Congress has taken no action this week to repeal an $8.7 billion rescission of federal highway funds set to hit the states on September 30. While for some states this will not have a direct effect, in many states the rescission will result in an actual cut in funding for highway construction projects. Congress included the $8.7 billion rescission in SAFETEA-LU as a way to make the total funding in the bill fit within federal budgeting parameters. At the time, the intent was to find other budget offsets to prevent the rescission from actually being implemented. However, Congress never took the necessary action. The impact on states will vary depending on the amount of unobligated budget authority each has on the books and in which highway funding categories.
While the House took action this week to extend authorization for the highway and transit programs for three months, it did not address the rescission in that legislation. The Senate has not yet taken action to finalize its version of the legislation extending authorization for 18 months, which includes language to remedy the rescission problem.