Wyden: House Trust Fund Fix ‘Goes Too Far’ on Pension Smoothing
The chairman of the tax-writing Senate Finance Committee on July 28 criticized the primary source of funding for a House bill that would shore up the Highway Trust Fund, a day before the Senate is expected to vote on the legislation.
“I do think the other body goes too far on the issue of pension smoothing. And given that position, the country is likely to have two big challenges in the future. One, how do you fund transportation. And second, what do you do about the hopes and aspirations of all those workers relying on pensions,” said Sen. Ron Wyden (D-Ore.), the Finance panel’s chairman.
UPDATE: Senate passes amended bill.
The House GOP bill relies mostly on pension smoothing to approve nearly $11 billion to keep the Highway Trust Fund solvent through May. Pension smoothing allows companies to reduce required contributions to their retirement plans as a way of inflating their taxable income temporarily.
Wyden’s opposition to the key provision in the House-passed legislation could prompt other Democrats to oppose the bill, hurting the bill’s chances of passing in the Senate. The Transportation Department has indicated that without a short-term fix, it would have to scale back reimbursements to states due to low funds in the highway account beginning Aug. 1.
Wyden urged colleagues to support an amendment he has offered to the House bill, which would approve nearly $11 billion for the trust fund without heavily relying on pension-smoothing. He explained that if Senate Majority Leader Harry Reid (D-Nev.) calls up the House bill and the proposed amendments to the bill on July 29, the House would have enough time to consider an amended bill before Aug. 1.
“I think it would be legislative malpractice for the Senate not to have a real voice in this premier economic issue now before the Congress,” Wyden added.
According to an agreement announced by Reid last week, a minimum of 60 votes are required for any amendments to be adopted. Passing the bill also would require 60 votes. Earlier this month, the House bill passed by a vote of 367 to 55.
The trust fund is used by DOT to pay states for certain large-scale infrastructure projects.
