By David Lawder
WASHINGTON (Reuters) - The U.S. House of Representatives overwhelmingly passed on Tuesday a two-month extension of federal spending authority on transportation projects, delaying decisions over longer-term funding until the Highway Trust Fund is depleted in July.
The bipartisan, 387-35 vote sends the measure to the U.S. Senate for approval. Current authority for road, bridge and rail transit projects is due to expire on May 31.
The two-month extension resulted from lawmakers' inability to agree on a funding formula for a six-year transportation bill that would cost nearly a half trillion dollars, as well as disagreements over an extension through the end of 2015.
Because it relies on the remaining money in the Highway Trust Fund, the House measure requires no offsetting savings.
Passage by the Senate and a signature from President Barack Obama would avoid disruptions to job sites as the road construction season reaches full swing. But it sets up a new deadline in July, when the trust fund is due to run dry again.
Fed by fuel taxes that have not changed since 1993, the fund has experienced chronic shortfalls in recent years due to rising vehicle fuel economy, fewer miles driven and construction cost inflation. Lawmakers from both parties have ruled out a fuel tax hike despite support for that from trucking and industry groups.
House Majority Leader Kevin McCarthy, a Republican, said the two-month extension "is not the ideal solution." He blamed Democrats for failing to agree on spending cuts to fund a longer transportation bill.
"Because of that, we were only able to pass a two-month patch and may be forced to yet another short-term patch in the future," McCarthy said.
State transportation officials and many lawmakers contend that a series of short-term funding patches may keep existing work going, but they do not provide enough long-term funding certainty to launch major new projects.
That may cloud the demand outlook for major construction materials, equipment and engineering suppliers such as Cemex, Caterpillar Inc (NYSE:CAT), and Granite Construction.