What Must Happen In The Next Three Weeks To Avoid Another Shutdown
States may be cautious about spending commitments in the face of uncertainty
The 35-day partial government shutdown, the longest in U.S. history, has ended—though just for a little while—as President Trump signed a three-week stopgap funding bill after the Senate and House approved the measure.
The new legislation was enacted on Jan. 25, less than eight hours after Trump announced a deal with congressional leaders to halt the shutdown, which had put a crimp in some, though not all, federal infrastructure programs.
The new continuing resolution, or CR, will allow full operations to resume at the Dept. of Transportation, Environmental Protection Agency and other shuttered federal agencies, but only through Feb. 15.
Funding for the rest of fiscal year 2019 for those agencies isn’t assured. It hinges on another part of the shutdown-ending deal, a new House-Senate conference committee to decide funding levels for the Dept. of Homeland Security. Full 2019 funding for DOT, EPA and the other agencies subject to the shutdown then also would be cleared.
The conferees’ toughest issue will be how much and on which programs to spend for security on the U.S. southwest border, and whether to accommodate Trump’s deep desire for $5 billion-plus for a wall there. The three-week CR has no funds for the barrier.
Industry officials also cautioned that newly reopened agencies aren’t likely to quickly clear the backlog of requests for infrastructure project funding or project approvals that may have built up over the past month.
Still, the CR’s enactment should allow funds to be released for infrastructure work and for agency staffers to at least start to chip away at pending permit decisions for construction projects.
“This is a good day,” said Steve Hall, American Council of Engineering Companies senior vice president for advocacy and external affairs, after Trump’s announcement. “Clearly lawmakers on both sides have been…under a lot of pressure to come to sort of an agreement.”
Hall adds, “The hope is that we can work out a broad agreement in these intervening three weeks and bring the shutdown permanently to a close.”
The border wall also remains an issue. While announcing the shutdown’s end, Trump also declared, “We really have no choice but to build a powerful wall or steel barrier.” The president added that if Congress doesn’t provide “a fair deal,” another shutdown will occur on Feb. 15 or he would use constitutional and other legal authority “to address this emergency.”
Over the past month, the shutdown has had an effect on engineering and construction programs, though not across the board.
The departments of Defense, Labor, Veterans Affairs and Health and Human Services weren't hit by the shutdown because they had full 2019 appropriations enacted before the November elections. The same was true for the Army Corps of Engineers civil works program, Dept. of Energy defense environmental cleanup, and the Interior Dept.'s Bureau of Reclamation.
DOT, EPA, the General Services Administration and other agencies were partly or largely closed for the month. Hall cites one ACEC member firm, which he declined to name, that had a Federal Aviation Administration contract that evidently was stalled by the shutdown and was “looking at the possibility of literally having to furlough hundreds of employees.”
He says another firm wasn’t able to communicate with the shuttered GSA about a project it was working on because of furloughs at that agency.
Although U.S. DOT was covered by the partial shutdown, funds continued to flow for its largest construction program, federal-aid highways, because it draws from the Highway Trust Fund not the general fund.
Implications for State Spending
Even so, a couple of state DOTs delayed bid lettings for some projects in January and February because of uncertainty about the amount of highway obligation limit they received in Federal Highway Administration allocations.
“The uncertainty that we’re seeing and the problem for states is a lot more about the partial-year funding than it is the government shutdown," says David Bauer, American Road & Transportation Builders Association’s new chief executive officer.
FHWA on Jan. 8 had provided states with their shares of the full $45.3-billion 2019 obligation limit set by the Fixing America’s Surface Transportation Act. But FHWA warned states that a new CR could reduce those obligation totals and said states should be careful not to obligate too much.
Now, a new CR has in fact been enacted, but some observers think FHWA may stick with its Jan. 8 full-year allotments because the just-signed CR extends only for three weeks.
Joung Lee, policy director for the American Association of State Highway and Transportation Officials, said via email on Jan. 25 that if FHWA decides to issue a new obligation limit covering the Oct. 1, 2018-Feb. 15, 2019 period, it it could take back about $28.2 billion, or 62% of the amount released on Jan. 8. But Lee adds, “Sometimes for short CRs, FHWA doesn’t feel that it’s worth the administrative bandwidth to process [a new obligation limit].”
Brian Deery, senior director of the Associated Genearl Contractors of America’s highway and transportation division, says, “I would think that most DOTs recognize what’s going on and they are going to be cautious” as FHWA warned.
He adds that states’ overcommitting funds is “unlikely to happen, unless again, this [stopgap-shutdown situation] goes on forever and ever and ever—which I don’t think it will.”
Bauer said in an interview the day before the shutdown ceased, “Certainly this situation is a more high-profile than what we have seen in the past.0” But he adds that dealing with stopgap spending bills is nothing new.
Bauer notes that U.S. DOT operated under three short CRs in 2015, as well as three in 2016 and in 2017 and five in 2018. “None of this is defensible. None of this is good,” he says, but it’s a continuation of a recent trend.
With employees due to return within days at largely shuttered agencies like EPA and Interior’s Fish and Wildlife Service it’s unclear how many requests for environmental approvals for construction projects have poured, or trickled, into their inboxes over the past month.
But Deery doesn't expect the incoming requests to be processed quickly. “I absolutely think that this is going to slow down environmental approvals,” he says. “You now have a backlog of a month.”
ACEC’s Hall agrees, “I’m sure it’s going to be some time before these folks get caught up and get back to normal.”
Regional transit agencies had said they were suffering under the shutdown, partly because most Federal Transit Administration employees were on furlough, and thus not available to sign off on funding or other approvals to allow projects to advance to the next stages.
There, too, backlogged requests aren't expected to be cleared overnight. “I have to think it will take some time,” Deery says. “Not only do they have a month worth of stuff that they haven’t been processing, but they’ll have new invoices that are being submitted next week.”
Hall agrees that the month’s shutdown will have an impact. “That’s got to affect their ability to restart and get this flowing again,” he says.
But releasing funds could be an FTA priority in the immediate post-shutdown period. “I’m sure that the FTA will do whatever they can to accelerate those payments, and move things along,” Deery says. But he still expects that the backlog will slow things down.