WASHINGTON – Congress has approved a bill to prevent a 28 percent cut in federal highway and mass transit aid at the height of the summer construction season.
The Senate voted Thursday night for a House-passed measure to augment the federal Highway Trust Fund with in infusion of $10.8 billion from the general Treasury — enough to keep the fund solvent through May. The Transportation Department set Friday as the date the fund would no longer be able to provide all the aid promised from incoming gasoline and diesel fuel taxes.
The two houses played legislative ping pong with the issue in recent days over what critics called a "gimmick" to fund the measure by letting companies defer government-required contributions to their employees' pension plans. The bill now goes to the president.
The bill raises the money through:
—Pension "smoothing." Raises $6.4 billion by allowing companies to reduce the amount that they contribute to their pension funds now and make up for it later. Since pension contributions are tax deductible, companies would owe more tax revenue in the next few years as more of their earnings are taxed. But in the later years, they would be able to claim higher deductions from larger contributions to their pension funds, costing the government revenue. Over time, the pension measure doesn't raise revenue. But over the next 10 years — the time frame used to estimate the cost of legislation — it does. Critics warn it could cost taxpayers in the long run if federally insured pension plans can't meet their obligations and the government's Pension Benefit Guaranty Corp. has to cover them.
—Customs user fees. Raises $3.5 billion by extending for one year — through 2024 — various user fees paid to the Customs Service for goods, vehicles and people entering the U.S. Critics say it's a gimmick that allows lawmakers to spend the money now and not pay it back for 10 years.
—Leaking underground storage tanks. Transfers $1 billion from an overfunded trust fund established to pay for cleaning up sites fouled by pollution from leaking underground storage tanks, including those at gas stations. Most problem sites have been cleaned up and the leaking tanks fund runs a surplus of about $200 million a year.