House and Senate Agree on 6-Month Transpo Extension

Just days after a Senate committee asked the full chamber to consider a four-month extension of SAFETEA-LU, new negotiations have replaced that idea with a six-month extension at current spending levels. The bill also extends the gas tax.

Over the weekend, the House and Senate decided to combine the long-overdue FAA reauthorization with the pending surface transportation bill, considering them together as one uniform transportation extension [PDF]. The FAA bill will be extended for four months, while SAFETEA-LU will be extended for six, with an expiration date of March 31.

As an added bonus, combining the bill with the FAA means that Congress can’t keep us in suspense until the last possible moment, as they’ve been prone to do lately. (Remember the debt ceiling? Remember the narrowly-averted government shutdown last spring?) The FAA extension expires September 16, so if Congress is to extend them together, they’ll have to act by the end of this week, instead of waiting till the end of next week, when they leave for another recess. The House is tentatively planning to vote on the bill tomorrow.

The extension is a clean one, with no changes in policy. That means bike/ped funding, which has been under threat over the last week, will remain for the next six months, at least. And the extension will be funded by the same 18.4 cent federal gas tax the U.S. has had since 1993, which was also due to expire September 30 and which is also renewed by this action.

The extension will stick to current funding levels, authorizing $24.78 billion in spending from the Highway Trust Fund for the first half of FY2012 (which begins October 1). That’s almost $19.8 billion for highways and $4.2 billion for transit.

That’s far more than the FY2012 budget just passed by the Transportation and HUD Appropriations subcommittee in the House, which agreed to $27.7 billion for highways and $5.2 billion for transit for the entire year. Although this extension can authorize more spending than that, actual spending levels are up to the appropriators, according to Jeff Davis at Transportation Weekly. Experts say that at this level, most of the money would go to pay states back for projects already built, and new highway project funding could be cut by as much as 75 percent.

But higher spending levels also have their down side. “Maintaining current highway and transit spending levels for any period of time deepens the Highway Trust Fund’s revenue hole,” writes Jeff Davis, noting that according to the CBO, “the Highway Account of the Trust Fund will run out of cash at these spending levels in the first few months of calendar year 2013, with the Mass Transit Account running dry a year or so behind that).”

Davis also notes that “bringing the extension bill to a vote in the House will require the House to vote to waive the budget totals in the Ryan budget plan, which will likely bring some opposition from conservative Republicans.”

The extension bill the EPW Committee passed last week included a $3.13 billion rescission, meaning that even though it provided $43 billion, more than $3 billion of that would need to be returned by the states. This new extension bill takes that “rescission” out of the total up front, lowering the $43 billion to just under $40 billion for the year.

Senator Boxer has raised an objection to the $3 billion cut, even though the front-end budget cut isn’t much different from her own back-end rescission. Davis speculates that this is because the EPW two-year bill seeks to hold current spending levels, but if current spending levels are lowered in this way, the EPW bill would actually represent an increase.

In Boxer’s statement, she also expressed her pleasure that the House is moving forward with an extension with current spending levels, which is what she has supported for both the extension and the full reauthorizations. “The original House proposal would have cut spending by more than 30 percent, which would threaten hundreds of thousands of construction workers’ jobs and thousands of businesses,” she said.

She also said she welcomes the longer extension “because it gives more certainty to the private sector and to states and local governments in their plans for road and transportation projects.”

However, pushing the expiration so far into next year makes it even more likely it will be followed by nothing but another extension, not an actual reauthorization. Both parties will be loath to pass a big spending bill so close to a presidential election.