Senate should act on highway bill after break: Reid

WASHINGTON (Reuters) - The Senate should take up legislation laying out how much money the country will spend on roads, bridges and highways when it returns from its month-long recess, Majority Leader Harry Reid said on Tuesday.

A short-term patch to fund transportation programs expires on September 30 and the Senate had hoped to consider a long-term spending blueprint before July. But the battle over raising the U.S. debt limit pushed many issues to the side.

Congress adjourns this week for its August break.

Speaking before the Senate voted to approve a debt limit deal, Reid, a Democrat, said: "I'm optimistic and hopeful that the spirit of compromise that has taken root in Washington over the last several days will endure."

"We have a highway bill that's due," he also said. "I've spoken to the chairman of the Finance committee today. There are ways we can fund that."

Funding has proven the biggest obstacle to long-term transportation legislation.

The primary source of money for highway and transit repairs, a gas tax charged at the pump, chronically runs short. The federal government must regularly provide extra funds.

President Barack Obama has trumpeted infrastructure investment as a way to create jobs, but since the November election, when Republicans took control of the House of Representatives on promises of cutting the deficit, Washington has had little appetite for a large highway bill.

States cannot plan large capital works with short-term patches and have called on Congress to make more permanent spending decisions. The last long-term authorization expired nearly two years ago.

Senator Barbara Boxer, the Democrat who chairs the Public Works committee, and Senator James Inhofe, the most powerful Republican on the committee, have outlined a bipartisan proposal for a two-year authorization.

But Inhofe said the bill creates a $12 billion shortfall and "it is unwise to push an unfunded proposal to spend over $100 billion at the same time the nation is singularly focused on cutting trillions of dollars in spending."

The Finance Committee will ultimately resolve funding issues.

Last month, the Republican leader of the House Transportation Committee suggested a bill limiting funding to gas tax receipts, putting the annual price tag at $35 billion.

Transportation groups, Democrats and the business community called foul, saying the country would struggle covering infrastructure costs. According to the American Society of Civil Engineers, the country will need to invest roughly $220 billion annually to keep U.S. infrastructure in "minimum tolerable conditions."

(Reporting by Lisa Lambert; Additional reporting by Doug Palmer; Editing by James Dalgleish)