Highway Program 07 Funding Cut Could be Permanent

Before its final adjournment, the 109th Congress passed a Continuing Resolution (CR) to fund all Federal programs for which a free standing appropriations measure has not been enacted. The CR funds these agencies through February 15, 2007 at last year's level or at the levels contained in House or Senate passed bills if these levels were lower. It was hoped that the 110th Congress would start in January and complete action on the nine (of eleven) appropriations measures that have not been passed. However, incoming Senate Appropriations Committee Chairman Robert Byrd (D-WVA) and incoming House Appropriations Committee Chairman David Obey (D-WI) have announced that instead they intend to push for a year long Continuing Resolution at current levels, with some minor adjustments, and that the measure would not include any earmarks. The incoming Democratic leadership issued a statement in support of this strategy; however, the Bush Administration expressed concern.

The DOT appropriations bill is one that was not enacted. Although the Administration's budget, the House passed bill and the Senate committee passed bill all proposed funding the highway program at the SAFETEA-LU $39.1 billion level and the transit program at $8.98 billion, both programs are funded in the CR at the 06 level, about a 10 percent cut. In addition, this action undermines the TEA-21 spending guarantee and RABA provisions that are key to ensuring that Highway Trust Fund revenue is fully spent as intended on transportation improvements. 

AGC is working with our transportation allies to devise a uniform strategy to correct this problem in the next Congress. Grass roots support will be essential. We encourage you to contact your Senators and representatives to educate them on the impact of this cut on highway and transit funding in your state.

AGC will be pointing out to Congress that inflation in construction materials has undermined the buying power of the Highway Trust Fund. AGC's economist has estimated that the federal-aid highway program needs a funding increase of between $1.4 billion and $2.6 billion in fiscal year 2007 to offset the rising cost of materials, labor and overhead since fiscal 2006.