An August extension of the Highway Trust Fund (HTF) became the latest shining example of partisan gridlock and political inaction in Congress.

The HTF acts as a backstop to provide state departments of transportation (DOTs) with the confidence and assurance they need to green light projects knowing the federal government will chip in its fair share. Typically, states receive roughly 50 percent of their funding for highway repairs and renovations from the HTF. Because the fund is topped off mostly through the 18.4 cents-per-gallon tax on gasoline, its solvency has become a snowballing problem due to advancements in vehicles’ fuel efficiency.

Unfortunately for the companies that build the nation’s infrastructure and for everyone who uses transit systems, the politics behind extending the HTF induced a legislative traffic jam and left states with few of the assurances they sorely needed.

In what amounted to a pingpong game, Congress passed a 10-month spending bill in early August that will keep the HTF funded until the end of next May. Without the extension, the DOT would have been forced to slow down payments on Aug. 1 and completely shut down disbursements at the end of August. Despite pleas from nearly every transportation group, Congress went down to the last minute to fix a problem it has known was coming for more than a year.

There was no singular moment when infrastructure advocates’ hopes for a long-term spending bill were dashed; it was more of a long, drawn out process. In mid-July, it seemed that Senate Finance Committee Chairman Ron Wyden (D-Ore.) was going to cobble together enough support of his three-month extension bill that it would pass the Senate and head to the House with strong momentum. But after his plan was completely rejected by Republicans, House Ways and Means Chairman Dave Camp (R-Mich.) took the reins and introduced a 10-month extension plan.

Camp’s plan pumps $10.8 billion into the HTF through increases in custom fees and a process called pension smoothing. Often seen as an accounting gimmick that takes advantage of government scoring, pension smoothing allows employers to contribute less to their employees’ pensions, thereby increasing taxable revenue. In essence, Camp’s proposal uses a 10-year budget window to finance 10 months of projects.

After Camp’s proposal cleared the House with bipartisan support, Beltway insiders expected the Senate to easily pass the bill—protecting construction jobs and giving states a few months of certainty. But in a surprise development, senators from both parties adopted two amendments to the House version: one from Sen. Wyden that would change the pay-fors to include corporate tax modifications and one from Sen. Barbra Boxer (D-Md.) that would back the HTF for three months (rather than 10). Boxer’s intention was to fund the HTF only through the lame-duck period, increasing the political chances of raising the gas tax.

Because the Senate passed an amended version of the bill, it was sent back to the House on the last day before the DOT would be forced to slow down payments to states. House Republicans, with their feet securely dug in, stripped the Senate’s amendments, passed the original bill and bolted out of town for their annual August recess. The Senate was left with few options but to pass the bill. Before President Obama signed it into law, he criticized Congress for not agreeing to a long-term solution, and predicted the same problem would arise next year.

Passage of a long-term highway funding bill can be seen as a political minefield. Members of Congress, especially Republicans, don’t want to be portrayed as “taxers and spenders” by agreeing to billion-dollar spending measures that could provide primary opponents with ammunition for criticism. Furthermore, the gas tax is an extremely volatile issue that members of both parties chose to avoid. Unfortunately, compromise and bipartisanship have fizzled in recent years, making long-term funding bills increasingly uncommon.

The outlook for a long-term extension of the HTF does not provide transportation advocates with any confidence or reason for optimism. If Republicans take back the Senate in November, they may wait until the new Congress is in place to begin crafting a long-term strategy.


Drew Schneider is manager of legislative affairs for Associated Builders and Contractors. For more information, email schneider@abc.org.