By David Lawder
WASHINGTON (Reuters) - Prospects for a deal to fund U.S. transportation projects over the long term appeared to brighten somewhat on Thursday as key House and Senate lawmakers described their negotiations in more optimistic terms.
Senate Majority Leader Harry Reid said the talks had improved in the last 24 hours and he was hopeful for an agreement before current authority for road, bridge and rail funding expires on June 30.
Congress has been struggling to approve a long-term transportation bill since last fall. Nearly 3 million construction jobs depend on the outcome.
House of Representatives Republicans have insisted on consolidating some federal transportation programs and streamlining environmental reviews of road projects in order to speed up construction. They also want to drop a proposal to use gasoline taxes to help pay for ancillary transportation "enhancements" such as bicycle lanes, flower beds and other streetscape improvements.
After marathon meetings over the past two days, the top negotiators on the measure, Democratic Senator Barbara Boxer and Republican Representative John Mica, issued a joint statement voicing optimism.
"The conferees have moved forward toward a bipartisan, bicameral agreement on a highway reauthorization bill. Both House and Senate conferees will continue to work with a goal of completing a package by next week," they said.
Mica and Boxer did not provide any details on the progress they have made towards a deal. The basis of their negotiations is a two-year, $109 billion measure passed by the Democratic-controlled Senate.
Representative Bill Shuster, a key House Republican negotiator on the transportation measure, said on the House floor the conference committee was moving toward accepting some Republican demands for funding reforms.
Earlier this week several lawmakers negotiating on Senate and House of Representatives differences over the highway funds had said they could not be done by the deadline and another stop-gap extension of current funding was inevitable.
"I don't think we'll need an extension. I hope not," Reid told reporters on Thursday. "I can't guarantee to anyone here that we're going to get a highway bill, but we're certainly in much better shape than we were 24 hours ago."
But the negotiations on the core highway and rail funding policy have thus far not tackled the thornier issue of whether to include the Republican proposal to approve the Canada-to-Texas Keystone XL oil pipeline.
Democrats and President Barack Obama oppose fast-tracking approvals for the $7 billion project until environmental review can be completed. If Republicans still insist on Keystone's inclusion, the talks are more likely to collapse.
House Speaker John Boehner also acknowledged "some movement" in the talks since he met with Reid on the deadlock on Tuesday.
Earlier this month, Boehner floated the idea of a six-month extension of current funding, which would remove the threat of a halt in road and rail construction until after the November 6 elections.
Democrats have balked at that idea, saying it would deplete the Highway Trust Fund because falling gasoline tax collections were insufficient to fund current projects.
They say U.S. states also would delay the start of new longer-term projects - and the hiring of hundreds of thousands of workers - due to the lack of funding certainty.
(Reporting by David Lawder; Editing by Jackie Frank)