WASHINGTON -- A decision by House Democratic leaders late Wednesday to drop their proposed "Nickel for America" gas tax increase broke the logjam that had been holding up the highway bill, but it could still take weeks or months to complete action on the legislation, congressional aides said yesterday.

The full House is not likely to act on the reauthorization bill before the scheduled Sept. 30 expiration of the highway and mass transit program because it will have to be scaled down to reflect the loss of the proposed gas tax revenues, said Jimmy Miller, director of the House Public Works and Transportation Committee.

After the House passes rejiggered version of its $153 billion bill, it must then go to conference with the Senate to work out considerable differences between the House version and the Senate's $123 billion bill -- particularly on allocating the highway funds. That process also will take weeks, he said.

The prolonged delay of the bill means more than half of the states could get perilously close to exhausting their federal highway funds before the program is reauthorized, he said. Twenty-seven states are expected to have $1 million or less of their federal allotments remaining at the end of the month to fund interstate highway projects, he said, while another 12 states are expected to have less than $1 million available to repair and maintain bridges.

"That's not a lot of money when you think of the large costs of maintaining interstate highways," he said. On the other hand, because it would take 60 to 80 days for all the states to use up their highway funds, according to Federal HIghway Administration estimates, Congress should have a little time and leeway to rewrite and pass the transportation bill, he said.

House Speaker Thomas Foley, D-Wash., has said that -- despite the leadership's oft-repeated goal of passing the bill before the Sept. 30 deadline as one of its top domestic priorities -- the "world will not come to an end" if the bill gets delayed for a few weeks.

Yesterday morning, Mr. Miller said the committee had not even begun to rework the $153 billion bill it had approved before the August recess to reflect the leadership's decision to abandon the proposed 5-cents-a-gallon gas tax increase. Staff aides on both the public works committee and the House Ways and Means Committee appeared as surprised as outsiders at the impromptu leadership announcement.

"This just happened yesterday. We do not have anything down on paper. We do not have a game plan," Mr. Miller said.

The decision to drop the gas tax proposal was prompted not only by discontent within the House Democratic Caucus over the proposal and the bill's highly publicized "pork barrel" projects, but by a signal from the Senate earlier this week that it would oppose the gas tax in conference, he said.

The Senate unanimously passed a resolution saying that, "in light of current economic conditions," the gas tax should not be increased. "We would have been blind to go ahead with it after the Senate publicly announced its position," Mr. Miller said. President Bush had also threatened to veto the proposed tax increase.

In jettisoning the proposal, Rep. Foley said he had agreed with both Public works Chairman Robert Roe, D-N.J., and Ways and Means Chairman Dan Rostenkowski, D-Ill., to instead extend for another three years past 1995 the 2.5-cents-a-gallon gas tax increase for highway spending that was enacted last year as part of the budget agreement.

While the gax tax extension would raise additional revenues in the neighborhood of $20 billion, that money would not be available for four years and would be far less than the extra $33 billion the committee had planned to begin spending immediately as a result of the proposed nickel tax increase, congressional aides said.

Next year, for example, instead of spending $26 billion on highways and mass transit with the help of the tax increase, the committee can slate only $19.5 billion of spending, Mr. Miller said. That is the level of spending authorized by the congressional budget resolution, and it is considered to be the most that could be spent in keeping with the budget law's tight spending caps.

Nevertheless, despite the apparent hole in the bill created by the loss of the proposed gas tax revenues, Mr. Miller said the public works committee does not intend to drop any of the bill's planned $153 billion of transportation projects. Instead, it will arrange to stretch out spending over six to eight years, rather than five, as originally planned, he said.

"We can change the spending plans to be within the budget ceilings for the first three years and then let the spending balloon during the last three years," after the budget law and the budget resolution expire in 1995 and 1996 respectively, he said.

Drawing out spending over several years would not be "unusual" for the slow-spending transportation program, since the first year of a project is usually consumed drawing up engineering designs and the heavy expenditures for construction do not occur until later, anyway, he added.

Because of the many strictures imposed by the budget agreement and the need to reschedule the bill's numerous projects, the task of rewritin the bill will be very complicated and could take a couple of weeks, he said.

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