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.”
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JULY 18, 2014
NORTHWEST LABOR PRESS
PAGE 7