Highway Trust Fund payments shut down last week for the first time in the fund's 54-year history after spending authority expired Sunday, resulting in a two-day suspension of federal highway and transit reimbursements to state transportation departments and transit authorities as well as the two-day furlough of some 2,000 U.S. Department of Transportation employees.  The shutdown was short lived, however, as the Senate approved a 28-day authorization extension Tuesday night, putting the trust fund back in operation and U.S. DOT workers back on the job first thing Wednesday.  The House of Representatives then voted Thursday to approve a 10-month authorization extension, which now returns to the Senate for further consideration.

The week began Monday with Sen. Jim Bunning, R-KY, continuing to object to senators' requests to approve the 28-day extension by unanimous consent.  Bunning had started his objections to the House-passed bill, HR 4691, on Thursday, February 25th.  Bunning refused to grant consent for expedited approval.  He raised concerns that the bill -- which also contained extensions of several other provisions of law that expired Sunday including additional unemployment benefits for Americans and boosting Medicare reimbursement payments for doctors -- was not paid for.

Leaders of 21 state transportation departments held a news conference last Monday afternoon during the opening day of AASHTO's Washington Briefing in Crystal City, VA, imploring Congress to act quickly to restore legal authority for the Highway Trust Fund so federal reimbursements to the states for highway and transit projects could resume.

The press conference took place following a conference call that state DOT executives had with Federal Highway Administrator Victor Mendez to discuss the crisis.  Mendez said 1,350 of the Federal Highway Administration's 2,900 employees were furloughed Monday, most in the Washington headquarters office.  Other FHWA employees remained on duty to work on essential safety and security matters as well as American Recovery and Reinvestment Act projects, which are funded by the federal government's General Fund rather than the Highway Trust Fund.  Furloughs also impacted employees funded by the trust fund at the Federal Motor Carrier Safety Administration, the National Highway Traffic Safety Administration, and the Research and Innovative Technology Administration.

Missouri Department of Transportation Director Pete Rahn said the federal funding suspension forced MoDOT to postpone advertising its March bid lettings worth an estimated $70 million.

"This crisis is just the latest example of why states need either a long-term extension of highway and transit programs or a multiyear authorization bill," Rahn said. "If Missouri and other states aren't able to plan major, long-term projects, then contractors can't hire workers or purchase new equipment. The result will be higher unemployment and more economic stagnation. Going from one extension to the next and one crisis to another is not the answer."

Highway, Transit Shutdown Ends with Enactment of One-Month Extension

The Senate approved a bill last Tuesday night to extend legal authority for the Highway Trust Fund for 28 days, sending the legislation to President Barack Obama, who immediately signed the measure late Tuesday.  The president's signature on HR 4691 ended the shutdown of the trust fund and the furlough of U.S. DOT employees.

Senators approved the bill by a vote of 78-19 after rejecting an amendment offered by Bunning, who dropped his days-long blockade Tuesday evening in exchange for a vote on his amendment to pay for the $10 billion bill with the closing of a tax loophole that has benefited the paper industry.  The amendment failed on a budget point of order, with 43 senators voting in favor of the amendment and 53 senators voting against it.

U.S. Transportation Secretary Ray LaHood (pictured) applauded the Senate for extending critical transportation funding.

The House approved an amended job-creation bill last Thursday afternoon that would extend Highway Trust Fund authorization until Dec. 31st, deposit $19.5 billion of general revenue into the Highway Trust Fund, restore this fiscal year's highway funding to $42 billion from $30 billion, and offer additional federal support for states and localities that wish to issue Build America Bonds to finance infrastructure construction.

By a vote of 217-201, the House sent the measure (HR 2847) back to the Senate.  Senators had approved the bill last week by a vote of 70-28 after overcoming a Republican filibuster.

The jobs measure approved Thursday by the House would be the fifth short-term extension of the 2005 transportation authorization law known as "SAFETEA-LU," which expired Sept. 30, 2009.  Under the fourth extension approved last Tuesday night, Highway Trust Fund authorization now lapses March 28th.  Work continues in Congress on a full six-year surface transportation authorization, which has been delayed over funding concerns.

Thursday's House amendment to the jobs bill maintains Senate provisions that would establish $15 billion worth of payroll tax breaks for small businesses that hire new workers and Build America Bonds financing support for state and local infrastructure projects.  The House amendment includes a few minor changes from the version passed last week by the Senate.  Those changes include reiterating existing federal law requiring state DOTs to award at least 10 percent of their contracts to "small business concerns owned and controlled by socially and economically disadvantaged individuals."  This provision was added to address concerns of the Congressional Black Caucus, CQ Politics reported.  Some CBC members had been withholding their support for the measure over concerns it doesn't do enough to address job creation for minorities.

Another change adopted by the House would add a year to the date of implementation of the worldwide interest allocation tax break -- which would begin in 2020 rather than 2019 under the Senate bill -- to offset the cost of the measure's tax cuts and bond provisions.

What enabled the legislation to move forward in the House was an agreement struck among House Transportation and Infrastructure Committee Chairman James Oberstar, D-MN, House Speaker Nancy Pelosi, D-CA, and Senate Majority Leader Harry Reid, D-NV, regarding funding formulas for two discretionary highway categories: Projects of National and Regional Significance and the National Corridor Infrastructure Improvement Program.

Oberstar (pictured) said on the floor Thursday that the agreement is to modify the two highway formulas in future legislation to distribute the funds more equitably to all states.  Oberstar urged representatives to approve the amendment and return the bill to the Senate.

"What we are doing here is restoring stability to the highway, bridge, safety, and transit programs, providing certainty for states so they can award bids, they can advertise bids, and keep contracts going," Oberstar said.  "I hope we can correct this measure and I will do everything I can to correct it to ensure fairness for all 50 states in the distribution of the funds they send to Washington."