With the current highway and transit authorization law set to expire on Sept. 30 and the Highway Trust Fund in deep, immediate trouble, a two-way tussle has arisen over what Congress should do next. Transportation Secretary Ray LaHood and the White House want an 18-month highway and transit extension with a trust-fund fix. House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) and other leaders on the panel reject an extension and have proposed a $500-billion, six-year reauthorization. They want to see the trust fund repaired, but their bill is silent on that point. Missing so far from both LaHood’s and Oberstar’s proposals is a key element: how to pay for the plans.

House committee chairman James Oberstar
Photo: Office of Rep. James Oberstar
House committee chairman James Oberstar
Secretary of transportation Ray LaHood
Photo: AP/Wideworld
Secretary of transportation Ray LaHood

The dueling proposals have unsettled the situation for state and local transportation agencies as well as for construction companies that rely on government-funded projects. “We’ve got two sides of a difficult coin here,” says one Washington source. Localities and industry want to see the trust-fund problem solved rapidly but also like the idea of a long-range highway-transit bill. No one wants to get on the wrong side of LaHood or Oberstar. “We’re walking this fine line between the two of them,” the source adds.

Industry and state officials are focusing on the first crisis first: the $5-billion to $7-billion shortfall, which is projected to hit the trust fund’s highway account in August. An estimated $8 billion to $10 billion more will be needed in fiscal 2010.

The National Governors Association is weighing in. In a June 22 letter to congressional leaders, NGA’s Chair, Pennsylvania Gov. Edward Rendell (D), and its Vice-Chair, Vermont Gov. James Douglas (R), warned, “Because of the time lag between state obligations and federal outlays to reimburse the states, a [trust fund] shortfall would trigger significant cuts in state transportation spending.” Adds David Bauer, American Road and Transportation Builders Association senior vice president for government affairs, “Clearly, any time when the federal government may not be able to follow through on its commitments, it is disturbing to all parties in this area.”

The legislative battle became public on June 17. That morning, LaHood, a former GOP House member who served six years on the transportation committee, met with Oberstar and told him about the extension. Later, Oberstar and Rep. Peter DeFazio (D-Ore.), the highways and transit subcommittee chairman, briefed reporters about their reauthorization “blueprint,” to be unveiled the next day. Then DOT issued a statement from LaHood, announcing the 18-month plan.

Oberstar said, “Extension of current law is unacceptable.” Instead, Oberstar, John Mica (Fla.), the committee’s top Republican, and others want a six-year successor to the present statute, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: a Legacy for Users. Their bill would authorize $337.4 billion for highways, $99.8 billion for mass transit and $12.6 billion for highway safety programs. The $450 billion for those three sectors is a 38% jump over levels for the past six years. The bill also includes $50 billion for high-speed rail.

Oberstar calls the bill “transformational.” It would end or consolidate 75 existing highway programs into just four: Critical Asset Investment (merging Interstate maintenance, National Highway System and bridge programs), Highway Safety Improvement (aimed at reducing highway fatalities and injuries), Surface Transportation (with flexible highway and transit aid for states and metropolitan areas) and a revamped Congestion Mitigation and Air Quality program.

Duration of bill Six years
Funding $500 billion ($337.4 billion for highways; $99.8 billion for transit: $50 billion for rail)
Source of additional funds Not specified
Gas-tax hike Supported in the past
Program changes Merge or terminate 75 highway programs, leaving four core categories. Expand high-speed rail. More focus on intermodalism. Establish national infrastructure bank.

Industry groups praised Oberstar’s proposal. Steve Hall, American Council of Engineering Companies’ vice president for government affairs, says, “We definitely feel very strongly we know what needs to be done, and the sooner we move forward with the reauthorization effort, the better.” But with little Senate action so far and the August recess on tap, having a multiyear bill signed by Sept. 30 is a long shot. “If you’re a betting person,” an industry source says, “you just can’t bet in favor of this bill being [enacted] any time soon, unless you’re getting gigantic odds. And maybe not even then.”

Duration of bill 18 months
Funding $13 billion-$17 billion (Highway Trust Fund infusion)
Source of additional funds Not specified
Gas-tax hike No
Program changes Use cost-benefit analysis to improve spending decisions. Direct more spending to metropolitan areas. Emphasize “livable” communities in which homes and workplaces are connected.

LaHood’s proposed extension did draw support from Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.), whose panel would draft the highway part of the reauthorization. But Congress may not go along with LaHood’s request to add “critical reforms” for transportation programs (see table). Patty Murray (D-Wash.), Senate transportation appropriations subcommittee chair, said June 18 she has “some serious concerns” about linking trust-fund repairs to program changes.

All sides are waiting for details of how the Obama administration proposes to shore up the Highway Trust Fund. As the transportation face off continues, one source says, “I think it’s way too early to judge where this is going.”