Contact:  Steve Hansen (Director of Communications)  (202) 225-7749
 Email: Steve.Hansen@mail.house.gov
     Justin Harclerode (Deputy Director of Communications)  (202) 226-8767
  Email: Justin.Harclerod@mail.house.gov

To:  National Desk/Transportation Reporter
October 15, 2002

        Washington, D.C. - An Office of Budget and Management (OMB) analysis of the recently approved Continued Resolution (CR) determined that “it is mathematically impossible” for highway funding to be cut under the terms of this bipartisan CR.

        Mitchell E. Daniels, Jr., the Director of the OMB, reaffirmed the fact that the CR would not decrease highway spending in a letter to U.S. Rep. Don Young (R-Alaska), the Chairman of the House Transportation and Infrastructure.  Young led the bipartisan House effort to increase the highway funding level in the CR from $27.7 billion to $31.8 billion.

        The bipartisan CR was approved by a bipartisan 272 to 144 vote.

        “Everyone who worked on this issue knew that this CR would sustain highway funding at its existing level - $31.8 billion,” Young said.  “It’s unfortunate that some Members of Congress have sought to mislead people throughout the country about the simple facts about this short-term CR.

        “The language in the bipartisan CR is very clear - during the period this CR funds the government, highway funding for all 50 states will continue to be distributed on a pro-rata basis at the Fiscal Year 2002 level of $31.8 billion.  It’s unfortunate that partisan politics has clouded the truth about highway funding.”

Dear Mr. Chairman:

        OMB has reviewed section 137 of Public Law 107-240, Making Further Continuing Appropriations for Fiscal Year (FY) 2003, which passed the House on October 11, 2002.   The enactment of section 137 will have no impact on the level of highway jobs or the level of highway spending for states.

        The effect of section 137 is to retain the FY 2002 rate of operations for the Federal aid highway program at $31.8 billion for the duration of the continuing resolution by requiring OMB to apportion funds at an annualized rate of $31.8 billion during that period.  As of today, OMB has apportioned funds in accordance with section 137.

        Much confusion has surrounded the language in section 137 that limits total annual obligations for this program while operating under continuing resolutions to no more than $27.7 billion.  This provision, as many of the terms of the current resolution, is subject to section 107(c) of P.L. 107-229, which establishes the date of expiration of the continuing resolution.    H.J. Res. 122 sets that date of expiration at October 18, 2002.  Consequently, it is mathematically impossible for the highway program, spending at an annualized rate of $31.8 billion, to reach the $27.7 billion cap on total obligations prior to mid-August 2003, well beyond the expiration date of this or any other continuing resolution that is expected in the future.

        Therefore, the effect of section 137 is to provide that the highway program continues at the FY 2002 enacted level of $31.8 billion until the final FY 2003 funding level is determined in the context of House, Senate and Administration negotiations on the FY 2003 Transportation Appropriations bill.

                                    Sincerely,
                                        /s/
                                    Mitchell E. Daniels, Jr.