"No reimbursements to states for their share of federal highway funds, no vouchers they have submitted or will submit to the Federal Administration will be able to be paid beginning Monday, March 1," House Transportation and Infrastructure Committee Chairman James Oberstar, D-MN, told reporters on a conference call Friday afternoon.  "The shutdown of the federal highway program means the Federal Highway Administration will not be able to reimburse states for any federal highway or transit funds."

Both chambers passed extension bills last week but could not agree on one piece of legislation to send to President Barack Obama.

Last Wednesday the Senate approved a bill extending surface transportation authorization for 10 months, depositing $19.5 billion of general revenue into the Highway Trust Fund, and offering additional federal government support for states and localities who want to sell Build America Bonds to finance infrastructure projects.  The House of Representatives responded on Thursday by passing a separate bill that would, among other provisions, extend surface transportation authorization for only one month and not include any additional transportation funding or bonds support.

Senate Democratic leaders kept the chamber in session until near midnight late Thursday night attempting to gain approval of the House's one-month extension bill.  However, Sen. Jim Bunning, R-KY, continued objecting to multiple requests to adopt the legislation by unanimous consent.  Under Senate rules, all senators must concur to passing a bill without a formal debate or vote.  Senate Majority Leader Harry Reid, D-NV, said Bunning was the only senator who refused to agree to allow the bill to pass to buy Congress an additional month to work out an agreement on a longer-term extension.

Bunning said he objected because the extensions were not paid for. He proposed covering the bill's $10.3 billion cost by rescinding unobligated balances from the recovery act, an amendment Reid declined to accept.

"I'll be here as long as you're here and as long as all those other senators are here and I'm going to object every time because you won't pay for this and you propose never to pay for it," Bunning said Thursday night.  "We have a debt of $14 trillion.  We can't sustain it."

Senate Majority Whip Dick Durbin, D-IL, brought up the House measure again Friday morning but Bunning reiterated his objection.  The Senate then adjourned at 11:40 a.m. and will meet again Monday, with no votes scheduled until Tuesday.  The House did not bring up the Senate's version of a 10-month extension today after a disagreement among Democrats regarding several provisions meant passage was unlikely if a vote had been called.  The House adjourned at 1:36 this afternoon and will meet again Tuesday.

As Congress left town for the weekend without extending the legal authority for operations of the Highway Trust Fund, the repercussions will be felt immediately in the early hours Monday as the Federal Highway Administration initiates shutdown procedures.  No payments to states or transit authorities can be made after Sunday until a new law is enacted providing authority for such expenditures.

Oberstar told reporters Friday afternoon that he has reached a deal with Reid and House Speaker Nancy Pelosi, D-CA, to move forward with the Senate version of an extension next week.  Under the agreement, Oberstar said the House would accept the Senate's language as is but the Senate would then follow up by passing a revised highway discretionary formula that the House could also approve and send to Obama.  Oberstar said that should happen sometime later next month.

Furloughs Expected to Begin Tuesday; Impacts of Shutdown Already Hitting States

Administrative expenses from the trust fund can be paid for 24 hours after a shutdown, meaning federal employees whose salaries are paid from the Highway Trust Fund can report for work Monday to have one day to shut down their operations.  Most employees from the Federal Highway Administration, the Federal Motor Carrier Safety Administration, the National Highway Traffic Safety Administration, and the Research and Innovative Technology Administration -- some 4,000 U.S. DOT workers in total -- will be barred from coming to work effective Tuesday since no legal authority for their salaries will exist.  Only select employees deemed "essential," high-ranking officials appointed by the president and some NHTSA and RITA employees paid out of the government's General Fund, will be able to report for work Tuesday.

FHWA averages $154 million in daily payments to states, Oberstar said, while the Federal Transit Administration averages $31 million, NHTSA averages $3 million, and FMCSA averages $2 million.  Those payments will all be suspended effective Monday.

However, collection of the 18.4-cent-per-gallon federal gasoline tax and 24.4-cent-per-gallon federal diesel tax -- the primary revenue sources for the Highway Trust Fund -- will continue because the U.S. Treasury Department has separate authority to collect those highway user fees, Oberstar said.

This is believed to be the first time since the Highway Trust Fund was created in 1956 that its legal authority will lapse.  Most of the federal government was closed from Nov. 13-19, 1995, and from Dec. 15, 1995, to Jan. 6, 1996, during budget disputes that left them without appropriations.  However, U.S. DOT was largely unaffected by the government shutdowns then because the department's appropriations bill was signed into law Nov. 15, 1995.