Congress Passes Extension of Transit Benefit Cap

Edenred, the provider of the premier commuter benefits programs, Commuter Check and WiredCommute, applauds Congress’ swift action to keep the pre-tax transit benefit cap at $230 per month.

In February of 2009, the transit benefit pre-tax “cap” was increased as part of the American Recovery and Reinvestment Act (ARRA) from $120 per month to $230 per month matching the amount allowed for parking expenses. This increase was lead by Congressman Jim McGovern of Massachusetts (D) and Senator Charles Schumer of New York. The parity established was set to expire at the end of 2010, but was extended for one-year today as part of the extension of the “Bush Tax –Cuts”.

By offering commuter benefits, employers, can save up to 10% on average in payroll tax savings, a savings they can invest back in their company. Through a company-sponsored plan, commuter benefits allow employees to use pre-tax dollars to pay for commuting costs, a savings of 40% on average.

Congressman McGovern, who has worked for years to promote commuter benefits, believes that, “there are a number of obvious benefits to transit ridership including a reduction in energy consumption, improved air quality, and reduced congestion. But the one issue that I think is most important to employees and employers is the fact that both employers and employees can save hundreds of dollars a year by simply doing the right thing. It’s a no brainer.”

Congresswoman Allyson Schwartz (D-PA) said, "The extension of this benefit will incentivize more employees to use public transit as their primary method for traveling to work. This will help reduce our national dependence on oil and make our communities more livable and sustainable."

This is a major victory for mass transit riders and will ensure that come January 1, 2011, commuters won’t be facing even more commuting costs than they currently do, with increased fares and reduced services we need to maintain incentives for the middle class so they don’t have to break the bank when commuting to and from work.

Groups like Commuter Nation help the voice of the American commuter be heard by our elected officials.  They collected nearly 10,000 signatures and comments, which were presented to Congress on December 1^st.  The message from the petition was clear, as Congress searches for ways to stimulate job growth; it should also recognize that transportation is the second largest household expense. Promoting transportation alternatives such as transit and vanpools is one-way Congress can help ‘Main Street’.

As Gerard Bridi, President & CEO of Edenred, said, “The extension of the transit cap at $230 is a win for the working Americans. It also makes a statement about our commitment as a nation to reduce our collective carbon footprint and reduce our country’s dependence on fossil fuels. There was a tremendous effort undertaken to insure that parity was extended. There are far too many people to recognize including the nineteen Senators and fifty plus Members of the House who sent a letter to Congressional leadership in support of this provision. However, this would not have been completed if it were not for the efforts of the legislative champions, Senator Charles Schumer (D-NY), his policy advisor Jeff Hamond, Congressman Jim McGovern (D-MA) and his staff Jennifer Walters. They worked around the clock coordinating the efforts of all the interested parties to make sure that this provision was extended so that Americans who choose to take transit or a vanpool did not see the cost of their commute unfairly increase. We will continue to work with our Congressional leaders to see this provision made permanent.”