House passes bill to keep highway aid flowing to states

The House passed a bill Wednesday to temporarily shore up funding for transportation programs and prevent a shutdown in highway and transit aid to states at the end of this month. But Senate Republicans are trying to cobble together a longer-term bill that could provide money for several years.

The House bill would provide $8 billion to keep transportation aid flowing through Dec. 18 while lawmakers work on a long-term bill. It passed by a vote of 312-119.

Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, said the five-month measure is necessary to buy more time to work on a longer measure.

The vote came exactly one year after the House passed another short-term extension because lawmakers said they needed more time to resolve the chronic problem of transportation money in order to pass a long-term fix.

Republican leaders are divided over a strategy for dealing with the problem.

As the House debated its short-term measure, Senate Republicans circulated a list of about $80 billion in potential savings, enough to cover the cost of a renewal of highway and mass transit funding for several years.

Among the items was a proposal to reduce the rate of return on one of the investment funds available to federal retirees, a $31 billion item over a decade. Senate Democratic leader Harry Reid of Nevada has said he would oppose the move.

Another proposal would reduce the dividend that the Federal Reserve pays to member banks, worth about $17 billion.

Tax compliance measures would bring in $5.2 billion over a decade, and raising custom fees annually to adjust for inflation would generate $4 billion.

Officials stressed that no decisions had been made on either the duration or the financing of a longer-term highway measure that Senate Republicans are likely to advance in the coming days.

Senate Majority Leader Mitch McConnell, R-Ky., has said he wants a bill that would cover programs at least through next year's election and preferably longer.

The Senate bill is also expected to include a provision to renew the Export-Import Bank, which provides backing for U.S. companies selling goods overseas. Authority for the bank to operate expired at the end of last month; supporters have said they will try to use the must-pass highway bill to win its reauthorization.

The bank has strong support in both the House and Senate, despite opposition from some conservatives who argue it amounts to crony capitalism.

Congress is under pressure to act quickly on transportation.

Authority for those programs expires on July 31, which would eliminate the Transportation Department's ability to process promised aid payments to states.

But simply renewing the department's authorization isn't enough. Without an infusion of cash, the balance in the federal Highway Trust Fund is forecast to drop below $4 billion -- the minimum cushion needed to keep money to flowing to states without interruption -- by the end of this month.

Transportation Secretary Anthony Foxx has warned states that he will start slowing down federal payments on Aug. 1.

The White House released a statement supporting that measure, saying "the unfortunate reality is that, due to inaction," Congress needs more time to work on a more permanent approach. Since 2009, Congress has passed 34 short-term bills to fund transportation programs.

The biggest holdup has been how to pay for a long-term bill because most lawmakers do not want to raise federal gasoline taxes, the chief source of revenue for the programs.

Federal fuel taxes and other fees bring in about $35 billion a year, while the government spends about $50 billion on these transportation programs. The gas tax has not risen since 1993.

The White House and lawmakers in both parties say a six-year bill would relieve states of the nearly constant uncertainty over whether they can count on federal aid. Some states have delayed or shelved construction projects this year rather than wait for Congress to settle on a solution.