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Tag: Senator Wyden

Senate passes plan to postpone transportation insolvency to the end of the year, sends it to House

Late Tuesday evening, the Senate modified and approved a measure transferring about $8 billion from the general fund to keep the Highway Trust Fund solvent until the end of the year. But because two amendments were made, it’ll return to the House for further action before any final deal can be approved on postponing insolvency of the nation’s transportation program. The House will have to act fast: the long August recess is scheduled to begin in just three days.

Conventional wisdom had held that the Senate would adopt the House-passed bill as-is so they could finish up well before recess begins later this week. However, a strong bipartisan group supported amendments to eliminate the most controversial accounting gimmick and cut the length of the patch in half to keep the pressure on to find a long-term fix as soon as possible.

“Today’s votes held some positive signs for the future of our nation’s transportation system,” said James Corless in T4Amercia’s full statement after the vote tonight. “The Senate overwhelmingly rejected a move to dismantle our key infrastructure fund, and instead challenged themselves to take up a long-term funding solution this year.”

Two of the four amendments considered were approved before the final bill was passed. The first, from Senators Wyden and Hatch and approved 71-26, replaced the House revenue sources with the bipartisan ones agreed to by the Senate Finance Committee several weeks ago.

Once this first amendment passed, guaranteeing that the bill would return to the House, it might have made it easier for Senators on the fence to support the second amendment. That second amendment, from Senators Carper, Corker and Boxer, entirely eliminated the controversial “pension smoothing” provisions from the House bill, cutting about $2.9 billion from the patch and keeping up the urgency on finding a long-term funding solution.

The most passionate speech of the day came from Senator Bob Corker on that very topic. Senator Corker, who is also pushing an actual long-term funding plan with Senator Murphy to raise the gas tax — was incredulous at the idea that the Senate and specifically his Republican colleagues would support a plan to take ten years of funds from an accounting maneuver like pension smoothing to pay for ten months of an extension, calling it “generational theft.”

“We’re taking a finance gimmick out of this bill. … It forces us to deal with a long-term solution, which we should have done a long time ago,” he said.

An amendment from Sen. Mike Lee (R-UT) to dramatically defund the federal program by cutting the gas tax from 18.4 to 3.7 cents failed overwhelmingly, drawing only 28 votes. Lee argued, correctly, that the existing program is out-moded and fails to give local communities the resources and latitude to meet their needs, but we — and a large majority of the Senate, clearly— strongly disagree that the solution is to take the resources away altogether.

The solution — one that we would hope to see as part of any long-term funding discussion — is forward-looking policy reform that gives local leaders more of a say in how the money gets spent. Local results and accountability are what will win and keep support for the program among the American people.

We are pleased to see so many Senators take a principled stand in support of the highway trust fund and an ongoing federal role in supporting our communities and their economic future. We especially recognize the leadership of Senators Wyden, Hatch, Carper, Corker and Boxer in forging their plan and rallying support. We hope this can spur the conversation to find a long-term solution as soon as possible, and we look forward to working with the leaders in both chambers.

Action will move back to the House tomorrow in these last few days before recess begins, so stay tuned.

Senate poised to take up House plan to patch Highway Trust Fund until Spring 2015

Sometime in the coming days the Senate is expected to take up and vote on the House’s bill to postpone the insolvency of the Highway Trust Fund until May of 2015 via an array of accounting maneuvers to cover ten months of transportation funding.

Last week, the House passed Ways and Means Committee Chairman Dave Camp’s bill transferring $10.9 billion to the trust fund from various sources, with a large portion coming from an accounting method called “pension smoothing.” This allows employers to defer payments to their employee pension plans; resulting in higher revenues for companies and therefore increasing overall federal tax revenue. It’s a controversial idea, lambasted by conservative political groups and the New York Times alike in advance of last week’s vote.

The Senate will likely be taking up the House’s version of the bill this week and voting on it, though several amendments could also be considered.

Finance Committee Chairman Wyden is expected to offer the alternative version approved by a bipartisan vote of the Senate Finance Committee earlier this month as an amendment. This would improve upon the House-passed bill by providing better revenue options, primarily tighter enforcement of tax laws and extension of certain fees.

Another amendment likely to be introduced by Senators Boxer (D-CA), Carper (D-DE), Corker (R-TN) would reduce the amount generated by some of the accounting maneuvers, essentially cutting the length of the patch and forcing Congress to act on a long-term funding solution before the end of the year.

This amendment would have the positive effect of keeping the pressure on lawmakers, as well as avoiding the potentially disastrous effects of pushing this debate to the months and weeks just before the 2015 construction season begins. (NPR took a look at this perpetual habit of “kicking the can” further down the road in a great piece earlier this week.)

While we commend Congress for reaching a short-term agreement to keep important projects from coming to a complete standstill, all this really accomplishes is postponing the inevitable insolvency for a later day. In the words of the letter sent to Congress this week by U.S. Secretary of Transportation Anthony Foxx and the last 11! USDOT Secretaries:

We are hopeful that Congress appears willing to avert the immediate crisis. But we want to be clear: This bill will not “fix” America’s transportation system. For that, we need a much larger and longer-term investment. On this, all twelve of us agree. Congress’ work will not be over with passage of this bill; they must continue moving forward and develop a long-term solution for our nation’s transportation funding.

We will continue to update as the Senate moves forward this week.

Senate, House committees approve short-term rescue of trust fund; long-term solution still needed

The Senate Finance and House Ways and Means committees today each passed similar short-term patches to keep the Highway Trust Fund in the black at least through early 2015. If adopted by the full House and Senate, the move to transfer $10.8 billion to the trust fund will avert immediate disaster, but there’s still heavy work needed to find a long-term funding solution.

Wyden Finance markup

Without this stopgap — if approved — worked out by Chairman Wyden and Chairman Camp and their respective committees, reimbursements to states would have been cut as much as 28 percent starting in just a few weeks, according to the U.S. DOT. But Congress has bought itself only a few months to address the larger problem of long-term solvency.

The House Ways and Means Committee was first to act this morning, marking up their funding patch to keep the trust fund solvent through May 2015 — five months longer than the Senate’s original plan. Senate Finance resumed discussion of its trust fund bail-out this afternoon after making key changes to match the $10.8 billion in the House provision while striking the language specifying an expiration date.

The upshot is that both measures have enough revenue to carry the trust fund into 2015, although Democrats have been pushing to consider a long-term transportation measure before the end of the year. Sen. Tom Carper offered an amendment to reduce the amount of the patch so that it would expire at the end of December, but it was not approved. Overall, the bill passed with just one “no” vote from Senator Carper.

As passed today, the Senate proposal would transfer $9.824 billion in general funds to the Highway Trust Fund, and $1 billion from fund for leaking underground storage tanks. The Senate bill modified some of the many mechanisms of paying this money back from their original proposal, most notably by including the House’s plan for “pension smoothing.”

The real question is how long this revenue cobbled from multiple accounting gimmicks will hold out. May 15 seems optimistic, given how the insolvency point moved sooner and sooner over the course of this year. Last month, the Congressional Budget Office projected we’d need $8 billion just to make it through this year.

Senator Bob Corker (R-TN), who co-introduced a plan to raise the federal gas tax 12 cents over two years, didn’t hide his disappointment in this plan and how Congress is paying for it. “This disgraceful practice of borrowing money to cover a few months of spending and paying for it over a decade is nothing more than generational theft,” he said in this Transport Topics story.

His comments as well as others made today by members of the House and Senate committees could represent a groundswell to find a real long-term funding fix and end the practice of lurching from crisis to crisis. After all, providing funding just for ten months instead of five months doesn’t actually give States the reliability and predictability they need for multi-year contracts and bigger projects — it just ensures that many projects underway or getting started this summer won’t hit the brakes. Think of it this way: States could resurface a road with some confidence, but that multi-year project to replace the deficient old bridge on the same road? Tough to do when you only have funding through May with any certainty.

Even House Transportation Committee Chairman Bill Shuster, who also supports the fix through May, said today, “This bill in no way precludes Congress from continuing to work on addressing a long-term funding solution, and a long-term reauthorization bill remains a top priority for the Transportation Committee.”

“We are pleased that Congress has begun to take the situation seriously and will avoid the economic pain of an insolvent trust fund, at least for the very near term,” said T4America Director James Corless.

“Perhaps the most important outcome is that the debate in both chambers showed a growing discomfort with short-term accounting tricks and a bipartisan desire for a long-term solution. In truth they have only bought themselves a few short months to grapple with an issue they have delayed for years.  We look forward to working with Chairman Wyden, Chairman Camp and other leaders as they make good on their promise to work in earnest on a long-term solution to fund the infrastructure our economy and daily lives depend on.”

Attempts for bipartisanship slow down Senate Finance plan for short-term trust fund fix

The Senate Finance Committee plan to rescue the nation’s transportation fund through the end of the year took a slight detour today as Chairman Wyden (D-OR) made some key changes and deferred debate on potentially contentious amendments in the name of trying to reach bipartisan agreement.

Between yesterday and today, Chairman Wyden amended his Preserving American’s Transit and Highways (PATH) Act, which would provide a short-term extension of the federal transportation program and come up with the necessary funds (about $9 billion) to the keep the Highway Trust Fund (HTF) solvent through the end of the year. (The HTF is expected to become insolvent before the end of August.)

The amendments came in the form of a Chairman’s mark – a  single package of amendments or legislative language put forth by the Chairman of a committee — which was agreed to by (bipartisan) unanimous consent today in committee, but final consideration was postponed until after the July recess.

“On the Finance Committee, all the Democrats and all the Republicans do not want to slam the brakes on 6,000 road projects, putting thousands of Americans out of work,” said Chairman Wyden this morning. “These modifications move the committee closer to bipartisan agreement.”

But it may yet be difficult to find agreement between the two sides and move a truly bipartisan package out of the committee that staves off insolvency of the trust fund. In the House, Ways and Means Chairman Dave Camp (R-MI) has said, “There is no way tax hikes to pay for more spending will fly in the House.”

All along, Republicans especially, but also Democrats, have asserted that it’s important to protect the historic principle of “user pays” for the trust fund — ensuring that the people using the transportation system are the ones paying for its upkeep or expansion. Yet, the most significant change made to the Chairman’s mark today was removing the increase in heavy truck fees — the only “user fee” in the handful of revenue increases included in the PATH Act that was introduced by Chairman Wyden two days ago. The other four methods of raising money are changes to tax code or accounting maneuvers, which were all largely modified as well.

The Republican ranking member Orrin Hatch (R-UT) made it clear that his party understands the urgency to do something, but are still unlikely to support a plan that won’t pass the House. “It’s important for the committee to get something done, but it’s even more important that we get it done right,” he said.

And, “The last thing we want is for state departments of transportation to be left holding the bag in August,” said Sen. Thune (R-SD).

The Senate Finance Committee is planning to resume discussions on this package again after the congressional recess for Independence Day. Amendments that may be considered at that point include plans for a gas tax increase and indexing it to inflation, creating a new multimodal account, ending the federal program as we know it, and an amendment to defund the extremely popular program that helps get money down to the local level for safer streets (TAP).

We’ll continue to track the developments.

Senate Finance Committee considers a trust fund stopgap, with long-term funding unclear

The Senate Finance Committee Thursday will take up a proposal from Chairman Ron Wyden (D-OR) to keep the Highway Trust Fund solvent through Dec. 31 with a $9 billion transfer from the general budget. The needed revenue would be raised by increasing the allowable tax on heavy trucks and four accounting maneuvers unrelated to transportation.

Chairman Wyden’s stopgap proposal would prevent the projected August insolvency of the nation’s key infrastructure fund and buy time until after the November elections, when Congress could consider a longer-term fix to the beleaguered trust fund.

Unfortunately, the proposal does not have bipartisan support. The top Republican on Senate Finance, Senator Orrin Hatch (R-UT), has indicated he would like the trust fund fix to rely more on spending cuts. Senator Bob Corker (R-TN), who is co-sponsoring a proposal to raise the gas tax with Senator Chris Murphy (D-CT), called the proposal “a complete sham” .

However, with the clock ticking toward an end of promised federal payments to states for their transportation spending, it is the only proposed stopgap on the table that would avoid idling thousands of workers and stalling key projects throughout the country. Senator Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, urged her colleagues on the Finance Committee to pass Wyden’s proposal. “I’m here to send an SOS to Congress because we are facing a transportation government shutdown,” Boxer today said at a press event.

Wyden’s proposal relies on accounting changes over ten years to amass the “savings” that would be transferred immediately from the general fund to cover the next several months of the trust fund outlays. The largest change ($3.7 billion) would require faster disbursement – and collection of taxes owed – on retirement savings of deceased account holders.

The only transportation-related source comes from raising the cap on the surcharge placed on especially heavy trucks, from $550 a year to $1,100. Set to take effect June 30, 2015, it would be the first change to the so-called heavy vehicle use tax since 1984 and is expected to raise up to $1.4 billion over the next 10 years.

Wyden told Transport Topics that he expects Republicans to offer several amendments at the committee hearing, set for 10 a.m. Thursday. “They indicated informally some rough ideas but that’s why we have opened the process,” Wyden said.

In the House, Chairman Dave Camp (R-MI) of the Ways and Means Committee, with jurisdiction over the Highway Trust Fund, has said,  “There is no way tax hikes to pay for more spending will fly in the House.” Camp plans to mark up an extension of the transportation program and Highway Trust Fund after the July 4 Congressional recess.

In an encouraging bipartisan move, Senators Corker and Murphy last week proposed raising the gas tax 12 cents over two years, and offsetting that increase by making some current tax breaks permanent. Corker has said the offsets could allow other Republicans to support the proposal because it would not violate Grover Norquist’s Americans for Tax Reform pledge.

Any such long-term solution for transportation funding – which we at Transportation for America certainly support – would have to come through Wyden’s Finance Committee, presumably after a stopgap such as that on the table for tomorrow’s hearing.

Raising the gas tax also would have to pass muster with the White House. In comments Monday, Administration officials did not rule out a gas tax hike but reiterated that corporate tax reform is their preferred pay-for.

“The Administration has not proposed and has no plans to propose an increase in the gas tax,” said White House spokesman Matt Lehrich. “It is critical that we pass a [transportation] bill that not only avoids a short-term funding crisis but provides certainty and lays the groundwork for sustained economic growth. So we appreciate that members on both sides of the aisle continue to recognize the need for a long-term infrastructure bill, and we look forward to continuing to [work] with Congress to get this done.”

Here, you can read a Description of the Chairman’s Mark, and the Joint Commission on Taxation’s Score (JCT Score) of the proposal.