Update 5/26/15: The senate passed a two month extension to surface transportation spending authority by voice vote. The spending authority will expire around the same time that funding is expected to dry up at the end of July. President Obama is expected to sign the bill into law before the May 31st deadline.
Update 5/20/15: The House passed the bill on Tuesday extending the spending authority from the Highway Trust Fund through July 31, 2015 by a vote of 387 to 35.
A vote in the House today could lead to another Band-Aid being slapped on the continuously depleting Highway Trust Fund. Currently there are enough funds to pay for highway projects through the end of July, maybe the first week or so of August. The problem is the authorization for highway and transit spending expires on May 31st, two months before the fund would be depleted. So basically this will allow highway spending to continue until the fund runs out of money. Nothing like waiting until the last minute, yet again, to try and come up with a solution to an ongoing problem.
The vote scheduled for today on H.R. 2353, the Highway and Transportation Funding Act of 2015, would authorize spending through July 31st. A similar bill was also introduced in the Senate and they are expected to move on it quickly once the House bill passes. A longer, seven-month extension was proposed but it seems like that is no longer an option at this point and there’s zero chance a multi-year funding solution will be agreed upon before members of Congress get out of Dodge, or D.C. in this case, for the Memorial Day break which runs through the end of the month.
This is probably not the fix most people were expecting when Congress passed the last short-term extension 10 months ago. Some of the reasoning given for such a short fix is that it will force the House and the Senate to come up with a long-term solution to fund surface transportation projects for the next six years. It’s hard to imagine that Congress will be able to do in two months what it wasn’t able to accomplish in 10 months.
We’ve talked in the past about how the construction industry needs a real fix for the Highway Trust Fund. In addition to the lost jobs that will occur if highway funding isn’t continued, there’s also the negative impact on GDP, trade value and consumer spending. A number of bills have been introduced for a long-term funding bill. A gas tax increase, something we haven’t seen in over two decades, looked like a possibility when fuel prices were plummeting, but ended up going nowhere. Now that gas taxes are back on the rise it seems unlikely that this will be an option in the next two months. Another option being bandied about is a tax repatriation proposal that would lower the federal tax on offshore corporate earnings that are returned to the United States.
Two months seems like an inadequate amount of time to come up with a long-term fix to highway funding, especially with another weeklong break coming for Congress around the Independence Day holiday. It wouldn’t be surprising to see yet another short-term patch to get through the end of the fiscal year. I haven’t seen the latest bill introduced last week, but someone should tack on an amendment that states passage is contingent on having a long-term solution in place before July 31st because it will be here before you know it.