(New throughout, adds reaction from conservative group)
By David Lawder
WASHINGTON, July 8 (Reuters) - U.S. House Ways and Means Committee Chairman Dave Camp on Tuesday unveiled a $10.9 billion plan to extend U.S. transportation funding through May 31, 2015, a measure that would avert an August slowdown of funding for construction projects.
Camp's plan would raise $6.4 billion through pension fund-related revenue changes, $3.5 billion through customs user fees and the transfer of $1 billion from a fund used to clean up leaking underground storage tanks.
With the Highway Trust Fund rapidly dwindling, the U.S. Department of Transportation is planning to sharply reduce the amount of federal money it distributes to states to fund road, bridge and rail construction projects on Aug. 1.
U.S. Transportation Secretary Anthony Foxx has said this would result in a 30 percent reduction in available transportation funds, causing delays in projects and layoffs of hundreds of thousands of construction workers.
Camp's plan, which has elements similar to those being considered for a companion measure in the U.S. Senate, would be a temporary fix for highway funding that would push a longer-term solution into next year, after a new Congress is elected in November.
Heritage Action for America, an influential conservative group, quickly criticized the plan as wasteful. The group contends that the Obama administration is exaggerating the economic impact of the trust fund depletion.
"This spend now, pay later bailout is not serious. The Republican-controlled House should not succumb to the Obama administration's reckless rhetoric," said Heritage Action spokesman Dan Holler.
The Camp proposal would employ a tactic known as "pension smoothing," which allows companies to delay contributions to employee pension plans and effectively raises corporate profits and taxable incomes, thus producing more revenue for the U.S. Treasury.
This was used to help pay for the last highway spending measure due to expire Sept. 30 and was considered by Democrats for a plan to extend long-term unemployment benefits, which has never come to a vote this year.
Camp said in a statement that his proposals can win support from both Democrats and Republicans and buys more time for a longer-term highway funding solution.
"This is the only package with a proven history of getting big bipartisan votes in both the House and Senate," Camp said, adding that a longer extension would have required much more difficult choices.
Lawmakers from both parties have shown virtually no desire to raise the fuel taxes that feed the Highway Trust Fund. They have not been increased since 1993 and are proving inadequate to fund transportation projects due to improved vehicle fuel economy, fewer miles traveled and construction cost inflation. (Reporting By David Lawder; Editing by Sandra Maler and David Gregorio)