New Congress Gears Up for Transportation Reauthorization Debate as House Rules Change and Earmarks Continue to Receive Scrutiny

The first half of January has already been full of news about federal transportation spending and how things may be different under new House leadership in the nation’s capital. The discussion continues about the potential impact of new House rules on the Highway Trust Fund and what a ban on earmarks may mean for transportation spending. Meanwhile, it appears there may be some movement afoot to tackle new legislation reauthorizing federal transportation programs this year.

More on the Potential Impact of House Rules Changes

Two weeks ago, I blogged about a change in House rules that many transportation industry officials warned could jeopardize the flow of money to state highway projects from the Highway Trust Fund. The rules change dropped a guarantee that fuel tax receipts would be distributed according to spending commitments contained in multi-year authorization laws. But the new chairman of the House Transportation and Infrastructure Committee John Mica told The Journal of Commerce recently he feels “pretty confident” that those funds would still be handled in the same way within the Highway Trust Fund and that “they would only be used for highway purposes” and not be diverted elsewhere. Mica said the new rules are just trying to bring trust fund expenditures back into balance with revenues.

But in a recent guest post on The Infrastructurist blog Oregon Democratic Congressman Earl Blumenauer had a different take:

“By eliminating the point of order guarding Highway Trust Fund balances, this Republican majority threatens investments in communities large and small across the country,” he wrote. “Historically, this point of order ensured that Congress delivered on the transportation investments promised in the transportation authorization, and that states and communities could count on the long-term commitments made in that legislation. By removing this point of order, and allowing Highway Trust Fund balances to accrue and mask the actual deficit, the Republicans are engaging in budget gimmickry that undermines our economy and the safety of our communities.”

Others have expressed concern that programs like the Recovery Act-funded TIGER (Transportation Investment Generating Economic Recovery) program and livability-focused programs are jeopardized by the new rules because they specify that the Highway Trust Fund be used only for authorized programs. TIGER doesn’t appear in the last transportation authorization bill, SAFETEA-LU.

A recent blog post on the Washington State Department of Transportation website assessed the potential impact this way:

“Nationally it would make it harder to get multi-modal mega projects off the ground. Livability projects, particularly those with a HUD/EPA/Transportation component, would be nearly impossible to fund. And that shouldn’t necessarily be so. TIGER is a proven and effective program that helped many worthwhile but very expensive projects get off the ground. The Livability programs have been more controversial, but there’s no denying that there is broad support within many communities for the program, and that the projects have provided tangible benefits to communities.”

The blog post goes on to tout the benefits of TIGER and Livability program projects on job creation, congestion reduction, increased safety, environmental improvement and improved mobility.

The blogger is pessimistic however about the chances that state departments of transportation and others would come to the defense of these programs because they may have to defend funding for core formula programs if the House decides to reduce overall transportation spending. Another reason the prospects for these programs don’t look good, the blogger points out, is that the House under Republican rule is expected to have a more rural than urban focus and as much as 75 percent of TIGER funding went to projects in the 100 largest metropolitan areas.

But The Journal of Commerce reported Friday that Chairman Mica is not talking about killing the TIGER program, only about how to “keep it on a leash,” reviewing and reassessing project selection and perhaps redirecting some funding. Mica also reportedly told U.S. Department of Transportation officials that as part of the new authorization he’d like to see a much larger national infrastructure bank concept than the $50 billion one the Obama administration has proposed. Most think such a bank could include TIGER-type grants along with federal loan and bond finance options.

Reauthorization Debate Gearing Up

Speaking of reauthorization, it appears that Chairman Mica and others are gearing up to debate the parameters of a successor to SAFETEA-LU, which officially expired in 2009 and has been continued six times on a short-term basis. Mica said last week he plans to hold a series of field hearings or “listening sessions” away from Washington beginning around February 18th to gather input on what new legislation should include including new financing ideas and strategies to cut red tape. The chairman previously indicated he wanted to move legislation as early as possible this year before the 2012 presidential election campaign kicks into gear. Mica told The Journal of Commercelast week that his goals for reauthorization include: retooling some current highway, bridge and transit programs to save money; speeding up projects to release funds already approved; spurring greater use of infrastructure loans from existing federal programs; and giving more incentives to private firms to invest in transportation projects.

It was also reported recently that Mica has already had discussions on a long-term authorization bill with the leaders of the Senate Environment and Public Works Committee, Democratic Sen. Barbara Boxer of California and Republican Sen. James Inhofe of Oklahoma. The Senate committee, which has jurisdiction in the Senate over highway issues, will hold its first hearing of the new Congress next Wednesday, January 26th. Among those expected to testify is the 2011 President of the American Association of State Highway and Transportation Officials, Nevada Transportation Director Susan Martinovich. The hearing is entitled “Transportation’s Role in Supporting Our Economy and Job Creation.”

U.S. Chamber of Commerce President Thomas Donahue will be among those watching the process closely. Long a proponent of infrastructure investment, Donahue once again last week called on Congress to quickly pass a long-term authorization bill.

“Neither states nor private investors can get projects off the drawing board with this kind of uncertainty,” he said during his annual State of American Business address in Washington. “American jobs hang in the balance.”

Finding a Home for Orphan Earmarks

In my blog post earlier this month, I also looked at the issue of transportation earmarks. USA Today reported recently that about $13 billion dollars in federal highway spending since 1991 has gone unspent. This money was earmarked for projects that could not be completed or didn’t ever get started. Even though the money was not spent, it counts against how much a state receives in fuel tax revenue from the Highway Trust Fund.  Well, now it appears a fix may be in the works. The Journal of Commerce reported that Missouri Sen. Claire McCaskill recently requested that the U.S. Department of Transportation work with her and Congress “on a process that will reallocate the orphaned, unused earmarks into formula funding for Missouri and other states that are adversely affected.”

House Republicans have voted to disallow earmarks in the 112th Congress and although there is no such ban in the Senate, Republican opposition to them makes it unlikely they would be approved there either. A Congressional Research Service report out this month examines “Transportation Spending Under an Earmark Ban.” According to the report, discretionary programs would feel the most impact and an earmark ban could increase congressional scrutiny of how funds are allocated by U.S. Department of Transportation officials.