New Budget Cuts Bite Transport

After the full scope of looming transportation spending cuts sank in this week, one industry official said "we feel like shrimp up against the whales."

Last weekend's initial one-week extension of the federal budget, which followed hard on the heels of a late deal April 8 between President Obama and House Speaker John Boehner to avert an impending government shutdown, had already cut $1.5 billion of rail grants accruing for the 2011 budget year.

That didn't really hurt, though, because it still left the $1 billion in place that Obama had requested for this year, and the Department of Transportation is so far scrambling just to use up all the past-year money under its High Speed and Intercity Passenger Rail program.

But when the follow-up package of full spending cuts came down this week, it zeroed out the entire HSR line for 2011 and even reached back to strip $400 million from 2010 grants that were not already allocated. That did hurt, say transportation specialists who closely follow the budget process.

The deal also trims the DOT's discretionary "TIGER" grants for 2011 to $527 million from last year's $600 million, erases some transit funds, calls back $630 million in long-dormant congressional earmarks for specific Highway Trust Fund projects and takes another $2.5 billion from excess trust fund contracting authority. That last measure will not affect current spending, feds say, but industry watchers say it can crimp states over time in their use of HTF money.

However, out of all the cuts "the high speed rail one, I think, is really damaging," said Mortimer L. Downey. He was deputy transportation secretary in the Clinton administration and is now senior adviser in Washington to the Parsons Brinckerhoff firm of infrastructure construction specialists.

The DOT still has about $2 billion in rail grants to allocate from the 2009 stimulus and a followup appropriation last year - even after the deal removes $400 million from a $2.4 billion pot the DOT already took applications for. But Downey says after the president agreed to wipe out his program for one year it can be hard to wrestle it back into future budgets. "It is a real concern, that by zeroing it out for 2011 it's no longer in the baseline" from which the next budget starts, he said.

Many industry officials think President Obama in accepting last week's terms has made it tougher to get the kind of major transportation plan through Congress that he proposed in February. That vision had a big rail grants program and infrastructure bank, but was waiting on him to say how it could all be funded. If he was willing to scrap his rail grants program to get a short-term budget deal, some ask, will he really fight for a bigger plan?

-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter @jboydjoc.

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