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Obama signs stopgap highway funding bill

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(Bloomberg News photo) The nation's Highway Trust Fund will stay operational until May of next year with stopgap highway funding signed into law.

WASHINGTON (Aug. 12, 2014) — President Barack Obama signed on Aug. 8 a $10.8 billion stopgap highway funding package designed to keep the Highway Trust Fund operational until May of next year.

The final version of the bill, which passed the House of Representatives July 15 and the Senate July 29, obtains most of the $10.8 billion through a method known as “pension smoothing,” which allows companies to contribute less money to their defined benefit pension plans over the less several years.

Pension smoothing causes companies to report more taxable income, thus enhancing revenue for the federal government.

When the House passed the bill, President Obama said the short-term measure will preserve 112,000 current transportation projects and 700,000 transportation-related jobs in the U.S. However, the administration continues to support its own multi-year, $302 billion transportation funding package.

In its Weekly Legislative Update of Aug. 11, the Tire Industry Association (TIA) said it supported passage of the short-term transportation bill, but would continue to fight for passage of a long-term bill.

“We will work to keep the issue in front of the media,” TIA said. “Stepped-up involvement from our members outside of the Beltway, including our grassroots network, will be needed to save the Highway Trust Fund from collapse in the future.”

Though pension smoothing will give the government a short-term bump in highway revenue, TIA said, companies will have to increase their pension contributions eventually, making pension smoothing an unlikely vehicle for long-term funding.

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TB Reader Poll

Previous | Published January 28, 2016

Titan International and the United Steelworkers union have petitioned the U.S. International Trade Commission and U.S. Department of Commerce seeking relief from OTR tire imports from China, India and Sri Lanka. What’s your opinion?

I wholeheartedly support their action – something needs to be done.
46%
(36 votes)
I think it’s a bad idea that could inevitably tie the hands of domestic tire makers.
13%
(10 votes)
I oppose any duties against tire importers—they only raise costs for distributors and make it harder to obtain inventory.
24%
(19 votes)
I’m kind of on the fence and not sure what’s right, but need more information before deciding.
14%
(11 votes)
I don’t really care whether or not relief is granted.
3%
(2 votes)
Total votes: 78