July/August 1997
Vol. 61· No. 1

Congress Battles Over Successor to ISTEA

by Cynthia Burbank and S. Lawrence Paulson

For those who are helping to decide the future of the nation's transportation system, there won't be many leisurely days this summer. Reauthorization of the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 has taken center stage on Capitol Hill, and a great deal is riding on the outcome. Secretary of Transportation Rodney E. Slater said the bill "will determine whether our nation can enter the 21st century ready to compete and win in a global economy."

ISTEA, which expires Sept. 30, was a landmark six-year funding law that made dramatic changes in the way the federal government dealt with transportation policy. It recognized for the first time that the components of the nation's transportation infrastructure truly function as a system. It gave states unprecedented flexibility to use federal funds for a wide array of projects to meet local and regional needs, whether they involved new highways, mass transit, or bikeways. And it attempted to balance the need for improved transportation with other vital national goals - a cleaner environment, a stronger economy, a more secure future.

Now Congress is involved in an intense battle over ISTEA's successor, and even veteran legislative observers are reluctant to predict the outcome. The issue has already become entangled in the fiscal year 1998 budget resolution, even threatening at one point to derail the balanced budget agreement reached by President Clinton and congressional Republican leaders. Earlier predictions that a new bill would be in place by the time ISTEA expires are being reconsidered.

After ISTEA

There are plenty of candidates to be the next ISTEA. The Clinton administration's proposal, the National Economic Crossroads Transportation Efficiency Act (NEXTEA), was introduced in the Senate (S. 468) by Sens. Daniel Patrick Moynihan, D-N.Y., and John Chafee, R-R.I., and in the House (H.R. 1268) by Rep. Bud Shuster, R-Pa. NEXTEA is considered a key step in developing a successor to ISTEA and an important source of ideas for bill drafters, but it is not a likely candidate to advance on its own through the legislative process. Congressional committee chairmen, after all, traditionally demonstrate their independence by distancing themselves from executive branch proposals. Nonetheless, U.S. Department of Transportation officials say they have been pleasantly surprised by the respect NEXTEA has garnered on the Hill, and it may prove to be highly influential in shaping the final bill. On the Senate side, a key proposal is STEP 21 (Streamlined Transportation Efficiency Program for the 21st Century), sponsored by Sens. John Warner, R-Va., and Bob Graham, D-Fla. The bill (S. 335) addresses one of the key issues related to ISTEA reauthorization: the distribution of federal transportation funds to the states. Under ISTEA, 20 states, clustered mostly in the South and Midwest and known as the "donor" states, received less in transportation funding from the Highway Account of the Highway Trust Fund than they remitted to the Highway Account. The "donee" or "recipient" states, mostly in the Northeast and West, received more than they contributed to the fund. Not surprisingly, lawmakers from the donor states want to change the formula in their states' favor.

The National Economic Crossroads Transportation Efficiency Act was introduced in the Senate by Sens. Daniel Patrick Moynihan (left) D-N.Y., and John Chaffee (center), R-R.I., and in the House by Rep. Bud Shuster, R-Pa.

Besides ensuring that a greater percentage of transportation dollars would go to donor states, STEP 21- introduced in the House (H.R. 674) by Majority Whip Tom DeLay, R-Texas - would authorize about $26 billion a year for highway projects, significantly more than ISTEA. More controversially, it would eliminate ISTEA's Congestion Mitigation and Air Quality Improvement (CMAQ) Program, a fact that has caused some local officials in the South to criticize the legislation even though the bill is designed to give more power over transportation programs to states and localities. Warner said STEP 21 "would move us beyond the advances of ISTEA by further streamlining the current bureaucratic maze of federal programs and allowing state and local partners to determine their own transportation priorities."

A Northeast-oriented bill (S. 586) that generally favors the current funding formula has been introduced by Moynihan. His "ISTEA Works" legislation would fund highways at about $26 billion yearly, increase funding for enhancement programs to about $600 million annually (about the same as NEXTEA), and would almost double annual CMAQ funding. In introducing his bill, Moynihan stressed its continuity with ISTEA, which he was instrumental in getting through Congress.

"We had a great success in both the House and the Senate," Moynihan said of ISTEA, "and we hope to do the same thing again this year."

Sen. Max Baucus, D-Mont., ranking minority member of the Senate Environment and Public Works Committee, introduced a bill (S. 532) called the Surface Transportation Authorization and Regulatory Streamlining Act (STARS 2000). This bill would give somewhat more authority to states and localities although not to the extent favored by supporters of STEP 21. STARS 2000 would authorize about $27 billion yearly for highway programs, increase enhancement funding by a modest amount over ISTEA levels, and reduce - but not eliminate - air pollution expenditures. In addition, Baucus' bill would ensure that Western states don't lose out in the Highway Trust Fund formula. Baucus said his bill will streamline the transportation program while maintaining ISTEA's integrity.

"Such streamlining will provide greater flexibility to the states so they may choose priority transportation projects without the straitjacket imposed by today's program," Baucus said.

A far more radical approach is taken by Sen. Connie Mack, R-Fla., whose Transportation Empowerment Act (S. 867) - introduced in the House (H.R. 1470) by Rep. John Kasich, R-Ohio - would cut the federal gasoline tax by 12 cents and turn most transportation funding authority over to the states. In introducing his bill, Mack said that the highway system "is a perfect example of a program that ought to be returned to the states."

Getting to Markup

Predictions that markup of a transportation bill would be underway in the House and Senate by May proved overly optimistic. One reason was the emergence of transportation funding as a major issue in the debate over the FY 1998 budget resolution. A key player in this skirmish - and in the entire effort to reauthorize ISTEA - was House Transportation and Infrastructure Committee Chairman Shuster, a staunch supporter of increased highway funding.

Shuster wants $32 billion a year for highway funding and favors using the current $23 billion balance in the Highway Trust Fund for roads. In addition, he has been highly critical of the current use of 4.3 cents of the 18.3-cents-per-gallon federal gasoline tax for deficit reduction rather than transportation, calling it a "cynical shell game." Shuster argues that "the relentless growth of traffic, estimated at 3.4 percent per year since 1980, has taken a toll on roads and bridges throughout the country."

"We need to unlock the trust fund balances now; we need to recapture the 4.3 cents being diverted from the trust fund; and we desperately need to invest in our highways and transit systems," Shuster said.

To help accomplish his goals and to lay the groundwork for his committee's work on ISTEA reauthorization, Shuster proposed an amendment to the budget resolution that would have increased transportation funding by $12 billion over five years. His proposal would cut other discretionary programs in the resolution by 0.39 percent and reduce proposed tax cuts by the same amount. The result would have been to reduce defense spending by $6 billion, domestic spending by $5 billion, and tax cuts by $1 billion over five years.

Shuster's amendment apparently caught congressional leaders off guard, and it nearly passed. At one point, according to Congressional Quarterly, Shuster's amendment appeared to be ahead by about 40 votes. But Republican leaders, concerned that the provision could quash hopes for balancing the federal budget by 2002, conducted an all-out effort to rally votes against Shuster's amendment, and it failed by a 214-216 vote in the early morning hours of May 21.

Nevertheless, the closeness of the vote demonstrated the popularity of transportation spending, and Shuster is not expected to abandon his effort to increase highway funding. In fact, aides to Shuster told reporters following the House vote that "all options remain on the table," including a reauthorization of ISTEA for only one or two years or even a delay in action on a bill until next year when all members of the House will face reelection. Officially, though, committee staffers insist a committee bill on ISTEA reauthorization could be completed by July or August. Procedurally, the legislation the committee will use for markup will be a Shuster bill that had not yet been introduced as this issue of Public Roads went to press.

Things are somewhat more straightforward in the Senate, where the committee with jurisdiction over ISTEA reauthorization is the Environment and Public Works Committee, chaired by Chafee. A bill to serve as a markup vehicle was still being drafted as of early June, but staffers expressed hope that markup could be completed by the July 4 recess. Even on the Senate side, however, there is considerable sentiment for increasing transportation spending. An amendment to the budget resolution sponsored by Warner and Baucus that would have boosted highway funds was tabled by only two votes, 51-49.

Difficult Issues

The debate over ISTEA reauthorization is already in full swing, and it seems apparent that the issues that are now dominating that debate will continue to be controversial until the final votes are cast. Key issues are the state funding formula, increased spending flexibility for states and localities, and the total amount of money available for ISTEA reauthorization. Supporters of enhanced transportation funding argue strongly that these subjects are closely related. Without more money in the bill, some members argue, it will be difficult to negotiate serious differences, turning ISTEA reauthorization into something of a zero-sum game that pits region against region and interest against interest. But the commitment to a balanced budget is strong, and there will continue to be heavy resistance to any substantial hike in transportation spending.

The Transportation Enhancements Program, one of the most innovative aspects of ISTEA, has its adherents and its detractors. Localities generally like using transportation funds for bikeway construction because these projects have proven to have a strong and vocal constituency. Renovations of abandoned railway stations and other transportation facilities are also a locally popular use of enhancement funds because such projects frequently help revitalize neglected downtown areas and spur other economic development. But some state transportation officials object that requirements to set aside funds for enhancement projects often prevent them from meeting their most critical transportation needs. And some highway advocates tend to view enhancements as luxuries the nation can't afford when there is so much work that needs to be done to improve the transportation infrastructure.

"When we look at the current conditions of our roads and bridges and we look at the rising death toll on our roads, it's hard to say this is the right time to be diverting money to bike paths," said American Highway Users Alliance President William D. Fay.

There is less controversy about keeping mass transit funding in a reauthorized ISTEA. And while it's doubtful that intermodalism is in any serious danger, a debate could arise over Amtrak funding, which the administration included in NEXTEA, but which was not part of ISTEA. Sen. William Roth, R-Del., suggested that Amtrak might not survive if it doesn't get the same access to capital funding that other transit modes received under ISTEA. "We can continue to focus on building new roads and larger airports where land is available, with the realization that this cannot possibly meet demand. Along with this construction, however, comes congestion, lost productivity, pollution, and gridlock. The alternative is to augment our existing highways and airports with an improved passenger rail system that alleviates congestion, saves precious open space, and eases gridlock," Roth said.

But Sen. Kit Bond, R-Mo., called funding Amtrak through ISTEA's successor an "outrage." Bond said, "Until we have dramatically closed the gap on the safety needs of our nation's roads and bridges, I am not willing to spend one dime of highway money on Amtrak or any other pet cause."

Because there are so many controversial issues to resolve, it's virtually impossible to find anyone willing to predict that a successor to ISTEA will be awaiting President Clinton's signature by Sept. 30, the date the present law expires. Some observers believe that after approving a temporary extension of ISTEA, Congress will pass a new bill by the end of the year. Others are betting that the issue will remain unresolved until 1998. But many are hoping that the widespread support for ISTEA programs and transportation infrastructure overall will lead Congress to act on a multiyear bill by the end of 1997. What's certain is that ISTEA has set a standard that no one in Congress is taking lightly. Lawmakers understand that in crafting ISTEA's successor, nothing less than the nation's economic future is at stake, and they seem determined to take the time to get it right.

Cynthia Burbank is chief of the Legislation and Strategic Planning Division of the Federal Highway Administration. From 1991 to 1994, she headed FHWA's Environmental Analysis Division with responsibility for implementing transportation provisions of the 1990 Clean Air Act Amendments. In her 22-year career in the U.S. Department of Transportation, Ms. Burbank has worked for the Federal Transit Administration, Federal Aviation Administration, Office of the Secretary, and FHWA. She received a bachelor's degree in economics from Georgetown University.

S. Lawrence Paulson is a partner in Hoffman Paulson Associates, a writing/editing and public relations firm in Hyattsville, Md. He has written and edited numerous studies for the Federal Highway Administration, Federal Transit Administration, and National Highway Traffic Safety Administration. He also spent seven years covering Congress as the Washington Bureau Chief of a national daily newspaper, The Oil Daily.