|LEGISLATIVE UPDATES are sent to rep and manufacturer members every week through ERA’s membership in the Small Business Legislative Council (SBLC). The bulletins explain the implications for small businesses of all pending or recently-enacted federal legislation.|
Current Legislative Alerts (All users)Highway Trust Fund - August 6, 2014 - A resolution, albeit temporary and imperfect, has been reached to prevent the impending insolvency of the Highway Trust Fund. click to read more ...
Although the Highway and Transportation Funding Act of 2014 averts what could have been a very harmful scenario for the recovery U.S. economy, it is not without its shortcoming. The version of the bill, passed by both chambers, extends funding through May 2015. One of the amendments originally passed by the Senate would have modified the bill to only provide funding through December, 2014. This amendment would have forced Congress to consider a long term fix during the lame duck session which many proponents argued would have presented the best opportunity and dynamic for a long term deal. As funding will now continue through 2015, the prospects of a long term resolution, as opposed to a temporary fix, is more tenuous. Additionally, the final version of the bill raises funds primarily through what is known as pension smoothing, which has received significant criticism as simply being a budget gimmick. Over a period of time, pension smoothing allows companies to contribute less money to their defined benefit pension plans over the next several years (thus causing them to report more taxable profits – and resulting in a short term revenue bump for the federal government). However, in the later years it is likely that companies will have to compensate for their prior lower rates of contribution by increasing contributions which will in turn lower their taxable profits. Thus, while pension smoothing raises money in the short term, it is probably not a a long term revenue raiser.
Although Congress was able to reach a resolution on the Highway Trust Fund, both chambers broke for August recess on Friday, without resolving another critical issue – that being, emergency funding to handle the increased levels of South American minors crossing the U.S.’s southern border.
The Senate adjourned with its bill (S.2648), which would provide an additional $2.37 billion for border control, stalled after having been blocked by Senate Republicans on July 31. On the other side of the Hill, just before adjourning on August 1, the House did manage to pass its own border funding bill. However, the House bill is likely to face a brick wall in the Democrat controlled house as it would provide just $694 million of additional funds and be paired with changes to a 2008 human trafficking law that would make it easier to quickly deport minors which Democrats have strongly opposed.
In light of the standoff on this issue, the President stated that the agencies, which have already exhausted their funds for the border security needs at issue, will have to begin to reallocate resources until the Congress reaches a resolution.
On the Senate side, this morning the House Ways and Means Committee approved Committee Chairman Dave Camp’s proposed Highway and Transportation Funding Act of 2014 (HR 5021). The Committee rejected a Democratic amendment to provide additional funds only through Dec. 1, 2014, with the hope that a long-term plan would be reached before that time. Like the Wyden-Hatch proposal, the House proposal would raise the necessary funds in part through pension smoothing and increase of customs user fees. The House proposal also includes a transfer from the Leaking Underground Storage Tank Trust Fund.
With significant progress on both sides of the aisle, we are optimistic that legislation will be passed to fund (at least in the short term) the Highway Trust Fund and that this solution will not be at the expense of small business interests.
If you have any questions about the SBLC or ERA’s participation as a one of the Council’s 64 association members, please contact Tom Shanahan, ERA Executive Vice President and CEO, at email@example.com or 312-419-1553.