Stimulus Funding Update from Williams Mullen

Tag Cloud from President Obama's Radio address of December 6, 2008. Discussion of jobs plan and economic stimulus package. Obama describes, "American dream energy economy" and mentions healthcare (better medical records) and education.

Stimulus in the News:

• $1.6 Billion Stimulus Funding Allocation Announced by Governor Kaine
• Gov. Kaine outlines use of stimulus to reduce cuts to education, transportation and other services.
• DOT Information Related to the American Recovery and Reinvestment Act of 2009
• Virginia makes plans for transportation stimulus package

Lawmakers Caution Obama on Transportation Funding by Colby Itkowitz, CQ Staff

A bipartisan group of lawmakers sent a letter to President Obama today urging him to reconsider an “ill-advised proposal” to open up highway and aviation spending to the appropriations process.

The administration’s budget proposal for fiscal 2010 includes a request to make all transportation spending discretionary, which would tear down a firewall that has protected the federal Highway Trust Fund and the Airport and Airways Trust Fund from being raided to help finance other domestic programs.

The administration said the goal was to improve transparency, but the lawmakers said in their letter that it would have the opposite effect.

“If any budget process reforms are to be made, they should serve to increase the separation of Trust-Funded programs from non-Trust-Funded programs.”

The letter was signed by some 14 Democratic and Republican members of both the House and Senate who hold key positions on authorizing and tax writing committees. Two GOP members of the Senate Appropriations panel — Sen. Kay Bailey Hutchison of Texas and George V. Voinovich of Ohio — also signed on.

Among those expressing their concern were House Transportation and Infrastructure Chairman James L. Oberstar, D-Minn and ranking member John L. Mica, R-Fla., and Senate Public Works Chairwoman Barbara Boxer, D-Calif., and ranking Republican James M. Inhofe, R-Okla.


Budget Would End ‘Firewall’ For Highway, Transit Funding by Colby Itkowitz and Kathryn A. Wolfe, CQ Staff

President Obama’s fiscal 2010 budget blueprint includes a proposal to tear down the “firewall” around highway and transit funding and make it subject to the annual appropriations process.

Currently, the transportation authorizing committees set the contract authority spending levels to ensure federal Highway Trust Fund revenues cannot be diverted to other domestic purposes.

The protection was put in place in the 1998 highway law (PL 105-178) to stop the practice of appropriating less for highways than the gasoline tax was generating for the trust fund.

Rep. James L. Oberstar who is on the brink of writing a huge highway authorization bill as chairman of the Transportation and Infrastructure Committee, strongly opposes changing the law.

“To raise this issue again now, when we have important work to do to rebuild our nation’s crumbling infrastructure and create family-wage jobs, is both a contradiction and an unnecessary distraction,” Oberstar, D-Minn., said in a statement.

In his budget document, Obama said that with all transportation dollars discretionary, taxpayers will have a more honest estimate of how much is being spent on such programs.

Jack Basso, finance director for the American Association of State Highway and Transportation Officials, said he is 100 percent against the idea.

“Contract authority affords the opportunity to do long-term planning,” Basso said. “The result of that would be no more stability than year to year.”

He said worse yet is that transportation programs could have to compete with other areas for spending.

But a Transportation Department source said the intent is merely to change how transportation spending is scored and not to eliminate contract authorities or use transportation money to offset deficits. “I think a lot of this is turf-orientated,” the source said.

Oberstar did say he was encouraged by other elements of Obama’s proposal that call for increased transportation investment.

The president proposes an additional $5 billion for high-speed rail grants beyond the $8 billion already appropriated in the economic stimulus package (PL 111-5).

The Transportation Department’s proposed $72.5 billion budget for fiscal 2010 represents a $2 billion increase from the estimated fiscal 2009 total. The department received about $48 billion in the stimulus package.

The budget suggests that the administration will seek to overhaul aviation financing policy, likely in a way that will reopen an old debate over new user fees that sparked an intense, multi-year lobbying fight between sectors of the aviation industry.

The general aviation community has generally preferred the status quo, while the commercial airline industry has pushed for wholesale changes.

The budget also proposes $800 billion to transition from the aging radar-based system of air-traffic control to a version of the satellite-based global positioning system.

The budget also proposes to fundamentally restructure the way subsidies are paid to airlines to keep them flying into small and rural communities that would otherwise be unprofitable to serve.

Updates provided by the Williams Mullen/The Keelen Group.