Arit John sums up yesterday’s news:
The House overwhelmingly passed an unpopular proposal to use revenues from underfunded pensions to pay for one year of funding for the Highway Trust Fund. According to NBC News, the House bill will pay for a 10-month funding extension for road and infrastructure projects “using pension tax changes, customs fees and a transfer from the Leaking Underground Storage Tank Trust Fund.” Despite threats from conservative groups Club for Growth and Heritage Action, only 45 Republicans voted against the bill.
Sargent explains why Republicans voted for the bill:
The battle over infrastructure in the context of the HTF is one area where GOP anti-government rhetoric collides with reality.
It’s easy for Republicans to strut around ranting about crony capitalism, and they know they can attack the Export-Import Bank’s efforts to help U.S. exporters as improper Big Gummint meddling in the economy because no one cares about it. But here was a case where infrastructure projects — and jobs — could have been put on ice in many GOP districts.
Plumer rattles off critics’ objections to the legislation:
For one, the House bill would only avert the crisis until next May — and doesn’t address the underlying structural problems with the Highway Trust Fund. Some Democrats would prefer to deal with the highway problem this December, in the lame-duck session right after the midterm elections. … Other tax experts have criticized the “pension smoothing” provision. As Len Burman points out, the move may not actually raise any money: Yes, companies can reduce their pension contributions now under the rules. But the amount those companies will eventually owe in pensions doesn’t change — which means they’ll have to increase their contributions later (and tax revenues will fall).
Bloomberg View’s editors pine for a long-term fix:
It’s a shame that Obama and members of Congress, including those who wanted to raise the gas tax, didn’t find another solution to the funding problem. The president reluctantly endorsed the House bill, explaining that he does not want to see the fund run dry in August, as the Department of Transportation says it will. That’s understandable, but it’s also shortsighted.
If the bill could be stopped, the economic impact would be limited. Work wouldn’t cease on projects already under way; funding for those is guaranteed. Some states might be forced to delay future projects, but this would help push unions and governors to increase the pressure on Congress to find a better answer. Without strong political pressure, Congress will keep the gimmicks coming — and that needs to stop.