Congress over the weekend approved a 30-day extension of federal surface transportation programs to buy time to negotiate a deal on a pair of infrastructure bills being followed closely by the municipal market.
Authorizing $50 billion for the Department of Transportation surface transportation programs ensures that Highway Trust Fund dollars will continue to flow for highway and transit projects through Oct. 31. Congress is only allowed to extend transportation funding for 30 days without appropriating additional money.
The extension comes as Democrats bicker over the fate of a $1.2 trillion bipartisan infrastructure bill that features a five-year extension of the surface transportation programs.
Transportation advocates urged passage of the five-year authorization.
“[American Association of State Highway and Transportation Officials] implores the House of Representatives to pass the [bipartisan infrastructure bill]—which provides five years of funding stability for highways, transit, and passenger rail programs—as quickly as possible to allow state DOTs to continue their work in delivering a safe, efficient, and multimodal transportation system for the communities they serve,” said AASHTO executive director Jim Tymon in a statement.
House Speaker Nancy Pelosi told lawmakers Friday she hopes to pass the bipartisan infrastructure bill well ahead of the new Oct. 31 deadline.
The House vote on the bill was halted last week as progressive Democrats said they would tank the legislation unless an agreement on the multi-trillion reconciliation bill is reached with moderate Democratic senators. On Friday, after meeting with House Democrats, Biden agreed with progressives that the two bills should be considered in tandem.
“It doesn’t matter when. It doesn’t matter whether it’s in six minutes, six days or six weeks,” Biden told reporters after the meeting. “We’re going to get it done.”
Biden is expected to travel to Michigan this week in the first of several stops across the country to promote the bills.
For the muni market, the bipartisan infrastructure bill, which includes $550 billion in new spending, would mean a supply boost in a year that has seen issuance lag expectations. It would also increase private activity bond volume.
Biden said the reconciliation bill should be trimmed from its $3.5 trillion price tag -- moderate Democrats want it cut to $1.5 trillion -- and muni market participants will be watching closely to see how that affects provisions that restore tax-exempt advance refunding and a direct-pay bond program.
Biden proposed a price range of $1.8 trillion to $2.2 trillion.
Also looming is a debate on the debt ceiling, which Treasury Secretary Janet Yellen warned last week needs to be lifted or suspended by Oct. 18 to avoid a default. The Senate is scheduled to meet Monday afternoon to consider a debt limit suspension bill.
"We're going to get this done, and we're going to do it in a responsible way and face this as soon as we return next week," Illinois Senator Dick Durbin, a Democrat, told CNN on Sunday.
