On Monday night (July 22), President Trump and Congressional leaders announced that they had reached an agreement to increase the discretionary budget caps for fiscal year (FY) 2020 and FY 2021. The agreement also suspends the Debt Limit until July 31, 2021. This announcement came after several weeks of negotiations between House Speaker Nancy Pelosi (D-CA) and Secretary of the Treasury Steven Mnuchin.

Under current law, both non-defense and defense discretionary spending would have been cut significantly barring this new budget agreement. For instance, under current law, non-defense spending (which includes some public transportation funding) is scheduled to decrease from $597 billion to $543 billion—a $54 billion cut—in FY 2020.

The agreement blocks this cut and increases the non-defense budget cap by $24.5 billion to $621.5 billion in FY 2020 and an additional $5.0 billion in FY 2021 to $626.5 billion. The bill contains $77.3 billion of offsets, which include extensions of mandatory budget sequestration and customs fees through FY 2029. The offsets do not directly impact public transportation funding.

The House of Representatives is expected to consider H.R. 3877, the Bipartisan Budget Act of 2019, later this week. The Senate will likely consider the bill next week and the President is expected to sign the bill. Congress and the President need to complete action on the bill prior to Congress’ August recess because there is concern that the United States will exceed its Debt Limit in early September.

To view the White House statement on the agreement, please click here. To view a memorandum outlining the terms of the agreement released by Speaker Pelosi, please click here. To view the bill text, please click here.

Assuming Congress completes action on the bipartisan budget agreement bill, Congress’ focus will quickly shift to the Senate Committee on Appropriations. Using these revised budget cap funding levels, the Senate Appropriations Committee will allocate the total funding among its 12 subcommittees. After the Committee establishes the subcommittee allocations, staff will prepare draft appropriations bills throughout August. In September, the Senate Appropriations Committee will resolve any remaining differences in these bills and determine how to move forward. It is unlikely that Congress and the Administration will complete appropriations action prior to the end of the fiscal year (October 1, 2019), and we would expect Congress to pass a Continuing Resolution prior to October 1 to avert a federal government shutdown. However, the budget agreement makes it much more likely that Congress could complete appropriations actions this fall.

Even with a budget agreement, the Transportation, and Housing and Urban Development, and Related Agencies (THUD) Appropriations bill faces a significant challenge in meeting the historic FY 2019 funding levels of $71.1 billion. The THUD Subcommittee needs an increase of approximately $4.5 billion in its FY 2020 allocation simply to meet FY 2019 funding levels because of FY 2020 budget anomalies in Department of Housing and Urban Development receipts and housing costs.

FRA Proposes Rule to Require Inward and Outward Cameras on All Passenger Rails

The Federal Railroad Administration (FRA) proposes a rule to require the installation of inward- and outward-facing locomotive image devices on all lead locomotives in passenger trains (including both intercity passenger rail and commuter rail trains). FRA proposes that the devices record while a lead locomotive is in motion and retain the data in a crashworthy memory module. In addition, the proposed rule would govern the use of passenger locomotive recordings to conduct operational tests to determine operating employees’ compliance with applicable federal regulations and railroad rules. The proposed rule is scheduled to be published in the Federal Register on July 24. To view the proposed rule, please click here.

GAO Report Released on Estimating Project Costs

Yesterday (July 22), the Government Accountability Office (GAO) released a report entitled, Federal Transit Administration Could Improve Information on Estimating Project Costs. In the report, GAO found that taken together, FTA’s cost estimating information substantially or fully met seven of the 12 cost estimating steps outlined in GAO’s Cost Estimating and Assessment Guide (Cost Guide), but did not align with five of the steps. GAO recommends that FTA’s cost estimate information be consistent with all 12 steps and that it provide a central, accessible source of cost estimating information for project sponsors. To view the highlights page, please click here. To view the report, please click here.

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