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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (July 18, 2014)
Lawmakers look to pension plans to bolster highway funding WASHINGTON, D.C. — Several nearly $11 billion to the Highway bills drafted by Congress to temporar- Trust Fund over the next 10 years. ily shore up the Highway Trust Fund About $7.824 billion of that would include schemes that allow companies come from general tax dollars. The bill would raise $2.7 billion by to reduce contributions to their em- ployees’ pensions. The fund, which extending changes made in federal helps states pay for transportation con- pension laws that were included in a struction and upkeep, is due to run out 2012 transportation measure. That pro- of money by the end of summer. If vision gives employers a temporary Congress doesn’t act soon, more than break on making contributions to their 700,000 middle-class jobs will be at employees’ pension plans (referred to as pension smoothing). risk. The Pension Rights National transporta- The bill would raise Center (PRC) in Wash- tion and construction ington, D.C., is con- unions have endorsed a $2.7 billion by proposal put forth by giving employers a cerned that giving em- ployers a pass on Sens. Bob Corker (R- pension contributions Tenn.) and Chris Mur- break on making might exacerbate a phy (D-Conn.) that growing problem of would raise the 18.4- contributions to pension plans that are cents-per-gallon federal their employees’ already underfunded. gas tax by 6 cents in “Pension policy each of the next two pension plans. should not be driven by years. After that, in- creases would be indexed to inflation. the need to raise revenue, especially [The federal gas tax hasn’t been raised when that revenue is not used to im- since 1993. If the tax had kept pace prove our nation’s retirement system, with inflation it would be at 29 cents a but to pay for other programs — no matter how worthy they might be,” gallon now.] A formal bill has yet to be intro- PRC posted on its web site following duced, and pundits don’t expect a bill passage of the 2012 transportation bill. The pension provisions in the bill with any substance will move through Congress until after the November are considered “revenue-raisers” be- cause contributions that employers elections. The Obama Administration does make to their pension plans are not not support the tax hike, and neither taxed by the federal government until the benefits are paid to workers. By al- does the Senate Finance Committee. Finance Committee Chair Ron lowing companies to contribute less to Wyden (D-Ore.) and top-ranking Re- their plans, PRC says, the federal gov- publican Orrin Hatch of Utah patched ernment calculates it will collect more together a proposal that would transfer revenue — either from the anticipated increase in company revenue, or from workers in the form of higher wages. A separate bill crafted by Republi- cans in the House Ways and Means Committee would raise $6.4 billion over 10 years using the pension “smoothing” process. “Allowing the Highway Trust Fund to go insolvent next month, clogging the roads Americans use every day and costing us hundreds of thousands of jobs, would be legislative malpractice and I’m not willing to let that happen,” Wyden said in a press release. “Sen. Hatch and I were able to compromise on a solution and deliver a true biparti- san path forward. At the same time we must push forward to define a sustain- able, long term plan to modernize our infrastructure.” Lawmakers have enacted 11 tempo- rary extensions to the Highway Trust Fund in the past five years. Transportation Trades Department President Ed Wytkind, appearing with President Barack Obama earlier this month to urge action on a long-term highway-mass transit bill, welcomed Wyden’s activism. “Wyden has been more than willing to work with his Republican col- leagues to find a solution to this avoid- able crisis. But to no one’s surprise, co- operation from key Republican leaders has been a little hard — OK, very hard — to find. That needs to change soon,” Wytkind said in a blog post. Laborers President Terry O’Sulli- van, who has been an outspoken advo- cate of congressional proposals to raise the gas tax by 12 to 15 cents over the next several years, said in a press re- lease that “while there appears to be movement on ensuring the Highway Trust Fund does not go bankrupt by the end of summer, Congress has no valid excuses to not act on a long-term plan. “There are multiple viable options which would end the duct-taping of our failing roads and bridges and pro- vide the long-term investment our na- tion, our people and our economy needs. If Congress fails, it will be due to cowardice in standing up to extrem- ists willing to destroy critical trans- portation infrastructure to make an ide- ological political point.” Oregon Department of Transporta- tion Director Matthew Garrett reports the state could lose $470 million in federal transportation money and 4,700 jobs next year if the fund runs out of money by Sept. 30. DeFazio introduces transportation funding bill that would eliminate 18.4 cent gas tax Oregon Congressman Peter De- Fazio introduced a bill June 12 that eliminates the federal gas tax, but still provides long-term funding for the Highway Trust Fund. His bill, HR 4848, “The Repeal and Rebuild Act,” would: • Repeal the federal gas tax (18.4 cents per gallon); • Increase the tax on a barrel of oil that is processed into gasoline to $6.75 and index it to construction cost infla- tion and fleet fuel economy; • Index the diesel tax to construction cost inflation and fleet fuel economy; • Bond the new revenue to backfill the Highway Trust Fund shortfall; • Support a $324 billion six-year reauthorization. DeFazio, a senior member of the House Transportation and Infrastruc- ture Committee, said in the first year the barrel tax would raise less than the 18.4 cent gas tax, but would provide potential short-term relief to con- sumers. The barrel tax would be indexed to the Department of Transportation’s National Highway Construction Cost Index and to CAFE (Corporate Aver- age Fuel Economy) standards to ac- count for less fuel consumption attrib- uted to those standards. The tax would not be applied to aviation, rail, or home heating fuel. “America’s economic competitive- ness is at stake. While Congress hems and haws over how to deal with the dwindling Highway Trust Fund, the rest of the world is moving full-speed ahead,” said DeFazio, “I introduced a real proposal be- cause I’m tired of Congress being all talk and no action. It seems like every politician says creating jobs is their pri- ority. Here’s a chance for members to do just that by investing in our nation’s infrastructure. Let’s get this done.” Low Prices! Mon-Fri 9-6, Sat 9:30-5:30, Sun 12-6 IRS PROBLEMS? • Haven’t filed for ... years? • Lost records? • Liens - Levies - Garnishments? • Negotiate settlements. • Prepare offer in Compromise. Call Nancy D. Anderson Enrolled Agent NPTI Fellow/America’s Tax Expert LTC-1807 www.nancydanderson.com 503-244-2577 JULY 18, 2014 NORTHWEST LABOR PRESS PAGE 7
