In this issue:

In the Senate, the stimulus bill was approved by the Appropriations and Finance committees last week. It is expected to be brought to the floor for debate and a series of votes next week. The Senate bill would cost approximately $888 billion, largely because of the inclusion of tax provisions connected to the Alternative Minimum Tax. The final package is likely to rise above the $819 billion approved by the House. Following action by the Senate, differences in the two versions will have to be reconciled. The Obama administration expects that the final package will attract bipartisan support. Recent indications of a deepening economic recession have added to the urgency of action on Capitol Hill.

House Raises Transit Stimulus Funding to $12 Billion
TRANSPORTATION FUNDING LOWER THAN SOUGHT

The $819 billion stimulus package passed by the House last week includes funding for key transportation programs, but timing requirements are of some concern at both the state and local levels. Of the total, $63 billion is allocated for infrastructure investment, including $30 billion for the Federal Highway Administration, to be distributed to states using the formula established by the most recent highway law. The House included $12 billion for mass transit, including $1.5 billion for the Transit Capital Improvement Program and $1.5 billion for the New Starts Program, as added by an amendment from Reps. Jerrold Nadler (D-N.Y.), Peter DeFazio (D-Ore.), Daniel Lipinski (D-Ill.), Mike McMahon (D-N.Y.), Keith Ellison (D-Minn.), and Ed Perlmutter (D-Colo.). An amendment from Rep. James Oberstar (D-Minn.) strikes language that had given MPOs longer timelines to obligate funding. The bill now requires that states obligate 50 percent of funding within 90 days and that MPOs do so within 75 days.

The Senate stimulus package, as marked up by the committees but not yet passed, allocates $27 billion for highway construction, including supplemental grants for states under the STP formula for highways and bridges. It also requires each state to allocate at least 5 percent of its funds toward programs that qualify for the Congestion Mitigation and Air Quality (CMAQ) improvement program. The bill also provides $8.4 billion for mass transit, apportioned via the transit formula.

For both highway and transit funding, 50 percent of funds must be allocated within 180 days, and the other half must be assigned within one year. The first half of the funds will be allocated exclusively to states, while most of the second half will be allocated to local governments. The bill contains a "use-or-lose" provision, which means that any funds remaining after one year will be transferred into the Supplementary Discretionary Grants program. The stimulus allocates $5.5 billion to this program, which gives the Secretary of Transportation discretion to award funds on a competitive basis to highway and bridge projects; to public transportation, including New Starts or Small Starts; or to passenger rail, freight, and port improvements. In addition the bill provides $1.1 billion to Amtrak and intercity passenger rail.

No funding is provided to fixed guideway modernization or specifically to New Starts, both of which receive funding in the House stimulus package. However, an additional $2 billion is included for high-speed rail that does not appear in the House bill. Overall, there are fewer dollars for key programs in the Senate bill, and concerns exist over the distribution and sub-allocation of funding.

CDBG, Neighborhood Stabilization Funding in House Stimulus
SENATE PROPOSAL FALLS SHORT ON COMMUNITY DEVELOPMENT

Through programs administered by the Department of Housing and Urban Development, the Public Housing Capital Fund is slated to receive $5 billion in both versions of the stimulus package. The House bill provides $4.2 billion for neighborhood stabilization programs; the Senate bill provides only $2.25 billion. More funding for the HOME Investment Partnership Program appears in the Senate bill: $2.25 billion versus $1.5 billion in the House. The House stimulus also provides $1 billion in Community Development Block Grants (CDBG), a program not referenced in the Senate bill.

For a school repair and modernization program administered by the Department of Education, the House allotted $14 billion for K-12 and an additional $6 billion for higher education. The Senate bill boosted funding for K-12 to $16 billion, but inserted only $3.5 billion for higher education facilities. The disparity will likely be negotiated when the bill goes to conference once it is passed by the Senate.

Big Boost for Energy Efficiency in Stimulus
HOUSE PROVIDES $3.5 BILLION FOR NEW ENERGY BLOCK GRANTS

In the energy investment funding portion of its stimulus bill, the House included an effort to double renewable energy production and increase efficiency in a variety of sectors, including government buildings and schools, as well as promoting technological developments in the production and distribution of energy.

Funding allocations in the House bill include $32 billion for energy grid investment and the rebuilding of transmission, distribution, and production systems. Both the House and the Senate bills allot $4.5 billion for smart grid investment through the Department of Energy, but the Senate includes more funding for Energy Efficiency & Conservation Block Grants: $4.2 billion versus $3.5 billion in the House. The Senate bill does not include funding for Institutional Grants for Energy Sustainability, which receive $1 billion in the House stimulus. While the amounts differ slightly, both the House and Senate would provide about $6 billion to the General Services Administration for federal green building construction and repair.

Water infrastructure funding remained relatively consistent between the House and Senate versions of the bill. Provisions included $1.1 billion for the Rural Water and Waste Disposal Program in the House versus $1.4 billion in the Senate, and $2 billion for the Drinking Water State Revolving Fund. However, for the Clean Water State Revolving Fund, the House includes $6 billion, while the Senate limited funding to $4 billion.

LaHood, Donovan Confirmed by Senate
NEW LEADERSHIP SIGNIFIES CHANGE IN ROLE FOR SOME AGENCIES

In his Senate confirmation hearing for Secretary of the Department of Transportation last Thursday, retired U.S. Rep. Ray LaHood, an Illinois Republican from Peoria, was met with a positive response from both sides of the aisle. LaHood's opening statement outlined four guiding principles he would bring to the office: safety, economy, sustainability, and livable communities. Although unable to provide details because of time constraints, LaHood voiced his commitment to making smarter investments and choosing projects that fit individual communities. He called for new and creative funding streams for the Highway Trust Fund, but did not offer examples of possible sources. LaHood said he supported the Amtrak funding levels proposed by Congress, and indicated that he would seek the funds needed to repair and expand rail lines.

Conservative lawmakers were expected to highlight LaHood's support of earmarks while in Congress. Questioned by Sen. Claire McCaskill (D-Mo.) about how he would treat earmarks as secretary, LaHood said he would defer to Congress regarding the appropriateness of earmarks in either the economic stimulus bill or the upcoming surface transportation authorization.

Members of the Senate Committee on Commerce, Science and Transportation agreed to forgo a vote in the committee and send the nomination straight to the Senate floor for consideration, where LaHood was confirmed by a wide margin.

Also confirmed by the Senate was President Obama's pick to lead the Department of Housing and Urban Development, Shaun Donovan. A Harvard-educated architect, Donovan comes from the New York City Department of Housing Preservation and Development, which includes the largest municipal affordable housing plan in the nation. Obama has indicated that he would like HUD to take on a more active role. In his confirmation hearing, Donovan pledged to take a more aggressive and far-reaching approach to easing the foreclosure crisis and promoting affordable housing.