On Aug. 5 President Clinton ended months of fractious political activity when he signed the budget-balancing law, which shifts the 4.3-cent per gallon federal gas tax for general fund use -- enacted in 1990 -- to the Highway Trust Fund, where the roadbuilding establishment has long insisted it belongs.

This singular event puts an end, perhaps temporarily, to efforts to soak highway users for general fund government expenditures, a long-established fixture in Europe and other countries. It's a big plus for the highway infrastructure community at all levels of government -- both the public and private sectors -- and for the motorist as well.

However, strings are attached. The extra money -- expected to provide as much as $6 billion more annually to the Highway Trust Fund (whose cash balance this summer was fluctuating around $24 billion) -- can't be spent under the existing balanced-budget deal that also was part of the tax bill. Limits that increased spending in small increments were enacted in the House/Senate balanced budget resolution that formed the basis for the tax bill that ultimately was enacted.

Emboldened by his success, Rep. Bud Shuster (R-Pa.) -- chairman of the House Transportation and Infrastructure Committee -- announced that he will attempt to use federal highway program reauthorization this fall to get the Highway Trust Fund out of the U.S. federal "unified" budget. Such a move would get federal surface transportation spending out from under the yoke of the budget-balancing scheme, although it still would be subject to the regular appropriations process each year.

Shuster has called his effort the "mother of all transportation bills", which when coupled with a "drawdown" of existing excess balances in the Highway Trust Fund, could increase federal surface transportation spending alone from $26 billion in FY 1998, to as much as $33 billion in FY 2000.

Removal of highway spending from the budget-balancing act is justified, because funds for highway spending at the federal level are collected in advance from ma and pa at the gas pump, and do not increase the federal deficit in any way. Instead, each year Congress consistently appropriates less money for highway obligations than it is allowed to under federal authorizing legislation like the existing Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA).

Earlier in the summer , the narrowly approved House/Senate balanced budget resolution -- which allowed for little increase in funding for surface transportation programs -- complicated surface transportation reauthorization this year.

A new federal surface transportation program must be reauthorized by Congress and signed by the president by Oct. 1, or all federal aid to the states for highway improvements will cease. Funding levels for surface transportation -- classed as "domestic discretionary spending" in the deal -- won't allow the multi-year surface transportation reauthorization to either address proven infrastructure needs, or satisfy donor states demanding a better return on the federal transportation excise taxes they send to Washington.

Amendments to the House and Senate balanced budget resolution that would have boosted transportation spending were defeated in both houses by only two votes.

Proponents of surface transportation were heartened by the close vote, which took place in defiance of furious opposition by the entrenched leadership of both parties in both houses, and the Clinton Administration.

In the face of the budget deal -- which will be reopened and revisited each year -- House and Senate transportation committees predicted a slowdown in efforts to reauthorize the program this year.A one-year extension of ISTEA -- the existing bill -- or deliberate lapsing of the current program on Sept. 30, could onstitute a strategy. If the program were to lapse, as happened twice in the 1980s, unobligated program balances would help keep the federal program going.

Shuster said in June that as a result of the balanced budget vote, he was no longer in a hurry to get a reauthorization bill out of committee. His ally, House Surface Transportation Subcommittee chair Rep. Tom Petri (R-Wis.) said he'd support a one-year reauthorization in an effort to force higher funding levels in 1998. But in August Shuster said he'd introduce a three-year bill, and if budget hawks in the House objected, he'd push a one-year bill.

During a June 16 joint Capitol Hill meeting of the Transportation Construction Coalition and the Keep America Moving Coalition, Senate Transportation and Infrastructure Subcommittee aides said neither chairman Sen. John Warner (R-Va.) nor ranking Democrat Sen. Max Baucus (D-Mont.) would support a single year reauthorization bill, and said they plan to proceed with a six-year bill, reported the American Road & Transportation Builders Association.

The balanced budget resolution, approved well after midnight May 21 after a contentious fight over transportation funds, attempts to balance the federal budget by the year 2002. Unfortunately, highways did not fare so well in the budget deal reached between the President and Congress in early May. Under the plan, highways would receive only about $2 billion more per year in addition to the amounts proposed in President Clinton's NEXTEA bill.

The total value of the new ISTEA bill under the budget agreement would be $185 billion (ISTEA I was valued at $155 billion). This is substantially less than the $26 billion or more per year that the highway industry was hoping for and which could easily be supported if the 4.3 cent gas tax is redirected to the Highway Trust Fund and the trust fund is taken off-budget.

To correct that shortfall House Transportation and Infrastructure Committee chairman Shuster and committee ranking minority member Rep. James Oberstar (D.-Minn.) offered a bipartisan amendment to that budget resolution which would increase transportation spending without endangering the balanced budget. The amendment was introduced just before the budget resolution vote.

The amendment would have increased spending for federal highway and mass transit programs by a total of $11.6 billion over five years compared to the budget resolution, and would offset this increase through a 0.4% across-the-board reduction in tax cuts and in all other spending categories in the budget resolution, except for mandatory entitlements which would not be cut.

Tremendous pressure to vote in favor of Shuster's amendment was placed on representatives by state governors, municipal officials, business, and highway and mass transit advocates alike. But a vote for the amendment would have been a vote against Republican and Democratic House leadership, and the Clinton Administration itself, all of whom had forged the deal among themselves.

After a day and evening of furious lobbying, at 3:30 a.m. May 21, the amendment was defeated by only two votes, 216-214. While a defeat, the vote has emboldened highway adovcates, who see in each vote for the amendment a courageous vote in defiance of House leadership and status quo.

Moreover, while setting upper limits on total federal spending, the resolution is nonbinding and subject to change as politics dictate. "Countless budget deals have taught us that the only year that really matters is the current one," opined the Wall Street Journal that morning.

Two days later, the Senate defeated a similar balanced budget resolution amendment boosting transportation spending, 49-51.

The possibility exists that competition to the existing U.S. Intermodal Surface Transportation Efficiency Act (ISTEA) could get stronger, if two alternatives to ISTEA which are similar move toward merging into a single, strong bill.

The Senate Environment and Public Works Committee -- the Senate panel considering ISTEA reauthorization -- has been divided among three reauthorization proposals: ISTEA Works!, which continues the existing ISTEA program, but with modifications; STARS 2000, and STEP 21.

Those who support STARS 2000, introduced by ranking Democrat Max Baucus (D-Mont.), and who support STEP 21, sponsored by Surface Transportation Subcommittee Chairman Sen. John Warner (R-Va.), have discussed combining major elements of their bills to gain the support of a majority of the committee.

"[STARS 2000] is a bill we think is one that is probably the most fair, the most evenly-balanced among the competing bills now facing the Congress with respect to highway funds," Baucus said. "STEP 21 [and STARS 2000] actually are much more alike than they are dissimilar, and I have a strong feeling that the two bills are going to merge and become not only one, but the major bill."

Opponents to ISTEA are determined to reverse that bill's inequities, as they see them. "It is essential that this piece of legislation be shaped to reflect the special needs of the United States of America, not just the Northeast corridor which dominated it so much in 1991," Warner said in March. "This bill -- I'm going to tell you -- will be one of the most hard-fought battles in this Congress."

ISTEA is disliked by highway interests because it

ISTEA, however, sweetened the pot for everyone by providing significantly higher funding levels than previous legislation.

ISTEA diminishes highways by putting other modes of transportation on an even footing -- funding and priority-wise -- with highways, even though highway users pay the surface transportation bills through fuel and excise taxes.

It gives the environmental movement new ammunition primarily, though not only, because in conjunction with the Clear Air Act Amendments of 1990 it precludes new highways or capacity increases in air pollution non-attainment areas. In many other ways ISTEA works with existing environmental legislation to curb growth in highways.

And it erodes the authority of state DOTs because in metropolitan areas of over 200,000 in population, federally established regional panels called Metropolitan Planning Organizations (MPOs) get to call the shots on how federal surface transportation block grants will be spent.

This legislation -- crafted in large part by a long-time opponent of "big" highways, Sen. Daniel Patrick Moynihan (D-N.Y.) -- was presented to the Congress as an accomplished fact. The original ISTEA legislation did not even provide for a National Highway System, which was added later in the year.

In summer at least three separate proposals for reauthorization away from the ISTEA model lay on the table. These are:

STARS 2000 would increase the percentage of funding sent to the Western plains and mountain states. It would decrease the percentage of funding for the Northeastern states, but guarantee a 95 percent return on the federal motor fuels taxes paid by each state. In addition, the plan would eliminate ISTEA's Congestion Mitigation and Air Quality Program and bridge maintenance program, but it allows states to address these needs individually. The plan was crafted with the Idaho, Montana, North Dakota, South Dakota and Wyoming transportation departments, and has been criticized bitterly by individuals such as Gov. Christine Todd Whitman of New Jersey.

Even as legislation was being introduced in Congress to implement the STEP 21 plan for changes to ISTEA, several states were parting ways with the coalition. STEP 21 is a group of state DOTs from the so-called donor states that wish to change the formulas used to allocate ISTEA funds and significantly alter ISTEA's structure by eliminating maintenance, air quality, and enhancements categories.

In the meantime, states scramble among themselves to stake out their positions on reauthorization.

The Oregon DOT dropped out of the STEP 21 coalition after it associated itself with the "ISTEA Works" coalition on the matter of ISTEA's structure. This brings membership in ISTEA Works -- a group of states that supports ISTEA without major changes -- to 17 entities, 11 mid-Atlantic and Northeastern states from Maryland to Maine, plus West Virginia, Illinois, Colorado, Oregon and Washington, and Puerto Rico.

After serious concerns about STEP 21 were raised by local governments, transit agencies and MPOs in Missouri, a consensus was reached by the state's major players in transportation to back a compromise position that shares more with ISTEA than with the STEP 21 plan, according the Surface Transportation Policy Project (STPP), a Washington-based coalition of activists who would constrain highway construction.

The Southern Governor's Association recently endorsed the STEP 21 proposal. In a resolution, the governors called for Congress to reauthorize ISTEA "based on the proposals of the STEP 21 coalition."