Playing with a New Deck

The rules of the transportation funding game have changed in Washington.

By John Latta

Rules about how things may be, can be, should be and are done on Capitol Hill are rarely written simply. And if they are, they rarely function simply.

Some of the key rules pertaining to Reauthorization and the Highway Trust Fund (HTF) have been changed by the new Republican majority in the House. Transportation and highway advocacy groups say the changes could create major problems for the recovery of the transportation infrastructure industry, i.e., highway and bridge contractors and state transportation agencies.

It is worth disentangling these changes because understanding what has happened allows us to follow the next moves. SAFETEA-LU expired in September 2009 and went into extended limbo. Those of us following attempts to replace it with a new six-year surface transportation bill (or for that matter to stall such a bill) were often frustrated by a barrage of arcane Capitol Hill mumbo jumbo that often made understanding what was going on a puzzle-solving exercise.

An awareness of the early January moves in the new Congress will be valuable in trying to keep up with reauthorization moves this spring.

He Said, She Said

The new Republican leadership has said these rule changes reflect their election pledge to rein in spending.

The new rules I refer to take the place of provisions that were passed back in 1998. Those old rules came about because of a practice that the new rules appear to have reinstituted. Prior to the 1998 rules, members of Congress did not have to use up all of the money in the Highway Trust Fund, an amount set in legislation, allowing surpluses to be built up within the fund.

Why not spend it all? Because a surplus of highway funds allowed the amount of that unspent surplus to be spent somewhere else in the national budget, somewhere that had nothing to do with highways. Congress could then claim a ‘balance’, that is, “hey, we didn’t overspend.” While the new rules do not change the requirement that Highway Trust Funds cannot be spent for nontransportation purposes, they do change the requirement that they must all be spent. So HTF funds still cannot be taken out and spent for other projects – but some of those funds can be left in the HTF, and when that happens, another part of government may be able to spend its money on a project with the yet-to-be-used HTF funds as a counterbalance.

From 1998 until now, that practice was out of play. Now it’s back. Probably.

Before the January change, any House member could essentially kill a bill, an amendment to a bill or a conference report that failed to appropriate funds for transportation programs at the level set by legislation by simply raising a point of order. In other words, if it didn’t spend the full amount, it could be stopped.

Now this situation is murky.

Republicans say the old 1998 rules are still in play and that the changes prohibit spending above the legislated limit, thus preventing what would essentially be deficit spending for transportation that would require general fund infusions into the HTF.

On the other hand, opponents on the other side of the aisle and highway advocacy, transportation and infrastructure development groups say it is not the broad language of the changes but loopholes that will allow the pre-1998 surplus practice back into the game.

Writing in the Bond Buyer (a newspaper owned by this magazine’s parent company), Lyn Hume says that “the new language, for example, does not appear to apply to amendments or to money transferred from the general fund to the Highway Trust Fund. Lobbyists said that doesn’t make sense because all gas tax and other revenues are transferred to the highway fund from the general fund.”

The new Republican chairman of the House Transportation and Infrastructure Committee, John Mica of Florida, has gone on record in the House as saying that the new rules don’t change the way highway programs are funded, a statement that does not appear to address or establish the degree to which they are funded. However the often blunt Mica did say that after meeting with Republican colleagues he felt confident the highway fund would not run up surpluses.

Senator Barbara Boxer (D-Calif), who heads the Senate Environment and Public Works Committee that will do the senior chamber’s lead work on Reauthorization, knows Mica and has had meetings with him since he took over. After those meetings, Boxer was optimistic about Reauthorization, but still warned that and a ‘raid’ on the HTF could throw a huge spanner in the works.