Story highlights

A compromise once considered unreachable may be at hand

The Senate passed a two-year bill with strong bipartisan support

House Republicans want changes to include some pet policies

The measure authorizes funding for highway and bridge construction projects

Washington CNN —  

Congressional negotiators facing a June 30 deadline before federal money runs out for highway construction projects across the country have the choice of punting a 10th consecutive time with a short-term extension or compromising on a multi-year bill.

Party leaders insist that letting the surface transportation funding bill expire is not an option, and President Barack Obama has called repeatedly for passing the measure to ensure continued funding for the hard-hit construction industry amid sluggish economic recovery.

A conference committee of House and Senate members is trying to work out a compromise that once seemed unreachable but now could occur before the current bill expires on June 30.

“The conferees have moved forward toward a bipartisan, bicameral agreement on a highway reauthorization bill,” said a joint statement Thursday by the panel’s co-chairs, Democratic Sen. Barbara Boxer of California and Republican Rep. John Mica of Florida. “Both House and Senate conferees will continue to work with a goal of completing a package by next week.”

The standoff is based on sharply differing views about the overall expense of the bill and how to pay for it. Failure to either pass a new version or extend the existing one would jeopardize thousands of road and bridge construction projects.

Congress has passed nine straight short-term extensions since the last surface transportation bill was enacted in 2005. In the political glare of an election year, neither party wants to be linked to inaction that would halt construction projects and increase unemployment.

Obama touched on the political environment in his weekly address to the nation, saying the responsibilities of leadership “are bigger than an election.”

“Let’s keep construction workers rebuilding our roads and bridges,” Obama said in the remarks released Saturday. “And let’s tell Congress to do their job. “

Formally called the Safe, Accountable, Flexible, Efficient Transportation Equity Act, the law authorizes funding for highway and bridge projects, including the federal gas tax dedicated to road construction.

Earlier this year, the Senate passed a two-year, $109 billion version with broad bipartisan support. House Republicans, spurred by their conservative wing, took issue with some aspects of the Senate plan and proposed their own five-year, $260 billion version.

However, that measure never won approval from the full House, resulting in Congress instead passing a three-month extension of the existing legislation in March. It was the ninth consecutive short-term extension of the 2005 bill.

Obama noted that the Senate measure had support from almost three-quarters of the chamber, including 22 Republicans.

“Now, it’s up to the House to follow suit; to put aside partisan posturing, end the gridlock, and do what’s right for the American people,” he said in his weekly address.

At issue are GOP wishes to speed environmental reviews and ensure the gas tax revenue is paying only for road and bridge construction.

“We just want to make sure it’s a bill that includes real reforms to ensure that taxpayer funds are paying for legitimate projects that support economic activity, not planting more flowers in beautification projects around the country,” House Speaker John Boehner, R-Ohio, told reporters Thursday.

Boehner had been pushing a five-year bill that would pay for highway programs with money raised from leasing drilling rights for oil and gas in the Arctic National Wildlife Refuge, as well as other energy measures.

In particular, Boehner wanted a provision to fast-track federal approval of the Keystone XL pipeline from the oil sands of northern Alberta in Canada to the U.S. Gulf Coast.

Concerns by Nebraska officials forced pipeline developer TransCanada to seek an alternative route, which the Obama administration cited last year in delaying its decision on whether to approve the project.

Republicans accused Obama of playing politics by stalling the decision on a pipeline opposed by the environmental lobby. They latched a provision requiring a fast decision on the Keystone pipeline to the debt ceiling agreement last December, forcing the administration to reject the incomplete pipeline application earlier this year.

Now TransCanada has resubmitted a pipeline application with plans for the alternative route, which is still being studied by Nebraska officials. A final decision by Nebraska on the alternative route is not expected for months.

Boehner said Thursday that some progress had occurred in the conference negotiations. However, the Keystone issue was still considered a stumbling block, a Democratic aide told CNN last week.

One potential alternative would be a six-month extension that would put off the issue until after the November presidential election. Boehner and Democratic leaders have said they don’t want another three-month extension.

“I don’t think we’ll need an extension (of any kind). I hope not,” Senate Majority Leader Harry Reid, D-Nevada, told reporters Thursday.

CNN’s Deirdre Walsh and Ted Barrett contributed to this report.