August 1, 2019

Prior to departing for its annual August break, the Senate voted 67-28 to approve a new two-year budget agreement (HR 3877) that will suspend the debt ceiling and lift the spending caps put in place by the Budget Control Act (PL 112-25). Pursuant to the legislation, which the House approved last week, discretionary spending would increase by approximately $320 billion over the next two years.  In addition, the limit on federal borrowing would be suspended through July 31, 2021, ensuring that the Treasury will be able to meet its debt obligations.  Once the limit comes back into effect, it would reflect all outstanding U.S. debt as of that date.

While the budgetary framework will grease the wheels for the fiscal year 2020 appropriations process to advance in earnest, there is no guarantee that Congress will pass all 12 spending bills by the start of the new fiscal year. In the House, lawmakers have cleared 10 of the annual funding measures, though adjustments will likely need to be made to reflect the terms of the new budget deal.

Across Capitol Hill, Senate appropriators have not yet approved – let alone written – a single FY 2020 spending measure. However, with this week’s budget agreement now in hand, committee staff has begun the process of drafting the Senate’s funding bills. Looking ahead, the chamber is expected to take a series of votes on the spending legislation once lawmakers return to the nation’s capital after Labor Day.

Senate Panel Advances New Surface Transportation Bill

On July 30, the Senate Environment and Public Works (EPW) Committee unanimously approved a five-year highway reauthorization bill (S 2302), entitled the America’s Transportation Infrastructure Act (ATIA).  The bipartisan legislation, which was unveiled earlier in the week, would authorize a total of $287 billion for surface transportation programs between fiscal years 2021 and 2025.  This would represent an increase of over 27 percent compared to the current levels authorized under the FAST Act, which is set to expire in September of 2020.

In addition to the increased funding levels, ATIA includes a number of provisions that would benefit California’s counties.  In particular, the legislation places a major emphasis on measures to improve the resiliency of transportation infrastructure.  Among other things, S 2302 would establish a new program for resilience improvements.  The so-called Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (PROTECT) grant program would distribute $786 million annually to States via formula grants and would make another $200 million available through competitive grants.

The legislation would also expand eligibility under the Emergency Relief (ER) program to include projects such as relocating roadways in floodplains to a higher elevation, stabilizing slide areas and slopes, improving drainage, installing seismic retrofits, etc.  Under the bill, projects like these would be eligible for a maximum Federal share of up to 100 percent.

Furthermore, ATIA would authorize $6.6 billion for a new Bridge Investment Program that would assist local governments to rehabilitate or replace structurally deficient bridges.  Of this amount, $3.3 billion would be dedicated funding from the Highway Trust Fund, and the remaining $3.3 billion would be available via the annual appropriations process.  It should also be noted that S 2302 would maintain the current set-aside for local bridges that are located off the federal-aid highway system.

With regard to streamlining, S 2302 would codify core elements of the Trump administration’s “One Federal Decision” policy (Executive Order 13807) for highway projects, including a two-year goal to complete all environmental reviews, as well as a 90-day timeline for related project authorizations.  It also seeks to avoid duplication by requiring a single environmental document and record of decision to be signed by all participating agencies.

Finally, the measure would provide $3.5 billion for formula and competitive grants to expand investments in transportation improvements that are designed to reduce carbon emissions, as well as $250 million over five years for a new grant program for projects designed to reduce the number of wildlife-vehicle collisions.

Looking ahead, the goal of Senate leaders is to combine the EPW bill with several other yet-to-be-written titles to essentially make the legislation a broader infrastructure package.  Accordingly, several other Senate committees will share jurisdiction over the final legislation.  The Banking, Housing, and Urban Affairs Committee has primary authority over public transit, while the Commerce, Science, and Transportation Committee will be charged with drafting provisions dealing with rail infrastructure.  However, the unenviable task of determining how to pay for the legislation will fall to the Finance Committee.

As has been the case throughout the multi-year discussion regarding the need for increased infrastructure investment, there is currently no consensus or leading plan on how to finance the new spending.  For his part, Finance Committee Chairman Chuck Grassley (R-IA) has indicated that his committee will not move forward unless Majority Leader Mitch McConnell (R-KY) agrees to allow the chamber to vote on a gas tax increase.  At this point, McConnell appears unwilling to make such a commitment.  It should be noted that the gas tax has not been raised since 1993.

The full text of S 2302 is available here; a section-by-section breakdown can be accessed here; and, a short summary prepared by EPW Committee staff can be found here.