The Senate passed late in May a two month extension of the highway funding bill by voice vote, avoiding an abrupt halt in infrastructure spending and pushing off a debate over how to finance road construction in the long term.   This vote came on top of a hectic week as politicians struggled to compromise on President Obama’s trade agenda and surveillance programs.   The vote extending the decision on the highway bill and trust fund avoided a deal on how to finance a longer term highway policy.  The Transportation Department said that with the extension, the trust fund had enough money to last until the middle of the summer.

So while the highway bill was the least contentious of the issues debated that week, leadership on both sides agree that finding the $15 billion at least needed a year for a 6 year highway bill will not be easy.  But Republicans are expected to push for a short term funding extension till the end of the year, which would make for a count of some two dozen extensions over the past 12 years.  However, Democrats are strongly opposed to another other short term fix.

Not surprisingly The Senate Environmental and Public Works Committee is expected to mark up a six year highway policy bill in late June, putting pressure on the finance committee to come up with the funding.   Both parties have suggested tax reform as a solution.  President Obama released a plan this year that would tax offshore income at 14 percent rate, and use the revenue to replenish the highway fund.   But it is uncertain, if there is enough revenue from offshore profits to both fund highways, and still cut corporate tax rates as both Obama and Senate Republicans want to do.  Many obstacles are facing tax reform, such as a small business lobby’s push to block any tax reform deal that doesn’t cut tax rates for individuals.  Other lobbies have pushed for a corporate tax holiday to help fund roads, but it is anyone guess how much traction any of these proposals will gain.

Bottom-line, there will be a push for a short term extension till the end of the year of the Highway trust fund, but the Democrats are adamant that Republicans need to make highways a larger priority and will fight hard against anymore short term funding extensions.   Meanwhile we can expect to see a mark-up on the re authorization or highway policy bill by the end June.  At the least, this mark will reveal the level of spending that lawmakers will push for highways, and whether programs such as Tribal Transportation can expect increases in funding or changes in policy.