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Appropriators’ Move to Free Up Earmarks Shows Wonkiness of Transportation Spending

State transportation departments will see extra dollars for roads and bridges, thanks to a move by appropriators in the fiscal 2016 omnibus to free up some $2 billion in once-earmarked money left unused.

The law (PL 114-113) gives cash-strapped transportation departments money that previously was designated by members of Congress for specific projects. The unused money demonstrates how earmarks reflected the priorities of individual lawmakers more than the planning priorities of state departments of transportation.

The Federal Highway Administration is expected to update the list of earmarks subject to the new provision in the coming weeks. But according to an FHWA spreadsheet provided to CQ and detailing old earmarks subject to the new provision, the amount is in the range of $2 billion. That estimate is from June 2015.

Joung Lee, policy director at the American Association of State Highway and Transportation Officials, said in most cases the kind of earmarks freed under the omnibus are typically related to a project that “just wasn’t able to move.” Earmarks subject to the provision must be more than 10 years old and less than 10 percent of the earmarked money can have been spent.

Lee said that is usually due to funding reasons, or because the project wasn’t planned by state or local officials. The FHWA is combing through the old project money to get a full account of what’s unspent and make sure states are ready to put the funds to new use.

The result?

“Dollars can actually be spent out rather than sitting indefinitely without benefiting transportation investment,” Lee said.

The FHWA puts constraints on how the money can be used. The provision stipulates the money has to remain in the state and be used on a project within 50 miles of the original earmark, according to the agency.

Some funds have been sitting on the shelf for decades. The FHWA is updating its information on unused earmarks and will then start allowing the money to be used on other projects.

“This process is taking some time because we need to validate what is turning out to be a very long list of qualifying earmarks to ensure that we have an accurate, complete set,” said Doug Hecox, FHWA spokesman. “We expect to have the updated list to the states in the coming weeks, as well as guidance on notification and reporting.”

Earmarks Dead, But Still A Problem

Congress is repurposing earmarks roughly a decade since the dust-up over the Bridge to Nowhere, a $223 million earmark to fund a bridge from Ketchikan, Alaska, to the tiny island of Gravina. That project was named in 2005, but Congress later stripped the earmark in clear embarrassment over the project.

But simply booting support for that project wasn’t enough: In 2011, the House eliminated earmarks altogether when Republicans took control. As a practical matter, the Senate’s banned congressionally directed spending since 2011, when then-Senate Appropriations Chairman Daniel K. Inouye, D-Hawaii, agreed to impose a temporary moratorium on earmarks.

“The president has stated unequivocally that he will veto any legislation containing earmarks, and the House will not pass any bills that contain them. Given the reality before us, it makes no sense to accept earmark requests that have no chance of being enacted into law,” Inouye said at the time.

The controversy over whether Congress made the right choice when banning earmarks, however, remains a hot issue on Capitol Hill. While it’s politically unpopular to vouch for them, earmarks were a major way of doing business for certain programs.

Take lock and dam projects overseen by the Army Corps of Engineers, for example. In 2013, the ban presented a serious problem for authorizers looking to pass a water resources bill, since the traditional method of getting projects going was earmark-centric.

For those keeping tabs on water projects, like Mike Toohey, president and CEO of Waterways Council Inc., a group advocating for inland waterways improvements, all eyes are on President Barack Obama’s fiscal 2017 budget request, which will set the stage for water projects this year.

“The earmarks ban is still problematic in the sense of Corps Navigation program because every project would be considered by Congress as an earmark,” Toohey explained. “Unless it’s in the president’s budget, it’s considered an earmark.”

Toohey added the day the budget is released is also the day the Army Corps is expected to release its work plan for projects funded by fiscal 2016 appropriations.

And while Congress has tied its hands, the waterways community has been advocating for — and paying more for — more projects. Despite the political intractability of gas tax increases for motorists, supporters of locks and dams lobbied successfully for a barge diesel fuel tax increase in 2014 to boost the available funds for projects.

But Toohey sees a potential issue in relying on the administration to have full discretion on which proejcts move and which don’t.

“I don’t think the administration’s selections are necessarily the same as what Congress would have chosen,” Toohey said. “At some point I think they’ve got to review how they define earmarks.”

But for these projects, getting rid of earmarks could be a small boon for local departments of transportation. According to the FHWA’s June estimate, Illinois could see more than $84 million in money to use for different projects — California has more than $124 million sitting idle.

Scoring Issues

The way the provision became law also shines light on the unusual budget treatment of surface transportation spending in Congress.

Transportation spending from the Highway Trust Fund exists in a quasi-mandatory, quasi-discretionary realm. Authorizers set overall spending levels with the highway bill and appropriators set a cap on how much money can be spent from the fund each year. But spending from the Highway Trust Fund doesn’t fall within the discretionary spending caps that Congress has placed on appropriators.

The distinction helps explain why the provision was included in the Senate’s original surface transportation authorization bill, but not in the five-year, $305 billion highway transit and rail reauthorization in December (PL 114-94), also known as the FAST Act.

“It kind of falls into this unique area in the overall federal budgetary realm,” Lee said.

According to Senate Appropriations Committee staff, the provision was included in the Senate Transportation-HUD appropriations bill marked up by the full committee in June 2015. The committee said it provided the item to the Senate Environment and Public Works Committee, which added the provision to the Senate highway bill. But it was dropped from authorization legislation due to scoring issues raised by the Congressional Budget Office, only to reappear in the omnibus.

For authorizers, reusing old earmarks would have been viewed as new spending — something that requires lawmakers to go looking for pay-fors, such as cuts in spending or new revenue. But appropriators, who look at budget authority and not outlays when scoring the provision, didn’t need to worry about offsetting spending that Congress had already approved.

“So any provision that cause[s] increased outlays are a problem in a highway bill but not a problem in an approps bill, which is why the omnibus, and not FAST Act, wound up carrying the language,” said Jeff Davis, senior fellow at the Eno Center for Transportation.

The case illustrates the varying powers of congressional committees, even when they are dealing with the same program.

“In order to fix this, you’ve got to get authorizers and appropriators and budget and tax committees, and get them all on the same playbook,” Davis said. “Someone has to give up power and no one wants to.”

Niels Lesniewski contributed to this report.

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