House Approves Stimulus Bill With Only $30 Bln. for Roads

By Sean McNally, Senior Reporter

This story appears in the Feb. 2 print edition of Transport Topics.

The House of Representatives last week approved an $819 billion package of spending and tax cuts aimed at boosting the economy, but with less spending on such projects as roads and bridges than some key legislators wanted.

The Senate planned to take up its version of the measure as soon as this week. Last week, the Senate appropriations and finance committees approved their sections of the bill.

“The needs are great. There are many projects on the shelf,” said Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee’s panel on highways and transit. “They just need the money.”

The House approved a De-Fazio amendment adding $3 billion for transit agencies, but the overall funding directed toward roads and bridges remained at $30 billion.

House Republican opponents said the bill should have more tax cuts and less spending, but after the vote, DeFazio said the infrastructure spending was “a smart investment as opposed to a tax cut that will be gone, with little to no benefit to the economy, in a matter of months.”

In addition to the highway and other spending measures, the plan has nearly $250 billion in personal and business tax cuts.

Some critics of the plan, which every Republican member of the House voted against, pointed to a report by the Congressional Budget Office that said the much of the funding for infrastructure would not be spent this year, or even in 2010.

“On balance,” the CBO said Jan. 26, “many states would move as rapidly as possible to obligate new funds, but . . . much of the construction and procurement work associated with highway and transit projects would occur over an extended period of time.”

The nonpartisan congressional research arm said that of the $30 billion tagged for highways, only $3 billion would be spent during the 2009 fiscal year, with $13.5 billion spent during the 2010 and 2011 fiscal years.

The balance of the funds would be spent in fiscal years 2012 through 2016.

“Lags in spending stem in part from the need to draft plans, solicit bids, enter into contracts and conduct regulatory or environmental reviews,” CBO said. It also said the seasonal nature of highway construction would slow the rate of spending.

Rep. James Oberstar (D-Minn.) blasted the CBO’s analysis, saying the agency “very conservatively scored on the basis of previous history, not on the basis of the real world that we live in.”

“I have been on the phone — CBO has not — with [state and local officials]. They have committed to have projects obligated or under contract in 90 days for the first $15 billion of [highway] funding and the next $15 billion in 180 days,” he said. “We are going to hold their feet to the fire and a blowtorch to their bottom side to make sure they deliver.”

The Senate bill, larger than its House counterpart, totals $888 billion, mostly the result of a one-year change to the alternative minimum tax.

However, the Senate bill includes less funding specifically for roads and bridges  — $27.06 billion — than the House bill does, but it also creates a new pool of funds totaling $5.5 billion that also could be used for a variety of projects, including highways.

The additional $5.5 billion will be used for grants, issued by the secretary of transportation for “projects that will make a significant impact on the nation, a metropolitan area or region,” according to the Senate appropriations committee.

Examples of projects the committee envisioned the funds to pay for include “freight rail transportation and port infrastructure, including projects that connect different modes of transportation and improve the efficiency of freight movement.”

The Senate bill also includes several provisions mirrored in the House version, such as grants for diesel engine retrofits and several business tax cuts aimed at stimulating capital investment.

Sen. Max Baucus (D-Mont.), chairman of the finance committee, said the bill “will jump-start jobs that . . . [will] build back our highways.”

Sen. Daniel Inouye (D-Hawaii), appropriations committee chairman, said Congress needed to “respond to this crisis with all weapons at our disposal. . . .”

“These investments will not only create jobs now but will also address neglected priorities here at home,” he said.