House Republicans want 5-month highway funding extension

Key House Republicans have filed legislation to extend federal highway funding for five months, casting it as a way to keep road projects moving beyond a July 31 deadline while buying enough time to fund the six-year bill that both parties want.

House Ways and Means Committee Chairman Paul Ryan of Wisconsin and Transportation Committee Chairman Bill Shuster of Pennsylvania said extending the federal Highway Trust Fund through Dec. 18 will cost $8 billion and is paid for by beefing up tax compliance and capturing the savings from a 2013 increase in airport security fees for another two years.

“I think this is the best path forward,” Mr. Shuster told the House Rules Committee Tuesday.

Mr. Ryan has said a five-month patch is the only way to build consensus for “a down payment” on tax reform that could cobble together the $90 billion needed to fill the gap between projected costs and expected revenues from the federal gas tax over the next six years.

Republicans refuse to raise the 18.4 cent-per-gallon gas levy. Instead, they’ve homed in on the bipartisan push for a one-time tax on about $2 trillion in business income lured back to the U.S.

Mr. Ryan wants that funding mechanism to be part of a broader push for tax reform. That process could take months, so he posted the short-term extension to get Congress beyond the July 31 deadline, when the federal government would no longer be able to reimburse state and local government for their highway projects.

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“What we’re trying to do is work on a bipartisan, bicameral basis to fill this big shortfall [in the highway fund],” Mr. Ryan told lawmakers. “We know those conversations will take at least a couple months to come to fruition.”

The White House and Democrats have demanded a long-term extension of highway funds now, saying Congress’ reliance on short-term patches imperils local planning, and that President Obama already proposed a suitable six-year bill.

“It appears the Republicans are once again going to offer a short-term, stop-gap, ’we haven’t gotten the job done yet’ proposal,” House Minority Whip Steny Hoyer, Maryland Democrat, told reporters Tuesday.

He said it “seems contradictory” that Republicans would rely on tax enforcement to fund their short-term bill, even as the GOP moves to cut the IRS’ budget.

But he stopped short of saying Democrats would oppose any type of short-term patch.

“I don’t think there are any Democrats who want to see the highway program come to an end,” he said.

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Among its reforms, the short-term GOP bill requires people who inherit property to report the value of large estates immediately upon the owner’s death, so they do not overstate its original value years later and understate their tax liability when they sell it.

It would also ensure that Transportation Security Administration fees, which doubled as part of a 2013 budget deal, are treated as mandatory savings through 2026, so the fees cannot be appropriated elsewhere as discretionary spending. It does not change the fee amount.

The bill also provides $90 million in tax relief for producers of liquefied natural gas and petroleum.

But it does not try to revive the federal Export-Import Bank, an agency that financed the sale of U.S. exports to international buyers for decades but lost its authorization to conduct new business on June 30.

Mr. Ryan and other conservatives want to kill off the bank, arguing the product of the New Deal handed out “corporate welfare” and should fade away once it meets its existing obligations.

Proponents of the bank say they have the votes to resuscitate it. They’re hoping to amend a highway bill in the Senate and send it to the House as must-pass legislation.

Mr. Hoyer said billions of dollars in transactions remain stuck in the Ex-Im pipeline, since it cannot conduct new business.

“We believe the Republicans’ failure to reauthorize the Ex-Im Bank has been costly already,” Mr. Hoyer said.