Bush releases budget request for Fiscal Year 2009

Request proposes cuts in the highway, transit and airport improvement programs

News AGC of America February 05, 2008
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On Feb. 4, President Bush released his budget request for Fiscal Year 2009, which proposes cuts in the highway, transit and airport improvement programs. The President requested a $39.4 billion obligation limitation for highways. This is $1.8 billion below the $41.2 billion level authorized in SAFETEA. This request is also $1.82 billion below this year's approved funding level, a reduction of about 4.4%. In 2008, the total obligation limit was $41.216 billion, which included an additional $1.0 billion for bridge repairs.

Budget documents indicate that these cuts are based on two factors. First, $800 million is due to a negative RABA calculation. RABA is the yearly adjustment that is made based on actual Highway Trust Fund revenue versus the amount projected in SAFETEA-LU. In addition, the Administration makes the case that in signing SAFETEA-LU it agreed to a total funding level of $286.4 billion over the 2005-2009 period. The Administration argues that the $1 billion in additional bridge funding provided in FY 2008 should count against the total six year commitment.

The budget request proposes $2.750 billion for the Airport Improvement Program which is $765 million less than last year. Transit spending is requested at $200 million below the SAFETEA-LU authorized funding level.

The Administration's budget also projects that next year revenue into the highway account of the Highway Trust Fund will be $3.3 billion short of the amount projected in SAFTEA-LU. This is significantly higher than the $1.3 billion shortfall projected last week by the Congressional Budget Office. Federal budget rules would require a program reduction of as much as $12 billion to account for this revenue short fall. The Administration's budget proposes borrowing funds from the transit account to cover the short fall in the highway account.

AGC's CEO Stephen Sandherr responded to the Administration's budget, pointing out, "At a time when we're looking for ways to stimulate the economy, cutting infrastructure spending is short-sighted. This budget does not help to promote job growth and protection in a declining economy."

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