Infrastructure bills threatened by bailout plan

Lobbyists are worried that a trio of key infrastructure bills could see their slice of the federal budget’s pie severely depleted by the Wall Street crisis.

The $700 billion bailout of financial services firms could double the deficit and make it much more difficult next year to win funds for the nation’s roads, bridges and airports.

{mosads}The next Congress is expected to take up a highway bill, the reauthorization bill for the Federal Aviation Administration (FAA) and the Water Resources Development Act, which authorizes funds for levees and waterway projects.

Even before the bailout, supporters believed they faced a difficult environment. Now the situation is worse.

“I am sure we are not the only ones worried. Everyone’s agenda, including the air traffic controllers, [is] on the second or third burner,” said Frank McCarthy, senior legislative and political representative for the National Air Traffic Controllers Association .

The top priority for air traffic controllers in legislation reauthorizing the FAA is a provision that would bring the FAA back to the negotiating table to work on a new contract with controllers. But the group is also pressing for more funding to modernize the aviation system.

“It is frustrating when you watch an issue that didn’t exist two months ago take front and center,” said McCarthy.

McCarthy and other backers of the FAA bill thought they’d be trying to press the importance of their issue in the context of a congressional debate over whether to allow coastal drilling for oil and gas. Now even the oxygen for that issue has been sucked up by Wall Street crisis.

The current FAA authorization expires on Sept. 30, but lawmakers plan to attach a six-month extension to the continuing resolution Congress must pass to keep the government working, according to Steven Broderick, press secretary for Sen. Jay Rockefeller (D-W.Va.), chairman of the Senate Aviation subcommittee.

Lobbyists already are pressing their case that the next president and Congress should commit to repairing America’s decaying infrastructure. They argue the bailout, though expensive and historic, should not be used as an excuse to delay needed infrastructure improvements.

“Even in difficult times, our country should be able to walk and chew gum at the same time,” said Polly Trottenberg. “Regardless what happens with the bailout, the federal government must commit to infrastructure development to ensure jobs and create long-term economic growth.”

Trottenberg is the executive director of Building America’s Future . The coalition, founded by New York City Mayor Michael Bloomberg (I), Pennsylvania Gov. Ed Rendell (D) and California Gov. Arnold Schwarzenegger (R), is made up of elected officials focused on renewing infrastructure spending.

Fixing the nation’s roads, bridges and airports won’t be cheap. It could cost $1.6 trillion over five years, according to the American Society of Civil Engineers (ASCE).

That includes $39.5 billion to modernize America’s aviation system over five years, which lobbyists for the airlines, airports and other entities say would ease air traffic congestion and cut down on passenger delays.

The ASCE argues Congress needs to appropriate $155.5 billion annually to fix roads and bridges. It estimates that drivers spend about 4.2 billion hours stuck in gridlock per year at a cost of $78.2 billion to the economy.

Improvements and maintenance of federal highways is funded through the Highway Trust Fund, which is facing a shortfall because of high gas prices. Taxes on gas go into the fund, but collections are dropping as Americans drive less due to steep fuel costs.

Congress passed an $8 billion stopgap this month for the fund that should last until the end of the next fiscal year, Sept. 30, 2009.

In writing next year’s highway bill, Congress will tackle how to handle the trust fund shortfall, which could be exacerbated by the financial meltdown. On Monday, the price of oil shot up as investors, shaken by the instability of U.S. financial institutions, sought refuge in oil stocks.

That means the trust fund that provides for road improvements could face a growing shortfall even as congressional appropriators have less money in their budgets because of the $700 billion bailout to financial institutions.

“We could see people driving less. That backbone of our revenue stream, which is the fuel tax, would then be bringing in less and less,” said Jim Berard, communications director for the House Infrastructure and Transportation Committee.

Those lobbying for more money for infrastructure say they’ll have to make the case next year that it is a national priority that cannot be ignored.

“We have to press the case that these are needs that cannot be pushed off anymore,” said Howard Marlowe, who lobbies for infrastructure projects at Marlowe & Company “It is time for the president and Congress to take accountability.”