"House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, would offset its costs by letting employers delay contributions to their employee pension plans, which raises corporate taxable income in a boon for the U.S. Treasury [known as "pension smoothing']," writes Laura Litvan of Bloomberg News.
House Speaker John Boehner today called the measure “a really solid bill” that he will put before the full House for a vote next week.
[Note Forbes' assessment of that strategy: "'Pension Smoothing' Is A Sham"].
Bernie Becker and Keith Laing of The Hill write that the "proposal would raise about $6.4 billion from pension smoothing, another $3.5 billion from customs user fees and a final $1 billion from an account set up to deal with leaking underground storage tanks."
Democrats in the Senate Finance Committee, chaired by Sen. Ron Wyden (D-Ore.) have based their $9 billion patch bill (known as the PATH Act) on savings achieved in how Individual Retirement Accounts (IRAs) are administered after dropping the increase in the heavy truck tax.
Because the House has taken a different approach than the Senate, it "complicates the ability to forestall a slowdown in disbursements from the highway trust (fund) to states next month," notes Litvan.
In addition, Camps bill funds the Highway Trust Fund shortfall through May while Sen. Wyden's bill only goes to Jan. 1. Streetsblog's Tany Snyder elaborates on why the bills are of different lengths and the problems that presents.
As noted earlier, unless Congress acts quickly, federal transportation reimbursements will be reduced effective August 1 due to the Highway Trust Fund's declining balance.
Lost in the dialog is the actual six-year reauthorization of MAP-21, a fact not lost on Sen. Bob Corker (R-Tenn.), co-author of a 12-cent indexed gas tax increase bill. Politico's Adam Snider captured his reaction to the House proposal, though it applies to Wyden's PATH Act as well.
“This disgraceful practice of borrowing money to cover a few months of spending and paying for it over a decade is nothing more than generational theft,” he said. “It's shameful for a nation of our greatness to be handling infrastructure funding the way that we are.”
