Happy New (fiscal) Year! Last week, Congress hurriedly passed a continuing resolution (CR) to keep government running. Once again, Congress failed to fulfill its responsibilities. And now it is putting off making the tough decisions and complicated trade-offs needed to fund basic government functions and provide for the upkeep of our nation’s roads, bridges, and transit systems. 

In addition to closing FY 2009, September 30^th also triggered a potent financial hangover for the nation’s transportation program.  The final act of the five year transportation bill that expired last week was a rescission – a ticking time bomb that required the Federal Highway Administration to snatch back from the states some $8.7 billion worth of spending authority. 

Rescissions are nothing new – in fact, this brings the total of rescinded transportation funds since 2003 to $24 billion. What makes this rescission so troubling is that it was inserted into the transportation bill as a budget gimmick pure and simple. There was no policy rationale: The rescission was just a budgetary girdle to make the bill appear smaller. Back in 2005, President Bush drew a $286 billion line in the sand, but rather than cut $8.7 billion to limbo under the budget bar, Congress simply inserted a huge negative sign that it fully expected to “fix” at a later date. There was never any question this money, technically projected to be returned to the Treasury thereby reducing the bills “cost”, would in fact be backfilled and the states wouldn’t lose a dime. It was supposed to be a done deal.

Last week, as the rescission reality started to set in for what this meant for state transportation budgets, Congress scrambled. But with an $800 billion health care bill on the table, $787 billion in stimulus spending already on the move, and potentially trillions of dollars committed to shoring up the economy, the 2009 budget deficit rang in at a nearly incomprehensible $1.4 trillion. There wasn’t much left to fill in a hole dug five years ago. When a last second effort to use bank bailout funds (TARP) to fill the gap was rejected in the Senate, the rescission became a reality.

This is what happens when Congress uses budget gimmicks and smoke and mirrors to mask the true size of legislation. And it’s some of the most cynical maneuvering that happens in a town known for its maneuvering. Cook the books by throwing a provision into a bill that reduces the perceived cost and worry later about effects. Well, there is no doubt that this rescission is going to have an enormous impact on the states and their transportation programs; California alone will lose almost $800 million and every state will lose at least $30 million. In effect, this will wipe out a good portion of the dollars states received in transportation funds from the federal stimulus bill.

It is possible if not likely that Congress will find a way to backfill these funds. But this would drive up the cost of the 2005 transportation bill to $295 billion; add to that the $15 billion Congress already deposited into the Highway Trust Fund to keep it from going broke, and the bill is more like $310 billion. But hey, we’ll print more. Makes it easy to see where our budget deficits come from.

And backfilling this rescission is certainly not a solution to a bigger problem. With record shattering deficits, it is well past time for Congress to be honest with themselves and American taxpayers when it comes to spending. Congress needs to quit pretending that we can put off for another day how we’re really going to pay for what we want or need today.