The recently passed Fiscal Responsibility Act of 2023, set to be signed by President Biden, has raised concerns regarding its effects on transportation funding and infrastructure projects. The debt ceiling deal, which suspends the debt ceiling until January 1, 2025, could result in significant reductions in transportation funding. The American Association of State Highway and Transportation Officials (AASHTO) has analyzed the legislation, highlighting the potential cuts and their impact on the transportation sector.

The bill includes the rescission of approximately $28 billion in unobligated COVID-19 pandemic funds, including the December 2020 Highway Infrastructure Program. This funding pullback would take effect upon the enactment of the bill, although states and localities are rushing to obligate the remaining $1.67 billion ahead of the debt deal's passage.

 

However, the debt ceiling deal protects certain advance appropriations funding from cuts. Programs such as the National Electric Vehicle Infrastructure formula program and the Bridge Formula Program, included in the $1.2 trillion Infrastructure Investment and Jobs Act, are shielded from any future Congressional rescission. These programs are safeguarded by not allowing cuts to count towards new spending or "pay-fors."

Furthermore, the debt ceiling bill incorporates project permitting reform measures from the BUILDER Act, including amendments to agency considerations in the National Environmental Policy Act (NEPA) and the codification of the One Federal Decision framework. These reforms aim to streamline the environmental review process and facilitate project approvals.

Regarding the debt ceiling agreement, AASHTO expressed its concerns about the potential impact on transportation projects and infrastructure investment. AASHTO emphasizes the importance of timely funding bills and highlights the consequences of a 1 percent cut to the Continuing Resolution if full-year appropriations measures for fiscal years 2024 and 2025 are not in place by January 1 of each respective year.

As transportation stakeholders navigate the implications of the debt ceiling deal, attention turns to the potential consequences for ongoing and future transportation initiatives, emphasizing the need for effective funding mechanisms and continued investment in infrastructure.

https://aashtojournal.transportation.org/debt-ceiling-deal-poised-to-cut-some-transportation-funding/