T4America Blog

House proposes a trust fund Band-aid through May, 2015, with key differences from Senate

House Ways and Means Committee Dave Camp (R-MI)

Late yesterday, House Ways and Means Chairman Dave Camp (R-MI) proposed a $10.8 billion infusion to cover a looming deficit in the Highway Trust Fund. The money for the next few months would come mostly from an accounting maneuver called “pension smoothing” over the next 10 years. The remainder comes from extending some customs fees and transferring $1 billion from the fund for leaking underground storage tanks.

The good news is that both Houses are now moving to take seriously the increasingly urgent warnings of insolvency coming from the Congressional Budget Office and the U.S. Department of Transportation. Absent action to transfer money to the trust fund, the flow of dollars to the states will be curtailed as much as 28 percent after Aug. 1.

The not-so-good news is that the recent hope for a speedy, bicameral solution seems lost for the moment. The House is taking a different tack from the Senate, whose Finance Committee had delayed its own proposal in hopes of negotiation a bipartisan compromise within both chambers. The Camp proposal covers a different time period – through May 31 versus Dec. 31 in the Senate – and uses different “pay-fors”. The differences mean it will be that much harder to reach a solution before the long August recess.

The other less-than-good news is that the proposal to extend into May of next year would reduce the urgency to address a long-term solution, such as the bipartisan Murphy-Corker proposal to raise the gas tax and index it to inflation. By extending only through the end of this year, the Senate deadline raised the possibility that Congress might move immediately after the election, in a lame-duck session where members feel less political pressure.

“While it doesn’t provide as much funding as I would like – enough to get through the end of next year – it does give Congress and the tax-writing Committees ample time to consider a more long-term solution to the Highway Trust Fund,” Camp said in a statement. However, Camp also indicated he is opposed to tapping the most readily available revenue source, the federal gas tax, calling it “just about the worst tax increase Congress could hit hardworking Americans with.”

The House Ways and Means Committee is scheduled to consider the legislation Thursday at 10:00 a.m.