Transportation Bill Could Stall Until 2013

By Audrey Dutton

Transportation stakeholders expecting a comprehensive bill anytime soon could be disappointed as major legislation reauthorizing federal highway and transit programs could be delayed until 2013, say sources.

That could mean a diminished long-term flow of transportation bonds backed by federal grants for the municipal market and a greater short-term flow as states react cautiously to the prospect of a more unpredictable environment for highway funding.

“My fear, but also my best guess, is that the administration and Congress will continue to pay for [transportation until 2013] the way they’re doing it now,” said James H. Burnley 4th, legislative and government affairs partner at Venable LLP and former U.S. transportation secretary, from 1987 to 1989.

“After the 2012 congressional and presidential elections, it’s a new day,” he said, and anyone who tries to speculate on what those lawmakers would create for a multiyear bill “is on a fool’s errand.”

Congress has already approved a 15-month delay in legislation to revamp the national transportation system and provide enough money to execute the plans. The last multiyear transportation law expired Sept. 30, 2009, and lawmakers opted to keep programs afloat through extensions.

“Politicians are going to be under a lot of pressure before 2013 to start taking action to put our fiscal house in order. A good, strong infrastructure bill can be very helpful in bringing about economic growth. … That could change the picture between now and 2013.”

Jack Schenendorf

Only one bill, by House Transportation Committee chairman James L. Oberstar, D-Minn., has been put forward. This is an encore of the 2005 reauthorization, which Congress took two years to approve.

But this time around, Congress is expected to do more than simply reauthorize federally-funded, state-run transportation programs. It is expected to confront the reality of funding shortfalls, caused partly by declines in the fuel tax revenues that are funneled to states by the federal government.

Industry sources speculate that Congress’ best option to pay for the next highway bill is to raise the existing fuel taxes. But that is a political non-starter in this election year, sources said.

So the highway bill could be pushed into 2011, at which point fiscal conservatives may control Congress, and President Obama may still be opposed to raising any tax. That combination could block the most likely route to a fully-funded transportation overhaul until after the 2012 presidential election.

The best hope for a multiyear transportation bill is for Congress to take action early next year, according to sources.

The Senate and House would both need to approve legislation by Memorial Day next year, then work out any differences between their proposals during the summer.

“In terms of the legislative world, time’s a-wastin’,” said one transportation lobbyist, noting that four separate committees in the Senate and two in the House have jurisdiction over a multiyear bill. “The real question also will be, is the president engaged in the issue?” Signs from the administration indicate that he is not, the lobbyist said.