Transportation Funding Targeted in House Approved Budget – Senate Version Likely This Week

  On Thursday, the House completed action on Budget Committee Chairman Paul Ryan’s (R-Wis.) version of a FY 2014 budget resolution mostly by a party-line vote of 221 to 207. While the budget resolution is nonbinding, it nevertheless establishes the overall framework for funding government programs for next year. The Ryan budget provides an ambitious plan to balance the federal budget and have a $7 billion surplus in 10 years.  To get there, the budget forecasts cuts of $5.7 trillion – compared to the Congressional Budget Office (CBO) baseline –calls for the repeal of ObamaCare, and calls for lowering the top tax rate to 25 percent. The House budget projects a significant drop in highway and transit spending in FY 2015 because of insufficient Highway Trust Fund revenue and would restrict the ability of Congress to transfer general fund revenue to help bail it out. In addition, unlike last year, this year’s resolution does not include a “reserve fund” that would allow transportation spending to rise above current Highway Trust Fund (HTF) supported levels even if lawmakers agree to additional revenue increases. In the text explaining the numbers in the budget is the following statement: “The mechanisms of federal highway and transit spending have become distorted, leading to imprudent, irresponsible, and often downright wasteful spending." The explanation goes on to talk about high-speed rail, stating "high-speed and other intercity rail projects should be pursued only if they can be established as self-supporting commercial services. The budget eliminates these projects." Senate Budget Chairwoman Patty Murray’s version of the budget is currently being debated and is expected to be approved before the spring recess begins next week.  The Senate budget – the first in four years -takes a much different tact than the House.  It calls for increased revenue of $923 billion over 10 years and $875 billion in spending cuts.  The Senate’s version does not aim to balance the budget; instead it would impose tax increases by eliminating certain deductions and is estimated to result in annual deficits of approximately $500 -$600 billion in 10 years. For transportation, the Murray budget keeps funding slightly below current levels over the next 10 years.  However, the plan calls for $50 billion in immediate (FY 2013) transportation investment, $10 billion in FY 2013 to fund an infrastructure bank, $10 billion for Corps of Engineers water projects, and $20 billion for high-tech investment.  The bill does not detail where this additional infrastructure spending would come from.  The Murray budget contains a reserve fund to allow transportation spending to increase should Congress raise the necessary revenue. A second reserve fund would also be established for Harbor Maintenance Trust Fund spending.