House Republicans, who gained the majority in last November's election, turned down an effort Tuesday in caucus to modify a rules provision that drops a "point of order" (Rule XXI, Clause 3) in place since 1998 that permitted any representative to object to an appropriations bill containing funding for state highway and transit projects supported by the federal Highway Trust Fund that provides less money than what was previously authorized by law.

"We are disappointed that House Republicans voted to rescind a guarantee that Highway Trust Fund revenues would be spent to fund the critical highway and transit programs that millions of Americans rely on everyday," said John Horsley, executive director of the American Association of State Highway and Transportation Officials. "There are two deficits facing the country today: the federal debt and the deficit in maintaining the infrastructure on which economic recovery depends. In their zeal to address the first issue, we hope the new House leadership will not take action that deepens the second."

An amendment offered in a closed party caucus Tuesday by Ohio Republican Steven LaTourette to modify, rather than repeal, the point of order was defeated, CQ Today reported. Republicans voted on the LaTourette amendment via secret ballot, and a vote count was not announced.

No amendments were permitted on the floor Wednesday, and the House voted 240-191 to adopt the package of rules (House Resolution 5) that will govern the body during this two-year session of Congress.

Supporters say the provision regarding transportation funding is intended to prevent the government from being forced to spend more on surface transportation projects than the Highway Trust Fund collects.

But opponents contend the change will create uncertainty as state transportation departments can no longer be assured that they will receive authorized federal funding levels when the yearly appropriations bills are enacted. That could lead to the postponement of numerous projects around the country as states are unable to proceed without financial guarantees from Washington. For most states, federal money constitutes almost half of their budgets for highway capital projects.

"If you're a state DOT, you've got to know that the funding stream you're making these commitments against is going to be there," Horsley said.

AASHTO and 20 other transportation, construction, business, and labor organizations warned in a letter sent last week to House leaders that the rule change "would hurt investment in transportation infrastructure, reduce jobs, and break faith with the American taxpayer." (see Dec. 30 AASHTO Journal story)

Surface transportation authorization bills are unusual in that they actually appropriate money rather than just authorize it. While obligation limits are included annually in appropriations bills, appropriators haven't been able to commit less than the totals authorized for that year. The 1998 framework was crafted to ensure that money in the Highway Trust Fund is spent on transportation and infrastructure rather than being tapped for other purposes or allowed to sit unused to help offset government deficits in other areas.

In some years before the 1998 rule adoption, lawmakers sometimes allowed surpluses to build in the Highway Trust Fund so they could be counted against the overall federal deficit. Highway and transit advocates fear the rules change opens the door to that occurring again.

"While the immediate impact of the rule is not quantifiable, it is clear that such a change opens the door to reducing the surface transportation program funding through subsequent congressional funding actions," Horsley said. "Related to this issue is the current Congressional Budget Office estimate of what the Highway Trust Fund can support. CBO estimates that the highway program could only support an average program level of $35 billion for highways and $7 billion for transit, despite the fact the current levels are authorized at $42.6 billion for highways and $10.7 billion for transit."

A table issued Monday by AASHTO (available at bit.ly/highwayfunding0111) estimates, based on the Fiscal Year 2010 apportionments, what the future federal highway program funding levels might be reduced to for each state.

"If we are to maintain the current funding levels, we will need additional revenue," Horsley said. "The rule change will make that even more difficult."

Mica Opposed Rule Modification

New House Transportation and Infrastructure Committee Chairman John Mica, R-Florida, opposed the rules change and worked with LaTourette, an appropriator as well as longtime member of the transportation panel, to blunt its impact.

LaTourette's amendment would have modified the point of order to exempt conference reports or amendments. According to a summary, this was designed to protect guaranteed transportation spending while allowing lawmakers the chance to reduce those levels through amendments.

Many transportation stakeholder groups supported LaTourette's compromise, but it was rejected by the House Republican Caucus. Traditionally, the rules package approved by the majority party caucus is then enacted on the House floor during the first day of a new Congress without further amendment.

The new rules addressed several other nontransportation matters including replacing "pay as you go" budget requirements with a "cut as you go" mandate that will permit bills that cut taxes without offsets to the resulting revenue losses, The Bond Buyer reported. Other rules changes require that the legislative text of bills be posted online before votes and for new bills to contain a section citing their justification under the U.S. Constitution.

Under the old House rules, any bill, amendment, or conference report would be out of order, and could be killed by any House member raising a point of order, if it failed to appropriate funds for transportation programs at the level set forth in the authorization legislation.

During the floor debate Wednesday on the new rules, Mica engaged in a colloquy with House Rules Committee Chairman David Dreier, R-California, to obtain assurances the rules would not hurt transportation funding. Dreier told Mica the new rules "do not change the way in which the underlying programs are funded."

But the colloquy was followed by complaints from Rep. Nick Rahall, D-West Virginia and ranking minority member of the House T&I Committee, that new rules eliminate the ties between the gas tax paid by motorists into the Highway Trust Fund and federal funding for highway and transit programs.

Rahall objected to changing House rules that for a dozen years have required appropriators to fund surface transportation programs at the levels previously authorized by Congress. Rahall labeled the rules change a "job-killing proposal" that threatens construction workers' jobs as well as necessary transportation improvements around the country. The new rule will have "a potentially devastating effect on highway investment," he warned.

Some state transportation department leaders cautioned their representatives about the impacts reduced transportation spending could have.

"If fully implemented, this rule could reduce Washington's federal transportation funding by an estimated $121.7 million annually," Washington state Transportation Secretary Paula Hammond wrote in a Tuesday letter to Rep. Dave Reichert, R-Washington state. "The declining federal funds means our backlog of projects valued conservatively at more than $1 billion over the next 10 years will continue to be deferred, even as our infrastructure continues to age. We rely on federal funds in particular for our infrastructure maintenance and preservation, and any reduction in federal funding simply defers that work and costs us -- and travelers -- more in the long run."

Despite states' efforts to block the rule change, House Republican leaders expressed Tuesday that highway and mass-transit programs should no longer be shielded from budget cuts, The Wall Street Journal reported.

Newly elected House Speaker John Boehner, R-Ohio, and his leadership team are striving to make good on campaign promises to cut as much as $100 billion from annual federal spending. The House started that effort Thursday by voting 410-13 to enact a 5% cut in its own budget, which supporters say will save $35 million.

"Everything is going to be on the table," said House Majority Leader Eric Cantor, R-Virginia.

Further action on spending cuts might wait, Cantor suggested, until after President Barack Obama outlines his plans for overhauling federal finances in his State of the Union address, likely to occur in late January.

Transportation Groups Explain Repercussions of House Vote

"The real life implication of this action is that it injects further uncertainty into the already reeling U.S. transportation construction market where unemployment is in excess of 18% -- twice the national average," Pete Ruane, president of the American Road and Transportation Builders Association, said in a statement.

Greg Cohen, president and chief executive officer of the American Highway Users Alliance, said the new House rules will be "a serious blow to the transportation community."

Such a move would "turn back the clock on transportation investment," Kathleen Marvaso, AAA vice president for public affairs, wrote in a letter sent Tuesday to every House Republican.

Eleven transportation experts, including Jack Basso, AASHTO's director of program finance and management, offered comments this week regarding the House rule change on National Journal's transportation blog at bit.ly/NJblog0111.