Transportation will be the victim of FY 2005 spending cuts

The release of the budget allocations in the House, known as the 302(B) allocations, sets the stage for the enactment of the 13 major appropriations bills for all federal agencies. The allocations are derived from the overall numbers established in the annual budget resolution.

Reacting to the dramatic increase in the size of the federal deficit, budget writers this year sought to out do the Administration in reining in federal spending. A House-Senate conference committee produced a joint budget resolution limiting federal discretionary spending to $821.419 billion, a reduction of $2 billion from the President's requested budget of $823.032 billion. While that was approved by the House shortly before the Memorial Day recess, it has yet to pass the Senate and observers say that Senate Majority Leader Bill Frist (R-Tenn.) will be hard pressed to find the needed votes for passage. If the Senate does not pass the conference agreement, the Senate appropriators may instead be forced to operate on the budget cap included in the FY 2004 budget agreement of some $814 billion.

It appears the brunt of the budget cuts, some $2.931 billion, will come out of the Treasury and Transportation allocation. While the distribution of those cuts between the two departments has not yet been announced, the Transportation Department makes up approximately 80% of that total allocation, raising the likelihood that it also will bear a larger share of the cuts.