Unlike much of the government, the Federal Highway Administration doesn’t rely on annual appropriations to keep running. Instead, its operations are paid from the Highway Trust Fund, which Congress typically authorizes for several years at a time. The fund is filled with gas tax receipts and the occasional top-off from the government’s regular coffers.
But the fund is set to expire Thursday, a deadline that looms as factions of the Democratic Party disagree over the infrastructure bill and a larger multitrillion social spending package, whose fates in Congress are intertwined.
The expiration of the highway program is one of three fiscal cliffs Congress is grappling with this week. Government spending and the trust fund are set to expire Thursday — the last day of the federal budgeting year — and the government is running up against a cap on borrowing. If the appropriations are not extended, tens of thousands of Transportation Department employees would face furloughs or unpaid work as part of a broad government shutdown.
Susan Howard, program director for transportation finance for the American Association of State Highway and Transportation Officials, said the immediate impact of a lapse in the trust fund would be fairly minor, but construction could suffer amid a lengthy shutdown.
“I don’t think any of our members are panicking yet,” Howard said.
About half the money in the $1 trillion infrastructure bill, which the Senate passed in August with bipartisan support, would support transportation programs. Much of the money would be routed through the Highway Trust Fund, which also pays for transit projects.
The bill would dramatically increase spending on highways, transit and intercity rail, but also would serve the more basic function of authorizing the underlying federal transportation funding system.
More liberal members of the Democratic Party are vowing to halt the bill’s passage unless congressional leaders move forward with the $3.5 trillion social spending package.
House Speaker Nancy Pelosi (D-Calif.) is pressing ahead with a plan to hold a vote on the infrastructure package Thursday, telling her caucus Monday the social package was not yet ready to advance.
The infrastructure bill has only lukewarm support among leaders on transportation issues in the House. During opening debate on the measure Monday night, Rep. Peter A. DeFazio (D-Ore.), the transportation committee’s chairman, said he would have preferred to meld parts of a more environmentally minded bill he crafted with the Senate’s effort.
“The reality today before us is this is the only option with an evenly divided Senate and the stupid rules of the Senate, including the filibuster,” he said. “It’s this or nothing on the long-overdue investment in America’s infrastructure.”
Some House Republicans pointed to the larger social-focused bill as Democrats’ real priority. Rep. Sam Graves (Mo.), the Republican leader on the transportation committee, called the infrastructure measure a “Trojan horse.”
“The speaker hijacked the process to hold infrastructure hostage,” he said.
The Transportation Department issued a plan Tuesday spelling out the ramifications of a shutdown, saying “States’, Tribes’, and territories’ active and planned transportation construction projects and related operations relying on Federal funds from the Highway Trust Fund will be impacted by a lapse in authorization.”
A 2019 plan spelling out how the department would respond to a broad government shutdown noted that some 8,700 employees were protected because their positions were funded outside of the regular budget. They included many at the highway agency and the car and trucking safety regulators, who are paid out of the trust fund. It’s those positions that are risk now.
The Highway Trust Fund briefly lapsed in early 2010 after a single senator objected to a $10 billion spending package, and Transportation Secretary Ray LaHood furloughed 2,000 employees.
“I am keenly disappointed that political games are putting a stop to important construction projects around the country,” LaHood said at the time.
Still, the immediate effect would be blunted because the federal government doesn’t build many roads or bridges itself, instead passing money to states, which design projects and hire contractors. Howard said state transportation departments would probably have enough money on hand to continue paying those contractors, at least in the short term.
But a lengthier shutdown, she said, could have a “chilling effect.”
A review by the Congressional Research Service last year concluded that some states would continue work on highway projects on the expectation of ultimately getting reimbursed, “but without current repayments, they might experience cash flow problems.”
Projects on federal lands would stop because they are directly overseen by the highway administration, according to the review.
The highway administration expects it would furlough 2,568 employees, according to the shutdown plan issued Tuesday.
The Federal Motor Carrier Safety Administration would keep 274 employees for work “necessary to protect life and property,” the plan says, while 798 would be furloughed. Some work at the National Highway Traffic Safety Administration and the Federal Transit Administration would be disrupted.
While transportation spending has typically enjoyed bipartisan support, Congress often has struggled to agree on long-term funding bills, opting instead to roll over existing policies — sometimes for as little as a week or two. There were five short extensions in 2014 and 2015 before a five-year bill passed, according to a tally maintained by Jeff Davis, a senior fellow at the Eno Center for Transportation, a policy group.
Then, before that bill expired on Sept. 30, 2020, lawmakers extended it another 12 months, setting up Thursday’s deadline.
Passing a short extension, as Congress has done in the past, also is an option this week.