This week two proposals for funding the nation’s transportation needs will hit the House and Senate floor. While a final deal that both Democrats and Republicans could live with remains elusive, a key similarity between the two Congressional proposals is the effort to use energy developments as a funding mechanism. And though the President’s budget proposal is attracting the majority of headlines, the fate of the Congressional proposals is likely to have a greater long-term impact on energy and transportation policy in this country. This week’s GR Energy and Climate brief analyzes these proposals and what they mean for US Transport policy.

Although President Obama’s FY 2013 budget is dominating the headlines this week, two very different transportation bills are being debated in the House and Senate that will have a much greater impact on the future of both transportation and energy policy for years to come. After three years of painstaking delay, leading to a critical situation for US transport funding, the Federal Transportation Reauthorization bill is going to be debated on the floor in Congress this week. Though the two parties still have a starkly different vision for the content of the bill – the most likely outcome is another short-term, six-month funding extension – both propose to generate the revenue through the development of energy resources. Today's GR Energy and Climate Brief surveys the range of Transportation funding proposals being debated in Congress and assesses the likelihood of compromise on a major Transportation funding package in 2012.

House Finding Revenue in New Energy Projects: Republicans in the House are looking to use the Transport bill to again force a vote on expanding domestic drilling and approving the Keystone XL Pipeline. As with all major spending proposals, the largest obstacle facing the transportation bill is its funding mechanism. The House version, a $260 billion bill that would provide highway financing for four and a half years, would generate 88% of needed revenues from new leases on oil and gas drilling, both offshore and on federal lands including ANWR. Supporters of this proposal, including GOP leaders John Boehner (R-OH), Eric Cantor (R-VA), and John Mica (R-FL), argue that in addition to generating revenues, the energy provisions would create one million jobs. The bill is expected to pass out of the House later this week along a party-line vote, sending the message that reconciliation with the Senate version will need to include an element of expanded domestic energy production and keeping Keystone in the center of the political debate. Just this afternoon, however, President Obama threatened to veto the House’s surface transportation bill, saying the bill includes specific language that “would make America’s roads, rails, and transit systems less safe, reduce the transportation options available to America’s traveling public, short circuit local decision-making, and turn back the clock on environmental and labor protections.”

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