With a shutdown looming on Sept. 30 for much of the federal government, the impact on construction and infrastructure programs is expected to vary from agency to agency and from program to program. But some key infrastructure accounts are expected to be protected from cutbacks because of the kind of funding sources on which they draw.
The deadline is the date when the 2024 federal fiscal year is to begin. A short-term stopgap or a full-year appropriations measure is needed to avoid a cutoff of funds.
A silver lining in the shutdown cloud is that billions of dollars that flow from the Infrastructure Investment and Jobs Act would be guarded from cuts because they are supported by advanced appropriations that were locked in at the IIJA’s 2021 enactment, rather than requiring regular appropriations that need to be approved on an annual basis.
A contingency plan from the U.S. Dept. of Transportation shows that employees of the Federal Highway Administration, Federal Transit Administration, Federal Motor Carrier Safety Administration and National Highway Traffic Safety Administration would not be furloughed.
Susan Howard, American Association of State Highway and Transportation Officials director of policy and government relations, said via email that those workers are protected because their salaries are funded from the Highway Trust Fund.
She also says that state DOTs' reimbursements from the Federal Highway Administration for their spending on federal-aid highway projects "should remain unaffected."
Howard says, “But even with some of the key federal transportation programs shielded from the direct impact of a government shutdown, the macro impact will introduce a level of uncertainty above what is normally expected during the course of usual federal government operations.”
FAA Authorizations Also Due to Lapse
Federal Aviation Administration programs are a special case. Besides being affected by the broader federal spending deadline, the authorization for FAA itself is also due to lapse on Sept. 30. If Congress does not pass an FAA authorization, the agency would be unable to collect passenger charges that help fund infrastructure projects.
In another FAA-related wrinkle, the IIJA provided supplemental funds for Airport Improvement Program grants and a new airport terminal grant program. Alex Etchen, AGC senior director for infrastructure investment, said in a call with ENR, "Those funds are safe," because they use advanced appropriations.
According to a backgrounder from the Associated General Contractors of America, direct, fixed-price federal contracts—with agencies such as the U.S. Army Corps of Engineers, Naval Facilities Engineering Command and General Services Administration—that are already awarded “will be substantially unaffected by the shutdown.”
But AGC adds that most direct cost-type, time and materials and indefinite duration-indefinite quantity contracts, as well as those that have not yet been awarded. probably would be suspended indefinitely.
Jimmy Christianson, AGC vice president of government relations, said in the call, “The real question is if this shutdown were to last for months, then I think we could possibly see some impact.” He added: “But if we’re talking weeks, there might be some minor headaches or further delays in getting responses from agencies [and] obviously some delays in getting permits out the door."
An Unsettled Picture
As of Sept. 28, the Capitol Hill picture remained unsettled. In the Senate, lawmakers have introduced a stopgap continuing resolution, or CR, that would run through Nov. 17. In general, its funding levels would remain at fiscal 2023 levels.
That bill, which cleared a procedural hurdle on Sept. 27 and another the following day, also would provide a further $4.5 billion to aid Ukraine and $6 billion to bolster the Federal Emergency Management Agency’s Disaster Relief Fund, which has been diminished by hurricanes, the Maui fire and other natural disasters.
In addition, the Senate CR would extend FAA's authorizations, but through Dec. 31, a longer period than for the other programs in the CR.
In the House, Speaker Kevin McCarthy (R-Calif.) reportedly has said he is opposed to the Senate measure. He said he wants to bring up a House Republican CR that would include provisions aimed at “securing the border.”
At the same time, McCarthy is moving several of the full-year appropriations bills, each of which covers one or more federal department or agency, through the House.
In the Senate, the Appropriations Committee has cleared all 12 of its annual spending bills, but there has been no floor action yet.