By David Lawder
WASHINGTON (Reuters) - The U.S. House of Representatives on Tuesday overwhelmingly passed a $10.9 billion extension of U.S. transportation funding through May 2015, a measure aimed at averting cutbacks in August in federal money for road, bridge and transit projects.
The measure, paid for largely through revenue generated by pension accounting changes and higher customs user fees, passed on a 367-55 bipartisan vote, despite opposition from outside conservative groups.
Senate Majority Leader Harry Reid said that "as soon as I can get to it," the Senate would begin considering a similar, $10.8 billion measure with some alternate funding provisions in the coming days.
Without new money for the Highway Trust Fund, the Department of Transportation has said it will start to cut back federal funding for projects by nearly a third starting on Aug. 1, the same day Congress begins a five-week summer recess.
"If Congress fails to act, thousands of transportation projects across the country and hundreds of thousands of construction jobs will be at risk," said House Transportation and Infrastructure Committee Chairman Bill Shuster, a Pennsylvania Republican. "This legislation provides much needed certainty and stability for the states."
The Highway Trust Fund, which has been supported by fuel tax revenues since its inception in 1956, has run chronically short of money in recent years because of higher construction costs and improved vehicle fuel economy. Trucking firms and many other industry groups favor higher fuel tax rates, unchanged since 1993, to return it to solvency.
But House Republicans have ruled that out, and the biggest revenue source in the House-passed bill is often called "pension smoothing," which allows companies to reduce near-term contributions to employee pension programs by assuming a higher, historical average rate of return. That move is expected to boost corporate tax collections by the U.S. Treasury by about $6.4 billion over 10 years.
WHITE HOUSE WELCOMES EXTENSION
The bill would transfer $1 billion in existing money to construction projects from a fund that helps pay for cleanup of leaking underground fuel storage tanks.
The $10.8 billion companion measure passed by the Democratic-controlled Senate Finance Committee would also fully fund transportation projects through May, although it would rely less heavily on pension changes and more on revenues from measures to boost tax compliance.
The White House said on Monday it would welcome the 10-month extension, to the chagrin of some Democrats who say it would push any decisions on long-term funding to a newly elected Congress next year. Among those is California Senator Barbara Boxer, who Reid said would get a Senate vote on her plan for a shorter, $8 billion extension. Boxer has argued a shorter extension is needed to force Congress to act on a long-term funding plan during the "lame duck" legislative session after November elections.
(Reporting by David Lawder; Editing by Peter Cooney)