Senate Committee Approves 18 Month SAFTEA-LU Extension

By an 18-1 vote the Senate Environment and Public Works (EPW) Committee approved an 18 month extension of spending authority for the federal highway program through March 31, 2011. The legislation authorizes the program in FY 2010 at FY 2009 funding level of $41 billion and provides $20.5 billion in authority for the first six months of FY 2011. The Senate Banking Committee must also pass an extension of the transit program and the Commerce Committee must take up safety programs. In addition, the Finance Committee is expected to include a $20 billion transfer of funds from the general fund to the Highway Trust Fund to ensure that there is sufficient revenue to reimburse states for on-going construction projects for the remainder of FY 2009 and FY 2010. The bill is a "clean" extension which does not include any policy provisions. In an effort to keep pressure on Congress to enact a six year transportation authorization measure, Senator George Voinovich (R-OH) attempted to amend the extension to 12 months but that effort was defeated on an 11-8 vote. The highway and transit programs face two related but separate problems. SAFTEA-LU expires on September 30, 2009. New authorization is needed to keep the program operating beyond that date. In addition, there is an insufficient balance in the Highway Trust Fund to pay for on-going construction through the end of the fiscal year. Also, incoming HTF revenue would only support FY 2010 funding of about $20 billion. House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-MN) is working to pass a six year authorization bill and does not support the extension although he is proposing legislation to transfer $7 billion in general fund revenue to the HTF to keep it solvent through the end of this fiscal year. The Obama Administration would prefer to put off the long term extension of authorization and has proposed instead an 18 month extension with a $20 billion transfer of general fund revenue to keep the programs operating through FY 2010. The Administration would also like to include some policy initiatives in the 18 month extension. Today's action by the EPW Committee would solve the short term funding problem and keep the program operating beyond the end of the authorization expiration. EPW Committee Chairman Barbara Boxer (D-CA) said she intends to have her committee continue to work on a six year authorization but took today's action to ensure there is no interruption in the program. AGC's top priority is to ensure that there is no disruption in payments to contractors for ongoing projects both in the short term and long term. AGC also is pressing for a long term reauthorization of the program that provides sufficient new revenue to address the backlog and growing national transportation needs.