By Nathan Hurst and Richard E. Cohen, CQ Staff

House Republicans are set to deliver a response Friday to the Senate’s latest highway bill proposal, but the counteroffer comes with a threat to cut off talks if there is no deal by the end of the month.

House Speaker John A. Boehner issued what amounts to an ultimatum Thursday, telling conferees for the highway bill (HR 4348) that if they do not finish their work before the current authorization (PL 112-102) lapses on June 30, he would support a six-month extension that would defer a surface transportation bill until after the November elections.

Further clouding negotiations is an expected House vote Friday on a motion to instruct conferees to limit spending in fiscal 2013 to funds available in the Highway Trust Fund. The effect would be a cut from current spending of about one-third.

The motion by Rep. Paul Broun, R-Ga., is not binding, but it will test the support in the GOP caucus for fully funding highway programs. Republicans are being pulled by competing constituency groups, with business interests such as the U.S. Chamber of Commerce opposing the motion and anti-tax groups such as Heritage Action for American pushing for a “yes” vote. The outcome may demonstrate whether Boehner can shepherd a conference agreement through the House without Democratic votes.

On Thursday, Boehner, R-Ohio, said he remains “very hopeful” that conferees “will get into serious discussions quickly.” Senate Environment and Public Works Chairwoman Barbara Boxer, D-Calif., and the panel’s ranking Republican, James M. Inhofe of Oklahoma, offered a new compromise earlier this week, and House negotiators are expected to respond Friday.

But by ruling out another short-term extension, the Speaker is ratcheting up pressure to get a deal done. Also, the move may give House Republicans a little more leverage in talks, where their negotiators have been playing a weak hand because that chamber, unlike the Senate, never passed a full authorization.

Boxer said she was “very disappointed that Speaker Boehner is even talking about a long-term transportation extension which would lead to the Highway Trust Fund going bankrupt, when all of our efforts must be focused on passing a transportation bill by the June 30 deadline. Three million jobs and thousands of businesses are at stake.”

But House Transportation and Infrastructure Chairman John L. Mica, R-Fla., was more upbeat about prospects, characterizing the Senate offer as a “positive step” that laid out a “reasonable process” to continue negotiations.

Addressing Difficult Questions

House aides and lobbyists said the Senate offer measured hundreds of pages and covered core transportation issues. The proposal sidestepped some of the most contentious issues that House Republicans want to address in a final bill, including mandates to expedite approval of the Keystone XL pipeline, to expand domestic oil and gas production and to rein in EPA regulation of coal ash.

“We are negotiating some of those concerns,” Mica said. “There are some difficult issues, but having had the experiences that we had [on earlier bills] . . . hopefully we can move forward with this important piece of legislation.”

A number of top industry lobbyists were slated to meet Thursday with House aides preparing the counteroffer to the Senate.

Still to be addressed is the difficult question of how to pay for a bill. Senate Finance Chairman Max Baucus, D-Mont., and House Ways and Means Chairman Dave Camp, R-Mich., are trying to devise a package of revenue offsets to fill the gap between Highway Trust Fund excise tax receipts and authorized spending levels.