House Approves Tax Deal That Would Retroactively Boost Mass Transit Benefits

The House on Wednesday approved a measure 378-46 that would retroactively provide federal employees and all American workers with a much larger mass transit benefit for 2014.

The benefit fell nearly in half in 2014, but the 11th hour agreement on a broader package of tax provisions would restore the subsidy to $250 per month, just more than the 2013 level. The maximum monthly mass transit benefit dropped to $130 on Jan. 1 when a provision of the fiscal cliff deal expired.

Lawmakers and employee advocates alike have balked at the gap between the parking benefit, which actually increased by $5 in 2014 to $250 a month, and the mass transit subsidy. The transit restoration would reduce federal revenues by $10 million, according to the Joint Committee on Taxation.

Congressional negotiators attempted to make the transit benefit and dozens of additional tax provisions permanent, but the proposal unraveled after President Obama threatened to veto the deal. The Senate Finance Committee in April approved the Expiring Provisions Improvement Reform and Efficiency -- or EXPIRE -- Act, which would have extended the tax cuts for two years, but Senate Republicans blocked the bill when it came to the floor in May.

Sen. Ron Wyden, D-Ore., who chairs the Senate Finance Committee, was unhappy with the one-year, retroactive deal, calling it unfair for working families. He continued on Wednesday to push for a multi-year deal, though with limited time for Congress to act, its prospects appeared dim.

House members from both parties were reluctant to support the temporary measure, voicing concern during Wednesday’s floor debate over the uncertainty it caused American businesses and families. Some lawmakers also complained the costs of the tax extenders were not offset. The bill still won the votes of a majority of both Republicans and Democrats, however, who called it necessary to avoid raising individuals’ tax bills.

“It’s the best that we can do in the environment we are in,” said Pete Sessions, R-Texas, chairman of the House Rules Committee.

The retroactive fix is not without precedent; a similar gap between mass transit and parking benefits also existed in 2012, though the disparity was eliminated after the fact by the fiscal cliff deal. The original transit benefit boost was created in 2009 in what is colloquially known as the economic stimulus package, which temporarily increased the subsidy from $115 to $230 per month.

The temporary extension sets up yet another fight over mass transit and other tax benefits in 2015. Lawmakers once again expressed hope for a more permanent solution next year. 

(Image via 2265524729 / Shutterstock.com)