While House and Senate transportation staffers are hopeful for a new highway and transportation bill by the end of February, another short-term extension may be needed to keep federal programs operating, according to Roads and Bridges. The current extension of the Transportation Equity Act for the 21st Century (TEA 21) expires Feb. 29.

Without passage of a new highway bill or a second extension by that date, the Federal Highway Administration would be forced to shut down.

In order to meet the deadline, at least four remaining Congressional Committees with unfinished work would have to favorably report titles of the bill, House and leaders would have to agree to schedule floor time with a very tight legislative calendar, both the House and Senate would have to pass the bill, a conference committee would have to resolve hundreds of differences between the two bodies, and the president would have to agree to sign it. The likelihood of all of these actions occurring by Feb. 29 is very small.

Among many issues unresolved at this point, staffers said, is the way to remedy the revenue aligned budget authority (RABA) provision of TEA 21. Intended as a mechanism to ensure that authorizations are tied to income in the Highway Trust Fund, the methodology of calculating RABA came into question when it had the potential to cause an $8.6 billion cut in the federal highway program in FY 2003.

In addition to the reauthorization bill itself, several other related legislative issues will affect highway funding.

Observers note that the FY 2005 budget resolution may have significant impacts on reauthorization, particularly with regard to funding firewalls created in TEA 21. Prior to that action, appropriators could reduce transportation funding in order to find funds to offset spending in other domestic discretionary programs.

The TEA 21 firewalls ensured that any savings from reducing transportation spending could not be used for other programs, thus protecting obligation levels. Combined with RABA, the bill also made it possible to increase budget caps to accommodate increased highway spending based upon additional revenues accumulated in the Highway Trust Fund.

All recent spending caps on domestic discretionary spending have now lapsed, and are unlikely to be brought up in the FY 2005 budget resolution. Thus, the possibility exists that if firewalls are not retained, future spending caps could reduce transportation funding below levels that the revenue to the Trust Fund could support.

The release of the President’s proposed budget for FY 2005 is another factor that could influence the progress of the reauthorization legislation. There’s rampant speculation that the Bush Administration may increase the funding levels of the SAFETEA bill it unveiled last year, by identifying as-yet undefined sources of revenue.

That could provide additional momentum for supporters to complete action on a long-term bill, albeit it at lower funding levels than those envisioned by the House and Senate authorizing committees.

Even more urgent than completion of the reauthorization bill is passage of appropriations for fiscal year 2004.

Currently, an extension to 2003 appropriations continues highway spending at 2003 levels until Jan. 31. However, before that happens, Congress is expected to pass a final appropriations bill that would provide $33.6 billion for highways, a $2.2 billion increase over the FY 2003 level. It also contains $7.3 billion for transit and $1.2 billion for the passenger-rail service Amtrak.