Biden’s FY25 Budget Again Proposes Not Renewing IIJA Advance Funding

Once again, President Biden’s fiscal 2025 budget proposes to let the Infrastructure Investment and Jobs Act’s $36.8 billion in annual transportation funding through “general fund advance appropriations” expire after the end of the IIJA in 2026, letting those accounts revert down to zero new funding in some instances. This allows the White House to claim $158 billion in deficit reduction between 2027 and the end of the 10-year budget planning horizon in 2034 because of the refusal to renew the IIJA.

In the Analytical Perspectives volume of the budget, two of the downloadable tables show the budget “baseline” in use by the executive branch this year, along with the President’s proposed budget in the same format (function-category-program). For the transportation budget function, here is the comparison of the baseline (current law/policy) versus the Biden proposal:

Billion $$ FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY25-34
Function 400 (Transportation)
Budget Authority – Baseline 160.1 164.5 165.1 169.9 172.0 175.8 178.0 175.3 176.4 185.5 187.9 189.0 1,775.0
Budget Authority – Biden Budget 160.1 164.5 164.0 168.7 134.1 137.1 138.4 132.7 132.8 140.9 142.2 142.3 1,433.3
Difference 0.0 0.0 -1.0 -1.2 -37.9 -38.8 -39.7 -42.6 -43.6 -44.6 -45.6 -46.7 -341.7
Outlays – Baseline 126.4 144.7 146.7 156.1 162.1 168.4 174.2 174.5 176.7 187.7 193.4 197.0 1,736.8
Outlays – Biden Budget 126.4 144.7 150.2 159.3 162.8 161.5 161.4 156.2 151.4 157.1 159.2 159.8 1,578.9
Difference 0.0 0.0 3.5 3.1 0.7 -6.9 -12.7 -18.3 -25.3 -30.6 -34.2 -37.3 -158.0

By striking the IIJA advances that are otherwise extrapolated in the baseline after 2026, the Administration looks to reduce total transportation budget authority (permission to enter into new commitments) by $342 billion by the end of the decade, with $158 billion of those savings translating into reductions in outlays (cash going out the doors of the Treasury), which is the measure that is counted for annual deficits.

This also has programmatic impacts, because mass transit and railroad spending at present is much more dependent on those IIJA advance appropriations than is highway spending. (Most highway spending is contract authority, which also gets extrapolated post-2026, but the Administration does not propose to tinker with that extrapolated funding.)

Compare total new highway budget authority to total new transit-rail budget authority. For the FY 2025 year, the $73.6 billion in highway funding is 1.85 times more than the $39.7 billion in combined transit-rail funding. But after the IIJA advances expire, the FY 2027 plan in the Administration’s new budget would see $62.1 billion in highway funding versus $22.0 billion in transit-rail funding, a ratio of 2.83 to 1. The ratio would remain at 2.7 to 1 at the end of the decade.

New Budget Authority (Million $$)
FY 2025 FY 2026 FY 2027
Baseline – Highways 73,595 75,018 75,294
Baseline – Transit & Rail 39,699 40,216 40,707
Highway to Transit-Rail Ratio 1.85 1.87 1.85
Budget – Highways 70,138 71,488 62,061
Budget – Transit & Rail 38,533 39,029 21,965
Highway to Transit-Rail Ratio 1.82 1.83 2.83

If the Biden Administration gets a second term, will they probably propose a fix for this in its 2027 budget, two years hence? Almost certainly. But by claiming the savings and deficit reduction from letting IIJA advances die permanently, in this budget, the Administration is wasting an opportunity to remind people of the hard choices that we will have to face at the end of the IIJA period.

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