Earlier this morning the Senate voted 68-29 to pass the $17.6 billion H.I.R.E bill (aka "Reid jobs bill") which contains language extending T-LU through the end of this year and extends the Build America Bonds program. The bill restores $8.7 billion to the Highway Trust Fund to offset last fall's rescission, and authorizes a transfer of $19.5 billion from the General Fund to the Highway Trust Fund to keep the account solvent through the end of the year and into 2011.

The bill now goes to the President to be signed into law.

Most Democrats claim the bill will stimulate the economy and address unemployment, while most Republicans dispute those claims and note the bill increases the deficit.

Later today the House will consider a bill that modifies H.I.R.E., and SAFETEA-LU, by changing the allocation of mega-project funding. This modification was negotiated and agreed to by House and Senate leadership, and is expected to become law. (Update: note this doesn't necessarily increase funding to states, it changes the allocation of funding a state is receiving.)


The Senate H.I.R.E. bill continued the mega project funding to the states which had received earmarks in certain accounts, and allocated the funds to a state’s formula program. Most of the funds went to 4 of 28 states, while 22 states would receive nothing. WA state was one of the four.

House Transportation Chairman Oberstar objected strenuously to that language, and probably had quiet support from many members in both chambers. Oberstar proposed sending the funds to USDOT for a competitive grant program. Ultimately he and Speaker Pelosi secured an agreement from Sen. Majority Leader Reid to support modifying the Senate’s provision. (Maybe this is inferring too much, but notably missing from the agreement was the name of Oberstar’s transportation counterpart in the Senate – Barbara Boxer of California, whose state would have benefited the most from the Senate language.)

The approved agreement calls for distributing the approximately $745 million among all states (instead of only 28) according to the ratio in which states receive total highway formula funding, rather than through the ratio in which states received earmarked funds from those programs in FY 2009. The $745 million represents the amount for FY 2010 and the first quarter of FY 2011 from the Projects of National and Regional Significance and National Corridor Infrastructure program.

The H.I.R.E. bill also includes a payroll tax break for businesses that hire new workers, and expensing rules to assist small businesses.

Update:

Build America: Provides $4.6 billion in additional federal subsidies for Build America Bonds. Build America Bonds were created by the American Recovery and Reinvestment Act of 2009. The bonds allow states and municipalities to finance infrastructure projects with an interest subsidy from the federal government. State and local governments issued $78 billion worth of Build America Bonds during the program’s first year.

The extension also allows the Highway Trust Fund in the future to collect interest on its deposits, as all other federal trust funds are authorized to do, and restructures fuel-tax exemptions for government vehicles currently paid out of the Highway Trust Fund so future payments come out of the General Fund rather than the Trust Fund, increasing money available for highway and transit projects in future years.