House Budget Committee Chairman Tom Price (R-Ga.) today released a proposed FY 2016 budget resolution that would, over the next 10 years, increase defense spending by $387 billion, provide $372 billion in deficit reduction, and cut non-defense spending by $759 billion. While the documents released today do not provide specific details on the individual programmatic investment levels, the federal transportation programs are part of the budget that is slated for a total 14 percent reduction.
Documents from the Budget Committee, however, detail the challenges that have plagued the Highway Trust Fund over the last eight years and state, “Our budget advocates sensible reforms to ensure the solvency of the Highway Trust Fund.” This language means the budget assumes federal highway and transit investment would be reduced to the level current trust fund revenues could support. While the Budget Committee documents do not include specifics about the extent of those reductions, U.S. Department of Transportation (DOT) budget officials told members of the Transportation Construction Coalition earlier this year that, without new revenues, the department would have to begin slowing down reimbursements to state transportation departments for already approved federal aid projects in July and the fund would be unable to meet its obligations in September. The Highway Trust Fund faced a similar situation at this point last year and it was projected there would be no new highway/transit investment in the subsequent fiscal year.
The budget documents claim that without curtailing trust fund spending, investment levels would have to automatically decrease and U.S. DOT would have to ration payments to the states; or Congress would have to “provide additional bailouts in the form of transfers from the general fund, paid for with borrowed money.” The budget omits the third obvious option—Congress could require system users to increase their contribution to surface transportation network maintenance and improvement for the first time in 22 years.
The GOP budget proposal, however, includes a procedural provision called a “reserve fund” that would allow the Budget Committee Chairman to adjust the highway/transit spending assumptions in the plan upward if new Highway Trust Fund revenues are generated by subsequent legislation that does not add to the deficit. This provision has become a standard inclusion in House and Senate budget proposals in years when the Highway Trust Fund requires additional revenues or a reauthorization measure is slated for action. The measure also includes positive reference to public-private partnerships, such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) credit assistance and loan guarantee program.
While the assumptions in the House budget plan are disappointing and one-sided, they are consistent with past House GOP budget proposals. Budget resolution assumptions and policy recommendations, however, are not binding and it is still up to the congressional tax and transportation committees to chart a path forward for the Highway Trust Fund and reauthorization of the highway and transit programs.