News

The President’s $3.1 trillion 2009 budget proposal includes $68.2 billion in new spending commitments for the United States Department of Transportation (USDOT). This amount is $2.13 billion less than the amount enacted in the 2008 omnibus appropriations law. Program details are as follows:

Highways
The budget requests an obligation limitation for the federal-aid highway program of $39.4 billion. This amount is $1.8 billion less than the total obligation limitation in 2008 (including the extra $1 billion for bridges) and the amount authorized by SAFETEA-LU for 2009. This reduction is the result of a revenue aligned budget authority adjustment (RABA) and an additional reduction proposed by the White House.

The 2009 RABA calculation results in a $1 billion reduction in obligation limitation due to lower-than-expected Highway Trust Fund tax receipts. Historically, Congress has ignored negative RABA adjustments. However, given the expected 2009 trust fund shortfall [currently estimated between $1.1 billion (Congressional Budget Office) and $3.2 billion (Treasury Department)] by the end of 2009, it is more likely the RABA reduction will be included in the final 2009 appropriations bill.

The Administration also reduced its highway proposal by $800 million to offset most of the extra $1 billion in obligation limitation added to the bridge program in 2008. The remaining $200 million would come from transit programs.

The President’s budget includes a $3.15 billion rescission of contract authority. This is the same amount as in 2008. In addition, there is an $8.54 billion rescission of contract authority in SAFETEA-LU to take effect on the last day of the bill, September 30, 2009. The total rescission of contract authority balances held by states in 2009 would be $11.69 billion. The budget also proposes to rescind any unobligated earmark money from the 1991 ISTEA law and the 1998 TEA21 law.

In its budget proposal, the Administration recommends a patch for the projected shortfall in the Highway Account (HA) of Highway Trust Fund (HTF). Rather than increasing revenue or reducing expenditures, the Highway Account would be allowed to borrow cash from the Mass Transit Account (MTA) of the HTF. The MTA account is projected to have enough money to cover proposed funding for public transportation programs, lend amounts to the HA to cover the projected deficit and still end 2009 with a $1.2 billion balance. Secretary Peters has said that the transfers would be temporary and that MTA would be repaid.

Public Transportation
The Bush budget proposal includes a total of $10.14 billion for the Federal Transit Administration (FTA) in 2009, an increase of $644 million over 2008 (6.8%) but $200 million less than SAFETEA-LU guarantees.

The Formula and Bus Grants, the largest transit account, receives the amount authorized in SAFETEA-LU – $8.36 billion, a $593 million (7.6%) increase over 2008

The other three transit accounts, which are funded by the general fund as opposed to the Highway Trust Fund, are collectively $202 million below the amount authorized by SAFETEA-LU. Presumably, $200 million is part of the reduction to make up for the extra $1 billion in 2008 bridge funding (see discussion in highway section). The Capital Investment Grants (a.k.a. new starts) would receive $1.62 billion in 2009, an increase of $51 million (3.3%) over 2008, but less than the $1.809 authorized by SAFETEA-LU. The budget also proposes $94.4 million for FTA operations (a $5 million increase) and $59.6 million for Research and University Research Centers (a reduction of approximately $6 million).

Aviation
The Federal Aviation Administration (FAA) would receive a total $14.64 billion, a cut of $272 million (2%) from 2008, if the President’s budget were enacted. This budget proposal largely restates the Administration’s FAA reauthorization and funding proposal from last year. The aviation reauthorization legislation, which expired September, 2008 is currently stuck in the Senate. Aviation programs and the related taxes are operating under a temporary extension that expires at the end of February.

The driver of the proposed decrease in aviation funding is the President’s $2.75 billion request for the Airport Improvement program (AIP) – $765 million less than last year. The Administration has proposed similar cuts in previous budget which Congress ignored.

FAA operations would receive approximately a 3% increase, and there is a $210 million funding increase primarily for Next Generation Airspace System activities.

Rail
Consistent with his previous budget proposals, President Bush puts forward a 40% cut in Amtrak funding for 2009 – providing $525 million for capital and debt service grants and $275 for “efficiency incentive grants” compared to 2008 with $850 million for capital and debt service and $475 in operating subsidies. Like the previously proposed cuts, these are unlikely to make it through Congress.

Federal Railroad Administration (FRA) safety and operations would receive $157 million in 2009 under this budget, an increase of $6.5 million, while research and development would be reduced by $2 million. This budget proposal eliminates the stand-alone appropriation for the Rail Line Relocation and Improvement Program, which received a little over $20 million in 2008.

The budget also proposes $100 million for the new interstate passenger rail grant program, which received $30 million in 2008.

Maritime
The budget includes $313 million for the Maritime Administration, roughly the same amount as last year’s level. Funding for the Maritime Security Program is increased by 11.5% to $174 million, while operations and training is reduced $4 million to $118 million.

The St. Lawrence Seaway Development Commission line item increases to $31.8 million from $17 million. This increase relates to a new U.S. and Canada ten-year capital program to modernize and upgrade the locks.

The President’s budget is the first step in the budget process. Funding levels will not be established until the President signs appropriations legislation adopted by Congress prior to the 2009 fiscal year, which begins October 1.