The House and Senate each passed separate six-year transportation bills with three years of funding, provided by a package that included measures like sales from the country’s petroleum reserve and fees from customs processing. The package passed the Senate and House by overwhelming margins, even as members on both sides bemoaned the funding package as being full of gimmicks.
The House, however, tacked on an additional provision that would liquidate a Federal Reserve surplus account, raising as much as $40 billion more for the bill, enough to cover two more years, while wiping out another pay-for that cut government dividends to large banks.
That’s led to a discussion about whether the bill should be shortened to five years—assuming the funding works out—or stay at the full six years to offer long-term certainty. Either solution is preferable to the Senate-passed bill, which would have required Congress to come back to the table after just three years to work out a new funding measure.
It remains to be seen what pay-fors can even stick in the bill. Despite passing the House with a hefty bipartisan margin, the Federal Reserve provision has become controversial as it spends more time in the open. Fed Vice Chairman Stanley Fischer said it set a “dangerous” precedent, and former Fed Chairman Ben Bernanke said it was nothing more than “sleight-of-hand.”
There are also lingering questions about various safety provisions and other policy language that have held up talks.
Members from both chambers are close to reconciling the two bills, with a conference report expected to be released Tuesday. That would leave just four days for both the House and Senate to pass the bill before a self-imposed Friday deadline, when highway funds would run dry.
If the two chambers can’t get the final bill to President Obama’s desk by then, they’d have to pass another short-term extension to keep money flowing.
While there’s bipartisan support for spending on infrastructure, the money question has dogged Congress for the better part of a decade. The federal gas tax, which fuels the Highway Trust Fund, hasn’t been raised or indexed to inflation since 1993, and improved fuel efficiency has hammered its receipts. Even talking about raising the tax has been a nonstarter, leaving members looking for whatever money they can find.
But a tax-reform-for-infrastructure bargain has stood as a way to solve two problems at once. Ryan, then chairman of the Ways and Means Committee, and Democratic Sen. Chuck Schumer had been engaged in talks about updating international tax rules for multinational corporations to back an infrastructure bill, but the plan couldn’t come together in time to be attached to a policy bill.
The White House pitched a transportation proposal funded by a mandatory “transition tax” for multinational companies in its fiscal 2016 budget. Paul and Boxer teamed up on a bipartisan bill that would allow companies to voluntarily return overseas profits at a reduced rate to shore up the Highway Trust Fund. Sen. Bernie Sanders, Clinton's rival for the Democratic nomination, included taxes on multinational corporations as part of his $1 trillion infrastructure spending plan.