2. TRANSPORTATION:

Conference pessimism mounts as House GOP says draft bill wasn't 'serious'

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Despite a brief bit of sun from members on the transportation conference, the clouds are returning after House Republicans deemed a draft offer from the Senate "not serious" and are preparing a counteroffer.

"Obviously, everyone's prejudiced to their own position. They could have, particularly on some of the streamlining reforms ... given us a better offer," said Rep. John Mica (R-Fla.). "But that's part of what a conference is about."

"The ball really wasn't moved far enough along the goal line to take it as a serious first offer," Mica added.

Staff members are still reviewing a proposal sent Tuesday from Sens. Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.), and Republicans say they will begin making counteroffers as early as today. Members would not talk about specific problems with the draft bill but said they wished to see more changes from the original Senate language.

And a source close to the negotiations said that the proposal showed that Boxer wasn't really moving on the bill and that "if she was really serious about getting a bill, she would have sent us a serious proposal."

"This was the Senate bill with a few minor tweaks. I guess she thought she could fool us or something," the source said.

But Boxer said yesterday that the characterization was incorrect and that the bill "contained a tremendous amount of their proposals."

"Senator Inhofe and I worked together on the changes, and there are a lot of changes in the bill that reflect what they want," Boxer said. "So if they don't think it's serious, then they don't take their own words seriously, because their own words are in there."

Sources on and off Capitol Hill indicated that there had been few changes to environmental streamlining language compared to the Senate bill, which has caused consternation for Republicans. Mica said that language remained a priority for Republicans, and other Republicans indicated they would continue to push back on it.

Democrats are still reviewing the offer but have supported the Senate language in the past.

However, members say they are not letting the latest setback deter them, and that this is just normal procedure for a conference negotiation. Boxer said the Senate would "look at" House proposals, and Mica said the back-and-forth would take several days.

The House also voted for a motion to instruct conferees from Rep. Jeff Flake (R-Ariz.), telling members to accept Senate language ensuring that states get at least 95 percent of the gas tax money they pay into the Highway Trust Fund.

A second motion from Rep. Lloyd Doggett (D-Texas) that would have instructed members to agree to Senate language taking tougher action on offshore tax havens failed. Another from Rep. Paul Broun (R-Ga.) that would tell conferees to insist on slashing funding levels for fiscal 2013 was introduced yesterday and is expected to be voted on today.

Transportation enhancements program exemplifies conference issues

Meanwhile, sources familiar with negotiations say that among the hang-ups has been a dispute about transportation enhancements, a program that offers funding for bike and pedestrian infrastructure, among other programs. They say that dispute has served to exemplify most of the problems with the transportation conference, as House Republicans hold fast to a position that the Senate has already negotiated.

"The sense from meetings is that the Senate is good with it ... but that the freshman vote is running the show on the House side," said a stakeholder familiar with discussions, requesting anonymity to speak freely. "We've heard that the Senate is really feeling like it's been litigated and been done."

However, House Republicans have said that a policy position negotiated in the Senate does not represent a bicameral compromise. Inhofe and Boxer may have carved out a solution on enhancements -- a program that pits them vehemently against each other -- but that does not mean the House will just sign on, they say.

In the Senate-passed bill, the transportation enhancements program was folded into another air quality program and the number of programs eligible for the set-aside was reduced. The Senate also approved an amendment from Sens. Ben Cardin (D-Md.) and Thad Cochran (R-Miss.) that would give local governments more control over that money, freeing up grants and the "additional activities" pool.

Supporters say the amendment not only would protect bike and pedestrian money but offers a bone to Republicans who want to see spending decisions devolved to the state and local level.

However, Republicans -- including Inhofe -- have long opposed the set-aside of 1 to 2 percent of funds for the transportation enhancement programs because it does not give states enough flexibility to make decisions.

Criticism of GOP approach to talks

Sources indicate that several freshman Republicans have been sitting in on staff-level meetings, an unusual move, and some have said that their presence is even causing some problems. The members may not be as well-versed on policy or may have hard-line positions on some issues, such as enhancements or project reform.

Mica said last week that the notion that members in the room are causing problems is incorrect. "What the hell did you send them here for if not to participate?" Mica joked to a coalition of construction groups last week in response to the criticism.

But stakeholders say their presence could be causing problems, especially if they completely refuse compromises like the Cardin-Cochran amendment.

"It doesn't sound like they've even looked at what Cardin-Cochran says or what's in there, so they're just railing against existing law," said a source familiar with the discussion.

The Senate made a similar compromise on project streamlining -- environmentalists have said even that language goes too far -- and other programs. Now members are faced with the problem of combining those compromises with firm Republican positions to appease both sides, a process that could jeopardize the conference.

"[Republicans] are hellbent on their extreme reforms," a source familiar with the talks said. "They may have backed off, but negotiating with that" won't work.

Reporter Jeremy Jacobs contributed.