Just before 5 pm today, June 15, 2014, the House passed the Highway and Transportation Funding Act of 2014 (HR 5021) which would provide a temporary solution to the impending insolvency of the Highway Trust Fund. As previously reported, the Highway and Transportation Funding Act of 2014, sponsored by Ways and Means Committee Chairman Dave Camp, raises funds for the Highway Trust Fund through pension smoothing and an increase to customs user fees.
In an unexpected development yesterday, President Obama gave a tepid endorsement of the Republican sponsored bill. Although the White House continued to express its support for a long term solution to the Highway Trust Fund funding issue, the President urged Congress to pass the short term fix.
On the other side of the Hill, Senate Finance Committee Chairman Ron Wyden and Ranking Member Orin Hatch have negotiated their own proposed legislation titled the Preserving America’s Transit and Highway (PATH) Act of 2014. The PATH Act would, like the House bill, raise funds through pension smoothing and an increase to the customs user fees but would also include other revenue raising changes to the tax code. The PATH Act was reported out of the Senate Finance Committee on Friday, July 11, however, no date has yet been set for the Senate to vote on it. Particularly in light of the President’s endorsement of the Highway and Transportation Funding Act of 2014, there is a good chance that the Senate will simply move to pass the House bill and save the additional measures in the PATH Act for a future proposal aimed at a more long term fix. Senators Wyden and Hatch have indicated that they are invested in passing major tax reform in the latter part of 2015. However due to some recent moves of US companies to other countries, we anticipate renewed interest in reform of the international corporate tax system sooner than later.