With both chambers of Congress on recess until the week of April 19, lawmakers will have a tough time reconciling differences between the two reauthorization bills by April 30, when the current TEA-21 extension bill elapses. Members of both parties would like to avoid passing a third temporary extension, especially as the transportation construction season begins in many of the northern states. Speaking for Senate Democrats, BNA News Service reported that Minority Leader Tom Daschle (D-South Dakota) commented that Democrats are “very hopeful that we can move to the discussions about how we can resolve the differences with the highway bill as quickly as possible.”

Senator Daschle favors a pre-conference on the reauthorization bill, which the Senator feels will ensure minority participation. Recently, Senator Daschle has been dismayed at what many Democrats feel are attempts by Republicans to exclude them from conference committees. “My concern is that as we’ve seen with virtually every conference, Democrats are locked out or unable to sustain the position even that the Senate itself has taken on given issues”, said Daschle.

For months, Daschle has fought attempts by Republicans to shut out Democrats in conference and has even issued threats to block certain conference committees from considering legislation. Daschle became even more vocal is his denunciation of Republican tactics during the conference committee on the pension reform bill. At the request of the White House, conferees on H.R. 3018 removed a provision supporting certain multi-layer employer plans without the consent of Democrats and over the objection of a majority of Senators. The Democrats decried the actions of conferees, claiming that no Democrat was consulted before the provision was removed from the conference report. Republicans have answered Daschle’s charges by accusing the Senate Minority Leader of obstructionism and using the Senate floor as a campaign tool. Senate Majority Leader Bill Frist (R-Tennessee) commented that he was “really bothered by the fact that we are not being allowed to govern, to debate, to amend, to pass legislation that is in the best interest of the American people.”

With regard to the highway bill, Senator Frist opposes a pre-conference on the basis that Democrats would only use such an occasion to stall negotiations until their demands were met. However, Daschle maintains that a pre-conference is the only mechanism to guarantee Democrats a voice in the entire process.

With the Republicans refusing to pre-conference on the highway bill, Democrats can either relent in their demands or delay the entire process, which would necessitate the passage of a third TEA-21 extension bill. State transportation departments and highway contractors desperately want a long-term bill passed soon, so highway construction planning can commence.

A spokeswoman for Majority Leader Frist confirmed that the Senator would try and appoint conferees by the end of the week. Republican leaders in both chambers must still sort out how large the conference committee will be and how many committees in the House and Senate will have jurisdiction over the reauthorization bill.

Yesterday the Senate voted 78-19 to provide American companies more than $80 billion in pension savings. It saves companies substantial amounts on their pension plans by changing the way their required contributions are calculated. The legislation ends a requirement that contributions be tied to interest rates on 30-year Treasury bonds; it substitutes a rate based on a composite of long-term corporate bonds for 2004 and 2005. The passage of this measure allows President Bush to sign legislation that provides $1.6 billion in additional relief to steel companies and larger airlines.

Opponents of the bill criticized the bill as unfair because it didn't provide the same benefits to some smaller union pension funds. Multi-employer plans which cover 10 million Americans were not covered in the legislation. Many Democrats were split because some labor unions backed the bill as did some segments of the auto industry. Democratic leadership did not send signals that it would stand in the way of final approval. The Senate may get another chance to vote on aid for smaller businesses participating in regional plans covering unionized workers next month. Senator Ted Kennedy (D-Massachusetts) has a proposal for helping them which could be voted on as a part of a stalled proposal for a tax break for exporters which is expected to come up after a weeklong recess.

Low fare airlines including JetBlue and America West opposed the legislation because these companies don't have the pension obligations of their larger competitors and gave the larger airlines an unfair advantage. Supporters of the bill said that this measure was only a temporary fix and that other pension plans could be helped later.

Of the 19 Senators who opposed the bill, twelve were Democrats and nine were Republicans.

The measure has already passed the House of Representatives and supporters of the bill were hopeful to get the bill to the President's desk in time to give a break to companies that have to make quarterly pension payments on April 15.

According to an audit prepared for the Department of Transportation by its Office of the Inspector General, the Federal Highway Administration has $284 million in unneeded obligations sitting unused on highway and other transportation projects. Here's their full report in .pdf format. OIG noted that internal state reviews seemed incapable of catching the obligations, as there was a 25% difference between the number of unneeded obligations detected by OIG (29% at 10 states) than by the number states came up with themselves (4% at 35 other states).

The administration and its congressional allies had hoped to use the reauthorization of welfare law to impose tougher work rules on welfare recipients and implement a new marriage initiative. Instead, Republican leaders last week suspended the debate on the reauthorization of the welfare law. They did so after their motion to invoke cloture on the measure, which would have limited debate and blocked Democratic amendments on a series of workplace and labor issues, was nine votes sort of the 60 needed to proceed.

The outlook for passage of welfare reauthorization this year looks slim.

During consideration of the welfare bill, Democrats refused to allow a final vote unless the Republicans agreed to a voice vote on an amendment offered by Senator Barbara Boxer (D-California), that would increase the minimum wage from $5.15 to $7 an hour over the next two years. Democrats were also trying to attach an overtime proposal as well as an amendment to extend supplemental federal unemployment benefits to the welfare bill. Democrats have used these three issues to question President Bush’s handling of the economy, arguing that the administration is insensitive to the needs of working class Americans.

The scuttling of welfare reauthorization will have an acute impact upon state governments. The 1996 law converted welfare into a block grant program that gave states the flexibility to set the rules for public assistance. State officials, many whom are struggling with budget crises, were closely watching the congressional debate to determine future levels of federal aid, and whether Congress would impose new rules for moving more people off welfare rolls.

Many in Congress believe there is support for a compromise that would fall somewhere between the bill passed by the House and the version written by the Finance Committee and debated in the Senate. The end result would likely increase work requirements for beneficiaries from the current 30 hours to about 35 hours a week; provide at least $3 billion more in mandatory child care funding over the next five years and provide $1 billion for Bush’s marriage effort.

To win Senate Finance Committee approval, Chairman Grassley (R-Iowa) had promised Sen. Olympia Snowe (R-Maine) that she could offer the first amendment during the floor debate – to increase child care funding. Grassley thought the Snowe amendment would be adopted and would help win Senate approval of the bill.

Snowe’s amendment was adopted, giving senators from both parties a chance to make a statement in favor of children and families in an election year. However, in the end Democrats and Republicans refused to budge on whether to hold votes on the labor related issues.

Yesterday President Bush called for an overhaul of the nation's worker training initiative. This is in spite of the fact that the Congress has nearly finished its reauthorization of the program.

President Bush is proposing to consolidate programs under the Workforce Investment Act (WIA) to give governors more flexibility on how they spend the funds in the program that help 16 million workers annually. His plan is as follows:

• Double the number of workers receiving job training by maximizing the available federal dollars going to workers and eliminating unnecessary overhead costs by an additional $300 million. His plan consolidates four major training and employment grant programs totaling $4 billion into a single grant to governors.
• Increased Innovation Training Accounts (ITAs): The president proposes to increase the use of Innovation Training. These ITAs would allow workers considerable flexibility to tailor training programs to meet their needs.
• Under the plan, governors would be given more flexibility to design their own workforce training programs. But they would also be required to set clear goals and outcomes focused on the number of workers placed in jobs, the duration of the job placement, and the earnings of the job. The president proposes consolidating the number of state performance goals of the federal job training system from 17 to 3.
• Jobs for the 21st Century Initiative: The president’s Jobs for the 21st Century Initiative, announced in the State of the Union address, includes a $250 million proposal to help America’s community colleges train 100,000 additional workers for the industries that are creating the most new jobs. This expands the Department of Labor’s High Growth Job Training Initiative, launched under President Bush in 2001, which has provided $71 million in 38 partnerships nationwide between community colleges, public workforce agencies, and employers.
• Personal Reemployment Accounts: The president has also proposed $50 million for a pilot program of accounts of up to $3,000 for some unemployed workers to use toward job training, transportation, childcare, or other assistance in obtaining a new job. Workers who found a job quickly would be able to keep the balance of the account as a reemployment bonus.

However, Congress is near the end of the rewriting and reauthorizing the 1998 law which consolidated more than 60 programs into block grants allocated to the states. It also allowed workers to use vouchers for training and education and established one-stop career centers.

Senate Democrats have not allowed the legislation to go to conference with the House because they fear that they will not have any input on the final bill.

Head over to the analysis side for the final committee report on HR 3550.

The House has passed H.R. 3550, the surface transportation bill after two days of floor debate. One major issue that was debated today was the Isakson amendment. The Isakson amendment was rejected by voice vote, and by a subsequent recorded vote of 170 to 254. The amendment would have included high priority projects and projects of national regional significance under the Minimum Guarantee.

Rep. Lincoln Davis (D-TN) then moved to recommit the bill with an amendment to raise the funding level to the Senate passed level of $318 billion. The motion with amendment was defeated.

The final vote on H.R. 3550 was 357 to 65, and the House and Senate will now meet in conference to work out differences.

House consideration of TEA-LU will be completed tomorrow. Some outstanding issues include the flexbility of states to charge tolls and redistributing the funding levels to account for special member projects. Though some concerns have been raised about various matters concerning the bill, final passage is expected by a significant majority of Representatives.

This is, however, just one more step along the journey. Following final passage, the negotiators from the House and Senate will meet to work out differences between the two bills. The White House will also weigh in on these negotiations. Overall funding levels differ significantly among the competing proposals - the Senate provides $318 billion over 6 years, the House provides $279 billion over six years, while the White House has indicated it will veto any bill over $256 billion.

The Transportation Equity Act: A Legacy for Users (TEA-LU), a $275 billion highway bill is currently being debated on the House Floor. This comes one day following objections forced House Republican leaders to temporarily pull the bill.

Yesterday, House Republicans voiced displeasure with topics including the bill's funding level and how big a share of that money their states and districts would receive. Chairman of the Transportation and Infrastructure Committee, Rep. Don Young (R-Alaska) held a meeting with members of the committee to listen to their concerns. After the meeting, Chairman Young said he would try to address the most divisive issues - the complaints of the "donor" states about getting less money from the Highway Trust Fund for projects than they pay in.

As approved by the committee, the bill would authorize 2,838 highway projects requested by lawmakers - leaving room for more. A total of $11 billion has been set aside for House member requests along with another $6.6 billion for projects of regional and national significance.

A final vote could come as soon as tonight or tomorrow. This would be the last action before the House begins a two-week recess.

In our last report, we indicated a House GOP caucus was meeting to discuss how to move forward on TEA-LU. The result of that meeting is the legislation has been pulled from the House calendar.

Apparently, there was open revolt at the meeting on a number of different issues. Among them was that the committee allocation of project money provided assistance to Democrats in tough races, but not to GOP members in donor states also facing tough battles. There was also concern from the donor state representatives generally that the bill does not address their concerns. These problems are acute because the price tag of the legislation was driven so far below the Committee on Transportation & Infrastructure's original level of $375 billion.

One senior member referred to the meeting as Humpty Dumpty falling off the wall. Obviously, the question is whether all the kings horse's and all the king's men can now put TEA-LU back together again.

The House of Representatives today will begin general debate on H.R. 3550, "TEA-LU." Late in the day, the House Rules Committee is slated to put before the body a rule for consideration which will limit the number of amendments which may be offered when the House moves tomorrow, April 1, to complete its work on the measure. As of this writing (2:45 pm Eastern time) no rule has been released and the House GOP caucus is meeting in a "mandatory" session to discuss the legislation. Rumors are circulating that the House GOP leadership has agreed to push the funding level in the bill down to the Administration 's level on the House floor.

The debate between Congress and the Bush Administration over the funding levels in the bill continued yesterday when the White released a "Statement of Administration Policy" on the bill. The White House indicated that the $275 billion funding level of the bill, even though it is $43 billion below the Senate-passed level would trigger a recommendation from the President's advisers that he veto the bill. A similar threat was lodged against the provision in the bill that requires a reconsideration (or "reopener"). To see the text of the statement click on this pdf document from the White House.

Earlier today, I had the opportunity to discuss with a senior GOP Senator the process for this legislation moving forward. He had participated in a Senate leadership meeting on March 30. His belief after that meeting was that congressional leadership was moving to accommodate the administration's position on the funding level. This is, of course, the view of one participant in the meeting. There may well be other Senators who took a different message away from that session.

Stay tuned for news as the day continues.

The Senate today added $6 billion in funding for child care after an amendment by Olympia Snowe (R-Maine) managed to pass 78-20 despite White House objections. The measure would increse the amount of money through mandatory state block grants. The overall bill will reauthorize the 1996 bill for another five years, and has already attracted a raft of amendments from Democrats eager to boost the minimum wage among other ideas. Snowe argued that low-income mothers would find it difficult to find and keep a job if they were unable to procure child care.

The House defeated a Democratic measure to impose pay-as-you-go rules upon the FY2005 Budget Resolution. The motion failed by a 209-209 vote, with 11 Republicans voting in the affirmative. The conference will now decide whether the final resolution echoes the Senate version (where 4 GOP members switched sides, passing pay-go) or the House version. The rule would require a 60-vote super-majority in the Senate for any tax cuts or spending expansions without an equivalent revenue enhancement measure to offset the loss of funds.

On March 29, a White House official told the BNA News Service that President Bush would veto the House TEA-21 reauthorization bill in its current form. The House reauthorization bill contains $275 billion in funding for highway and transit programs. The bill was scaled down from $375 billion, which the House Transportation and Infrastructure was originally clamoring for.

House Speaker Dennis Hastert had prodded the T&I Committee to mark-up a $275 billion bill to allay administration officials' concerns, who felt the price tag of the reauthorization bill was too high. The administration had made it known that the President would veto any bill over $256 billion, which is the amount of funding the White House requested for reauthorization in the FY 2005 budget. However, the veto threat came after the Senate passed a $318 billion reauthorization bill. Most lawmakers were certain that the administration would be amenable to a bill that significantly reduced the $318 billion package.

The White House is citing two major concerns with the House reauthorization bill. First, the administration has cast some skepticism on the actual price tag of the bill. Some analysts believe that the bill would cost $279.5 billion because of an additional $4.5 billion in exempt obligations that are found throughout the bill. Another industry source commented that the bill would authorize $283.3 billion in highway and transit funding, but only guarantee $279.5 billion in funding. Also, the White House views the T&I bill as a two-year reauthorization because of a re-opener provision included in the bill. The re-opener provision mandates that highway and transit funding be cut-off at the end of FY 2005 until Congress enacts a new law increasing the minimum guaranteed level of funding bequeathed to the states.

Current law requires each state to receive a 90.5 return on gas tax revenue submitted to the highway trust fund. Donor states such as Texas and Florida have long coveted a more equitable allocation of highway funding. House Majority Leader Tom Delay (R-Texas) wants the reauthorization bill to guarantee each state a minimum return of 95%. However, with a $275 billion bill, it is unlikely that the contentious donor-donee issue would be resolved. Delay was originally going to introduce an amendment on the House floor, but will now likely press lawmakers to settle the issue in conference. The Senate bill was able to guarantee each state a 95% return by 2009, the last year of the reauthorization bill.

Despite the veto threat from the White House, lawmakers believe they have enough votes to override such a veto. It takes two-thirds of Congress to override a presidential veto. By vetoing the TEA-21 reauthorization bill, President Bush can assuage his conservative critics by demonstrating fiscal discipline. And if the veto is overridden by Congress, the President can still claim that he is committed to reigning in spending.

Tomorrow the House is expected to vote on a proposal to increase pay-parity for civil service workers. Currently, the White House is asking for a 3.5% pay increase for soldiers and a 1.5% increase for government workers. Virginia Republican representatives Thomas Davis III and Frank Wolf are joined by Steny Hoyer (D-Maryland) in sponsoring the legislation to have the House's version of the 2005 budget blueprint include pay parity. The Senate version already includes such a measure and when the details are hammered out in conference, Davis and other believe it will be easier to pass if both houses have the resolution contained within them.

Ernest Istook (R-Oklahoma), who chairs the House Appropriations Subcommittee on Transportation and Treasury, has been fighting the measure in order to cut costs.