As part of their takeover of the House of Representatives tomorrow, House Republicans are scheduled to adopt a new package of rules for their chamber (H. Res. 5) that will have the effect of freezing most new federal funding for the Department of Transportation at least for most of this year, if not for the next several years.

(We aren’t sure when the vote on H. Res. 5 will be, because the House has to elect a Speaker first, and this may be one of those once-a-century contests that takes multiple votes, possibly over multiple days. Expect the first Speaker vote starting at around 12:45 p.m. tomorrow, and see this excellent Twitter thread for an explanation of the math.)

The new rules package makes several changes in the budget rules that apply to House consideration of legislation. Some of these rules were around the last time the GOP controlled the House, and some are new.

(Addendum: We should emphasize that none of these changes restrict any of the funding that was provided directly by the Infrastructure Investment and Jobs Act. The Highway Trust Fund contract authority, and the general fund advance appropriations, provided directly by that law are on the books and are safe unless Congress passes a new law specifically reducing or repealing it. The restrictions below apply to new appropriations that may or may not have been recommended by the IIJA, however.)

CUTGO

Once again, per section 2(a)(1) of H. Res. 5, House leaders are dispensing with “pay-as-you-go” budgeting (PAYGO) and replacing it with “cut-as-you-go” budgeting (CUTGO). The big difference, of course, is that under PAYGO, your bill can pay for spending increases with equivalent tax increases. Under CUTGO, you can only pay for spending increases with other spending cuts.

The “spending cuts instead of tax increases” part isn’t really the problematic part for transportation. The real problem is a technical one. PAYGO (which is a law as well as a House and Senate rule) is measured by the effect that a change in spending or tax law has on the federal deficit. And deficits are measured, on the spending side, by outlays (the cash leaving the Treasury to liquidate federal commitments).

But CUTGO isn’t just triggered by an increase in outlays, it is also triggered by an increase in budget authority (the permission slips to enter the federal government into commitments that will eventually, months or years later, result in an outlay).

Because of a weird budgeting crisis that happened in 1976, contract authority from the Highway Trust Fund and the Airport and Airway Trust Fund is not subject to PAYGO if that contract authority is also subject to obligation limitations in annual appropriations bills (which all airport contract authority, and 99 percent of HTF contract authority, is). But all that contract authority is subject to CUTGO.

CUTGO, which was in place in House rules during the negotiation of the 2012 and 2018 aviation reauthorization laws, is the big reason why contract authority for the Airport Improvement Program has been stuck at $3.350 billion per year for 12 straight years (FY 2012-2023).

50-Year Freeze on Contract Authority

Elsewhere, section 3(f)(2) of H. Res. 5 establishes a new House point of order against long-term spending increases. Since existing budget law only requires scorekeeping bodies to look at the first 10 years worth of costs of new legislation, this provision seems designed to force everyone to take a look farther down the road. It creates a new point of order against any legislation that “would cause, relative to current law, a net increase in direct spending of more than $2,500,000,000 in any of the 4 consecutive” decades after the current 10-year budget window.

Because of the peculiarity of contract authority, this restriction, like CUTGO, has massive effects on transportation. In this case, it’s not just that you are measuring budget authority instead of (or in addition to) outlays. It is also a question of what you are measuring against. Most direct spending programs have an inflation adjustment, and demographic adjustments, built into future year projections of their spending.

Not contract authority. At the end of a multi-year authorization bill, the “current law” baseline moving forward, for budget authority, is whatever the last year of the authorization bill was, flat-lined forever.

This might be a problem for the aviation reauthorization that Congress is supposed to consider next year. As mentioned, airport contract authority has been frozen at $3.350 billion per year for 12 years. If you wrote a 3-year authorization bill and gave the program a $100 million per year bump for 3 years, that isn’t a $300 million increase over a decade, it is a $2.7 billion increase over a decade, since the full $300 million increase over the FY 2023 level reoccurs in each of the “out-years” 2027-2032. The point of order would be triggered and, presumably, would kill the bill, because the bill’s spending over the next decade would be $36.2 billion and the highest permissible amount is only $36.0 billion.

The new rule would lock in maximum allowable AIP spending at $36 billion ($33.5 billion plus $2.5 billion) in budget authority every decade until 2073.

And, while the November 2021 IIJA infrastructure law means that Congress doesn’t have to consider Highway Trust Fund programs until the end of next Congress, if this provision is still on the House books when Congress is reauthorizing those programs, it will have a major effect on that bill. The final year of the IIJA is FY 2026 and total Highway Trust Fund contract authority provided in that year is $80.0 billion, so the trigger under this new provision will be a $2.5 billion, 10-year increase from an $800 billion starting point.

That means the maximum future growth rate on Highway Trust Fund spending under this rule would be 3.125 tenths of one percent, per decade, until 2073. Essentially a 50-year spending freeze starting in 2027.

(One could argue that, at least until Highway Trust Fund taxes are increased to match outlays, that a freeze is justifiable. But it seems a strange thing to be doing in a rules package that almost no members will understand at the time they are voting on it.)

Freeze on unauthorized discretionary appropriations

Section 3(bb) of H. Res. 5 appears to be an attempt to strengthen longstanding House and Senate rules against making appropriations for programs that are not currently authorized by law. Over the last 40 years, the authorization process has broken down to the point that the point of order in House rule XXI that is supposed to ban all unauthorized appropriations is never enforced because it would wipe out entire departments and agencies.

The old rule still stays on the books but will, presumably, be ignored in 2023 as it was in 2022. But the new provision in H. Res. 5 says, separately, that the Appropriations Committees cannot report a bill containing an unauthorized appropriation if that appropriation is greater than it was in last year’s appropriations act.

Freezing unauthorized appropriations indefinitely seems like a happy medium between killing programs entirely versus making the authorization side entirely irrelevant. But the problem with this House rule is that it rewards Senate dysfunction.

Assume that House committees get busy and pass reauthorization bills all through March, April and May of this year and then the House starts considering appropriations bills in June. As this new rule is currently drafted, none of that hard work by the authorizing committees will matter if the Senate does not work at the same pace. All those appropriations accounts will be frozen at last year’s funding levels, even if the authorizing committee is recommending an increase for a good reason.

In the past, House leaders have recognized that there is no sense in penalizing themselves for Senate dysfunction and have redefined the rules, sometimes on an ad hoc basis, so that if the House has passed a reauthorization bill, the House can consider the appropriations that would be authorized by that bill to be authorized in law.

This will matter for the FAA bill this year. Even if the House Transportation and Infrastructure Committee gets an early start on aviation reauthorization, no one is really expecting the Senate team of chairman Maria Cantwell (D-WA) and new ranking member Ted Cruz (R-TX) to gel quickly. So getting a FAA authorization bill enacted by June or July, when the House is supposed to consider appropriations bills, probably won’t happen and this will lead to a spending freeze at the FAA (at least in the House appropriations bill).

In addition to the FAA, the Maritime Administration and the pipeline safety side of PHMSA are unauthorized for FY 2024 and will have to be frozen. We don’t have the time to figure out which of the odds-end-ends accounts in the Office of the Secretary are unauthorized, but Essential Air Service subsidies run on the same calendar as the FAA. (RAISE grants are specifically authorized by the IIJA.)

In total, we identify $17.2 billion in discretionary appropriations made in the 2023 USDOT appropriations act that will probably be frozen in 2024 under this proposed new House rule. This is 59 percent of the total USDOT discretionary budget for last year.