Later this year we will know whether long-awaited, high-ticket federal surface transportation reauthorization legislation was signed into law -- or crashed into flames during a combative House/Senate conference committee -- or was vetoed by President Clinton. 

In mid-April the U.S. highway and transit community looked forward to big boosts in federal surface transportation spending from authorizing legislation that was under discussion in a House/Senate conference committee. The committee began discussion on return from Congress' Easter break on April 21. 

The House of Representatives passed BESTEA -- the Building Efficient Surface Transportation and Equity Act (H.R. 2400) -- on Wednesday night, April 1. The $218 billion highway and transit reauthorization bill was passed overwhelmingly, 337-80. 

BESTEA -- the "Mother of all Highway Bills" as proclaimed by House Transportation and Infrastructure Committee Chairman Bud Shuster (R-Pa.) -- authorized $181 billion for highway programs and $36 billion for mass transit over six years. 

BESTEA represented an funding increase of 41 percent over its predecessor, ISTEA, which authorized $155 billion for surface transportation programs. The bill would authorize an annual federal highway program of $24 billion in FY 1998, increasing to nearly $32 billion by FY 2003. Transit funding could grow from $5.4 billion in FY 1998 to $6.4 billion in FY 2003. But actual funding levels always are set by appropriating committees acting within budget guidelines. 

Earlier, on March 12, the Senate approved a surface transportation reauthorization bill that provided much higher funding for highways and mass transit than did the Intermodal Surface Transportation Efficiency Act of 1991, the bill it would replace. 

ISTEA II (S. 1173) authorized $173 billion over six years for federal highways, and $41 billion for mass transit. The bill's total authorization level of $214.3 billion approached the $218 billion authorized in BESTEA.  ISTEA II included a 40 percent increase in federal highway dollars and 31 percent increase in transit dollars over predecessor ISTEA, which expired Sept. 30. 

Both bills appeared to overcome objections of donor states -- those states that send more gas tax money to Washington than they get back -- and modal interests by providing high enough funding authorization levels to keep nearly everyone happy. 

But not all were happy with the new bills. Echoing the concerns of the administration, U.S. Transportation Secretary Rodney Slater said the administration -- while firmly behind the higher funding levels -- was definitely opposed to taking the Highway Trust Fund off-budget. But he said he felt methods could be worked out that would make sure highways were permanently funded at higher levels. 

In late March Clinton stated that he had "serious concerns" about the levels of spending in both bills, and that the "proposed new spending in this transportation bill goes too far and could threaten both our fiscal discipline and our commitment to education and other critical investments in the future." 
 

Devolution beaten down 

An amendment to BESTEA -- sponsored by program devolutionist Rep. John Kasich (R-Ohio) -- would have attacked the House bill by lowering the federal gas tax over the next four years by 11 cents/gallon, and give most responsibilities for the nation's road and bridge network to the states, reported the American Road & Transportation Builders Association (ARTBA). The amendment was defeated 98 to 318. 

Kasich, chair of the House Budget Committee, has two major objections to BESTEA. The $218 billion-bill exceeds agreed-on budget caps by $26 billion. Furthermore, the number of "high priority", so-called demonstration projects the bill earmarks -- called "pork barrel" projects in the parlance -- ballooned to an obnoxious 1,467, costing $9.3 billion total, at the expense of state and local agency-programmed projects. 

Kasich wants most federal gas taxes to be dropped, which would allow state lawmakers to replace them with local taxes and more local control of what the money is spent on. But while getting much lip service, this idea is no closer to passing Congress than it was a year ago. 
 

Donor/donee dispute blunted 

Even though both bills contain mitigating language, the problematic issue of "donor" states subsidizing programs in "donee" or recipient states by unequal returns of federal gas tax revenue fundamentally were left unresolved by the bills. 

The issue was a contentious one, so much so that as winter waned in early March -- in the light of the failure of Congress to pass the authorizing legislation by its sunset deadline of Sept. 30, 1997 -- it seemed as though Congress might never be able to agree on reauthorization. Instead Congress could have opted for yet another six-month extension, or fail to adopt any new program at all, a kind of "devolution by default". 

But the finding early in 1998 that the unified federal budget may actually run a surplus blew the issue wide open. 

In 1991, proponents of ISTEA were able to overcome serious objections to its radical elements by providing so much more money to all surface transportation programs that few legislators had the stomach to fight it. 

Likewise, in April 1998, both the House and Senate bills wound up with such higher funding levels -- so much more so than ISTEA -- that donor vs. donee, highways vs. mass transit, rural state vs. urban state, and other disputes of 1997 were easily suppressed under the proposed torrents of cash. Whether these issues will rise later lies in the future. 
 

ISTEA lives on 

ISTEA lives on in both bills in unneeded air pollution programs, in funding for ossified mass transit systems, and "transportation enhancement" projects which may be only dimly related to highways. 

However, the bill, despite its flaws, will be popular to outside-the-Beltway motorists and voters because it contains remedies and elements that matter to them, and who are weary of watching their federal gas taxes pilfered while their vehicles are battered by potholes and disintegrating roadways. 

Also, in a major victory for surface transportation, the 4.3 cents of federal gas tax originally provided for subsidizing general fund spending now is destined for road use. Anti-tax proponents had vowed to repeal the tax if it weren't utilized for transportation this year. 
 

Demo projects threaten bill 

Going into conference in April, critics maintained that the House bill burst the limits of the balanced budget agreement of last year, despite the fact that historically much more federal gas tax revenue is collected each year than is spent for the purpose for which it was collected. 

More to the point, they maintained that BESTEA contained nearly 1,500 special projects sought by legislators. 

On March 28, the Clinton administration attacked the earmarking of the $9.3 billion in highway projects, stating that it was "not an appropriate way to allocate billions of dollars of public resources". 

Then on March 31 six House members held a bipartisan press conference to blast BESTEA's "demonstration projects", urging that Clinton veto the legislation if the projects were not cut back in the House-Senate conference. An editorial that morning in the Wall Street Journal, Highway Robbery, said much the same thing. 

But on April 1, the day the bill passed the House, Shuster said that the bill was fiscally responsible. He said BESTEA would return to the general fund some $10 billion in interest that had accumulated on the balance of the Highway Trust Fund in past years, reported the American Association of State Highway & Transportation Officials. 

In addition, the bill would also eliminate the payment of an additional $15 billion in interest that would accrue over the six-year span of BESTEA, ARTBA reported. Shuster said the two actions would reduce the federal deficit by some $25 billion over the next six years, approximately the amount by which the bill exceeds the discretionary budget caps of the balanced budget agreement. 
 

Into conference and out? 

After the House and Senate passed their ISTEA reauthorization bills, focus moved to the conference between the House and Senate to reconcile the bills. 

But observers were concerned that a combative conference to reconcile the bills may erupt when Congress reconvened April 21 after the Easter recess. 

Issues to be reconciled in conference committee included funding levels. Although S. 1173 at $214 billion came relatively close to the House level of $218 billion, the Senate bill contained fewer earmarks. Also, the Senate bill required that earmarked projects must be included within a state's obligation limitation, essentially penalizing the state by the amount of the specified project. 

Both bills addressed state complaints by modifying the allocation formulas for distribution of funds to the states, but a compromise formula had to be worked out. 

In a move that would risk a presidential veto, the House bill would have removed the Highway Trust Fund from the unified federal budget, which is strongly opposed by the Senate and administration. This may be overcome by establishment of mechanisms that would ensure that transportation funds are spent for that purpose. 

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