Two-Month Extension For Federal Highway Transit Program

June 1, 2015

By Ann Warner
Managing Partner, Ann Warner LLC

In the wee hours of the morning on May 23rd, the U.S. Senate cleared by voice vote for the President’s signature H.R. 2353, the Highway and Transportation Funding Act of 2015, extending Highway Trust Fund spending authority through July 31st. The Senate vote followed the nearly unanimous (387-35) vote in the U.S. House of Representatives on May 19.

The only floor debate in the Senate was a statement by Sen. Richard Durbin (D-IL) remarking that, “I just want to make it clear that instead of enacting a six-year transportation program worthy of our great nation, this Congress continues to limp along down a political highway of excuses. It’s coming to an end. There have been lengthy discussions in our Democratic caucus that these continued short-term extensions are unacceptable in this great nation, and I would just say though we will agree to this 60-day extension, we are serving notice on the Majority Leader in the Senate, as well as the Speaker, to do their job and to enact a law that provides the kind of infrastructure that can build America’s economy.”
Shortly after the Senate passed the bill, Senate Environment and Public Works Chairman James Inhofe (R-OK) and ranking minority member Barbara Boxer (D-CA) released the following statement:

“With the two-month extension of the Highway Trust Fund, Congress prevented many critical road, bridge, and transit projects from coming to a grinding halt. But it’s time we end this costly uncertainty with the Highway Trust Fund. The only solution to fixing this problem is to enact a consensus- based, bipartisan, six-year surface transportation bill that will provide states and local communities the funding and the certainty they need to plan and construct multi-year projects to modernize our infrastructure.”

“The Senate Environment and Public Works Committee continues to make progress on a consensus, six-year surface transportation reauthorization bill, with a goal to mark up the legislation on June 24.”

No official committee mark-up has been scheduled at the time of this writing.

Current Funding Shortfalls
As the May 31 MAP-21 deadline loomed, there was interest among Republican House and Senate Leaders to find $11 billion in offsets that consisted of half revenue increases and half spending cuts to keep programs running through the end of the current FY 2015 (September 30th). Many of the proposed spending cuts, however, crossed committee jurisdictional lines and could not get consensus support from various House and Senate committee chairmen.

The latest estimates from the U.S. Department of Transportation project that the Highway Account of the Highway Trust Fund will still have about $3.6 billion in cash on hand as of July 31st and the Mass Transit Account will still have $1.6 billion. Those same estimates show the Highway Account hitting a zero balance sometime in late August and the Mass Transit Account hitting zero at around the last week of September or the first week of October.

Upon introduction of H.R. 2353 on May 15th, House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) and House Ways and Means Committee Chairman Paul Ryan (R-WI) released the following statement: “While highway and transit program spending authority expires at the end of the month, the Highway Trust Fund has sufficient resources to fund its obligations through the end of July. It was our preference to move an extension through the end of the year, but we will need more time to reach a bipartisan agreement on offsets. This legislation will allow transportation spending to continue through July, while we work towards a next step to close the Trust Fund’s shortfall. Doing so will require our colleagues on both sides of the aisle to be constructive in working towards a solution. Only then will we be able to produce a plan that gives states the certainty they need to build the roads, bridges, and other infrastructure our communities and economy need to thrive.”

Continued Funding Challenges
Senate Finance Committee Chairman Orrin Hatch (R-UT) summed up the problem when he said that “make no mistake, we are going to be here again in two months, facing the same problem, because unless someone has $90 billion [$15 billion – $16 billion annually] just lying around, a long-term highway solution is not going to simply materialize between now and July. Don’t get me wrong, fixing it in December was going to be difficult as well, but in the end it will likely take at least that long to find a solution that has a chance of passing through both chambers.”

The fundamental questions remains: does the failure of Congressional leaders to find $11 billion in acceptable offsets by a May 31st deadline really make it more likely that they will be able to find $90 billion in acceptable offsets by July 31 in order to pay for a six-year reauthorization bill at baseline or current spending levels? Is it really nine times more difficult to find $90 billion than it is to find $10 to $11 billion? Are we looking at the possibility of Congress re-aligning (reducing overall) spending with revenues coming into the Highway Trust Fund?

Action in the States
This dilemma then points to the number of States (23) who have successfully raised taxes or secured other funding mechanisms which are generating billions of revenues for infrastructure spending – notably for transportation.

This column is adapted from an article written for Arizona Eye on D.C., the newsletter of Total Spectrum Arizona.

— Posted on June 1, 2015 at 2:59 pm by