Yesterday, the House of Representatives passed legislation providing an $11 billion bailout to the Highway Trust Fund (HTF) and steady state funding for highway and transit projects and programs through May 2015. Only 45 Republicans and 10 Democrats voted against H.R. 5021.
The bill now moves to the Senate where Majority Leader Harry Reid wants to have the bill on the Senate floor before the August recess. Environment & Public Works Committee Chairman Barbara Boxer wants the authorization portion of H.R. 5021 to end five months earlier to force additional consideration prior to the end of 2014 and is likely to offer an amendment on the floor.
The House bill sources the $11 billion by way of customs fees, redirecting funds set aside for leaking underground storage tanks, and “pension smoothing,” which allows companies to pay in less pension benefits and report higher taxable profits. According to the Congressional Budget Office (CBO), allowing pension plans to use higher interest rates when calculating their future liabilities would reduce the minimum contributions that employers are required to make to such plans, leading to increases in offsetting receipts, direct spending, and revenues. The CBO report also noted its expectation that H.R. 5021 would increase the amount of underfunding in pension plans. A Senate Finance Committee amendment with a slightly different plan to provide the $11 billion HTF bailout waits in the wings. The Senate plan relies less on pension smoothing and more on tax law compliance enforcement.