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Highway Trust Fund bill passes the Senate ends unemployment extension funding

The Democratic Senate passed and President Barack Obama signed the Highway Trust Fund bill which takes away funding for the unemployment benefits extension bill, Aug. 1, 2014
The Democratic Senate passed and President Barack Obama signed the Highway Trust Fund bill which takes away funding for the unemployment benefits extension bill, Aug. 1, 2014
Chip Somodevilla/Getty Images

Now that the Senate passed and President Barack Obama signed the Highway Trust Fund extension bill on Friday, Aug. 1, 2014 the payment method for the unemployment benefits extension bill has been permanently taken away. The highway bill uses pension smoothing and custom fees to pay for the short-term extension lasting until May 2015. The unemployment benefits extension bill's co-authors Senators Jack Reed, D-RI and Dean Heller, R-NV had been planning to use since March 2014 when they first unveiled their bipartisan bill, the Emergency Unemployment Compensation Extension Act of 2014. Meanwhile Reed and Heller are working to find new funding, and unfortunately the 3.2 million long-tern jobless will have to wait another five weeks until the Senate returns on Sept. 8 from the August recess to see any real possible action on the bill.

The highway and transportation bill, the MAP-21 Reauthorization had two different incarnations in the House and Senate; the bill had to pass by Aug. 1 if not transportation funding would have been cut by 28 percent with "100,000 transportation projects" and "700,000 construction jobs" on the line. Since so many jobs are at stake, it has been deemed a priority to President Obama, the GOP House and Democratic Senate. The bill's importance and funding methods come at the expense of the unemployment benefits extension bill and the over 3.2 million Americans that desperately want to see the bill pass and benefits renewed.

The unemployment benefits extension's bill's authors Jack Reed, D-RI, and Dean Heller, R-NV have been trying to get their bill added as a supplemental to must pass bipartisan bills, including the Highway Trust Fund bill, and the emergency border crisis spending bill, both efforts have proved fruitless. Although Senate Majority Leader Harry Reid, D-NV was open to adding the extension to either bill it never happened.

The Highway Trust Fund bill first passed the Senate on Tuesday July 29, 2014 with a vote of 79 to 18. The Senate passed their own version of the bill forgoing the House's version. The primary reason the House's bill was refused was their choice of funding sources, which the Senate considered a "gimmick." According to the Associated Press, "Lawmakers" think "it will cost the government money in the long run and undermine the financial stability of pension funds." Instead the Senate wanted to make "it harder for people to claim tax deductions and credits they don't qualify for."

Republicans usually object to pension smoothing, including when it was being used for the unemployment benefits extension, but this is the second time in this year they have used it to fund bills. The Highway Trust Fund has always been paid for by the 18.4-cents-per-gallon gas tax, but the tax is too low and can no longer support it, the Democratic Senate wanted to raise the tax for a long term bill, but the House Republicans and President Obama oppose the idea.

The Senate added a bipartisan amendment sponsored and authored by Tom Carper, D-DE, Barbara Boxer, D-Ca and Bob Corker R-TN "stripping" the bill of the funding of the questionable funding sources, lowering its price tag to $8.1 billion and making the extension last on until Dec. 19, 2014. The point was to make the House agree to a long-term bill during the lame duck session after the midterm elections in November. The amendment passed 66 to 31.

The fact that the Senate refused the the House's bill at first first seemed like the only good news for the unemployment benefits extension because it appeared to ensure the funding sources were still available for the bill. Later in the week the House decided to refuse the Senate's revised bill forcing the Senate to agree to the funding meant for the unemployment benefits extension.

Speaker of the House John Boehner, R-OH promised if the Senate passed their own version of the bill the House would just send it back, the original way they passed it. Boehner warned; "I just want to make clear, if the Senate sends a highway bill over here with those provisions, we're going to strip it out and put the House-passed provisions back in and send it back to the Senate." The House did reject the Senate passed version with a vote of 272 to 150 held on Thursday, Aug. 1, 2014. Since Majority Leader Reid promised President Obama will have a passed bill by the Aug. 1 deadline the Senate had no choice but to pass the House bill with a vote of 81 to 13.

The House version of the highway funding bill drafted by the Republican majority, and sponsored and authored by House Ways and Means Committee Chairman Dave Camp (R-MI) is a temporary short term bill extending funding until May 2015. The $10.8 billion bill is being funded the same way as the unemployment benefits extension bill had planned to be paid for, through pension smoothing and custom fees. The unemployment benefits extension bill also will cost $10 billion for the five month extension that is planned in the Reed-Heller bill.

In contrast, the Democratic controlled Senate's bill sponsored by Sen. Ron Wyden (D-OR) planned to fund their bill by pension smoothing and raising taxes, particularly the gas tax. The Senate had two bills, one provides a long-term solution, but without Republicans agreeing to raise taxes the two parties might never come to an agreement on the bill. The second bill is an even shorter term bill, last only until December and paid for with tax increases. Majority Leader Reid wanted the Senate to vote on all three versions of the transportation bills, saying; "My intention is have votes on all three."

The House of Representatives passed the Highway Trust Fund Extension bill; H.R. 5021: Highway and Transportation Funding Act of 2014 on Tuesday, July 15, 2014. The House passed highway trust fund extension bill takes away the funds from pension smoothing and increasing customs fees that Reed and Heller had been planning to use. Even more bad news is the fact that the bill passed with bipartisan support 367 to 55.

With so many jobs on the line if the highway bill fails to be renewed, the bill had the reluctant support of President Barack Obama and the Democratic Senate as well, leaving the unemployment benefits extension almost doomed to failure. Senate Finance Committee ranking member Orrin Hatch, R-UT admitted the Senate has no choice if they are to meet the deadline; "Congress needs to act immediately to prevent a shortfall in the Highway Trust Fund … Thousands of jobs are at stake here. The only viable solution is for the Senate to take up the House bill and pass it. … We don’t have any other options if we want to get this done before the recess."

Over three million long-term jobless Americans have been unemployed for more than 27 weeks, they need the benefits to survive. Although the total unemployment rate keeps falling each month, the long-term jobless rate remains virtually the same with high numbers at 3.2 million for July. The long-term unemployment fell by 293,000 and in total has dropped 700,000 in the past three months since March, and dropped by 1.1 million since July 2013.

There are however, still 3.2 million unemployed for six months or more, and compromise 32.9 percent of all unemployed Americans. Older workers, women and younger workers with in service and blue collar jobs with only a high school diploma are the most affected. The Emergency Unemployment Compensation (EUC) program expired on Dec. 28, 2013, the EUC program usually has been renewed as long as the long-term jobless rate is above 1.3 percent. Here it is eight months later with long-term unemployment essentially not and Congress is no closer in fact further from passing an extension than it was then.

When the House passed the Highway Trust Fund Sen. Heller acknowledged that it was going to difficult to find new funding that Republicans would approve of, saying; "That's going to be an issue." Heller spoke to Congressional Quarterly's Roll Call about finding new funding for the bill and not giving up, saying; "Jack [Reed] and I had a conversation last week just trying to figure - you know there are no pay-fors left out there - trying to figure out how we can move this thing forward. We haven't given up, we are just still trying to figure out what our next move is." With a five-week recess they are bound to find a way to fund the bill, the more difficult problem is how to get the Senate and House to pass the extension.

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Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. She covers US, Canadian & Israeli politics, with a particular focus on the Obama presidency, Congress, domestic policy, and elections.