Lawmakers embrace budget gimmick to fund highways

Republicans and Democrats embrace 'pension smoothing' budget gimmick to fund highway projects

Associated Press
INSIDE WASHINGTON: Bogus cash pays for roads
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FILE - In this June 20, 2014, file photo, Rep. Dave Camp , R-Mich., at a hearing on Capitol Hill in Washington. If there’s anything that can unite Democrats and Republicans in the partisan swamp of Capitol Hill, it’s free money. The latest example of free money in Washington is a retread proposal called "pension smoothing" that raises money but doesn’t actually increase anyone’s taxes. A plan by Camp would raise almost $19 billion over the next six years by extending for another five years a pension smoothing plan enacted to help pay for the 2012 highway bill. But over the final four years of the budget window, roughly two-thirds of that revenue gain is taken back as companies take higher tax deductions from larger pension contributions in the longer term. So the 10-year revenue gain is $6.4 billion, though it’ll continue to cost revenues after 2024. (AP Photo/J. Scott Applewhite, File)

WASHINGTON (AP) -- If there's anything that can unite Democrats and Republicans in the partisan swamp of Capitol Hill, it's free money.

The latest example of free money in Washington is a retread proposal called "pension smoothing" that raises money but doesn't actually increase anyone's taxes.

To some people's way of thinking, that's a win-win situation. But others say lose-lose is more like it, arguing that it's budget fakery at its worst and that it could undermine pension security for millions of workers.

Lawmakers revived pension smoothing Tuesday to help find money for a government fund that finances highway construction projects.

Over time, the provision doesn't raise revenue. But over the time frame used to estimate the cost of legislation — the next 10 years — it does.

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