SPECIAL REPORT ON TRANSPORTATION

August 9, 2004

Congress Adjourns for Summer Without Enacting TEA-21 Reauthorization...

Chances for passing a reauthorization of the TEA-21 surface transportation funding bill this year dimmed significantly when Congress adjourned for the summer on July 23 without any substantial progress in House-Senate conference committee deliberations.  While House and Senate committee members will resume negotiations in the fall, it appears unlikely at this stage that they will be able to agree on a bill that the President can sign in the heat of a Presidential campaign season.

During conference committee proceedings in July, Senate negotiators offered to reduce the overall funding levels of $318 billion in contract authority and $301 billion in guaranteed spending included in the Senate-approved bill.  Specifically, the Senate offered to reduce contract authority to $301 billion and guaranteed spending to $289 billion.  House Republicans responded with a counter-offer of $299 billion in contract authority and $284 billion in guaranteed spending.  While the differences between House and Senate offers appear small, neither side seemed willing to budge to break the logjam.  Furthermore, both offers are still well above the President's publicly-stated veto-threshold level of $256 billion.

Even if overall funding levels are agreed to, House and Senate conferees must negotiate a number of differences between the two bills, including the minimum rate of return on gas tax revenue paid by so-called "donor" states.  During an election year, legislators from donor states are unlikely to support a final bill that fails to guarantee a return to their home states of at least 95 percent of the gas tax paid at the pumps by their constituents.

In all likelihood, Congress will hold a "lame duck" session after the elections in November.  Leadership on both sides of the aisle will weigh the results of those elections in their own political calculus as to whether to act before the end of the year or wait until the 109th Congress convenes next January.

... As Transportation Appropriations Moves Through House Committee

While TEA-21 reauthorization remains mired in Conference Committee, the House Appropriations Committee on July 22 approved its version of the fiscal year 2005 Transportation-Treasury Appropriations bill.  The bill appropriates $34.6 billion for highways – the amount included in the House-approved TEA-21 reauthorization bill for fiscal year 2005.  This represents an increase of $1 billion over the fiscal year 2004 amount.

For transit, the House Committee bill appropriates $7.25 billion – a $16 million cut from the fiscal year 2004 level of funding.  Perhaps the toughest cuts come for AMTRAK, which receives only $900 million in the bill – a reduction of $300 million from the fiscal year 2004 level.  The bill is slim on earmarks, providing New Start earmarks only for those projects with full-funding grant agreements (FFGA) and a few that are close to receiving approval.  However, no earmarks are included for the Bus and Bus Facilities programs or the Job Access and Reverse Commute program.

The Senate Appropriations Committee has yet to act on its version of the Transportation-Treasury Appropriations bill.  It is likely that both bills will be combined with several other appropriations bills in an Omnibus Appropriations Act that will be considered in the fall or during a lame-duck session after the November elections.