Congress Flirts with Long Term Transportation Bill but Settles for 3 Month Extension

The week began with Congress facing a deadline to reauthorize the federal transportation program requiring either passage of a comprehensive long term transportation bill or yet another temporary funding patch to keep the program on its feet. Despite an attempt by Senate Majority Leader Mitch McConnell (R-KY) to develop a six year bill in the Senate, Congress is now headed for a three-month extension that will last until October 29. This will be the 34th such extension since 2008.

Two weeks ago, the House of Representatives acted first and passed an $8 billion measure that will ensure the Highway Trust Fund remains solvent for the remainder of 2015. House leaders view the five month extension as necessary to provide time for ongoing negotiations to find sufficient funding to pay for a longer transportation bill. The hope is that sufficient revenue could be tied to a future comprehensive tax reform measure if Congress can act. President Obama and Senate Minority Leader Harry Reid (D-NV) subsequently came out with their support for the House extension.

But last week Senate Majority Leader Mitch McConnell (R-KY) upped the ante by launching an aggressive effort to pass a six year billion transportation bill. The week was spent negotiating with the ranking Democrat on the Senate Environment and Public Works Committee (EPW), Barbara Boxer (D-CA) to iron out the details. Previously, McConnell had not expressed much interest in moving the issue forward and while some view McConnell’s renewed emphasis as nothing more than a means to push the issue of transportation into 2017 and beyond the Presidential Election, the prospect of a long term bill was met with enthusiasm from transportation stakeholders who have been clamoring for such a measure for years.

While the Senate continues to debate the long term bill, McConnell’s ambitious effort ultimately seems to face too many serious challenges, mostly from House Republicans who are dubious as to what the bill will contain. Probably the biggest obstacle is the time constraints of a dwindling Congressional calendar as Congress will recess for the entire month of August at the end of the week. As the Senate considered the transportation bill throughout the week, some fractures became apparent as well from within McConnell’s own Senate caucus who objected to the inclusion of an amendment reauthorizing the Export Import Bank.

The bill authorizes spending levels of $317 billion over six years for highway and transit programs but there is only enough revenue currently to pay for about three years due to the depleted balances in the Highway Trust Fund and the estimated revenue from the federal gas tax. A variety of proposals were utilized to pay for McConnell’s bill including the reduction of interest paid by the Federal Reserve to member banks, the elimination of the “Hardest Hit” fund which compensated homeowners impacted by the mortgage crisis in 2008, and selling off oil from the US Strategic Petroleum Reserve – nothing that really has anything to do with transportation. But this serves to underscore the ongoing inability of Congress to find the political will to gain the necessary revenue either by raising the federal gas tax or transitioning to a vehicle miles tax. Any new or increased taxes remain a poison pill.

Even as the Senate grappled with the bill, U.S. Transportation Secretary Anthony Foxx reiterated the Administration’s preference for the House extension, citing some safety concerns with the Senate bill but left the door open for White House support if some of these issues are addressed. Notwithstanding the lukewarm message from the White House, House Republicans openly balked throughout the week at the idea that they would even consider the Senate bill even if it survives. House Majority Leader Kevin McCarthy said, “I don’t see the Senate bill flying in the House. The idea of a Senate bill that is not long term and not paid for, I think brings real doubt to a lot of people.”

Earlier this week, the House finally forced the issue by passing a three-month extension and then leaving town for recess. The extension is packaged with U.S. Department of Veteran Affairs (VA) legislation that will provide a temporary transfer of $3.5 billion from the VA budget to avert a funding shortfall by the end of August. “I want a long term highway bill that is fully paid for,” said House Speaker John Boehner (R-OH). “That has been the goal all year and that continues to be the goal.” In response, Senator McConnell said that the Senate will take up the House’s three-month transportation patch, if leaders in the lower chamber commit to working on a multi-year bill. Speaker Boehner’s statement would seem to fill that requirement.

McConnell further said, “The House of Representatives, as a result of our passing a multi-year bill, now feels they should pass a multiyear bill. That’s a good first step. And when they do that in September, we’ll follow the regular order. We’ll have a conference, we’ll try to work out the differences, and we’ll try to agree to how to pay for it.”

Whether or not the Senate passes its long term transportation bill by the end of the week, we are likely set for another short term extension to buy more time for negotiations on a more comprehensive bill. The Senate bill could be resurrected as part of the discussion as the new October deadline comes closer but hope remains that the time will be used wisely by the House to develop its own long term transportation vision.

Since 2005, Congress has been unable to pass anything longer that a two-year transportation bill.