Friday, November 18, 2011 The CSAC Bulletin
Update from Washington, D.C.
Time is running short for the supercommittee to produce a plan that would reduce the deficit by at least $1.2 trillion over the next decade. With just days until their November 23 deadline, Democrats and Republicans remain deeply divided over the proper balance of tax increases and spending cuts. While a deal has proven elusive thus far, lawmakers are eager to avoid across-the-board spending cuts that would automatically go into effect in 2013 if the committee is unable to fulfill its mandate.

The latest GOP proposal would overhaul the tax code and raise $250 billion in individual taxes, $50 billion in corporate taxes, and an additional $40 billion from changes to the consumer price index. It would also extend the Bush tax cuts that are set to expire at the end of 2012.

For their part, Democrats on the panel are mulling a two-step tax overhaul that would produce between $600 billion and $800 billion in new revenue. The first step of the process would include an immediate tax increase as a “down payment.” This would be followed by instructions to the House and Senate tax-writing committees to overhaul the tax code by a later date.

On the appropriations front, the House and Senate cleared the conference report for the first minibus spending package (HR 2112), which contains the fiscal year 2012 appropriations for Agriculture, Commerce-Justice-Science (S 1572), and Transportation-Housing and Urban Development (S 1596). Appropriators had considered expanding the package to include two other measures, namely the Legislative Branch (HR 2551) and Homeland Security (HR 2017) bills, but in the end opted not to do so.

In total, the spending bill provides $128.1 billion in discretionary funding which is subject to the $1.043 trillion cap established by the debt limit law and an additional $2.3 billion for emergency relief activities not subject to the cap.

From that pot, $52.7 billion is set aside for the Commerce-Justice-Science section of the minibus. This is $583 million lower than the fiscal year 2011 level. With regard to funding for the State Criminal Alien Assistance Program (SCAAP) and Community Oriented Policing Services (COPS) programs, the conference report provides for $240 million and $198.5 million, respectively. This is a significant improvement from the original House proposal, which did not include funding for either program.

The Transportation-HUD section of the package totals $55.6 billion in discretionary spending. Notably, the report eliminates funding dedicated to high-speed passenger rail. Senate Democrats fought to retain $100 million in high-speed rail funds they secured in the Senate-passed bill, but were unsuccessful. They were, however, able to secure $500 million for the TIGER grant program, which House appropriators had zeroed out.

For HUD, the Community Development Block Grant program will be funded at $3.3 billion, which is $192.9 million less than in fiscal year 2011.

The Agriculture agencies and programs will receive a total of $19.8 billion in discretionary funding, which is a reduction of $350 million from last year’s level. The compromise provides $80.4 billion in mandatory funding for the Supplemental Nutrition Assistance Program, formerly known as food stamps. The measure also provides $6.6 billion for the Women, Infants and Children nutrition program, which is $570 million above the House-passed level and $33 million above the Senate’s version.

A continuing resolution was also included in the final agreement. This stopgap funding provision will keep the government running through December 16. Congressional leaders are hoping that this will be the last continuing resolution needed this year, but it remains to be seen whether lawmakers will be able to complete the remaining nine spending bills in less than a month.

In related news, Senate Majority Leader Harry Reid (D-NV) attempted to package three additional appropriations bills – Energy-Water (HR 2354), State-Foreign Operations (S 1601), and Financial Services (S 1573) – into a second minibus. This measure has proven more difficult than the first, and as such, the prospects are not as bright.

One of the main obstacles has been the sheer volume of amendments prepared. One amendment – sponsored by Senators John Barrasso (R-WY) and Dean Heller (R-NV) – to the Energy-Water portion of the bill would bar the U.S. Army Corps of Engineers from implementing a controversial guidance that drastically expands the scope of the federal Clean Water Act. CSAC, in partnership with the Regional Council of Rural Counties (RCRC), sent a letter to Senators Dianne Feinstein and Barbara Boxer in support of the amendment.

As efforts on the second minibus have stalled, the Senate has turned their attention to other matters. At this point, the remaining spending measures will likely be rolled into one massive omnibus package.

In other news, the Senate Environment and Public Works (EPW) Committee unanimously approved its long-awaited highway reauthorization bill (S 1813) on Wednesday, November 9. The two year, $109 billion package, entitled Moving Ahead for Progress in the 21st Century (MAP-21), would fund highway programs at current levels, plus inflation.

Notably, the legislation does not identify a source for the roughly $12 billion that would be needed to fully fund the proposal. That particular task lies in the hands of the Senate Finance Committee, which has jurisdiction over the revenue title of the bill. It is unclear when the Finance Committee will produce its MAP-21 financing package.

Sponsored by EPW Committee Chairman Barbara Boxer (D-CA), MAP-21 would consolidate the number of federal highway programs from 90 down to less than 30. Under the bill, core programs would be reduced from seven to the following five programs:

National Highway Performance Program – consolidates the Interstate Maintenance, National Highway System (NHS), and Highway Bridge programs into a single new program designed to provide increased flexibility while guiding state and local investments to maintain and improve the NHS.

Transportation Mobility Program (TMP) – replaces the Surface Transportation Program (STP) while retaining the same structure and goals of STP to allow states and metropolitan areas to invest in highway, bridge, and other priority transportation projects. Certain activities that previously received dedicated funding via SAFETEA-LU, but are being consolidated under MAP-21, would be retained as eligible activities under the TMP (such as border infrastructure projects and safe routes to school projects).

Unlike current law, MAP-21 would not provide dedicated funding for bridges (the legislation would eliminate the Highway Bridge Program (HBP), as well as the 15 percent off-system set-aside for local bridges). MAP-21 does include language, however, that specifies that if the total deck area of deficient off-system bridges in a state increases for the two most recent consecutive years, the state is required to spend an increased percentage of funding on off-system bridges.

Under the new TMP, and unlike the program it would replace (STP), funding for Transportation Enhancement (TE) activities would no longer be set-aside. However, TE activities, while somewhat narrowed, would be one of 26 eligible TMP funding categories.

National Freight Network Program – designed to improve goods movement by consolidating existing programs into a new freight program. Funds would be provided to states by formula for projects to improve regional and national freight movements on highways, including freight intermodal connectors.

Under the Senate bill, network components would include a primary freight network (comprised of 27,000 miles of existing roadways), portions of the Interstate System not designated as part of the primary freight network, and critical rural freight corridors (comprised of rural principal arterial roadways that meet certain criteria).

Congestion Mitigation and Air Quality (CMAQ) Improvement Program – CMAQ would continue to provide funds to states for transportation projects designed to reduce traffic congestion and improve air quality. The bill would require a performance plan in large metropolitan areas to ensure that funds are used to improve air quality and congestion in those regions. The legislation also includes particulate matter as one of the pollutants addressed by CMAQ.

Highway Safety Improvement Program (HSIP) – MAP-21 would significantly increase the amount of funding for the HSIP in an effort to build upon strong results in reducing highway fatalities. Comparable to current law, states would need to develop and implement State Strategic Highway Safety Plans that identify priority safety programs. Plans would need to be developed after consultation with the governor, regional transportation planning organizations and metropolitan planning organizations, county transportation officials, and other state and local representatives and stakeholders.

Under the HSIP, construction and operational improvements on high risk rural roads would be one of a number of allowable highway safety improvement project areas. Although the bill would eliminate the High Risk Rural Roads (HRRR) program, the legislation specifies that if the fatality rate on rural roads in a state increases over the most recent two-year period, the state is required to provide for a specified level of increased funding for rural roads in the next fiscal year.

Environmental Streamlining Provisions

As expected, MAP-21 includes various provisions designed to expedite project delivery, including language that would continue the Surface Transportation Project Delivery Pilot Program (California’s current NEPA delegation program). Under the bill, the current pilot could be made permanent for a State that has demonstrated to the Secretary of Transportation that it has adequately carried out the responsibilities assigned to it under the streamlining program.

MAP-21 expands the types of projects that could be undertaken through a categorical exclusion (CE). Additionally, the bill would require the Secretary to issue a rulemaking that would allow certain types of CEs that currently require Administration approval to qualify as traditional CEs.

The legislation also would require the Secretary to seek opportunities to enter into agreements with states that establish efficient administrative procedures for carrying out environmental and other required project reviews. Similarly, the measure includes provisions aimed at providing for “accelerated decision-making in environmental reviews” and language designed to encourage early coordination and agreements among Federal agencies with jurisdiction in the environmental review process.

Designation of Metropolitan Planning Organizations (MPOs)

Under MAP-21, urbanized areas with a population of more than 200,000 would be guaranteed an MPO designation. In general, areas with more than 1 million residents would receive a “Tier I” designation, while areas with 200,000 to 1 million residents would be designated as “Tier II” MPOs. Multiple MPOs would be able to consolidate to achieve the population thresholds for Tier I and II status.

With regard to planning activities, Tier I MPOs would be held to performance-based standards, including incorporating performance targets and scenario-based planning processes, into regional plans. Tier II MPOs could employ a performance-based planning approach if approved to do so by the Secretary; the Secretary would be required to take into account the complexity of the area and the technical capacity of the Tier II MPO in making such a determination.

With regard to small urbanized areas (areas with a population greater than 50,000 but less than 200,000), MAP-21 would terminate such MPOs three years after the Secretary promulgates new rules. However, smaller MPOs would be allowed to continue as Tier II MPOs if reaffirmed by the Governor and if minimum technical requirements are met. If minimum standards are not met, the Governor would be able to request probationary continuation on behalf of the MPO, which would delay termination by one additional year.

Transportation Infrastructure Finance and Innovation Act (TIFIA)

MAP-21 includes provisions that build upon the current Transportation Infrastructure Finance and Innovation Act program. TIFIA, which provides direct loans, loan guarantees, and lines of credit to surface transportation projects at favorable terms to leverage private and other non-federal investment in infrastructure improvements, would be modified by, among other things, increasing the maximum share of project costs from 33 percent to 49 percent. Additionally, the legislation includes a program set-aside for rural areas (10 percent) at more favorable terms. Overall, TIFIA program funding would be increased to $1 billion per year.

House Transportation Bill on the Horizon

Across Capitol Hill, House Speaker John Boehner (R-OH), Transportation and Infrastructure Committee Chairman John Mica (R-FL) and other House Republicans announced on Thursday, November 17 their plans to move forward with a long-term transportation reauthorization bill. While details of the proposal are not yet available, the legislation will reportedly span five years, instead of six as previously advertised, and will link new American energy production to investment in infrastructure projects.

According to House Republicans, their transportation legislation, which will be titled the American Energy and Infrastructure Jobs Act, is the latest component of the GOP’s American Energy Initiative. The transportation bill will include three energy-related measures, including legislation that would lift the Obama administration’s drilling ban on new offshore areas, a bill that would set clear rules for oil-shale development, and a proposal that would open roughly three percent of the Arctic National Wildlife Refuge (ANWR) for oil and natural gas development.

Additionally, the reauthorization measure is expected to eliminate and consolidate nearly 70 surface transportation programs, as well as streamline the project delivery process.

The GOP’s transportation bill is expected to be released shortly after the Thanksgiving holiday. The legislation may be considered in the T&I Committee in early December, with House Republican leaders indicating that they expect to move the bill through the full House before the end of the year.