Senate Leaders Introduce Bill Repealing Highway Rescission

June 27, 2019

Yesterday, the chairman and other leaders of the Senate Environment and Public Works Committee, John Barrasso (R-WY) and his counterparts introduced a bill (S. 1992) repealing the rescission of $7.569 billion in federal-aid highway contract authority under section 1438 of the FAST Act that is currently scheduled to take place on July 1, 2020.

The rescission is yet another example of the “let’s put a big funding cut in the final year of a multi-year funding bill and then count on a future Congress to fix it” stupidity that first showed up in the 1978 surface transportation bill, then again (to a lesser extent) in the 1991 bill, and the 2005 bill, and then somehow (after the rescission in the 2005 bill was allowed to take effect on October 1, 2009 and then be repealed months later, after much drama at the FHWA and state level) once again in the FAST Act of 2015.

Dispensing with the $7.6 billion rescission involves a host of technical budgetary issues that serve to remind a person why the fundamental structure of transportation contract authority programs needs to be rethought. To wit:

  • S. 1992 repeals a rescission scheduled to take place on July 1, 2020 of $7.6 billion.
  • But FY 2020 is the last year of contract authority currently authorized for the federal-aid highway program.
  • Under budget law and scorekeeping rules, highway contract authority is extended forward in the baseline forever at the net total of the last year of its authorization, which in this case is FY 2020 at the post-rescission level.
  • So S. 1992 doesn’t just get scored as increasing net budget authority by $7.6 billion in 2020, it gets scored as increasing net budget authority by $7.6 billion per year over the next ten years of the budget scorekeeping window – $76 billion in total.

This is all just “on paper.” It matters for purposes of internal Congressional budget scorekeeping – the budget totals given to the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee, and in terms of the government-wide budget “aggregate” totals of budget authority.

But we have to wait for the Congressional Budget Office score of the bill to see if any of that $76 billion in on-paper cutting would result in any state DOTs being unable to spend any money in the real world. (It might, but it wouldn’t be anywhere close to $7.6 billion, much less $76 billion). In that case, canceling the rescission might be scored as increasing federal outlays (cash going out the door of the Treasury) by some measurable amount, which would bring up the PAYGO budget enforcement system, which is not just “on paper” and which could trigger budgetary sequestration if not offset.

The chairman of the House Transportation and Infrastructure Committee, Peter DeFazio (D-OR) and other leaders of that panel sent a letter on May 8 of this year to House budget negotiators to  urge them to include a repeal of the FAST Act rescission in any budget law to be enacted for FY 2020. (Ed. Note: For a variety of reasons, a budget deal really is the best place to deal with this kind of thing.) But, with budget talks in limbo, chairman Barrasso has apparently felt the need to introduce a bill in order to serve as a marker in future negotiations.

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