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The Uncertain Future of the Highway Bill—An Update

Posted by Ken Orski on Monday, April 2nd, 2012

Innovation NewsBriefs
Vol. 23, No. 13

On March 14, by a vote of 74-22,  the Senate passed an 18-month highway bill (S. 1813) reauthorizing the federal surface transportation program through the end of FY 2013. Twenty-two senators, all Republican, voted against the final bill.

While Washington stakeholder interests and advocacy groups applauded the Senate action as a “victory for bipartisanship,” the question of the House response and the prospect of another temporary extension cast a shadow on the celebration. A March 21 attempt by House Democrats to force a vote on the Senate bill was defeated.  This should have sent a clear signal that the bill does not enjoy the support of House Republicans,  yet pleas from liberal advocacy groups and from Senate EPW Chairman Barbara Boxer (D-CA) to “please pass the Senate bill” continued. Another push by House Democrats for a separate vote on the Senate bill was blocked by the House Rules Committee on March 28.

Today,  the House voted a temporary 90-day “clean” extension  (H.R. 4281) before leaving  town for a two-week Easter recess.  Thirty-seven Democrats joined 229 Republicans in adopting the extension. This left  the Senate  with little choice but to go along or risk being blamed for closing down  the transportation program and “putting hundreds of thousands of people out of work.”  The extension was adopted in the Senate by a voice vote.   

The Senate bill was never popular among House Republicans but it became even less so when the full extent of the budgetary maneuvers employed by the Senate leadership became known. One of the most egregious examples was their use of the device of  the “Manager’s Amendment” to insert  into the bill shortly before the final vote a provision transfering $5 billion in general funds without offering an immediate offset (Sec. 40313 of the Manager’s Amendment). This provision, buried in the 221-page amendment,  was adopted — probably unread by most Senators— by unanimous consent without debate.

The text of the Manager’s Amendment was not publicly revealed until it was  posted online on March 14 as part of the previous day’s Congressional Record. A wealth of other substantive changes to the original version of the bill also were incorporated in the Manager’s Amendment (the full text can be found in the Congressional Record of March 13 at pp. S1618-1638).

Using offsets over a period of 10 years to cover spending over just 18 months was another aspect of the questionable tactics employed by Senate bill managers that turned off  House Republicans.   And  even many senators “held their noses and voted for the bill knowing full well that the $12 billion shortfall was funded with budgetary accounting gimmicks,” as one Senate Republican aide told us.

With the bill expiring at the end of FY 2013, the Senate measure took on the appearance of a short term fix rather than legislation that would enable state transportation officials to enter into major long-term commitments.  By the time the parties would come to an agreement,  the Senate bill would  become little more than a year-long extension with some reforms attached to it, one lobbyist observed.  Indeed, Sen. Barbara Boxer herself acknowledged the short-term nature of the bill when she reportedly joked with reporters  that in six months’ time “we”ll have to start all over again.”

The 90-day extension should give the House leadership  more breathing space to build support for its bill. The House Republicans’ goal is still to move a five-year $260 billion bill (H.R. 7) according to John Mica, Chairman of the House Transportation and Infrastructure Committee. The bill contains many of the same reforms sought by the Senate and is eminently negotiable  in the opinion of some observers, especially if the House leadership agrees to shorten the term of the bill from five to say, three years.

But whether the House rank-and-file will have the political will and motivation to pass a major multi-year transportation bill with the election campaign well underway, remains to be seen. For many House Republicans the goal of reducing spending, as reflected in the  Paul Ryan-authored FY 2013 budget proposal, takes precedence over any concerns about an “infrastructure deficit.”  For others, the Senate’s controversial offsets would make a compromise difficult to achieve.  

Nor will the lame-duck session, with its prospect of spending cuts mandated by sequestration, offer any easier climate for a major new spending initiative. Moreover, many  House and  Senate Republicans would just as soon see the current law extended  into next year in the hope that a Republican-controlled Senate  would give them a better chance to enact a long-term bill to their liking. In sum, getting a bill on the President’s desk this year is more than many observers deem politically feasible.

Implications for the Future

In retrospect, the Senate bill appears as only a band-aid measure that gave the illusion of a legislative success but in reality left all the fundamental questions unresolved. The contortions that the Senate Finance Committee had to go through to come up with offsets to cover a mere $12 billion funding gap, presage an even more difficult challenge ahead. The next time around, new offsets will be even harder to find and without a new source of revenue the Highway Trust Fund will continue to teeter on the edge of insolvency.

There is speculation that this may force Congress to abandon the practice of long-term reauthorizations in favor of short-term bills  that would require only modest amounts in offsets each year. Short-term bills may thus become the practice, these observers contend, until a brand new way is found to pay for the federal transportation program in a technically sound and politically acceptable way.

C. Kenneth Orski is a public policy consultant and former principal of the Urban Mobility Corporation. He has worked professionally in the field of transportation for over 30 years, in both the public and private sector. He is editor and publisher of Innovation NewsBriefs, now in its 22nd year of publication.

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