Highway program's 2007 funding cut could be permanent

Incoming appropriations committee chairmen announce intentions for year-long Continuing Resolution at current levels

News AGC December 13, 2006
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Before its final adjournment, the 109th Congress passed a Continuing Resolution (CR) to fund all Federal programs for which a freestanding appropriations measure has not been enacted. The CR funds these agencies through Feb. 15, 2007, at last year's level or at the levels contained in House- or Senate-passed bills if these levels were lower.

It was hoped that the 110th Congress would start in January and complete action on the nine of 11 appropriations measures that have not been passed. However, incoming Senate Appropriations Committee Chairman Robert Byrd (D-W.Va.) and incoming House Appropriations Committee Chairman David Obey (D-Wis.) have announced that instead they intend to push for a year-long Continuing Resolution at current levels, with some minor adjustments, and that the measure would not include any earmarks. The incoming Democratic leadership issued a statement in support of this strategy; however, the Bush Administration expressed concern.

The DOT appropriations bill is one that was not enacted. Although the administration's budget, the House-passed bill and the Senate committee-passed bill all proposed funding the highway program at the SAFETEA-LU $39.1 billion level and the transit program at $8.98 billion, both programs are funded in the CR at the '06 level, about a 10% cut. In addition, this action undermines the TEA-21 spending guarantee and RABA provisions that are key to ensuring that Highway Trust Fund revenue is fully spent as intended on transportation improvements.

The Associated General Contractors (AGC) is working with its transportation allies to devise a uniform strategy to correct this problem in the next Congress. Grassroots support will be essential. A legislative alert sent out last week, before the conclusion of the 109th Congress, received an excellent response. A new legislative alert will be posted to the Legislative Action Center at the appropriate time.

AGC will be pointing out to Congress that inflation in construction materials has undermined the buying power of the Highway Trust Fund. AGC's economist has estimated that the federal-aid highway program needs a funding increase of between $1.4 billion and $2.6 billion in fiscal year 2007 to offset the rising cost of materials, labor and overhead since fiscal 2006.

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