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by Angela Cotey, Associate Editor
Last month, Reps. Jim Jordan (R-Ohio) and Scott Garrett (R-N.J.), and Sen. Jim DeMint (R-S.C.) unveiled the Spending Reduction Act of 2011, which proposes to reduce national debt by cutting funds from a range of federal programs. The congressmen serve on the Republican Study Committee (RSC).
The legislation caused an uproar in the transit community, as it proposes to cut $2 billion in New Starts funding, $1.5 billion in Amtrak subsidies, $2.5 billion in high-speed and intercity passenger-rail grants, and $150 million in Washington Metropolitan Area Transit Authority subsidies annually. The bill also calls for repealing unspent stimulus funds, which would affect high-speed rail.
The plan would save $2.5 trillion through 2021 by paring back current spending to 2008 levels. By Oct. 1, the bill proposes to further reduce spending to 2006 levels and freeze spending for the next decade.
American Public Transportation Association officials called the bill "ill conceived and short sighted," and Transportation Trades Department, AFL-CIO leaders said the proposal was "reckless." Amtrak President and Chief Executive Officer Joseph Boardman said eliminating federal investment for the intercity railroad would "deprive our nation of a critical transportation choice."
But it's not very likely that the drastic bill would pass in its current form, says National Railroad Construction and Maintenance Association President Chuck Baker, who also serves as a partner at rail lobbying firm Chambers, Conlon & Hartwell L.L.C.
"This crash diet to balance the budget by cutting infrastructure investment is insane," he says. "It's like trying to balance your family's budget by pulling your kid out of college."
That's not to say the proposal isn't cause for concern, Baker says.
"It serves as a marker for the coming debate over spending," he says. "I do think that meaningful cuts to transportation investment are, unfortunately, on the table, and it's something we need to be pretty worried about."
That's why it'll be vital for industry stakeholders to explain the difference between transportation spending and transportation investment to RSC's 174 members. They'll need to start soon; all federal spending programs have been extended through March 4 under a continuing resolution passed in December. The Republican fight to reduce spending will ramp up during budget discussions as Congress determines how to set spending levels for the remainder of FY2011.
"Right now, a lot of this conservative Republican wing is very, very focused on spending reduction with a pretty broad brush," says Baker. "I do think there's reasonable hope that when we get into this with some more detail, [RSC members] can understand the distinction between spending and investment."
And typically, even the most conservative Republicans support some sort of transit investment, says Baker.
"You don't find a lot of serious proposals that would actually eliminate all federal funding [for transit and Amtrak]," he says. "That would have consequences that nobody wants, even the RSC."
For years, surface transportation legislation has included a guarantee that money earmarked in the authorization bill be automatically appropriated at the annual levels specified in the bill. Not anymore.
The House last month approved a series of amendments to House Rules that would make it easier for members of Congress to reduce the transit project funding levels from what is approved in the surface transportation bill. And that has many transit industry officials concerned about future project funding.
"There's a level of uncertainty now that whatever comes out of a long-term authorization bill might not be doled out," says American Public Transportation Association (APTA) Director of Government Relations Paul Dean. "It takes the trust out of the trust fund."
The rule change already is having a ripple effect: Since the rules package was approved, financial services organizations have downgraded stock ratings for transportation construction companies because the perceived lack of guaranteed funding might prevent agencies from launching longer-term projects, Dean says.
Although some congressmen had questioned the funding guarantees in the past, APTA officials didn't discover House members were considering the rule change until late December.
"This shouldn't be an issue debated in the context of a rules package. It really should get a full hearing from the full Congress in the context of an authorization bill," says Dean. "But because the point of order only existed in the House, it didn't require any Senate action to move forward."
APTA will work to restore the funding guarantees during the authorization process, he says.
— Angela Cotey