Senate Bill Boosts Highways

This story appears in the Feb. 15 print edition of Transport Topics.

The Senate began debate last week on a proposal that would inject nearly $20 billion into the ailing Highway Trust Fund and extend the current highway spending law as part of a new jobs bill.

Majority Leader Harry Reid told reporters Feb. 11 that the Senate would move to a “smaller package” than the $85 billion that initially had been proposed by some senators. Earlier versions of the bill included a broad array of provisions, including extension of unemployment benefits, a cut in estate taxes and extension of the Patriot Act.

However, Reid (D-Nev.) said the Senate would take up a bill “that has four things in it.”

Reid said those issues would be the expansion of the Build America Bonds program, extension of accelerated depreciation for equipment purchases, a tax credit for employers hiring out-of-work Americans and a package that included extending the highway funding bill and a $19.5 billion injection into the trust fund.

“Three provisions create jobs and the provision dealing with highways saves a million jobs,” Reid said, pledging to get back to a series of tax-credit extensions after the Presidents Day recess Feb. 15.

Earlier in the day, leaders of the Senate Finance Committee, Chairman Max Baucus (D-Mont.) and ranking Republican Chuck Grassley of Iowa put out draft legislation that included more proposals and carried an $85 billion price tag.

One of the key provisions in the Baucus-Grassley draft that got included in Reid’s smaller plan was the transfer of the $19.5 billion to the Highway Trust Fund from the general treasury. That amount equals the interest on trust fund money that has been transferred to the general fund since 1998, before it became obvious that the fund did not have enough cash to meet road needs.

The new bill also would extend current highway spending authorization through the end of 2010. Currently, the highway program is authorized only through the end of February after Congress passed a second short-term extension of the long-term bill that expired in September. The White House has helped delay congressional action on the passage of a new, long-term highway bill, in order to focus on other priorities.

The measure also would stop reimbursement payments to tax-exempt entities from the trust fund and pay them from the general fund, as well as repeal an $8.7 billion cutback of contract authority that would increase the amount of money the federal government can spend on roads and bridges.

Reid said he wanted the Senate to begin voting on the jobs package before the scheduled Presidents Day recess, but two massive snowstorms battered the capital.

“Despite the storm, we are going to make progress on the jobs bill,” Reid said Feb. 9, but said he doubted there would be any votes during the week. “It appears . . . [that] people now cannot get planes to get here, and they are having trouble getting planes to get out of here, so it has made for a very difficult situation.”

Baucus and Grassley cautioned that while it was important to move “expeditiously” on a bill, “any efforts that needlessly rush the process through partisan means will undermine our goal of a bipartisan and transparent legislative process.”

Reid’s plan also includes a $10 billion exemption for employers from paying their share of the Social Security payroll tax for hiring unemployed workers, a proposal by Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah).

Schumer said that “Congress must focus like a laser on job creation, and that’s what this proposal does. . . . [It] will put people back to work right away and help create the only thing that will finally bring us out of this recession: job growth.”

In addition, the proposal includes an extension of previous stimulus programs allowing companies a tax write-off of up to $250,000 for certain equipment purchases in 2010, rather than depreciating the cost over time.

The final provision is an expansion of the Build America Bond program.

Timothy Lynch, senior vice president of federation relations and strategic planning for American Trucking Associations, said that despite the severe winter weather, Congress needed to limit the potential delays on the bill.

“The clock is ticking for Congress to act on both the highway program extension and infrastructure jobs bill,” Lynch said. “Any further delays will negate the benefit of this infusion of badly needed infrastructure funding.”

Brian Turmail, a spokesman for The Associated General Contractors of America, told Transport Topics that at first blush the package “looks like it might be bipartisan.”

The House passed a more expansive jobs bill before Christmas last year, and President Obama has called on the Senate to follow suit.

Reid said the Senate “doesn’t have a jobs bill, we have a jobs agenda.”