Even with spending framework, infrastructure delays loom
Democrats are eager to turn their legislative victory into real projects as they try to protect their narrow majorities in Congress this fall
An $8.7 billion grant program to help states build infrastructure resilient to the impact of climate change. A $6.42 billion, five-year program aimed at reducing transportation carbon emissions. A $250 million program to help states and cities come up with plans to alleviate congestion.
As appropriators begin to flesh out the framework for the fiscal 2022 omnibus, those who anxiously waited for passage of a bipartisan infrastructure law last year say those programs and others remain in a holding pattern until that spending bill passes.
The tentative framework reached Wednesday still leaves much at stake, particularly for Democrats: They have lauded the infrastructure package as a win that, ideally, should help them make their case for retaining House and Senate majorities in November.
“When the Congress enacts this omnibus, we will also unlock the increased federal funding included in our Bipartisan Infrastructure Law, which will transform our roads, bridges, water systems, airports, broadband and more as we revitalize our middle class,” Speaker Nancy Pelosi said Wednesday shortly after appropriators announced a deal.
Despite that, the deal could still collapse. And until it is enacted, the federal government, currently operating under a continuing resolution, is stuck at fiscal 2021’s levels.
The issue has raised worries among transportation officials and lawmakers alike since the beginning of the year. But as Congress moves toward yet another temporary spending measure — this one through March 11 — while the tentative deal reached Wednesday is fleshed out, stakeholders are getting increasingly antsy to begin translating policy into roads, bridges and ports.
The five-year infrastructure law includes a hybrid of funding from general revenue and contract authority — spending financed largely via the gas tax-funded Highway Trust Fund — and until appropriators agree on topline numbers, state departments of transportation are essentially stuck operating under past spending limits, particularly for areas funded by contract authority.
That means the 20 percent increase in highway formula money and 30 percent increase in transit formula dollars authorized by Congress remains out of reach.
Without a full-year spending bill, the Transportation Department is relying on internal guidance and the Office of Management and Budget to determine what it can and cannot spend. On Dec. 15, the Federal Highway Administration announced a $52.5 billion apportionment for highway dollars for next year through the new bill, but cautioned that it was only spending a small, prorated slice of that through Feb. 18, when the current continuing resolution ends.
Ed Mortimer, vice president of transportation and infrastructure for the U.S. Chamber of Commerce, said states are still operating at last year’s apportionment levels of $46.3 billion. The rest of that money, he said, “is being left on the sidelines.” Transit money, which is also paid for through the Highway Trust Fund, is in a similar fix.
That includes some very specific programs. The PROTECT program — which stands for Promoting Resilient Operations for Transformative, Efficient and Cost-saving Transportation — and the carbon reduction formula programs didn’t exist before the infrastructure law and are considered “new starts,” according to Susan Howard, program director for transportation finance for the American Association of State Highway and Transportation Officials.
“We’re operating under the scope and parameters of last year’s appropriations bills,” she said.
She said states eager to spend the money are in a federal funding purgatory until the omnibus passes. “The longer it drags on, the more dicey it gets,” she said, adding that the multiple continuing resolutions shorten the window where the money can be committed. “The absence of some finality on fiscal year 2022 is really kind of putting a muzzle on things and making it really hard to navigate.”
It’s an issue that has frustrated the Department of Transportation, which is eager to start getting the money out the door but hobbled by Congress’ ability to appropriate the money it agreed to spend last year.
As early as mid-January, three DOT administrators — Stephanie Pollack, acting administrator of the Federal Highway Administration; Federal Transit Administrator Nuria Fernandez; and Amit Bose, now the administrator of the Federal Railroad Administration — acknowledged at the annual meeting of the Transportation Research Board that the stopgap resolution had hindered their ability to move forward.
“The continuing resolution that we’re currently living under has limits on new starts,” Carlos Monje, undersecretary of Transportation for policy, said on Jan. 25. “If there’s a program that wasn’t part of that approps package, we’re very limited in kicking off new programs.”
Monje said that while the DOT was working with appropriators and the White House “to push the limits as far as we can,” there remained limits to not having a full-year funding bill.
“We are working to try to get as much money out the door” as possible, he said.
Stakeholders are all but begging for appropriators to act.
On Tuesday, a group of state and local government groups including the National Governors Association, the National Conference of State Legislatures and U.S. Conference of Mayors wrote congressional leaders asking them to “swiftly” pass appropriations for fiscal 2022, which began in October.
“If lawmakers do not agree on dedicated FY 2022 funding, many programs, including those authorized by the bipartisan Infrastructure Investment and Jobs Act … will be constrained by last year’s levels,” they wrote. “Many programs designed to bolster economic recovery and support critical state, territory, and local infrastructure projects will be unnecessarily delayed or severely hampered.”
They added that if Congress does not enact a federal spending law for fiscal 2022, some $45 billion in competitive resources provided for in the first year of the law “will go unrealized.”
And nearly 70 groups including the U.S. Chamber of Commerce and the state transportation officials' organization wrote congressional leadership and appropriators on Jan. 24 with a similar plea.
“The signing organizations have advocated for and continue to advocate for a full-year appropriations bill,” they wrote. “However, a delay of almost six months since the beginning of FY 2022 in providing the much-touted funding increases from the [bipartisan infrastructure law] is wholly unacceptable and will cause significant project disruptions, reduced construction and manufacturing employment, and delays in delivering critical transportation infrastructure improvements — just when Americans were promised the most ambitious infrastructure package of our time.”
Mortimer said that because of the current funding restrictions, the department is also inhibited from doing the hiring needed to implement the law.
He said the varied pots of funding for transportation leave a lot of “gray areas” where it’s unclear which federal dollars can be spent. The Office of Management and Budget and DOT are trying to determine how to move forward, but “there’s no definitive language from Congress to clearly lay out” what can be spent, he said.
“When bills are passed, people just assume they are going to be funded,” Mortimer said. “And it’s not been an easy process in the appropriations area for many years.”