“It is a good sign, indeed, that bipartisan negotiations between House Speaker John Boehner and Senate Majority Leader Harry Reid resulted in an agreement that will keep Americans at work building our nation’s infrastructure. We are especially pleased that the extension funds the transportation program at existing levels and does not include divisive policy changes that deserve a full hearing and debate.

“The six-month timeline allows the relevant House and Senate Committees an opportunity to continue crafting a long-term authorization that protects and creates jobs, while investing in the travel options Americans want with the accountability they deserve. We look forward to working with Congress to get a new bill done next year.”

The transportation bill extension. The current transportation bill expires at the end of September. Congress needs to pass another temporary extension — the 8th extension of the last bill — to give them the necessary weeks/months to hammer out a plan for a long-term transportation bill. The Senate could mark up a clean, four-month extension of the current bill as early as the end of this week. The House will likely take up the FAA authorization bill first since their last temporary agreement expires in the middle of the month. Indications are coming from both chambers and both parties that passing an extension shouldn’t be a problem, though promises like that may ring hollow in most ears these days.

A long-term transportation bill. As far as a long-term bill goes, you may remember, the House has already released their plan for a transportation bill that would run for the full six years, but would cut funding by 35 percent across the board. The Senate is still working on their plan for a two-year bill that would maintain current funding levels. They’re nearing the finish line on that plan, and they’ve at least announced a plan to mark up a two-year bill in committee sometime next week. If a timetable like that holds, the two-year Senate bill could make it through that chamber before Rep. Mica’s House bill sees action in the House.

The gas tax. After much prognostication, it doesn’t seem that there will be any widespread opposition to extending the gas tax in the House or Senate. The word around town is that a reauthorization of the gas tax will be folded into a “continuing resolution” that will be used to continue funding the government after the end of the month. (It’s unlikely that a proper budget or individual appropriations bills will pass before September 30th, meaning that the “CR” will extend last year’s funding levels, with some cuts, for another few months.)

The month of September will be a busy time with all these elements in play. Be sure to check back here or follow us on twitter to stay in the loop and find out what you can do to take action and weigh in with your members of Congress.

As the national transportation program faces fiscal uncertainty today following Sen. Jim Bunning’s (R-KY) refusal to extend legislation to fund transportation and other national programs on Friday, James Corless, campaign director of Transportation for America, released the following statement:

“The problem is not simply that one Senator was able to thwart a crucial, timely vote. That lone Senator was able to shut down our nation’s transportation program only because Congress has left this essential underpinning of our economy on life-support for far too long. The highway trust fund we created to build the interstates in the 1950s simply is not up to the job of building and maintaining the system we need for the 21st century. This is not a backburner issue, even if Congress has been treating it as one.

“While we lurch, from extension to extension, with our transportation program teetering on the brink of insolvency, the rest of the world is not standing still. China is building a $500 billion rail network. Canada, whose hockey team just beat us for the gold medal, is beating us in building efficient urban transportation networks, even as our public transportation systems are being forced to slash service in the face of Congressional inaction.

“American jobs – millions of them — are relying on the authorization of our transportation program. Americans everywhere depend on an efficient, safe and accessible network of roads and transit systems to get to work each day. If we are going to right this economy permanently, Congress must quickly address our nation’s outdated transportation program and ensure stable funding levels for public transportation, including operating assistance for struggling systems, for the repair and maintenance of our highways and bridges, and a robust investment in projects that will make our communities sustainable for the long haul.”

James Corless is the Campaign Director of Transportation for America.

Any plan to create jobs through transportation spending should:

1. Create the greatest number of jobs in the quickest time possible by prioritizing rehabilitation and operation of existing infrastructure and target new workforce development opportunities for people most in need of employment. (i.e., “Fix-it-first.”)
2. Chart a new 21st century direction in transportation policy.
3. Be limited to no more than a year and not replace the long term authorization of the transportation bill.

Click through the jump to read the full letter to the Speaker of the House from Transportation for America and several of our key partners.

Dear Speaker Pelosi,

We applaud your leadership in addressing America’s economic challenges and your desire to address the nation’s unemployment situation.  As organizations that understand how transportation spending both creates jobs and connects people to jobs, we believe any investments that are part of any short-term jobs package should follow three principles:

(1) Create the greatest number of jobs in the quickest time possible by prioritizing rehabilitation and operation of existing infrastructure and target new workforce development opportunities for people most in need of employment. The rehabilitation and operation of existing roads, bridges, rail lines and transit systems are investments that have been proven to create more jobs and get projects underway in the shortest amount of time possible.  Intelligent Transportation Systems (ITS) that increase operating efficiency of all transportation systems are quick to implement and provide 50% of project costs as direct labor compared to 20% for new highway construction. And significant funding for transit and intercity bus operations in a jobs bill would allow hundreds of public transit agencies all across America to rehire workers and drivers immediately after a jobs bill is signed while reconnecting thousands of people to jobs.

A focus on workforce development would target new transportation construction jobs to the people who need them the most by dedicating one percent of all funding for apprenticeship and construction careers programs in the transportation sector and targeting 30 percent of all construction work hours to local, lower-income workers.

(2) Chart a new 21st century direction in transportation policy. Our federal transportation policy and programs are stuck in the past and are out of touch with a 21st century economy.  We urge a jobs bill to begin to chart a new direction in federal transportation policy by including significant funding for the new TIGER multi-modal discretionary grants program as established in the American Recovery and Reinvestment Act of 2009, the TIGGER grants to green and modernize transit vehicles, new investments in new public transit (New starts and formula funding), high speed rail, intercity bus, intelligent transportation systems, and seamless networks of on-road bicycle and pedestrian facilities and trails.

Finally, in order for Congress to lay the groundwork for a new outcome-oriented direction in federal transportation policy in the upcoming legislation, we request a requirement be included for the US Department of Transportation to develop and, within nine months, report on new transportation performance measures to be incorporated into a subsequent [full] transportation authorization.

(3) Be limited to no more than a year and not replace the long term authorization of the transportation bill. Any short-term jobs package for transportation should be limited to no more than one year, providing a strong boost to the American economy in 2010, while making sure this Congress finishes its work on a longer-term transformational transportation authorization bill that can bring our nation’s transportation policy and programs into the 21st century.

The economic challenges we face as a nation face are staggering.  Our organizations applaud your leadership on job creation and we look forward to supporting your efforts in enacting such critical legislation.

Respectfully,

Transportation for America
Reconnecting America (T4A Co-Chair)
Smart Growth America (T4A Co-Chair)
Amalgamated Transit Union
America 2050
America Bikes
American Bus Association (ABA)
Apollo Alliance
Center for Neighborhood Technology (CNT)
The Community Transportation Association of America (CTAA)
Conference Of Minority Transportation Officials (COMTO)
Environmental Defense Fund (EDF)
Environmental Law and Policy Center (ELPC)
The Federation of State Public Interest Groups (USPIRG)
Gamaliel Foundation
Intelligent Transportation Society of America (ITSA)
LOCUS: Responsible Real Estate Developers and Investors
National Coalition for Promoting Physical Activity
National Housing Conference (NHC)
Natural Resources Defense Council (NRDC)
Partnership for Prevention
PolicyLink
Rails to Trails National Conservancy (RTC)
Transportation Equity Network (TEN)
Alternatives for the Community and Environment (Massachusetts)
Transit for Livable Communities (Minnesota)

Here’s our attempt to simplify that issue just a little bit for those who are interested in the policy details. Non-wonks, feel free to skip over this one. Just a fair warning! Click through the jump to read in its entirety.

What is a rescission?

A rescission is essentially the cancellation of some amount of a state’s transportation funds that have not been obligated to a contract or to a project. Otherwise known as contract authority, states are given a certain amount of money each year in under the current transportation bill to enter into contracts with builders to construct transportation projects of all kinds. This rescission takes away a portion of those funds that states would otherwise spend on projects to build highways, repair roads and bridges, build bike lanes, and plan transit systems.

So why in the world did Congress write a provision that takes money away? That doesn’t make much sense.

This rescission was an accounting provision (some might call it trickery) inserted to artificially reduce the size of the last transportation bill to a level the White House would support to ensure the passage of SAFETEA-LU in 2005.

Congress added this rescission to reduce the overall size of the bill to $286.5 billion while actually authorizing a larger sum of $295 billion to states. At the time, this was a way to punt the issue down the road, hoping that a future Congress would vote to cancel the scheduled rescission. This never happened, and now states are facing the loss of $8.7 billion.

Can Congress undo the rescission by passing a longer extension of the transportation bill soon?

Yes. They were close to a deal in the Senate as we mentioned above, but it appears that a collection of GOP Senators wanted the money to cover the gap to come from the stimulus package, and not from the Troubled Asset Relief Program (TARP), which was initially intended for the rescue of toxic assets and troubled banks.

That said, the rescission started on September 30th, and states will likely lose some portion of their transportation money, even if Congress passes something soon to repeal the rescission (only in Washington, can you hear a statement like “repeal the rescission.”) Some have suggested that any losses could be made up by the larger full transportation bill that Oberstar hopes to pass this year.

The rescission issue does give the Senate an urgent impetus to act quickly to try and reach an agreement and find the funding to cover it. You can be certain their phones are ringing off the hook with unhappy state constituents, DOT officials, and contractors.

How will the rescission impact local transportation projects and programs in my area?

In a word, the exact funding that states will lose from particular programs is unclear. We’re working on some specifics and will share what we can when the numbers firm up. If you want to see the total money that will be rescinded from each state, you can view this table from the USDOT.

States usually prioritize transportation projects based on the amount of available money and the loss of funding may change the types of projects selected to be built. Reducing any funding commitments to help local areas repair local bridges, comply with the Clean Air Act, or increase investment in transit, biking and walking will impact everyone.

Elana Schor at Streetsblog Capitol Hill has some details on the specific cuts that a few state DOTs are facing.

Are all the cuts taken evenly from all the different transportation programs?

Somewhat, and much more now than with past rescissions, which have been much worse.

States once had broad flexibility to pick and choose which programs to take the money from. They could choose to take a larger share of money from bridge and road repair, non-motorized (bike and ped) projects, or transit projects, while cutting far less from other programs dedicated to building new capacity.  For example, during 2006, Congress issued three separate rescissions totaling more than $3.8 billion. Nearly 60 percent of the reductions came from these above programs despite the fact they made up only 20 percent of all funds.

Therefore, Congress amended SAFETEA-LU and began requiring proportional cuts to programs depending on the amount of unspent funds remaining in each program. See this DOT table for amounts to be rescinded by program, by state.

That said, there is still a small amount of flexibility, so the cuts won’t be exactly proportional. According to language from USDOT and the FHWA, they can’t take more than 10% of the amount they are directed to cut from a program. Which basically means that if a certain program has $10 million in unspent funds to be rescinded, they can’t cut more than $11 million from that program (allowing them to cut less from another program.)

This little bit of flexibility makes it an issue worth keeping an eye on. Watching your State DOT and seeing what programs they decide to cut more than others can inform you where their transportation priorities lie.

UPDATED: We posted a similar question-and-answer document covering the specific issue of rescissions. Read that here.

As you may have read on Streetsblog Capitol Hill, where Elana Schor has been closely tracking the inexorable march toward expiration of the old transportation bill (SAFETEA-LU), the Senate passed an emergency one-month extension of the current law last night, just hours before the deadline.

There have been a lot of questions flying around today, so we’re going to try to post some simplified answers to clear up any confusion. Federal transportation policy is not the simplest code to decipher, but we’ll try our best to start with the basics.

The short explanation?

The Senate failed to pass an extension of their own to match the House’s recent 3-month extension before the transportation bill expired last night.

To prevent transportation spending from stopping entirely, Congress added a one-month extension of current transportation law to a last-minute bill (a Continuing Resolution) that keeps the federal government from shutting down in case they don’t pass the required individual spending bills for the next year. The one-month Continuing Resolution did not address the scheduled loss of $8.7 billion in transportation funds that will be taken from states, starting today.

Click through the jump below if you want much more detailed information.

Did our current six-year transportation bill (SAFETEA) expire at midnight last night?

Yes it did. Though it expired, the spending and programs of SAFETEA will now be continued for one month.

Why September 30th?

The start of the new fiscal year for all government agencies is October 1st. Every year, the House and Senate have to pass a slew of yearly spending bills that fund all government agencies before the previous bills expire on September 30th. This includes the Department of Transportation in addition to all other government agencies.

If new bills are not passed, the government can shut down, as it did in 1994.

The House recently passed a 3-month extension and the Senate wanted an 18-month extension of the transportation bill. How did we end up with just one month?

Last Friday the House passed a three-month extension of SAFETEA. The Senate needed to pass an extension of their own and then reconcile the length of their version with the House’s version in a conference committee before sending it to the President. The Senate failed to pass an extension of 3, 18 or any other substantial number of months before reaching the deadline.

To keep government from shutting down when old spending bills expire on September 30th, lawmakers have built in a backstop known as a Continuing Resolution (CR). The House and Senate included a one month extension of funding for the transportation bill in the CR. The House passed their CR bill on Friday as part of the Legislative Branch Appropriations Bill, and the Senate passed theirs last night and sent it to President Obama.

What does this one-month emergency CR extension do to the possibility of a longer extension of SAFETEA.

This stopgap Continuing Resolution (CR) buys just one month of time for the Senate to act on their version of a longer extension. The House passed a 3-month extension last week. The Senate can pass a longer-term extension this month, and then try to reconcile the length of theirs with the House version. As of today, they have 31 days left to work on this.

But, starting today, 8.7$ billion in transportation money is being taken away from the states (see rescission, last section below). This will give the Senate strong urgency to work out a deal as soon as possible. State DOTs, local politicians, lobbyists and others will be putting heavy pressure on Senators to work out a deal immediately to keep their states from losing money.

Does this mean they can still pass a longer extension soon?

They can pass a longer extension anytime this month. The House passed a 3-month extension, so the decision is now up to the Senate on how to proceed, and how long of an extension to pass. The ball is in their court.

It is virtually guaranteed that a full transportation bill will not pass during October, though it’s legally possible. Chairman Oberstar in the House will continue negotiating with the Senate to pass his 3-month extension, while continuing to work on his full transportation bill (STAA). He wants to pass a full, six-year bill before the end of the year. (Though if a 3-month extension is enacted this month, it would carry us to January 31st instead of December 31st.)

What are the chances it’ll be 18 months like the Senate originally preferred.

Though the Senate maintained their preference for an 18-month extension, in line with the administration, they’ve shown willingness to negotiate. There was an attempt to pass a 3-month extension in the last two days, which failed to garner enough support to reach a vote. It’s entirely possible the Senate could pass a 3-month extension in the coming days or weeks.

If they pass an extension longer than 3 months, then the House and Senate will reconcile their versions before sending it to the President.

They have until October 31st to act, though states will be losing transportation money until they do.

States will be losing money? What is this “rescission” issue I keep hearing about?

In short, it was an accounting provision built into the last transportation bill, SAFETEA-LU, that takes back a share of funds that states have not obligated to contracts or projects yet. Under the Continuing Resolution, states will lose a total of $8.7 billion in contract authority (spending, basically) for all transportation projects.

We’ll have more details on this issue later today. It’s quite complex, but here is a quick summary from the subscription service Transportation Weekly

…state highway departments can expect the Federal Highway Administration on Wednesday to withdraw each state’s share of the $8.7 billion rescission in highway obligation authority.  Many states will, overnight, lose millions of dollars in transportation spending authority…

Attempts last week to attach the rescission repeal to either the government-wide continuing resolution or to the House-passed three-month SAFETEA-LU extension bill failed, having run into House rules requiring an offset of either increased revenues or equivalent spending cuts in other areas of the budget, neither of which can normally be easily done on an expedited basis.

For the House to repeal the rescission, they needed to find other funds to pay for it, per budget rules in the House. Streetsblog reports this morning that there was a bipartisan plan to use TARP money to prevent the rescission, clearing the way for the House to approve it, but that it was shot down by a group of GOP lawmakers in the Senate:

A bipartisan bid to extend existing federal transportation law for three months — and tap the TARP bailout fund to avert the cancellation of $8.7 billion in contract authority — was rejected on the Senate floor last night after GOP senators insisted on using stimulus money, rather than bailout cash, to fix the problem.

The drama played out hours before the midnight deadline for preserving the $8.7 billion, the majority of which would go toward state road and bridge work. Senate environment committee chairman Barbara Boxer (D-CA) and her panel’s senior Republican, Sen. Jim Inhofe (OK), agreed with their respective party leaders to shift $300 million in bailout money as a temporary fix to prevent state DOTs from canceling projects.

The rescission will affect every state differently in terms of money lost — and from what programs it will be taken. The last time there was a rescission, some states tried to take an unfairly large share from programs that repair and maintain bridges, protect air quality, or build sidewalks or bike commuting trails.

We will have some details on the numbers up as soon as we have them. Questions? Ask away in the comments and we’ll try to answer.

UPDATED: The bill will likely be voted on today under suspension of the rules, and there will be at least some GOP opposition to it. Elana Schor at Streetsblog reports that “Brad Dayspring, a spokesman for House Minority Whip Eric Cantor (R-VA) said Cantor would join Minority Leader John Boehner (R-OH) and Rep. John Mica (FL), senior Republican on Oberstar’s committee, in opposing the three-month extension.”

Rep. Jim Oberstar’s plan to introduce and/or pass a 3-month extension of the expiring surface transportation bill has hit a snag. According to the subscription-only email service Transportation Weekly, House Republican leadership has decided to oppose the bill, creating a roadblock for passing it today as planned under suspension of the rules, which requires a 2/3 vote and therefore some Republican support.

The 3-month extension (H.R. 3617) has been removed from the scheduled votes for today according to Transportation Weekly, noting that the reason for opposition isn’t exactly clear just yet:

Republicans have not yet made a public announcement as to what their objections to the three-month extension are, but one GOP staffer said that there should be a longer extension until the Democrats take the issue of a gasoline tax increase to pay for House Transportation and Infrastructure Chairman James Oberstar’s (D-MN) $450 billion, six-year bill off the table.  Therefore, this could represent a real breaking point between Oberstar and his ranking Republican, John Mica (R-FL), who has so far been in lockstep with Oberstar (at least in public)…

To add to the confusion, The Journal Of Commerce reported yesterday that momentum might be building for a a shorter extension in the Senate, where all signs thus far have pointed toward passing the 18-month extension that the Obama administration prefers.

In the face of insistence by leaders in the House of Representatives to extend soon-to-expire federal highway programs by only three months, some senators are beginning to move away from plans for an 18-month extension…

…“There’s some movement, I think, toward a short-term extension” in the Senate, said Sen. John Thune, R-S.D. Thune is not only part of the Senate Republican leadership team as chief deputy whip but also ranking minority member on the surface transportation panel of the Commerce, Science and Transportation Committee.

So to summarize, the Democrats in the House want to pass a 3-month extension. The Republicans in the House are now opposing that, potentially leaning towards an 18-month extension. The Democrats in the Senate want an 18-month extension. The Republicans in the Senate are now leaning towards a shorter extension, possibly 3 months.

There are still several other ways for Rep. Oberstar to get his bill passed in the House without that Republican support, and it’s  not certain at all that House Republicans would actually vote against it if push came to shove. Same goes for the Senate.

Stay tuned.

No word yet on how this will affect the proposed transportation bill outline to be released by Rep. James Oberstar tomorrow morning. Be sure to check back over the next few days for the latest.

From the DOT press room:

“This morning, I went to Capitol Hill to brief members of Congress on the situation with the Highway Trust Fund. I am proposing an immediate 18-month highway reauthorization that will replenish the Highway Trust Fund. If this step is not taken the trust fund will run out of money as soon as late August and states will be in danger of losing the vital transportation funding they need and expect.

“As part of this, I am proposing that we enact critical reforms to help us make better investment decisions with cost-benefit analysis, focus on more investments in metropolitan areas and promote the concept of livability to more closely link home and work. The Administration opposes a gas tax increase during this challenging, recessionary period, which has hit consumers and businesses hard across our country.

“I recognize that there will be concerns raised about this approach. However, with the reality of our fiscal environment and the critical demand to address our infrastructure investments in a smarter, more focused approach, we should not rush legislation. We should work together on a full reauthorization that best meets the demands of the country. The first step is making sure that the Highway Trust Fund is solvent. The next step is addressing our transportation priorities over the long term.”

UPDATE: The Wall Street Journal has a story up covering LaHood’s proposal, and includes a quote from Rep. Oberstar, responding to the idea of an extension:

In a meeting with reporters Wednesday, Mr. Oberstar was adamant that Congress must pass a new law before the current one expires.

“Extension of current law is unacceptable,” Mr. Oberstar said. “Now is the time to move.”

UPDATE 2: Michael Cooper of the New York Times covers the proposed extension, and gets a statement from Jim Berard, spokesman for Rep. Oberstar. “The chairman is not too pleased with the administration’s proposal,” he said.