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Highway funding still stuck in gridlock

While Congress struggles to come up with a solution, highway and bridge construction has already begun to stall.
Traffic jams up on the Kennedy Expressway leaving the city for the Memorial Day weekend on May 23, 2014 in Chicago, Illinois.
Traffic jams up on the Kennedy Expressway leaving the city for the Memorial Day weekend on May 23, 2014 in Chicago, Illinois.

Congress is closer to a deal to ensure construction on federal highways and bridges doesn't grind to a halt. But while lawmakers continue to hash out their differences, infrastructure projects across the country are already being delayed as the expiring funds dry up.

Committees in both the House and Senate have marked up legislation to prevent the federal Highway Trust Fund from running out of money, as it is scheduled to do by the end of September.

There is significant overlap between the two proposals, both of which would provide a short-term fix to the highway fund's fiscal woes by relying on custom fees, a transfer from a trust fund for protecting leaking storage tanks and a provision that would temporarily reduce employers' mandatory pension contributions.

But the House is at odds with Senate provisions that would strengthen a handful of tax compliance requirements.

"The Senate appears to be heading down a road of higher taxes for more spending. That’s not a path forward in the House," House Ways and Means Chair Dave Camp said in a statement on Thursday.

Meanwhile, the legislative impasse has already prompted some states to halt construction on federally funded roads and bridges. Last week, Kentucky announced that it was delaying $185 million in road construction projects because of the expiring federal funds, including the expansion of a highway with a history of fatal crashes.

“Kentuckians should be concerned about the transportation funding situation unfolding in Washington,” Kentucky Governor Steve Beshear said last week. “This uncertainty means money for new projects, preservation efforts and most importantly, improved highway safety and construction jobs, is at risk. Our vast transportation network relies on assistance from the federal highway program.

Earlier in the spring, Arkansas announced that it was delaying work on 10 highway projects, fearing it would not have adequate federal funds to pay contractors. Missouri stopped adding new projects to its five-year construction budget back in January, citing the looming insolvency of the federal highway fund.

The federal highway trust fund has traditionally been funded by the gas tax. But while revenues have been declining for years, there hasn't been a gas tax hike for more than 20 years. Some Democrats and a few outlying Republicans have rallied to raise the gas tax this year, but it has been a political non-starter.

Congress is expected to come up with a short-term solution, at least, before the federal funds expire on September 30. But neither the House nor the Senate's proposals would solve the underlying funding problem. 

Dennis Slater, president of the Association of Equipment Manufacturers, said in a statement that he was "appreciative" of the progress being made on Capitol Hill. 

"However," he added, "lawmakers should have pause before patting themselves on the back. Congress remains a portrait of dysfunction when it comes to their inability to rally around commonsense solutions to put the Highway Trust Fund on sound financial footing for the long term."