Congressional leadership is getting antsy over the possibility of no highway bill for the year, and another in a series of extensions, which will likely depress construction spending and harm local vulnerable members back in their home district. Senate Majority Leader Harry Reid and House Speaker John Boehner asked both sides to iron out their differences this week:

“Senate leader Harry Reid and Speaker John Boehner have told Chairman John Mica and me to finish our work this week on the transportation bill,” Sen. Barbara Boxer (D-Calif.) said after a Capitol Hill meeting of the four leaders. “I have asked Chairman Mica to meet continually over the next several days to achieve this deadline.”

Without a conference-committee deal by June 30, Congress will face extending funding levels set in 2005 yet again. An extension may force Congress to deal with an issue it has avoided for almost three years: how to pay for the nation’s long-term transportation needs.

We’re at nine extensions and counting, with a tenth on the way if Congress doesn’t figure this out by next week. The major issue is long-term funding. The Senate version of the bill, which passed with broad bipartisan support, provides stop-gap funding over a two-year period, covering the shortfall created by the inability to have gas taxes meet highway spending demand. The House version accomplishes that in far different ways, in particular through additional offshore and Arctic oil drilling royalties. There are plenty of other differences between the House and Senate bills – and approval for the Keystone XL pipeline looms in the background as a potential rider here – but the funding issue is the real nut that must be cracked.

Senate Democrats made a new offer on the bill yesterday, but did not release details. Meanwhile, Republicans, even at the leadership level, continue to take a hard line on what they’re describing as “program reforms”:

Republicans say they must see movement from Democrats on the issues of program consolidation, transportation reforms and relaxed environmental rules.

Earlier Tuesday, Boehner told reporters, “I’m going to stress to Sen. Reid and Sen. Boxer that we want a bill, but we also are going to insist on reforms to the process by which we spend the highway tax dollars that the American voters give us to rebuild America’s highways.”

Most observers have been pessimistic that anything will get done on the surface transportation bill beyond perhaps another extension, and even that could be a fight. This rhetorical play from the leadership represents a last-ditch effort, and perhaps an early jump on the political fallout if it all collapses.