"As state transportation executives from across the country come to the nation's capital next week, we hope Congress will act to preserve jobs and economic development by ensuring that extensions are swiftly enacted to continue programs funded by the Highway Trust Fund and general appropriations," said AASHTO Executive Director John Horsley.

White House officials said Wednesday that President Barack Obama remains optimistic that Democratic and Republican leaders can reach an agreement soon on federal spending. Failing to do so would hurt the current economic recovery, they warned.

Washington is preparing for potential of the first federal government closure since 1996 if leaders on both sides are unable to reach agreement by March 4 to continue Fiscal Year 2011 appropriations.

"A government shutdown would have harmful effects on our economy, would set back our economic recovery, would potentially reduce our job-creation efforts," White House spokesman Jay Carney told reporters.

Carney cited a new analysis by Goldman Sachs that says a shutdown could result in $8 billion less in weekly federal spending, an amount that equates to $32 billion in annualized terms or around 0.2% of gross domestic product for each week of shutdown, BNA reported.

House-Passed Appropriations Bill Not Expected to Clear Senate

The House of Representatives was in session past midnight three nights last week debating a measure to extend appropriations through Sept. 30, the end of this fiscal year. After considering more than 100 amendments on the House floor, representatives cast a final vote of 235-189 to approve HR 1 at 4:40 early Saturday morning. Congress then went into recess this week in observance of Presidents Day. Lawmakers are scheduled to return to Washington on Monday.

The White House has threatened to veto the $1.2 trillion bill, which includes more than $60 billion in cuts to last fiscal year's spending levels. Senate Democrats are not expected to call up the House-passed measure but rather to debate a shorter-term funding extension to allow for more time to strike a deal with House Republicans on budget cuts. Obama and Senate Democrats have proposed freezing discretionary spending rather than cutting it.

Senate Majority Leader Harry Reid, D-Nevada, who is opposed to the House bill, said there will not be enough time to finish work on the legislation when Congress returns from recess. Reid said he will introduce a "clean" one-month extension of current spending when the Senate returns to give both sides more time to negotiate an appropriations measure for the remainder of this fiscal year.

But House Speaker John Boehner, R-Ohio, is insisting that any bill to contain funding the government past March 4 contain spending cuts. House Republicans are looking at a two-week CR that would cut about $4 billion

The disagreement between Reid and Boehner sets the stage for appropriations to run out for most of the federal government for the first time in 15 years, just as state transportation leaders convene in the capital to discuss legislative issues such as a six-year surface transportation reauthorization bill and the need to increase federal investment in infrastructure.

Last week, another temporary extension of the 2005 surface transportation authorization law known as "SAFETEA-LU" advanced. The House Transportation and Infrastructure Committee approved a bill, HR 662, to extend the law by seven months. (see Feb. 18 AASHTO Journal story)

House T&I Committee Chairman John Mica, R-Florida, told reporters Wednesday after a field hearing in Los Angeles that he and Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-California, had agreed to move the bill through both chambers next week to avert another shutdown of surface transportation programs.

If the authorization extension passes Congress and is signed by Obama but no action is taken on the appropriations bill, however, federal reimbursements to state transportation departments would still be suspended as both an authorization law and an appropriations law are required to be in effect for payments to go out.