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Author: Christy Gullion

Surface Transportation Reauthorization

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House Republicans released the text of their much-anticipated $260 billion, four-and-a-half-year surface transportation reauthorization bill last night.  You can read the text of the bill here (PDF).  Legislation action on the draft bill begins in earnest today as the House Natural Resources Committee marks up the bill’s energy title.  That markup, starting at 10 am today, will tackle the controversial proposal to link transportation funding to increased energy production in ANWR and along both coasts.  The House Transportation & Infrastructure is scheduled to markup the policy provisions Thursday, with House Ways & Means Committee markup of the financing expected February 3rd.  Finally, the House Energy and Commerce Committee will markup the drilling provisions on February 8th.

Here’s a partial list of what made it into the House bill, with more to come.

Highway funding: Highways would be funded at $37.4 billion in FY13, rising to $38 billion for FY16 (this is essentially level funding).

TIGER Grants:  Eliminates the TIGER discretionary grant program.

University Transportation Centers: Eliminates “Regional, Tier I, and Tier II Center” from SAFETEA-LU and replaces them with 10 Regional Centers funded at $3.5 million and 20 Standard Centers funded at $2 million.  The language directs one of the regional centers to focus on Comprehensive Transportation Safety, and one (separate) regional center to focus on Intelligent Transportation Systems.   The bill requires a new round of competition 180 days from enactment of the legislation.

Transportation Enhancements: The bill would eliminate the Transportation Enhancements set-aside, which is set at 10 percent of a state’s Surface Transportation Program funds.  This could hurt UW’s efforts to secure federal funding to improve the Burke Gilman Trail.  I understand that Reps. Tom Petri (R-WI) and Tim Johnson (R-Il) will offer amendments to restore funding to the Transportation Enhancements and Safe Routes to School programs.

Bridge inspections: Mandates inspection standards for highway bridges and tunnels, and requires the creation of a training program for bridge inspectors.  Of particular interest to research universities that are working with composites is a section that reads:  The Secretary shall establish research and development programs… (C) The development of more durable highway and bridge infrastructure materials and systems, including the use of carbon fiber composite materials in bridge replacement and rehabilitation. We understand that this wording is in Section 7005 under Research and Development (page 626 of the draft T&I Bill).

Tolling: Significantly expands tolling on the National Highway System, including for initial construction, initial construction of a lane on an existing highway that increases its capacity, and reconstructing both interstate and non-interstate highways under certain conditions.

Truck weight: Truck weights would be allowed to be increased from 80,000 pounds on five axles to 97,000 pounds on six axles.  States could also boost weights up to 126,000 pounds on some portions of the interstate.

Minimum DUI penalties: Creates minimum penalties for driving while intoxicated, including for first-time offenders, which includes suspension of a person’s driver’s license.  In some cases driving privileges could be reinstated contingent on installation of an ignition interlock device that requires blowing sober on a Breathalyzer before the car will start. 

Amtrak: Reaches back into the 2008 law (PL 110-432) that last reauthorized Amtrak and brings back some of the passenger rail service’s authorization levels.  The bill would cut Amtrak’s authorization for operating grants for FY12 and FY13 from $616 million and $631 million respectively to $466 million and $463 million.

House Speaker Boehner will start working his caucus today to build support for quick passage of the surface transportation bill. Conservatives in his conference feel they were shut out of developing the bill and worry they will be forced into voting for a measure that they don’t support and that has little chance of passing the Senate.  House Democrats may also oppose the funding options that use drilling royalties to pay for the bill.

In the Senate, the Finance Committee mark up the revenue title of their surface transportation bill has been delay (again) until next week. The Senate version offers a two-year, $85.3 billion version of the authorization approved by the Senate Environment and Public Works Committee late last fall. Like the House measure, it also calls for continuing spending at current levels. 

Funding issues remain the biggest obstacle to passage of either version (or a compromise bill). The main source of dollars, fuel taxes collected by the Highway Transit Fund, has been depleted because of the development of more fuel-efficient vehicles and fewer miles driven by consumers. In its new projections, the Congressional Budget Office found that the trust fund’s balance in FY11 was $22 billion, and the balance will be spent down precipitously: to $12 billion in FY12, $3 billion in FY13, and zero for the remaining 10 years. The House proposal would seek new funding for the bill from royalties by expanding oil and gas exploration along coastal waters and in the Arctic National Wildlife Preserve, but the plan is likely a non-starter with many Democrats.

Congress last cleared a surface transportation bill (PL 109-59), known as SAFETEA-LU, in 2009, and the current short-term extension (PL 112-30) expires at the end of March.

Budget Season Begins

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President Obama will delay the release of his FY13 budget request by a week, until February 13th, but lawmakers will still get a start on budget season today when the Congressional Budget Office (CBO) releases its annual budget and economic outlook. This report will certainly re-energize the debate around the issue of the automatic spending cuts that are set to take effect next January as required in the Budget Control Act of 2011 (PL 112-25).  Those cuts, officially referred to as a sequester, were required when the Joint Select Committee on Deficit Reduction failed to produce $1.2 trillion in savings over a decade.  The cuts are expected to reduce appropriations for FY13 by roughly 9 percent across the board.

The CBO’s report, to be released momentarily, serves as the unofficial kickoff of budget season.  Congressional budget committees in both chambers will hold hearings over the next few weeks on spending, taxes, and entitlements. The pace will pick up further when President Obama presents his FY13 budget request to Capitol Hill on February 13th. Committee leaders say they plan to hold hearings on the request and want to write congressional budget resolutions this spring. Those resolutions will serve as non-binding blueprints for appropriators as they draft the annual spending bills.

The President is expected to include an alternative to the automatic cuts in his budget request, which will likely include a number of familiar policies that have been recommended previously but not enacted.  House Republicans will present their recommendations in their FY13 budget resolution in a few months. The GOP budget is expected to limit the automatic cuts, especially for defense programs, by making further reductions in discretionary and maybe even mandatory programs.

However, none of this is likely to lead to any serious deficit reduction action.  As you might recall, lawmakers debated and negotiated this issue for much of 2011 and still failed to come to any consensus on deficit reduction recommendations.  This will probably end up in a chaotic post-election lame-duck session to deal with the sequester – and a whole lot of expiring tax cuts – which will kick in on January 2, 2013 unless Congress takes action. 

Read more about the traditional calendar of congressional budget activities.

Obama proposes Race to the Top for College Affordability

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Details are beginning to emerge on Obama’s proposal to make college affordable.  He spoke to this during his State of the Union address on Tuesday, and again today at an event at the University of Michigan.  US Department of Education Secretary Arne Duncan has also been talking about this issue since late last year, and often refers to the challenge as looking “beyond the iron triangle” of cost, quality, and access.

Obama is proposing a financial aid overhaul that would – for the first time – tie colleges’ eligibility for campus-based aid programs (Perkins loans, work-study, and supplemental grants for low-income students) to the institutions’ success in improving affordability and value for students.  Under the proposed plan, the amount available for Perkins loans would grow to $8 billion, from the current $1 billion. Obama also wants to create a $1 billion grant competition, along the lines of the Race for the Top program for elementary and secondary education, to reward states that take action to keep college costs down.  Finally, he has also proposed a separate $55 million competition for individual colleges to increase their value and efficiency.

The administration also wants to give families clearer information about costs and quality, by requiring colleges and universities to offer a “shopping sheet” that would make it easier to compare financial aid packages and post-graduate earnings and employment information – all in an attempt to give students and families a better sense of what to expect from the college and after graduation. This would be in addition to the requirement imposed this year on the “college cost calculator.”

These proposed changes would all require Congressional approval, which is not likely to happen this year.  While some legislation may get introduced, most of the discussion around these ideas will take place out on the campaign trail.  Hang on for a bumpy ride!

Read more about the State of the Union address. 

Read more about the President’s speech at University of Michigan. 

Read more about Secretary Duncan’s “Beyond the Iron Triangle” speech.

FY13 Budget Outlook

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President Obama will release his FY13 budget on February 13th this year, one week late. Under the law, the budget is to be released on the first Monday in February but yesterday the Office of Management and Budget (OMB) announced that they would be releasing the budget late. The Obama administration also delayed the release of the budget last year, waiting until February 14th. OMB offered no reason for the delay, but it’s not unusual for the administration to push back the date, this being the third time it has done so. President Obama is expected to offer some broad outlines of his budget this evening in the State of the Union address. The Congressional Budget Office meanwhile, will provide detailed spending and economic projections for the next 10 years on January 31st, when it releases its annual budget and economic outlook for fiscal years 2013-22.

The President’s budget request will urge lawmakers to come up with $1.2 trillion in spending cuts and scrap the automatic reductions known as sequesters that are due to kick in next year. Despite the failure of last year’s joint deficit committee, Obama has urged lawmakers to continue seeking ways to cut the deficit rather than face the automatic budget cuts mandated by last year’s agreement to raise the debt ceiling. During his State of the Union address, the President is likely to offer the broad outlines of his deficit-reduction plan. If lawmakers were to reach an agreement on deficit reduction, they would have to amend the Budget Control Act to turn off the sequester. Unless the law is changed, OMB will implement the sequester in January 2013 that would cut discretionary spending by a projected $97 billion in that year (7.8% cut to the overall FY13 budget). The law calls for annual sequestrations totaling almost $1 trillion and saving $1.2 trillion, including reduced interest costs, through fiscal 2021.

Members of congress from both parties say they are hoping to reach a deal with the President to negate the automatic cuts, or substitute another deficit-reduction package for them, before they take effect in January 2013. But because of the elections this fall, it seems most likely that the sequestration will be dealt with after November, leaving plenty of uncertainty in the months ahead.