House & Senate Surface Transportation Reauthorization Bills, A Far Cry from the President's Proposal

>> Rep. Mica's six-year, $230 billion proposal, or an average of $38 billion a year, would drastically reduce federal spending on all modes of transportation (overall 35% cut from FY 2009 levels), stabilizing the Highway Trust Fund (HTF), which currently pulls in about $35 billion a year. The bill would cut Amtrak funding by 25%.

>> Sen. Boxer's two-year, $109 billion bill would maintain current spending levels under SAFETEA-LU at about $55 billion a year, or about $20 billion more a year than Mica's bill. Boxer's proposal includes $12 billion that the HTF cannot cover. Boxer argued that this additional funding could be redirected from the Defense budget.

>> Pres. Obama's six-year, $556 billion bill proposed $53 billion for the High-Speed Intercity Passenger Rail (HSIPR) Program.

Background: SAFETEA-LU

The legislation that funds and authorizes the nation's surface transportation program, SAFETEA-LU, expired at the end of September 2009. Since then, Congress has struggled and failed to pass a multi-year reauthorization bill that secures funding for the nation's highways, bridges, intercity rail and transit systems, bike and pedestrian facilities, and other transportation infrastructure. Eight times since SAFETEA-LU expired, Congress has passed short-term extensions, which makes it very difficult for states to effectively plan for long-range transportation investments. States do not have the certainty that funding for critical maintenance and construction projects will be authorized.

Complicating matters, if Congress does not act soon the HTF will go bankrupt as early as next year. Without identifying new sources of revenue or funding mechanisms to close the yawning gap between receipts and outlays, as U.S. Senator Menendez (D-NJ) noted last month, "if spending continues at current levels, the highway account could run out of money next year and the transit account shortly thereafter."

House Republican Plan

new_direction.JPGOn Thursday last week, Republicans on the House Transportation & Infrastructure Committee led by Chairman John Mica, released a 22-page summary of a transportation reauthorization bill. While specific details of the bill have not been publicized, as expected, it does abide by the Rules of the House, adopted by Republicans in 2010, which require that the Committee not authorize spending above projected revenue into the HTF. So, Mica's plan invests $230 billion over six years, or $38 billion a year on average, which is roughly equal to Highway Trust Fund receipts.

This level of funding simply falls far short of what is required to address the Northeast's critical infrastructure investment needs, create much-needed jobs, and get the country's economy back on the right track. According to data released by the Federal Highway Administration, cuts of this magnitude will come at the cost of 630,000 jobs across the nation. Hopefully, negotiations between the House and the Senate will provide an opportunity to raise spending levels above Mica's woefully inadequate proposal.

High-Speed Rail and Amtrak

The bill makes fundamental changes to the HSIPR Program that would make conventional intercity rail project ineligible for grants, which would undermine it's ability to sustain support in Congress. The amount of funding for the HSIPR Program provided in the bill has not been specified yet. However, the bill will make high-speed rail projects eligible for loans through the Railroad Rehabilitation and Improvement Financing (RRIF) program, which provides loans with low interest rates and long repayment terms for railroads and reforms the application process for a RRIF loan. The bill will also expand the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which helps finance major surface transportation projects.

The bill makes dramatic cuts to all modes of transportation, including intercity passenger rail, which would have devastating effects on Amtrak and the HSIPR Program. Specifically, Mica's bill slashes Amtrak's funding by 25% in FY 2012 and 2013, and puts limits on Amtrak's use of federal funds.

New Sources of Revenue or Funding Mechanisms

Both the House and Senate proposals are far more austere than President Obama's six-year, $556 billion proposal, or the six-year, $500 billion bill introduced in 2009 by former House Transportation & Infrastructure Committee Chairman Jim Oberstar, and (then) Ranking Member John Mica, which Congress never passed. Without new sources of revenue or funding mechanisms, all three proposals are severely hemmed in by the diminishing balance of the HTF. Ever since 2008, revenues from the federal gas tax into the HTF have been unable to cover the costs of projects because the gas tax does not adjust for inflation over time and people are buying less gas due to improvements in vehicle fuel-efficiency.

None of these proposals offer any serious solutions to this major funding crisis. Chairman Mica's bill does not raise revenues, Senator Boxer's bill proposes to temporarily close the budget gap by redirecting funds from other areas, and the President's proposal is mum on the funding issue. Unfortunately, Republicans, as well as the President, have ruled out raising the gas tax above 18.4 cents a gallon, where it has stood since 1993. The source of funding remains the most critical unanswered question to achieving the investment levels the nation's infrastructure requires.

Summary of House Republican Proposal (PDF)

Statement by House Democrats

Statement by Senator Barbara Boxer

Analysis of Jobs Losses, by State