With the economy continuing to decline, Speaker Nancy Pelosi announced today that House Democratic leaders will convene an economic forum on Monday with some of America’s leading economists. A statement from the Speaker’s office said that the October 13 forum will help Congress develop an economic recovery plan that will create jobs by rebuilding our roads, bridges and highways, prevent cuts to vital government services such as health, education, and public safety, extend unemployment benefits, and help families cope with rising food costs. Although Congress is currently in adjournment, it did not adjourn “sine die,” which means it could be reconvened if necessary. Prior to adjournment, the House did pass a stimulus bill that included approximately $34 billion for infrastructure investment, including $12.8 billion for the federal-aid highway program; $3.6 billion for transit; $600 million for airport capital improvement projects; $7.5 billion for water infrastructure; $5 billion for the U.S. Army Corps of Engineers; $3 billion for public school reconstruction; $500 million for Amtrak; and $1 billion for public housing construction. The Senate, however, failed to pass its version of economic stimulus legislation.AGC is providing information to the forum pointing out that $100 billion of new infrastructure projects have recently been delayed due to the constricted credit market. This is in addition to the already reduced number of infrastructure projects that have been going out to bid because of the impact of construction material cost inflation on the buying power of public works dollars and the diminished availability of tax revenue from the decline in real estate values. AGC is also pointing out that 52,000 highway construction jobs have been lost in the past 16 months and that a US Department of Transportation report demonstrates that a $1 billion investment in transportation infrastructure can induce 35,000 jobs. Over the past year, AGC has met with congressional leaders, sent strong messages to both the House and Senate, and signed on to letters from transportation related coalitions in support of infrastructure investment to stimulate the economy.

One of the major issues to be faced by the 111th Congress which begins in January 2009 is the reauthorization of the federal surface transportation programs. SAFETEA-LU expires on September 30, 2009 which leaves the new Congress and the new Administration only nine months in which to draft and approve legislation to carry these programs into the future. A key issue to be addressed will be how to fund highway and transit projects. With the Highway Trust Fund’s balance essentially at zero, new revenue will be necessary to provide the amount of funding necessary to address current and future demands.There will be many new members of Congress next year who will not be familiar with the Highway Trust Fund, the Federal-aid Highway program, transportation infrastructure needs and the impact of transportation on America’s quality of life. AGC worked in support of the American Highway Users Alliance to create a publication entitled "The Road to Congress" to educate Congress on the issues related to highway and transit funding.Copies of the binders have been provided to AGC chapters and the grass roots network to share with candidates running for office and their staffs. This publication will also be useful to you as you meet with your members of Congress before the election and in the coming months before the reauthorization legislation is considered. Copies are available by contacting deerb@agc.org .

The 110th Congress adjourned on October 3 after having completed action on the Economic Rescue Plan. In the final week of the session attempts to pass economic stimulus legislation, however, were unsuccessful. Senate leadership left open the possibility of returning for a "lame duck" session following the elections but the House did not. The House passed an economic stimulus bill (264-158) which included $12.8 billion for the federal-aid highway program; $3.6 billion for transit; and $600 million for airport capital improvement projects. The Senate bill, which included $8 billion for the highway program; $2 billion for transit; and $400 million for airport capital improvement projects failed on a procedural vote (52-42).Congress also failed to enact an appropriations bill to fund the Department of Transportation for FY 2009. Therefore, DOT programs were included in a continuing resolution which provides funding at the 2008 level through March 6, 2009. Congress will need to take additional action before March 6 to fund DOT programs for the remainder of FY 2009.

Both the House and Senate took action yesterday approving legislation extending for six months authority for Federal Aviation Administration (FAA) programs and the aviation taxes to pay for them. The President is expected to sign the bill. This action was necessary because Congress has been unable to pass an FAA reauthorization bill which has been under discussion for the past year. The 111th Congress must now take up FAA reauthorization next year. Both House and Senate committees of jurisdiction expressed the desire to complete action on the FAA bill before turning to the highway and transit reauthorization bill next year.

House Democrats are advocating for a second economic stimulus bill and infrastructure funding, including highway funding, is being discussed. AGC has sent a letter to the House pointing out the job creation benefits that results from infrastructure funding and pointing out that rising construction material prices and inadequate state budgets have resulted in fewer publics works projects going out for bid. In the case of highway projects, AGC pointed out that state DOTs have responded to an AASHTO survey indicating that over 3000 highway contracts could go out to bid within 90 days if additional federal funds were made available.

By a vote of 372-56, the House of Representatives today passed a continuing resolution (CR) to provide partial funds for Fiscal Year 2009 for those federal programs for which a free standing appropriations bill had not been passed, including the Department of Transportation. Fiscal Year 2009 begins on October 1, 2008 and the CR provides funds from then through March 6, 2009. Under the terms of the CR, programs will be funded at their FY 2008 level. For the Federal-aid highway program the FY 2008 funding level is $41.216 billion which included $1 billion above the SAFETEA-LU authorized level for a bridge repair initiative. It is anticipated that the additional $1 billion will not be included in this CR’s partial funding and therefore the highway program will receive a prorated share of $40.2 billion through March 6. SAFETEA-LU authorizes $41. 2 billion for the highway program in FY 2009. When the new Congress takes over in January it will be necessary to pass an additional appropriations measure to fund government programs for the remainder of the fiscal year and at that time could restore the full SAFTEA-LU funding. The transit program receives a prorated share of $9.4 billion. The Highway Trust Fund fix, which was enacted on September 15, ensures that the revenue is available to fund these appropriated levels for the highway and transit programs. Congress is scheduled to adjourn by the end of the week and passage of a CR is necessary to keep government agencies running. The Senate is expected to pass the CR as soon as it is sent over from the House.

Taking the final step necessary to ensure that the payment of Federal-aid highway funds to states will continue uninterrupted, President Bush on September 15 signed HR 6532. The legislation transfers $8 billion from the US Treasury's general fund to the Highway Trust Fund (HTF).

The House of Representatives today approved H.R. 6532 transferring $8 billion from the general fund of the Treasury to the Highway Trust Fund (HTF). The vote was 376 in favor and 29 Republicans voting against. House action was necessary because the original version of H.R. 6532 transferred the funds on October 1. The Senate yesterday amended the bill to allow the transfer to happen when the president signs the bill, which is expected by the end of the week. This immediate transfer was necessary because the HTF does not have a sufficient balance to fully reimburse states for payments they have made on ongoing federal-aid highway contracts. Once the bill is signed FHWA will resume its long standing procedure of reimbursing states on a daily basis for the full amount submitted.The transfer of these funds reimburses the HTF for $8 billion that was taken from the HTF in 1998, as part of the TEA-21 negotiations. At that time, the HTF had a large balance and the $8 billion was a trade off for fire wall protection of the HTF and funding guarantees. With this action completed, there should be a sufficient balance to fully fund SAFETEA-LU through its full authorization period which expires on September 30, 2009.AGC worked very closely with our chapters and our construction and transportation industry allies to generate the support necessary to have this legislation enacted. Thank you to all who took the time to communicate with your Congressional delegations.

On a voice vote today the Senate today passed HR 6532, legislation transferring $8 billion from the general fund of the Treasury to the Highway Trust Fund to prevent a shortfall in available funds from slowing down Federal reimbursements to states for on-going federal-aid highway construction projects. The Senate amended the House bill to allow for the transfer to happen immediately rather then on October 1st. The House must now approve the amended bill which is expected to occur this week. The President is expected to sign the bill expeditiously.This action caps off several days of intense negotiations with three Republican Senators who were seeking to offer amendments to the bill and were also requesting a roll call vote on the measure.In an announcement last week Transportation Secretary Mary Peters reported on the dire situation in HTF revenue which, if not remedied, will result in a slow down and reduction in payments to state DOTs. At that time she called on Congress to pass HR 6532. Numerous state DOTs announced that, if the full federal funds were not forthcoming, that they would be forced to cancel contract lettings, slow down work on on-going projects and, in some cases, issue debt to make payments to contractors.AGC chapters and members responded to AGC of America's many pleas for contacts with Congressional delegations on this legislation. Thank you for your help.

Secretary of Transportation Mary Peters today acknowledged that the Highway Trust Fund has an insufficient balance to continue to make full and timely payments to reimburse states for on-going Federal-aid highway construction projects and will be forced to reduce payments starting the week of September 8. The Administration projected that by the end of September the balance in the Highway Trust Fund will be zero. Secretary Peters pointed out that an infusion of revenue into the HTF is necessary to prevent further disruptions to the highway program and called on Congress to pass a "clean" bill transferring $8 billion in revenue into the HTF by next Friday. The House has already passed H.R. HR 6532, legislation sponsored by Ways and Means Committee Chairman Charles Rangel (D-NY), T&I Committee Chairman Jim Oberstar (D-MN) and the bipartisan T&I Committee leadership, to make the $8 billion transfer. Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Committee Republican Chuck Grassley (IA) have been championing the effort in the Senate to include the HTF fix as part of other legislative initiatives. Their efforts have been stifled by the Administration’s opposition. Just last July, the Administration issued a Statement of Administration policy threatening a veto of the Rangel/Oberstar bill. Senate opposition has also come from Sen. Jim DeMint (R-SC), Judd Gregg (R-NH) and Sen. Tom Coburn (R-OK).Standard operating procedures currently are for FHWA to reimburse states twice daily as they submit vouchers for payment. The procedures announced today will have FHWA making payments to states once per week on Thursdays and at a reduced rate. States will be reimbursed on a pro-rata basis, based on the amount of funds available at the time payments are made. The longer it takes to get new revenue into the HTF the greater the subsequent percentage reductions in payments will be.AGC has been working closely with our construction industry and transportation allies calling on Congress and the Administration to work together to guard against HTF insolvency since its financial instability became apparent in the President’s 2007 budget proposal, submitted to Congress in February 2006.  AGC will be urging the Senate to heed the Department’s call to enact this legislation by the end of next week and send it to the President’s desk.