The future of approximately 112000 road work projects and nearly 700000 jobs is now uncertain after Congress failed to reach an agreement to replenish the Highway Trust Fund before a one week recess. The Fund could be gone as early as July and in the meantime roadwork could slow during the peak of construction season.
Senator Ron Wyden a Democrat from Oregon proposed a six month bill to add $9 billion to the fund through tax changes. House Republicans however said they wouldn’t approve tax increases so Congress left without a vote waiting for a deal that has a chance of approval by all sides.
Currently the Highway Trust Fund is largely maintained through a 18.4 cent-per-gallon gas tax but that tax expires on Sept. 30. The U.S. Department of Transportation is estimating the $50 billion a year fund will be $400 million short in August after a harsh winter that has affected roads across the country.
Wyden’s proposal could raise $2.2 billion over ten years through reforms that would allow for better tax compliance. In short the proposal would require banks to report additional mortgage information to the IRS. But an even larger portion of the funds needed for the next six months would come from a five year tax on inherited IRAs and retirement plans.
The proposal also originally included a tax increase for heavy vehicles plus a fuel tax on natural gas but on June 26 Wyden eliminated those tax increases from the proposal.
Michigan Republican Dave Camp said that tax hikes aren’t going to fly in the House. He said he is working on a different approach during the week off.
“It’s important for the committee to get something done but also to get it done right” Senator Orrin Hatch a Republican from Utah on the Senate Finance Committee told Bloomberg.
Both Wyden and Hatch have said they plan to work with Camp on a new bill that has the potential to be approved from both sides.
Both a measure by President Barack Obama introduced in April and a Environment and Public Works Committee proposal from May are both already off the table and are not being considered at this time.
Transportation Secretary Anthony Foxx said the DOT will begin delaying payments in states in a month if an agreement isn’t reached.