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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.