Senate bill takes $2.2B away from transportation to help Medicaid, education

House leaning to pass legislation that rescinds highway contract authority apportionments from balances held by state DOTs

News AASHTO August 06, 2010
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The Senate passed a bill Aug. 5 that would rescind $2.2 billion in highway contract authority apportionments from balances held by state transportation departments. The House of Representatives has been called back into session early next week to approve the measure and send it to President Barack Obama.

Senators voted 61-39 to pass the bill, HR 1586, which contains $16 billion to extend increased Medicaid funding for states by six months and $10 billion to help states cover teacher salaries for the upcoming school year. The bill is fully paid for with several provisions to increase taxes and cut spending, including the $2.2 billion reduction in highway contract authority.

The Senate’s language would give states flexibility to choose which highway formula programs to cut. The Federal Highway Administration released a table showing how much each state will lose as a result of the rescission if it is enacted into law. Cuts range from $8.5 million for Delaware, the District of Columbia and Vermont to $205 million for California.

Representatives had originally proposed this $2.2 billion highway rescission in June. The American Association of State Highway & Transportation Officials wrote House members July 1 opposing this action after that chamber's Appropriations Committee proposed an amendment to a FY 2010 supplemental appropriations bill that would rescind $2.2 billion in highway contract authority. The amendment to that legislation was never adopted, but then resurfaced as the Senate called up a Federal Aviation Administration reauthorization bill. Senators stripped all aviation language out of it, then inserted the funding for Medicaid and education along with accompanying offsets.

House Speaker Nancy Pelosi (D-Calif.) announced Aug. 4 that the House will meet on Aug. 10 to consider the legislation. It is rare for a congressional chamber to return to Washington during a legislative recess, but the increased funding for Medicaid and education is a high priority for Democratic leaders. They have expressed an urgency to complete action on the bill immediately because the new school year will soon be starting across the nation, and cash-strapped states and localities might be forced to lay off thousands of teachers if they do not receive federal assistance.

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