WASHINGTON (Reuters) - Republicans in the U.S. Congress, unable to reach agreement on a long-term transportation funding bill in time for a May 31 deadline, on Friday introduced legislation for a two-month extension to buy more negotiating time.
The House of Representatives bill would extend federal spending authority on major road, bridge and rail transit construction projects through the end of July, about the time that the Highway Trust Fund is expected to be depleted.
Lawmakers from both parties want a six-year transport funding bill, but have made little progress on finding a way to fund the nearly half-trillion-dollar expected cost. There also is no consensus on how to fund the roughly $11 billion that would be required for an extension to year-end.
The two-month extension proposed by House Ways and Means Committee Chairman Paul Ryan and House Transportation and Infrastructure Committee Chairman Bill Shuster would not require offsetting savings as it uses the remaining trust fund assets.
"It was our preference to move an extension through the end of the year, but we will need more time to reach a bipartisan agreement on offsets," Shuster and Ryan said in a statement. "This legislation will allow transportation spending to continue through July, while we work towards a next step to close the Trust Fund’s shortfall."
Infrastructure advocates say the extension will keep money flowing to existing projects but will not provide enough certainty for states to launch new major construction projects that would benefit engineering, materials and equipment companies such as Fluor Corp, Vulcan Materials and Caterpillar Inc.
Major business groups, including trucking companies, advocate funding a long-term surface transportation bill by raising federal fuel taxes, unchanged since 1993. Both Democrats and Republicans have dismissed such an increase as politically impossible.
Many Republicans advocate using revenue captured from inducing or mandating the repatriation of some $2 trillion in profits held overseas by U.S. corporations.
But a "repatriation holiday" that grants companies a lower tax rate to bring funds home is viewed by some, including Ryan, to be a key part of a broader tax reform plan, complicating its use as a funding source for road and rail projects.
The Highway Trust Fund, fed by fuel taxes, has been chronically underfunded for more than a decade due to higher vehicle fuel economy, lower miles driven and rising construction costs. Congress has kept it going with $52 billion in general fund transfers since 2008.
Reporting By David Lawder; Editing by Andrew Hay