If Congress is unable to reach a full FY22 appropriation deal before government funding runs out next month, it could spell trouble for the rollout of the Infrastructure Investment and Jobs Act.
The government is currently funded through a continuing resolution, which freezes most federal spending at FY21 levels. It’s the second CR that Congress has passed this fiscal year, which began in October, and it expires on Feb. 18. If Congress is unable to reach a full-year spending agreement by the deadline, and reverts to another CR, the move would continue to bottle up billions in the IIJA.
“This is a very unique and complicated bill and the situation we’re in with the continuing resolution itself is uniquely complicated,” said Shant Boyajian, partner at Nossaman LLP.
The $1.2 trillion IIJA, also called the Bipartisan Infrastructure Law, features dozens of new programs, including transportation and transit dollars reauthorized through the Highway Trust Fund, which need a new appropriation bill to begin to flow.
Other IIJA new programs are funded already through a separate, direct appropriation included in the act, and that money will flow independent of the larger appropriations debate in Congress.
For the Highway Trust Fund and other programs, “until there’s actually a full-year appropriation at those higher levels, the money cannot be obligated,” Boyajian said. “That’s the real source of tension right now.”
On top of hampering state and local governments trying to plan for IIJA funds, a budget bottleneck also would also impede the U.S. Department of Transportation’s ability to administer the IIJA, Boyajian said.
“Given the magnitude of the new funding under the BIL, and the number of new programs that the law creates, there’s a huge administrative burden on the DOT to actually hire new staff, to process all the additional funding and to implement the new programs,” he said. “Not having a full-year appropriation bill in place that provides the appropriate amount of administrative resources to the U.S. DOT is extremely limiting to the U.S. DOT’s ability to implement the new law.”
The Federal Highway Administration’s proposed FY22 allotment totals $52.5 billion, which is a record high, noted Joung Lee, deputy director and chief policy officer for the American Association of State Highway and Transportation Officials. But states are only allowed to tap $14.1 billion of that through Feb. 18 due to the CR.
If Congress is unable to hammer out an FY22 spending package and turns to another CR, AASHTO will ask for an exception, Lee said.
“Let me make it 100% clear that after Feb. 18, we want to see full-year appropriations done first and foremost, as we have consistently called for since last fall,” Lee said. “However, if they can’t, we’re going to have to ask for an exception to the CR so they can fully honor the spending commitments made in the infrastructure bill for Highway Trust Fund programs,” Lee said.
“We’d much rather see the full-year appropriations, which has been our consistent stance since last fall. However, we really do need to see the funds flowing in full by mid-February.”
With funding expiring in four weeks, appropriations talks are starting to heat up. The two parties disagree over spending increases to both the defense and nondefense budgets, and Democrats in recent days have talked about including additional pandemic aid or paid leave in an omnibus spending package.
The four leaders from the House and Senate Appropriation Committee met on Jan. 13 to advance talks in a meeting they later called “constructive.”
“We look forward to further conversations in the coming days, with the shared goal of finishing our work by the Feb. 18 government funding deadline,” said Appropriation Committee chairs Sen. Patrick Leahy and Rep. Rosa DeLauro.