By David Lawder and John Crawley
WASHINGTON (Reuters) - Republican and Democratic leaders in the U.S. Congress held talks on Monday over an extension of transport construction authority that would avert project shutdowns and give House Speaker John Boehner a shorter window to resolve Republican divisions over a signature jobs initiative.
Aides said that Boehner and Senate Majority Leader Harry Reid and their staffs were discussing how to proceed after Boehner postponed a House vote on his proposal for a 90-day renewal of current law.
If no action is taken by week's end, the government would have to stop collecting gasoline taxes and cut off the flow of money to road, bridge and mass transit projects, forcing the lay-off of tens of thousands of construction workers.
"We are in the midst of bipartisan conversations about a short-term extension of the highway bill," Michael Steel, a spokesman for Boehner. "To facilitate those conversations, the House vote on an extension will occur later this week rather than tonight."
After months of disagreement among House of Representatives Republicans that turned their five-year, $260 billion transport bill into road kill, Democrats want to force Boehner to accept bipartisan legislation passed by the Senate to spend $109 billion over two years. "Allowing Republicans another 12 weeks would do nothing but feed their dangerous addiction to serial extensions and damaging delays", Nick Rayhall, the top Democrat on the House Transportation Committee said.
House and Senate Democrats fear that a 90-day extension would lead to a highly partisan House bill loaded with features that are non-starters for Democrats and force both chambers to start over from scratch.
A senior Senate Democratic aide would not specify a length of extension that would be acceptable, saying only that it must be as short as possible, as this would put more pressure on Boehner to retool his bill to more closely resemble the simpler Senate version.
But House Republicans are unlikely to adopt the Senate bill, which does not contain the energy provisions they favor, such as approval of the Keystone XL oil pipeline from Canada to Texas, and expanded offshore drilling opportunities. Boehner has touted the legislation as the Republicans' top jobs initiative this year.
House Transportation Committee Chairman John Mica said Democrats would be "playing politics" with jobs by rejecting a spending extension.
If an extension deal can't be reached with Democrats, House Republicans may struggle to win the 218 votes needed for approval of their plan with only Republican votes.
Factions of Boehner's caucus rebelled at the cost and other provisions of the five-year House plan. And some conservative Republicans won't vote for any spending legislation in an era of high budget deficits.
Also, Republican members from states with large urban centers oppose a House plan to cut funding for mass transit projects. Moreover, there are questions about a signature Boehner initiative to expand oil and gas drilling and use any royalties to help cover a shortfall in gas tax revenue. Republican leaders are considering changes that could include dropping the five-year package in favor of a smaller bill and eliminating the controversial provision to decouple mass transit from its dedicated funding stream.
But Boehner has shown no inclination to give up on expanded oil and gas exploration, a key plank of Republicans' election-year campaign against President Barack Obama.
Thus far, Republican aides are divulging little about Boehner's plans if he is successful in winning an extension.
Kevin Smith, a Boehner spokesman, declined to discuss the longer-term future of the measure but Mica said that efforts were ongoing to work toward "a responsible, long-term" bill. Both sides ultimately have little interest in allowing construction funding to lapse in an election year amid a still-tenuous U.S. economic recovery.
Construction sector unemployment stood at 17 percent in February, nearly twice the national average. Moreover, the Treasury collects $110 million per day in gasoline taxes, money that industry trade groups say would not be recovered if government authority to collect that revenue lapsed. The U.S. government spends $50 billion annually on road, bridge and transit projects.
Some states are already scaling back plans for construction due to the uncertainty over federal transportation spending. North Carolina, for instance, has slowed awards for $1.2 billion in projects that would employ some 41,000 people, according to an analysis by state officials provided to the American Association of State Highway and Transportation Officials.
Hobbled by partisan wrangling last summer, Congress let aviation funding lapse, resulting in a two-week shutdown of airport projects. The Treasury lost $400 million in ticket taxes due to the standoff.
(Editing by Eric Walsh)