Senate passes multiyear highway bill, must negotiate with House this fall

The Senate laid down its marker for the massive highway bill Thursday, passing a measure that would fund three years of new road-building by eking $46 billion out of fees and tax policy changes.

But with a Friday deadline looming and the House already rejecting that bill, senators also approved a three-month extension of current highway building, sending it on to President Obama and buying more time to negotiate a long-term bill this fall.

That agreement will prove much tougher.

Senate Majority Leader Mitch McConnell personally negotiated the three-year bill that passed on a 65-34 vote Thursday, with its small tweaks. But House Speaker John A. Boehner is backing a different approach that would use a one-time tax on overseas corporate income repatriated into the U.S. to fund a $90 billion road-building bill.

“We’ll go to conference and see what the conference produces,” Mr. McConnell told reporters.

Thursday’s extension, which Mr. Obama is expected to sign, would authorize road-building through Oct. 29.

---

SEE ALSO: White House blasts House GOP for skipping town

---

There have been more than 30 short-term extensions since the last long-term highway bill, which was passed in 2005 and expired in 2009.

All sides agree on the need for federal highway funding and generally agree that more money will be needed than what’s brought in by the current gas tax, which has been producing diminishing returns.

Democratic leaders say they would prefer a gas tax increase, but GOP leaders have rejected that, leaving lawmakers to try to figure out where to get the additional money.

Sen. Orrin Hatch, Utah Republican, urged the House to look at the Senate’s mix of several smaller changes that combine for $46 billion in revenue — enough to cover three years of the six-year plan all sides want. Mr. Hatch said a tax overhaul could then be used to cover the final three years.

“It gives them a little more leeway,” he said, while leaving the door open to other ideas from the House.

The House, though, is committed to a bigger tax overhaul.

---

SEE ALSO: Planned Parenthood: Obama White House calls undercover videos ‘fraudulent’

---

“We plan to pursue the tax plan,” said Brendan Buck, spokesman for Rep. Paul Ryan, Wisconsin Republican and chairman of the House Ways and Means Committee.

House Majority Leader Kevin McCarthy has pointed to a tax-reform framework by Sens. Charles E. Schumer, New York Democrat, and Rob Portman, Ohio Republican, as proof that there’s a will in both chambers to go for a big solution.

But Mr. McConnell’s spokesman, Donald Stewart, said the Senate leader doesn’t want to produce tax reform just so Congress can “turn around” and spend money on other things, and it’s still unclear whether the House can sort out a tax overhaul in mere weeks.

Efforts to avert a collision course on roads will have compete for attention with a vote on the nuclear deal with Iran and efforts to pass a stop-gap spending bill that averts a government shutdown. By late October, the U.S. runs up against the nation’s borrowing limit.

Thursday’s three-month bill, meanwhile, also plugged a $3.4 billion budget deficit at the Veterans Administration that had threatened funding for hospitals and clinics across the country.

The Senate’s multiyear bill would revive the expired Export-Import Bank, a key priority for Democrats and some Senate Republicans who say product of the New Deal still bolsters jobs.

But the short-term extension left the bank to wither, placing its fate in doubt until at least September.

Interest groups toggled between gratitude for the short-term highway relief and warnings about yet another looming showdown over roads.

“The discouraging reality is that the clock is again ticking on yet another short-term extension, and after their recess lawmakers will have to accomplish something in about six weeks that hasn’t been achieved in six years — agree on a satisfactory way to pay for a long-term bill and get it to the president’s desk,” said David A. Raymond, president and CEO of the American Council of Engineering Companies.

Nineteen Democrats and 15 Republicans voted against the bill amid doubts about its provisions and how its paid for.

Sen. Lindsey Graham, a South Carolina Republican who is running for president, missed the vote; three other GOP senators seeking the White House voted “no.”