydenIRS inversion rules face blowback Senate faces critical vote on Puerto Rico Reid backs House Puerto Rico bill MORE (Ore.), the top Democrat on the Finance Committee, told reporters on Friday.
The Senate vote on highways was also one of the last acts in a hectic week, in which the chamber struggled to find compromises on both President Obama’s trade agenda and surveillance programs.
The House and the Senate agreed to back a two-month extension of highway policy after top Republicans like House Ways and Means Chairman Paul RyanPaul RyanCoal’s clout in Congress to take a hit Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Overnight Defense: Benghazi report fallout | Nearly 50 dead after Istanbul attack MORE and Senate Finance Chairman Orrin HatchOrrin HatchA bipartisan bright spot we can’t afford to pass up: child welfare reform Medicare trust fund running out of money fast Long past time to fix evidence-sharing across borders MORE (R-Utah) fell short in their efforts to find the $11 billion or so needed to push the highway deadline back until the end of 2015.
Hatch blamed the failure to reach a deal squarely on Democrats.
“Unfortunately [Democratic] cooperation didn't last,” he said. “In fact it never really began.
By passing the simple two-month deal, lawmakers didn’t have to come up with any new cash for the Highway Trust Fund. The Transportation Department has said that, as long as highway policy was extended, the trust fund had enough money to last until the middle of this summer.
But while infrastructure might have been the least contentious of the three issues this week, leaders in both parties acknowledge that finding the roughly $15 billion a year necessary for as much as a six-year highway bill will be far from easy, and that there are plenty of divisions among lawmakers about how to achieve that goal.
Sen. Pat RobertsPat RobertsUSDA extends comment period for 'certified organic' animal rule Senate contradicts itself on Gitmo GOP senators propose sending ISIS fighters to Gitmo MORE (R-Kan.) said Friday that he would love to “give some people some legitimate expectations, predictability.”
“But I’m just not sure that we can get that done,” Roberts said.
Republicans are expected to push for yet another highway patch before the July deadline, seeking to fund highway programs through the end of the year in what would make roughly two dozen short-term extensions over the last 12 years.
But even that narrow agreement could be difficult to achieve, with Democrats vowing that the new two-month patch should be the absolute last short-term extension.
Plus, Senate supporters of the Export-Import Bank insist Majority Leader Mitch McConnellMitch McConnellTrump hires Rand Paul's former digital director: report Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Overnight Healthcare: Blame game over Zika funding MORE (R-Ky.) has assured them the bank’s reauthorization can be attached to a highway extension this summer. The fate of the export bank has split Republicans, and attaching a reauthorization to the highway bill could especially complicate matters in the House.
“If it ends up being in the mix of a transportation funding bill – yeah, it makes it more complicated. For sure,” Sen. John ThuneJohn ThuneOvernight Tech: Groups grade Clinton tech agenda | Facebook activates safety check in Istanbul | Another holdup for location data bill Congress prepping short-term FAA bill GOP rep pushes Gingrich for Trump's VP MORE (S.D.), the No. 3 Republican in the Senate, said about the Ex-Im Bank.
Not surprisingly, the forecast for a longer-term is even cloudier. The Senate Environment and Public Works Committee is expected to mark up a six-year highway policy bill in late June.
But to pay for it, Republicans say there’s no chance that an increase of the gas tax – the major cog in the Highway Trust Fund – can make it through Congress. The gas tax covers only about $34 billion of the $50 billion the federal government spends each year on roads.
And while some GOP leaders have floated the idea of pairing tax reform and a highway bill, Republican tax writers in both chambers are far from sure that sort of plan is feasible.
“We’re not even near doing tax reform at this point,” Hatch told reporters this week.
Republicans and Democrats have found some overlap on how to deal with the roughly $2 trillion worth of profits that multinational corporations have parked offshore, with both wanting to find a way to lower the taxes on those earnings so companies will bring the money back to the U.S.
The White House released a plan this year that would tax all that offshore income at a 14 percent rate, and use the revenue to replenish the highway fund.
President Obama and congressional Republicans have also discussed how to revamp the tax system for businesses. But it’s an open question whether there’s enough revenue from the offshore profits to both fund highway projects and slash the corporate tax rate, as both Obama and Senate Republicans want to do.
The president’s plan for roads, Senate Majority Whip John CornynJohn CornynOvernight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Senate faces critical vote on Puerto Rico McConnell tees up House Puerto Rico bill MORE (R-Texas) said this week, “is a non-starter for us.”
That’s on top of the other obstacles facing tax reform, including the small business lobby’s push to block any tax reform deal that doesn’t cut tax rates for individuals. Some lawmakers have also pushed for a simple corporate tax holiday to help fund roads, but tax writers say they won’t go for that.
“There’s been a lot of loose talk about repatriation,” said Rep. Charles BoustanyCharles BoustanyBoeing tells lawmakers sale of planes to Iran well-known part of nuclear agreement The Trail 2016: Post-Orlando maneuvers Senate campaign posts private conversation on Facebook MORE (La.), a senior Republican on the House Ways and Means Committee.
Before those broader talks heat up, lawmakers will try to find another highway extension to get the trust fund through December. But recent discussions over a seven-month extension hit the skids after Republicans sought to use savings from mandatory spending to help cover the costs, something Democrats wouldn’t support.
Democrats also say that Republicans need to make highways a larger priority, and are warning against any further short-term extensions.
“I'm serving notice here,” Sen. Dick DurbinDick DurbinReid backs House Puerto Rico bill McConnell pledges redo vote on Zika after break Senate Democrats want new round of Zika talks MORE (D-Ill.) said Friday. “This 60-day extension will go through, I understand that. But from this point forward it's not going to be automatic anymore. …It's time for the Republican speaker and the Republican majority leader to lead.”