From: "Friends of Transit" To: Subject: Fw: Rethinking Transportation Reauthorization -- An Innovation Briefs News Analysis Date: Sunday, October 03, 2004 11:50 PM Rethinking Transportation Reauthorization An Innovation Briefs News Analysis In a not entirely unexpected action, Congress gave up passing the transportation reauthorization before its planned adjournment on October 8. Instead, it voted to extended the current surface transportation program until next May 31, 2005 (H.R. 5183). While theoretically, lawmakers could still act on the bill in a post-election session (should one be held), chances of resolving the outstanding differences during a lame duck session are remote. The eight-month extension is seen as a clear signal that lawmakers do not intend to complete action on the bill during the current session of Congress. The extension- the sixth short-term extension since the expiration of TEA 21 on October 1, 2003- authorizes $24.5 billion for highways, a slight increase over the FY2004 spending rate. It also extends the budgetary firewalls established under TEA 21 and directs the revenue from the 2.5 cent ethanol tax into the Highway Trust Fund. The extension bill restores to the core programs the $1.8 billion in obligation authority that had been withheld earlier and that House leaders hoped to use as a down- payment on the "high priority" projects earmarked in the House version of the reauthorization bill. What Went Wrong? In the end, negotiations stalled not so much over the size of the bill as over policy differences. When Congress adjourned for the summer recess, a mere $5 billion separated the White House-blessed House offer of $284 billion in guaranteed spending ($299 in contract authority) from the $289 billion ($301 billion in contract authority) proposed by Sen. James Inhofe (R-OK), chairman of the Senate Environment and Public Works Committee. But Inhofe failed to muster support from his Democrat colleagues on the conference committee, who insisted on holding the line at the Senate-approved level of $301 billion ($318 in contract authority). Many observers believe their unwillingness to back the chairman was at least partly motivated by a partisan desire not to give President Bush a legislative victory so close to the election. But there were also other hurdles. Chief among them was the inability of the conferees to agree on how the money would be divided between "donor" and "donee" states. The House offer of $299 billion in contract authority was not sufficient to meet the donor states' demand of a 95 percent minimum guarantee while holding other states harmless. In addition, some senators of both parties entertained the hope that a new administration, whether Republican or Democrat, would be more sympathetic to higher spending levels next year. The final straw came when Republican senators John McCain (R-AR) and Richard Shelby (R-AL) withdrew their support from Inhofe's compromise proposal, believing that the mostly Southern and Western donor states were being unfairly treated. What Next? With the reauthorization now effectively deferred until the next Congress, "it will be a brand new ball game" in the words of one observer- but one that does not necessarily augur increased transportation spending. Cutting the federal deficit will remain a top priority next year no matter which party is in power. The "revenue enhancements" that have been laboriously cobbled together during the current session of Congress to justify the Senate's $318 billion funding level may not be available next year-at least not all of them. Without the augmented revenue, the next congressional budget resolution would likely cap the funding level at approximately $253 billion-the projected income to the Highway Trust Fund. Prospects for an increase in the gas tax likewise remain uncertain. Congress has been reluctant to raise gasoline taxes even in non-election years. The last increase in the federal gas tax (of 4.3 cents/gallon) took place more than ten years ago, in 1993. According to may observers, growing global demand for crude oil (for the first time above $50 a barrel) will continue to exert upward pressure on the price of motor fuel at the pump, making a gas tax increase politically difficult, especially if Congress remains, as expected, in Republican hands. In a written interview conducted by the Automobile Club of Southern California, both President Bush and Senator Kerry said they, too, are opposed to increasing the gas tax (AAA Westways Magazine, "The Presidential Candidates On Transportation, August 2004). In these circumstances, Congress may be obliged to take a fresh look at the federal transportation legislation, and particularly at the earmarks explosion that has greatly increased demand for fiscal resources but contributes little to improving the nation's mobility. What was once a purposeful program to provide America with the best possible transportation system has increasingly become a gigantic public works program whose collection of local pet projects-many having nothing to do with transportation-artificially inflates demand for Highway Trust Fund dollars. Limiting spending to programs and projects that have direct transportation benefits would go a long way to resolving the current fiscal dilemma. By eliminating earmarks that serve special interests and are anything but "high priority" transportation projects, the next Congress has it in its power to turn a looming budgetary crisis into an opportunity to preserve the integrity of the Highway Trust Fund and restore to the federal-aid transportation program its lost sense of purpose. C. Kenneth Orski korski@erols.com tel: 301.299.1996 fax: 301.299.4425 http://www.innobriefs.com _____ To unsubscribe, please Click Here