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House OKs temporary funding fix for highway programs

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By The Associated Press
Tuesday, July 15, 2014, 6:51 p.m.

WASHINGTON — With an August deadline looming, the House voted on Tuesday to temporarily patch over a multibillion-dollar pothole in federal highway and transit programs while ducking the issue of how to put them on a sound financial footing for the long term.

The action cobbles together $10.8 billion by using pension tax changes, customs fees and money from a fund to repair leaking underground fuel storage tanks to keep the federal Highway Trust Fund, which pays for transportation programs nationwide, solvent through May. The vote was 367-55. A similar bill is pending in the Senate.

Without congressional action, the Transportation Department says that by the first week in August the fund will no longer have enough money to cover promised aid to states, and the government will begin to stretch out payments. Congress has kept the highway trust fund teetering on the edge of bankruptcy since 2008 through a series of temporary fixes because lawmakers have been unable to find a politically acceptable long-term funding plan.

The most obvious solution would be to raise the federal 18.4-cent-a-gallon gasoline tax and 24.4-cent-a-gallon diesel tax, which haven't been increased in more than 20 years. But lawmakers are reluctant to raise taxes in an election year.

As a result, Congress has had to look elsewhere for transportation money while not increasing the federal deficit. The bill by Ways and Means Committee Chairman Dave Camp, R-Mich., relies on tax changes that are forecast to generate revenue over 10 years but provide only enough money to keep the highway and transit programs going for 10 months.

The largest chunk of the money, $6.4 billion, results from allowing employers to defer payments to their employee pension plans. Funding pension plans normally results in a tax savings for companies, and deferring those payments means they will pay more in taxes and increase federal revenue. But several lawmakers suggested the revenue from the pension changes is illusory.

“Come on. Really, it's pretty phony stuff,” said Rep. Peter DeFazio, D-Ore. “Let's get real about how we're going to fund our transportation” programs.

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