States normally receive a full fiscal year's apportionment of contract authority for transportation projects on the first day of the federal fiscal year, Oct. 1. But this year, with the previous transportation authorization known as SAFETEA-LU having expired Sept. 30 and no new law in place, the Federal Highway Administration has distributed only one month's worth of funding thus far for Fiscal Year 2010.

There are essentially three options Congress can take this month to address the transportation funding crisis. It could approve a full six-year authorization measure, though this is considered difficult because of the scope and complexity of what needs to be done in three weeks. Congress could enact a multimonth extension of SAFETEA-LU to keep federal transportation programs operating at last fiscal year's funding levels. Or it could extend the continuing resolution funding most federal departments this month for another month or months if all appropriations bills are not completed by the end of October.

Failure to take any action would result in no additional money available for federal surface transportation programs as of Nov. 1 as the U.S. Department of Transportation would lack legal authority to fund them. This is considered unlikely, however, due to the crippling economic effects such a shutdown would have in all states.

State transportation departments suffered a double blow Oct. 1 when the new fiscal year began. Not only did they suffer an $8.7 billion rescission of previously granted highway contract authority, they also saw a $1 billion decline in the amount of highway formula funding available for the month because of complex budget-scoring rules that resulted in the continuing resolution containing only $2.03 billion in highway funds for October versus the $3.04 billion that states had been expecting based on Fiscal Year 2009 levels. That is the result of the $8.7 billion rescission carried out Oct. 1 combined with another $3.4 billion rescission earlier this year, which reduced the baseline funding for the highway programs by $12.1 billion. Thus monthly funding for the programs dropped by $1 billion.

The path forward is unclear now that SAFETEA-LU has expired and there is no new authorization in place. While key senators were willing last week to agree to the House's position favoring a three-month extension of authorization in exchange for repealing the $8.7 billion rescission, it's unknown what their next step will be now that the rescission has been implemented.

Congressional Leaders Meet with Obama to Discuss Potential Recovery Extensions

President Barack Obama hosted congressional leaders at the White House on Wednesday to talk about the growing unemployment rate, which reached 9.8 percent in September -- a 26-year-high. House and Senate Democrats continue to mull how to respond to stubbornly high unemployment, CQ Today reported.

Leaders have made it clear there will not be a second major stimulus bill this year. Instead, they are looking at what aspects of the existing $787 billion American Recovery and Reinvestment Act, adopted in February, could be extended or beefed up with additional dollars to further try to revive the sluggish economy. Sources told CQ Today that major talks about which programs to extend or add funding to are not expected to gear up for another week or two since legislation to overhaul the healthcare system is presently dominating the congressional agenda.

The discussions have included boosting transportation spending, Bloomberg News reported. Administration officials have told allies in Congress that a broader transportation bill is on the table along with extensions of a homebuyer tax credit and unemployment benefits.

"If there was to be another round of stimulus, additional infrastructure would be at the top of the list," said Rep. Chris Van Hollen, D-MD.

House Transportation and Infrastructure Committee Chairman James Oberstar, D-MN, continues to push for adoption of a full six-year transportation bill. His spokesman, Jim Berard, noted a six-year bill would be "a better stimulus than a temporary, one-time infusion of cash."

House Democratic Caucus Chairman John Larson of Connecticut agrees, telling Roll Call this week that Oberstar's $500 billion legislation would be a great way to jump-start job creation.

"What we really need to focus on is putting people back to work, and I think Oberstar's got the right plan," Larson said.

House Rules Committee Chairwoman Louise Slaughter, D-NY, said she likes the idea of passing Oberstar's legislation, which would put people to work "building things we need anyway."