WASHINGTON — After years of promises to find new cash for roads and transit systems, the House on Wednesday admitted failure once more, voting to use a hodgepodge of money to extend the current bill until just before Christmas.
The debate on the House floor quickly descended into the partisan bickering that has characterized the discussion regardless of which party has had control of the House or Senate. At its core: There never has been agreement on how to replenish a fund that gets its money from the federal gas tax.
House Ways and Means Committee Chairman Paul Ryan, R-Wis., whose larger vision includes an overhaul of the corporate tax structure to help pay for transportation, said approval of the 34th highway fund extension in six years would buy time for completion of a long-term bill.
“We believe we have a chance to write a multiyear transportation bill,” Ryan said. “We know we’re not going to write that bill in two weeks. Yes, we knew this was coming, but it takes a while to do things like rewrite international tax law.”
Unless Congress acts before the current extension expires July 31, states that are relying on federal money to pay for highway projects this summer will be left in the lurch. But a five-month extension leaves them in a quandary: Should they embark on multiyear bridge, highway or transit projects without confidence of federal funding beyond Dec. 18?
The House action appeared intended to preempt the Senate, where Majority Leader Mitch McConnell, R-Ky., has run into opposition from fellow Republicans in his attempt to muscle through a long-term transportation bill before the July 31 deadline.
In keeping with ritual, the phrase “kicking the can down the road” was invoked almost a dozen times in the House on Wednesday.
“If kicking the can down the road were an Olympic sport, here in the United States Congress we would win bronze, we would win silver and we would win aluminum, for kicking the can,” Rep. Alcee Hastings, D-Fla., said.
Rep. Rob Woodall, R-Ga., said he was reassured by promises from Ryan and House Transportation Committee Chairman Bill Shuster, R-Pa., that with five more months “we could do it right.”
Rep. Earl Blumenauer, D-Ore., responded that Republicans said the same thing a year ago, when they pushed for an extension to this past May 31, and again in May when they argued for an extension to July 31.
“It’s time to stop pointing fingers and do the job,” Blumenauer said. “I don’t care what it is that we do. I care that we don’t continue to stall.”
Final arguments on the extension bill were preceded by an hour-long rules debate which co-mingled the extension with a bill regarding the West Coast water shortage, creating an Alice in Wonderland-like discussion that included predatory fish, potholes, produce prices and collapsing bridges.
Past extensions have tapped into various sources to pay the fare, among them the Leaking Underground Storage Tank Trust Fund and a process called “pension smoothing.” The discovery of handy sources of cash has been likened on both sides of the aisle to finding money under a couch cushions or mattresses.
“We’re running out of mattresses, we’re running out of duct tape, we’re running out of chewing gum,” Transportation Secretary Anthony Foxx said in May as the search for new revenue sources continued.
The House bill would raise $8.1 billion through changes to Internal Revenue Service rules, including tightening disclosure requirements for mortgages and giving IRS investigators more time to investigate and collect on tax avoidance.
Ryan sees the IRS changes as an opportunity to buy time to complete work on a narrow tax-reform package that could raise enough funds for a multiyear extension.
Lawmakers have used similar measures in the past, but a long-term extension requires significantly more money. McConnell plans to make up the additional funding through spending cuts elsewhere in the budget.
Ryan is working with Sens. Charles Schumer, D-N.Y., and Rob Portman, R-Ohio, on a new system that would tax future foreign earnings for corporations at a rate lower than the current 35 percent top rate.
Money for highway funding would come from a one-time tax on all of the cash and assets companies are holding overseas, a process known as “deemed repatriation.” The total value of those overseas assets is estimated to exceed $2 trillion.
The broad outlines of the plan are in place but details, such as what rates companies will pay, have not been set but are critical to determining how much revenue the new system could raise.
The process of setting rates and deciding which, if any, exemptions would be granted is the most politically difficult part of striking a final deal. Many, including McConnell, are skeptical that the details can be resolved in time to cover the trust fund shortfall.
Since 2008, lawmakers have transferred $62 billion in general tax revenue to bolster the sagging trust fund. To maintain spending at the current level of about $50 billion a year, lawmakers have to plug a $16 billion gap. Revenue from the 18.4-cent-per-gallon federal gas tax has been eroded by fuel-efficient vehicles and now brings in about $34 billion a year.
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