TSP Benefits Remain at Risk in Clash Over Highway Funding

With just 12 days until highway funding is due to expire, the House and Senate appear on a collision course over how to keep current and future transportation projects afloat.

The Senate on Tuesday is poised to pick up a bipartisan, multiyear bill from Sens. James Inhofe of Oklahoma and Barbara Boxer of California that would fund transportation departments for as many as six years. The policy language has cleared the Environment and Public Works and Commerce Committees, but as usual, it's the funding that remains in question, with plenty more question marks hounding the must-pass bill.

Democratic and Republican leaders are currently mining through a list of possible pay-fors provided by Senate Finance Committee Chairman Orrin Hatch in the hopes of finding $80 billion to supplement gas-tax revenue and shore up a $275 billion, six-year bill. And from the perspective of the members, it's all-systems-go.

"I think we're going to get it passed," said Hatch, a Utah Republican. "It depends. I mean, you know, we've got to get some cooperation, but I think we've come up with the right pay-fors."

There's still plenty of room for the Senate to get hung up on the pay-for list, which has bedeviled lawmakers in the past. Even if the Senate does cobble together the money and pass a bill (which is expected to get as much as two weeks on the Senate calendar), there's still a significant roadblock in the way: a much shorter House bill.

The House last week cleared a five-month extension that Republican leadership hopes will give them enough time to write a broader tax-reform deal that would fix the Highway Trust Fund. The fund is currently filled with revenue from the 18.4 cents-per-gallon federal gas tax, but it has not been raised or indexed to inflation since 1993 and boosting it is a political nonstarter.

House Ways and Means Committee Chairman Paul Ryan has said that the patch gives his committee time to negotiate a reform of the international tax code, then use its revenue for the highway bill. Some in the Senate, including Democratic No. 2 Chuck Schumer of New York, are also bullish on the chances of getting tax reform.

While everyone's preferred option is a long-term deal, even the White House has begrudgingly lent its support to the five-month bill if it produces a longer-term solution.

In the immediate future, that leaves lots of sunlight between the House and Senate bills, and not much time to correct them, which means a five-month extension may be the best Congress can produce before funding expires on July 31. If there's no bill passed by then, the Transportation Department has warned it would stall payments to state and local transportation departments in the midst of construction season.

In an interview, Inhofe said he was optimistic that there was enough will and time to get a conference in the express lane.

"There's not a conflict between the House and the Senate," Inhofe said. "I think most of the House people realize there's got to be a long-term bill, and I think they had to pass something to get to conference. You know how fast conferences can go if they want to go.

"This place never acts unless something is on fire and there's an emergency, so I'm hoping this falls into that category," Inhofe added.

But that would require quick action to smooth over any trouble spots on the list of pay-fors, which reportedly includes some nonstarters for Democrats. The list is said to include a change to the federal employee retirement-benefits program that would bring in as much as $30 billion, which Democrats won't support.

With a cloture vote on the bill scheduled for Tuesday afternoon, it's expected that a funding deal will be settled before then.

There are plenty of other hang-ups to the multiyear bill, which would put a stop to the lurching series of short-term extensions Congress usually employs. Although the measure passed the Environment and Public Works Committee unanimously, Democrats have balked at some of the safety provisions that passed the Commerce Committee on a party-line vote Wednesday. Speaking on the floor Wednesday, Minority Leader Harry Reid said that the bill would roll back safety provisions for cars and trains, while also delaying federal action on auto recalls.

"The Senate can do better than adopting the Republicans' attack on public safety," Reid said.

Also looming on the bill is the reauthorization of the charter of the Export-Import Bank, as supporters are expected to try to attach it to the highway bill. Democrats say that they've got the votes to restore the loan body, which lapsed on June 30, but see the highway bill as probably the best vehicle for moving its reauthorization.

Sen. Heidi Heitkamp of North Dakota, a supporter of the reauthorization, said last week that she's still eyeing the transportation bill, although she said she was open to a stand-alone vote.

Inhofe said he's "opposed to the Ex-Im bank and we're going to pass our bill," but he said he wasn't asking Majority Leader Mitch McConnell to keep a vote off the bill. Sen. Ted Cruz at a press conference last week threatened a filibuster or using other "procedural tools" to stop the Ex-Im charter from staying on the highway bill, but it's unclear if conservatives would have enough support to stop the bill entirely, since a test vote last month got the support of 65 senators.

That could jam Republican leaders in the House, who have urged the Senate not to send them a highway bill with the Ex-Im charter on it. If the Senate takes more than a week to wrap up the transportation bill, that would leave House members with precious few days before July 31 to figure out how to deal with the bill before departing for August recess.