Republicans seek deal on highway spending bill

WASHINGTON -- Unable to settle on a compromise spending level, Republican leaders and the White House switched gears Tuesday and decided to initiate formal House-Senate talks on a huge highway and transit spending bill. Lawmakers emerging from a GOP leadership meeting with White House chief of staff Andrew Card said they would turn to House and Senate negotiators to thrash out a deal on the six-year highway bill that has eluded them for months. Congressional aides said the White House made some concessions during the weekend, agreeing to a new $275 billion ceiling. That apparently remains too low for lawmakers wanting more money to fix the nation's roads and boost home-state economies.

House Speaker Dennis Hastert, R-Ill., hoping to avoid a confrontation with the White House and possibly President Bush's first veto, has tried to reach an agreement with the administration on an overall spending number before turning over the massive bill to congressional negotiators to work out the details.

"The speaker is not interested in going to conference until we get that agreement," House Majority Leader Tom DeLay, R-Texas, said earlier Tuesday.

But Rep. Tom Petri, R-Wis., chairman of the House Transportation subcommittee on highways, said House leaders, unable to get that agreement, decided on a different course. "To do one thing in isolation is almost counterproductive," he said of the leadership talks.

Senate Majority Leader Bill Frist, R-Tenn., is expected to try to name Republican and Democratic participants this week to a formal negotiating conference.

The 1998-2003 highway bill, funded at $218 billion, expired last September and has had to be extended three times since then to keep federal money flowing to the states while Congress works on the new bill.

The Senate passed a $318 billion bill this year, while the House, under pressure from a White House veto threat, agreed on $275 billion last month. The White House has disputed that number, saying the real cost of the House bill would be $284 billion.

The White House originally said it would not accept anything over $256 billion, but House and Senate aides said that in staff discussions over the weekend White House officials indicated they would accept a bill that did not exceed $275 billion.

There's strong sentiment in the Senate for a bigger bill, and business groups are lobbying hard for the $318 billion Senate bill. Aides said that $275 billion would not pass in the House unless the bill contained a reopener clause.

Federal highway grants to the states come from the highway trust fund, paid for by the 18.4 cents a gallon in federal taxes drivers pay at the gas pump. Under current law, states are to get back at least 90.5 cents for every dollar they contribute to the highway trust fund, and states that pay more into the fund than they get back are pressing for that minimum to be raised to 95 cents.

The House-passed bill would reopen the six-year bill in two years if the 95-cent guarantee is not achieved, presumably resulting in the approval of more money. The administration strongly opposed that provision as another way to increase spending.

Meanwhile, lawmakers from Northern states chafed at the slow progress, warning that their states were in danger of losing a construction season. "We need a long period of planning" in the frost belt states, said Sen. Charles Grassley, an Iowa Republican.

Senate Democratic leader Tom Daschle, D-S.D., said: "The longer we wait, the more of the construction season will be lost, and the more jobs -- permanent jobs -- will be lost." Daschle, while supporting the Senate bill, has voiced objections about going ahead with House-Senate negotiations until he gets assurances that Democrats will not be excluded from the talks.

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

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