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2009 Transportation Bill

GOP Blocks Plan to Use Bailout Fund to Preserve $8.7B in Transport Money

A bipartisan bid to extend existing federal transportation law for three months -- and tap the TARP bailout fund to avert the cancellation of $8.7 billion in contract authority -- was rejected on the Senate floor last night after GOP senators insisted on using stimulus money, rather than bailout cash, to fix the problem.

large_vitter.JPGWas Sen. David Vitter (R-LA) the force holding up the transport bill extension? (Photo: NOLA.com)

The drama played out hours before the midnight deadline for preserving the $8.7 billion, the majority of which would go toward state road and bridge work. Senate environment committee chairman Barbara Boxer (D-CA) and her panel's senior Republican, Sen. Jim Inhofe (OK), agreed with their respective party leaders to shift $300 million in bailout money as a temporary fix to prevent state DOTs from canceling projects.

But the GOP side of the aisle objected, with Sen. Mike Johanns (R-NE) insisting that the chamber vote on Sen. David Vitter's (R-LA) proposal to patch the transportation contracting gap with unused money from the Obama administration's economic stimulus law.

Johanns' argument on behalf of Vitter: the bailout has already been used for purposes for which it wasn't intended, and the stimulus law included transportation aid, so the latter should be utilized to save infrastructure projects.

"There are many who believe that the TARP money, which was originally
designed to buy toxic assets, has drifted so far away from its original
purpose that we haven't kept faith with the taxpayer who paid the bill
for all this," Johanns explained. "On the other hand, the stimulus -- which, incidentally, I
did not support -- had money in it to do highways and that sort
of thing, and that is where the objection is coming from."

Boxer and Sen. Dick Durbin (D-IL), the majority party's chief vote-counter, appeared perplexed by the rationale behind the objection. "[Johanns] said the TARP money was misspent, and we are saying we
agree with the premise; that this [bailout] is a better place to take money [from]
rather than to take it away from tax cuts to working families in the
stimulus."

Democrats had no intention of allowing a vote on Vitter's long-standing legislative push to transfer stimulus money to the nation's highway trust fund, and so the three-month extension was abandoned. As a result, the $8.7 billion will begin to be yanked from state DOT coffers today, leaving the road lobby as stunned as Boxer and Durbin.

Still, one question remains.
Was Vitter the only senator objecting to the use of bailout funds to halt the contract cancellation? In a statement last night, Sen. Robert Menendez (D-NJ) credited a "group of Republicans" with holding up an agreement:

Delaying this federal investmentwill affect transportation projects that have the potential to create andsustain jobs, improve the transportation system and save families time andmoney. Now more than ever, it is irresponsible to deny our communities of theseeconomic benefits. This group of Republicans needs to lift its roadblockimmediately and help America get back to work.

Meanwhile, the loss of the $8.7 billion in authority is not hitting every state equally. The "rescission," as it is known in Washington parlance, applies to federal money that was not already obligated to road, bridge, or other transport work. The Oregon DOT, having acted quickly on their annual infusion of cash, is fairly unfazed.

"We make it a point to spend or obligate every federal dollar we get and not leave any on the table,” ODOT spokesman Patrick Cooney told the Daily Journal of Commerce.

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