Senate Passes Three-Month Highway Spending Bill

The Senate on Thursday passed a three-month highway spending bill, a measure that allows Congress to avoid a cutoff of transportation funds set to occur on Saturday and give lawmakers time to develop the sort of multiyear package they haven't been able to pass in years.

The House approved the bill on Wednesday, and President Barack Obama is expected to sign it. The Senate vote was 91-4.

With the longer-term in mind, the Senate also passed a bill that would continue highway programs for six years. That measure, which passed 65-34, would likely serve as the Senate's opening volley in what are expected to be high-profile, contentious negotiations with the House this fall, when lawmakers return from a recess.

The question is whether the two chambers, which have taken sharply different approaches, can work out a multiyear package by the end of October, when the three-month patch would expire.

Republican leaders are eager to pass a long-term highway bill to prove they can govern now that they control both chambers. So far, however, they have delivered only two short-term patches. The last one had extended the program for two months through July 31.

Despite the challenges ahead, Republican leaders in both chambers are projecting optimism and putting their faith in a conference committee to work out differences in competing highway plans.

House Republicans are also pursuing an alternative plan that would be linked to an overhaul of the system for taxing American multinational companies and using a one-time tax on profits parked overseas to fund a six-year highway bill. Senate Majority Leader Mitch McConnell, (R, Ky.), however, has rejected that approach and insisted on using a grab bag of maneuvers to offset the cost of a highway bill.

Senate Republicans said their own six-year highway bill, which includes three years of funding, was an important accomplishment that showed progress toward the most ambitious highway bill in a decade. The last big highway-spending bill passed in 2005.

"We all want to work out the best possible legislation for the American people in a conference later this year," Mr. McConnell said on the Senate floor on Thursday. He said passing the three-month bill would give the House space to develop its own plan.

House Republicans have rejected the long-term Senate bill mostly because it extends the Highway Trust Fund for six years but only provides funding for half of that period.

The legislation backed by Mr. McConnell would pay for the cost of replenishing the Highway Trust Fund in the first three years in part by selling oil from the nation's emergency stockpile and by cutting the dividend the Federal Reserve's regional reserve banks pay on stock that private-sector banks hold as members of the system. There is no provision yet for funding the final three years of that plan.

Some lawmakers say those funding proposals are bad ideas, and others dislike them out of principle, saying Congress needs to come up with a sustainable funding source for the Highway Trust Fund and end the ritual of passing temporary patches to shore up the program.

Since 2008, Congress has transferred $65 billion into the trust fund, according to the Congressional Budget Office. The federal gasoline tax that is the primary source of money for the program hasn't been increased in more than two decades.

Another point of contention involves the Export-Import Bank. The Senate tacked on an amendment to its long-term highway bill to renew the bank, whose charter lapsed earlier this year.

The bank provides financing for foreign customers of U.S. companies, but conservatives say the bank distorts markets and unfairly helps a small group of businesses at taxpayer expense. Any negotiations between the two chambers over long-term highway funding could thrust the bank back into the spotlight.

By Siobhan Hughes