Bipartisan Congress Likely to Reject Many of Biden’s Proposed DOT Changes

In broad strokes, the White House’s fiscal 2024 budget request for the U.S. Department of Transportation is pretty simple:

  • Get rid of $5.4 billion in Congressional priorities. Eliminating all Congressional earmarks would save $2.6 billion. Eliminating all general fund “plus-ups” for trust fund contract authority programs in the aviation, highway and mass transit modes would save another $2.0 billion. And the budget proposes to eliminate the 2024 annual appropriation for RAISE grants, saving $800 million. (RAISE would still get the $1.5 billion advance appropriation provided by the IIJA for 2024.)
  • Add back $4.6 billion in new Administration priorities, starting with $1.2 billion for MEGA project grants (in addition to the $1.0 billion provided by the IIJA). MEGA is arguably more oversubscribed than RAISE. The budget would also increase Federal Railroad Administration funding by $1.4 billion, Federal Aviation Administration funding by $1.3 billion, and increase Federal Transit Administration by almost $250 million, in addition to proposing smaller increases here and there.
  • End up with a proposed DOT total that is $882 million below fiscal 2023, and those proposed savings can then offset proposed increases elsewhere in the non-defense discretionary budget (and the budget proposes an overall $46.9 billion in base non-defense funding, not counting veterans health).

In millions of dollars, here is ETW’s summary table of the big substitution:

(See our full packet of funding tables, downloadable here).

However, almost all of those proposed cuts are to bipartisan Congressional priorities, and are likely to be instantly rejected by Congress. Whereas many of the funding increases are unlikely to pass bipartisan muster in Congress, either, even if DOT gets an adequate budget allocation this year (which it probably won’t).

Earmarks. The Administration did the same thing last year – start the process by proposing to get rid of the $1.5 billion in earmarks that were in the FY 2022 law. Congress ignored this request and instead went the other way, increasing the earmarked total to $2.6 billion in the FY 2023 law. Earmarking is just about the most bipartisan thing that Congress does today, and it is absurd to think they will stop just because President Biden put it in his budget request.

Other General Fund plus-ups. Ever since President Trump negotiated the spring 2018 budget-busting discretionary caps deal, the Appropriations Committees have had enough money to “plus up” trust fund contract authority programs for airports, highways, and mass transit with hundreds of millions of extra dollars from the general fund. The Biden budget proposes to get rid of all of those program plus-ups for 2024.

But when you look at the specifics, there are as many Democratic priorities among those plus-ups as there are Republican priorities. Let’s start with the biggest one – $1.15 billion for an extra formula-based highway bridge improvement program. This was originally the brainchild of former Senate Transportation-HUD Appropriations chairman Jack Reed (D-RI), whose home state had the worst bridges, per capita, in the U.S., and thus was going to get the most benefit, proportionately speaking, under any needs-based distribution formula.

Reed is no longer chairman of THUD, but the program continues because it has widespread popularity and some key blue state beneficiaries. Similarly, the 2023 Act gave an extra $150 million for PROTECT climate resiliency grants at FHWA, which have at least as many Democratic supporters as they do Republicans, and the 2023 law also put an extra $130 million in mass transit buses and an extra $275 million into airport grants, which are broadly popular. And Congress included $100 million for Appalachian highways in those redder areas.

These are not the kinds of things that Congress will stop funding just because the Administration asks them to. If they have the money, they will continue most of these plus-ups so that the appropriators can have some control over relative priorities at DOT.

RAISE vs MEGA. The fact that the IIJA provided five years of guaranteed supplemental funding for both the existing RAISE multimodal grant program and the new MEGA multimodal grant program has allowed the Administration the room to propose to shift priorities from RAISE to MEGA. By killing the regular appropriation for RAISE and proposing a new, larger appropriation for MEGA, this would combine with the IIJA money to make MEGA the larger program. In millions of dollars:

FY 2023 FY 2024 Change
RAISE – IIJA 1,500 1,500
RAISE – Regular 800 0
Total, RAISE 2,300 1,500 -800
MEGA – IIJA 1,000 1,000
MEGA – Regular 0 1,220
Total, MEGA 1,000 2,220 +1,220

The problem is, as the Administration has discovered, that $1 billion per year doesn’t really go far when you are dealing with megaprojects. The first round of announcements (FY 2022) only named nine projects, whereas DOT was able to make 166 separate grants under the FY 2022 round of RAISE  grants.

There are 435 Representatives and 100 Senators. Congress is not set up to give preference to programs that give out fewer, larger grants; they are set up to prefer programs that spread the wealth as widely as possible.

While DOT may be right that MEGA is more underfunded than RAISE, relative to program goals and demand, the fact that RAISE was created and nurtured by the Appropriations Committees, and is a hugely popular program, means it is extremely unlikely that Congress will even partially defund it.

Rail programs. The Administration proposes increasing funding for railroad programs by $1.4 billion over 2023. For ease of presentation, we are combining the IIJA and regular funding in the following table, even though the Administration is only proposing changes in the non-IIJA funding in 2024:

IIJA + Regular FY 2023 FY 2024 Change
Amtrak – NEC 2,460 2,427 -33
Amtrak – NN 4,393 5,041 +648
Fed-State Part. 7,300 7,760 +460
CRISI 1,560 1,510 -50
Grade Crossing 600 850 +250

The House, on a bipartisan basis, is unlikely to re-prioritize Amtrak’s National Network so far ahead of the Northeast Corridor (it is the Senate that keeps the National Network alive, and always has been). Similarly, it would be extremely unlikely if Congress were to expand the already-huge federal-state partnership program, at least until the Administration makes a round or two of grant announcements from the 2022 and 2023 appropriations to demonstrate how they are administering the program.

Mass transit. The Administration proposes a $215 increase in the Capital Investment Grant appropriation (to $2.85 billion), in part so they can sign promises to spend $12 billion in future appropriaitons made by future Congresses. The fight over the new Hudson River Tunnel is finally here and will be fought on this appropriations request. (See elsewhere in this issue for more information.)

Aviation. The budget proposes $1.3 billion in increased aviation spending, and much of that is actually plausible, even in divided government. Covering the air traffic controller annual salary increase is always a top priority, and the budget says that is an uncontrollable $523 million increase. Given the complaints about air service, one might also expect the $117 million for the aircraft controller hiring surge (aiming for 1,800 new controllers in 2024, up from just 500 per year during COVID) to get a favorable reception.

There are strong bipartisan arguments in favor of the proposed $517 million increase in FAA capital spending as well, but capital programs always suffer when put up against pay raise and other check-writing-to-individuals benefit programs.

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