Highway, Transit Lapse Looms Again as Democrats Wrangle Agenda

The clock is once again ticking for lawmakers to prevent another lapse in federal highway and transit programs.

As negotiations continue over President Joe Biden’s economic agenda, Congress faces an Oct. 31 deadline to reauthorize surface transportation programs. It’s déjà vu for lawmakers who were up against the same deadline last month and failed to meet it when a vote on the infrastructure bill was delayed.

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The upcoming Glasgow global climate conference also serves as another pressing deadline. Biden and Democrats want to be able to tout the climate change provisions of their agenda at the conference, which kicks off Sunday.

“It would be very, very positive to get it done before the trip,” Biden told reporters Monday, adding that he didn’t know if there would be a vote this week.

Why is Congress facing this deadline?

Surface transportation programs require an authorization to be in place, separate from government funding legislation. The Senate-passed bipartisan infrastructure bill (H.R. 3684) would reauthorize the programs for five years.

House Majority Leader Steny Hoyer (D-Md.) said action is “possible” this week on the infrastructure bill, as well as on the larger social spending and tax bill that progressives have said needs to advance in tandem.

Highway Programs Head for Lapse with Furloughs, Payment Pauses

Last month, when Democrats couldn’t reach an agreement on a path forward by Sept. 30, the end of the fiscal year, they briefly let highway and transit programs lapse before passing a short-term extension (Public Law 117-44), which Biden signed on Oct. 2.

What would happen if lawmakers let the programs lapse (again) while negotiations continue?

Without the authority to spend from the Highway Trust Fund, the main source of money for federal transportation programs, the Department of Transportation has to shut down programs and furlough staff.

Highway Bill Extension Readied to Avert Transportation Chaos

The October lapse caused about 3,700 DOT employees to be furloughed, according to an agency spokesperson. That figure included about 2,600 employees from the Federal Highway Administration, 32 employees from the Federal Transit Administration, 798 employees from the Federal Motor Carrier Safety Administration, and about 300 from the National Highway Traffic Safety Administration, according to the Congressional Research Service. Those workers were paid back under the short-term extension law.

Sen. Ben Cardin (D-Md.) said last week that there’s a “really good faith effort to try to get in place a game plan” before the end of October. He said he thought Democrats could reach an agreement on the larger spending bill and pass the bipartisan infrastructure bill before the end of the month, but that lawmakers “can always miss that” and temporarily extend the programs.

Is the Highway Trust Fund going to run out of money?

The Highway Trust Fund was running low toward the end of the fiscal year, limiting how long lawmakers could extend highway programs without transferring money into the fund. Last week, however, the FHWA told lawmakers that an infusion at the end of the fiscal year left it with enough money to fund highway programs through the rest of the 2021 calendar year.

Highway Fund Cash Infusion Buys Lawmakers Time on Infrastructure

Congress will still need to either pass the infrastructure bill or another temporary extension of highway and transit programs to avoid a lapse. But lawmakers won’t have to transfer money to the trust fund from Treasury’s general fund if they pass another brief extension, buying time as the larger negotiations over Biden’s domestic policy agenda drag on.

Why are states and lawmakers unhappy with short-term extensions?

Some states are struggling to plan future road and bridge projects without certainty over what long-term federal funds will be available. The uncertainty caused by the 30-day extension meant higher costs, job declines, and more disruptive delays, state officials and industry representatives said.

Construction Firms, States Fret as Highway Patch Nears Lapse

A recent survey from the American Association of State Highway and Transportation Officials found that states across the country worry about how the short-term extension is affecting their operations. The single month of funding “forces us to either delay letting much needed projects due to inadequate funding or requires us to front the cost with state funds which severely impacts our diminishing state cash,” the Alabama Department of Transportation wrote.

Although challenging, states have seen many short-term extensions before. The current stopgap measure, coming on the heels of a one-year bill, is the 16th short-term highway extension since 2009.

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editor responsible for this story: Sarah Babbage at sbabbage@bgov.com