U.S. Senate returns raided highway funds with interest, may get derailed

The Senate is expected to bring to the floor a bill that would extend the surface transportation law by 18 months and include a transfer of almost $20 billion from the general fund to the Highway Trust Fund.  The $51.5 billion draft measure — a consolidation of three Senate committee-passed bills — keeps the current law, governing highway, transit and transportation safety programs, going until March 31, 2011.

The revenue section, which falls under the jurisdiction of the Finance Committee, has been folded into the full extension bill, bypassing a panel vote.

The Senate legislation transfers $7.3 billion from the general fund to repay the Highway Trust Fund for money taken out over the years for emergency spending. The Senate bill also would reimburse the trust fund on interest it has not been paid since 1999.

To make up for the lost interest payments, the Senate bill takes $7.7 billion from the general fund for the highway account and $4.8 billion for the mass transit account.

Opponents argue that offsets should be included to cover the loss to the general fund, but supporters say it is money that is owed to the trust fund.

Fiscal conservatives may stand in the way of passing the bill by a voice vote.

Congress had a similar debate before the August recess when it was forced to pass a $7 billion transfer to the highway trust in order to keep promised transportation money flowing to states. The president signed the bill Aug. 7.