Obama Administration Backs GOP Transportation Trust Fund Extension Bill

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The White House has backed a $10.8 billion bill in the House of Representatives that would extend federal transportation funding through next May.

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The surprise endorsement of the bill clears the way for a deal with democrats in the Senate, the Hill reported. The House moved quickly today and approved the bill 367-55 in a morning vote after arguments that mainly centered on what Congress should do when the extension runs out next Spring, raise the 18.4 cents per gallon gas tax or reexamine the entire federal transportation funding process. The extension bill sets aside $10.8 billion that will come from using pension tax changes, customs fees and money from a fund to repair leaking underground fuel storage tanks to reinvigorate the Department of Transportation’s Highway Trust Fund, in danger of running dry by next month, through May.

Rep. Dave Camp (R-Mich.), the transportation committee’s chairman, said the bill is “enough to get through the end of next year – it does give Congress and the tax-writing committees ample time to consider a more long-term solution to the Highway Trust Fund.”

Construction_Chart_July-2014_FNLPrior to the extension bill coming forward there was raucous debate in both chambers as to how the federal government pays for construction projects and even proposals to eliminate the Highway Trust Fund altogether. The Obama administration had sought to tie major cities to federal funds for highway construction projects while House republicans had sought to scrap the current gas tax system, wherein money is distributed to states and local governments based on federal formulas, and transfer authority for highways and transit programs back to the states and replace current congressional appropriations with block grants.

If the Senate does not pass a similar bill that can be negotiated and sent to Obama by the first week in August, the Transportation Department has warned that the fund would no longer have enough money to cover promised aid to states and that the government would begin to stretch out payments.

If the fund goes broke, it also is expected to freeze thousands of transportation and infrastructure projects across the country and cost about 800,000 jobs. Construction has been a bright spot of the economy this summer and both sides have strong incentives to fund the Department of Transportation through May.

 

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