Senate proposes $301 billion highway bill, sets deadline

WASHINGTON (AP) - Senate Republicans on Tuesday proposed a $301 billion compromise highway-mass transit bill, defying a White House veto threat and warning that a lesser amount would doom the massive job-creating measure in an election year.

Sen. James Inhofe, R-Okla., chairman of the Senate Environment and Public Works Committee, gave the House until Thursday to decide on his offer that would split the difference between a more expensive Senate bill and a House-passed bill. He termed it "our last shot ever" to get a bill this year.

Inhofe was seeking to break a yearlong deadlock on the giant jobs and public works bill that has divided the Senate, which is seeking robust spending on the nation's infrastructure, the White House, which is trying to hold down federal spending, and the House, which is caught in the middle.

Inhofe proposed that the two sides agree to $289 billion in guaranteed spending over the next six years, and $301 billion in contract authority, which can run beyond the six-year framework.

He also suggested that by the end of the six-year period all states be assured of getting back 94 percent of what they put into the highway trust fund, which is derived from the 18.4-cents-per-gallon in federal tax that drivers pay at the pump. Currently states are guaranteed only 90.5 cents for every $1 they contribute.

Congress leaves at the end of this week for a six-week recess including the two national party conventions, and Inhofe said that failure to reach a compromise number this week would leave them no choice but to extend the old six-year plan into next year.

That plan expired last September, and has to be provisionally extended four times to keep federal money flowing to the states at the old level of $218 billion over six years.

The Senate approved a $318 billion bill for the 2004-2009 period and the House voted out a $284 billion version, but efforts to reach a compromise have been hampered by White House threats to veto any bill that goes much over $256 billion. The administration says the bill must not add to the deficit or take money from outside the trust fund.

"We will mull this over very closely," House Transportation Committee Chairman Don Young, R-Alaska, said of Inhofe's offer. But House Ways and Means Committee Chairman Bill Thomas, R-Calif., cautioned that any bill they pass must get the president's signature.

At stake is tens of thousands of good-paying construction jobs, delays in repairing the nation's deteriorating roads and bridges and postponement of new safety programs aimed at reducing the highway accidents that claims more than 40,000 lives a year.

Both House and Senate Democrats urged the conference to go with the original $318 billion Senate number, even if it means the first veto of the Bush presidency. "We are not here to serve the White House," said Sen. Barbara Boxer, D-Calif. "Let's show a little backbone here and move this thing forward."

Democrats also demanded to know how the lower $301 billion figure might affect the formula for highway trust money going to the states and the division between highway and transit money, traditionally split along a 80-20 ratio.

Rep. Jerrold Nadler, D-N.Y., whose state receives more from the trust fund than it pays in because it relies more on public transportation, argued that at $301 billion his state would effectively lose money after inflation if the 94 percent guarantee was put in place. "That's totally intolerable."

Nadler said it would be better not to pass a bill and wait until after the election when the new administration, whether Republican or Democrat, might be more sympathetic to a higher spending bill.

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The House bill is H.R. 3550. The Senate bill is S. 1072.

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