Bipartisan Budget Agreement Offers Little Holiday Cheer for Transportation Funding

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William Moore of Vianovo works with the Transportation Transformation Group,  a consortia of public and private entities that looks at ways of improving the funding and financing of the nation's transportation infrastructure, which is co-chaired by Nossaman Partner Geoffrey Yarema.

Don’t let anyone tell you the Bipartisan Budget Agreement (BBA) enacted this week by Congress and President Barack Obama is good for transportation. The BBA rolls back the sequester of discretionary spending scheduled for 2014 and 2015 and increases discretionary spending by $45 billion this year ($22.4 billion each for defense and non-defense) and $18 billion for 2015.  But those increases are not increasing mobility.

The BBA leaves in place sequestration for mandatory spending, including cuts to the Highway Trust Fund.  The BBA requires a $960 million cut from the general funds transfer to the HTF that is provided by existing law.   In addition, it changes House budget rules to require offsets to future transfers if the next surface transportation bill authorizes them – making the writing of new highway bill in 2014 more fiscally difficult.

The BBA also will take away resources from transportation appropriations, probably cutting USDOT appropriations 2 percent from last year’s funding level.  Appropriators will be developing an omnibus spending bill against a January 15 deadline, and we won’t have bill language until the deadline approaches.  Without the details it is impossible to say whether the cuts will land hardest on Section 8 housing grants, personnel to process TIFIA loans or other programs.  But in its totality, no one can say the BBA is a good deal for transportation.

Disclaimer: The views and opinions expressed in this post are those of the author and do not necessarily reflect those of Nossaman LLP.

Topics:  Department of Transportation, DOT, Federal Budget, Highways, Sequestration, Surface Transportation

Published In: Transportation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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