UPDATE 2-U.S. Senate Democrats relent on transport funding, accept longer extension
(Updates with planned Senate vote on House plan)
By David Lawder
WASHINGTON, July 31 (Reuters) - With time running out to avert cutbacks in federal transportation money due to start on Friday, Democratic leaders in the U.S. Senate agreed to accept a Republican plan to extend funding for highway and transit construction through May 2015.
Senate Majority Harry Reid said he would put the House of Representatives' $10.9 billion funding plan to a vote on Thursday evening after the House rejected a shorter, $8.1 billion extension passed by the Senate.
The legislative ping-pong has heightened uncertainty over the dwindling Highway Trust Fund as Congress prepares to start a five-week summer recess this weekend.
The Department of Transportation has said it will start on Friday reducing payments to states by as much as 30 percent from the dwindling Highway Trust Fund.
Lawmakers and transportation officials say that failure to approve new funding would cause work slowdowns at the height of summer road construction season and halt planning for new projects, putting thousands of construction jobs at risk.
The Senate on Tuesday approved the shorter extension, lasting only through the end of 2014, because Democrats wanted to force Congress to act on a long-term funding plan during the post-election, lame duck session of Congress in November.
But in a vote that Democratic aides said was engineered to "jam" the Senate just before the recess, the House earlier on Thursday rejected the Senate plan and sent back its original version. That left senators little choice but to take the House plan or face criticism for allowing the trust fund to be depleted. Continuación...