Highway funding budget cuts still being considered

Across-the-board spending cuts and other fiscal measures to help pay for the Federal response to hurricanes Katrina, Rita and now Wilma are still being considered in Congress. The House leadership is pushing for approval of a list of cuts from mandatory Federal spending programs (such as Medicare, Medicaid, etc.) totaling $50 billion. In addition, House leaders have proposed an across-the-board cut would be applied against final FY 2006 appropriations measures once they are completed. President Bush recently voiced his support for the across the cut. AGC has sent a letter to all Representatives recommending against cutting infrastructure spending, especially cutting trust fund programs that are funded by a dedicated user fee.

The Senate is looking at cutting mandatory programs by a smaller amount and at this point is not considering across-the-board cuts in domestic discretionary spending. As a part of this process, the Senate Environment and Public Works (EPW) Committee recently approved a $27 million reduction of Alaska’s federal-aid highway formula funds. The SAFETEA-LU legislation included a provision that allows Alaska to exceed its obligation limits for reconstruction of portions of the Alaska Highway and the Alaska Marine Highway System.

Also in the Senate, a group of eight fiscally conservative Senators held a press conference recently proposing about $125 billion in cuts over two years to help pay for hurricane costs. Included in their proposal is a provision to eliminate all $24 billion in earmarked high priority highway projects that were included in SAFETEA-LU. Their proposals are largely symbolic, as they appear to have little chance of passing. Cutting the projects from SAFETEA-LU had been previously proposed by a group of House members but it was not received with any enthusiasm there and no action has been taken.