The media has reported a lot on the 2011 negotiations between President Obama and congressional leaders to raise the federal debt limit. The failure of those negotiations to reach an agreement by its November 2011 deadline triggered a “sequestration” process that will lead to a $1.2 trillion deficit reduction by 2021. This process requires across the board spending cuts in discretionary programs of approximately eight percent.
So what impact does this have on transportation? The Building Control Act (BCA) has led efforts to reduce the federal deficit since 1985, and one of their rulings has been that certain classes of programs are exempt or partially exempt from sequestration. The federal transportation programs are a mix of exempt programs and non-exempt programs. According to the White House Office of Management and Budget, the federal transportation program could see approximately $551 million in reduced spending. Below is a summary of how the sequestration will impact the overall program.
| Program | 2013 Investment Level | 2013 Sequestration (New Level) |
| Airport Improvement Program | $3.515 billion | Exempt |
| Core Highway Program | $39.7 billion | Exempt |
| Highway Emergency Relief | $2.0 billion | $101 million ($1.899 billion) |
| Payments to Highway Trust Fund | $6.2 billion | $316 million ($5.884 billion) |
| Highway Exempt CA | $739 million | $38 million ($701) million |
| Transit Formula Programs | $8.5 billion | Exempt |
| Transit Capital Programs | $1.9 billion | $96 million ($1.804 billion) |
The reduction in the transfer to the Highway Trust Fund noted above will not impact highway investment in FY 2013. However, it will reduce the Trust Fund balance going forward.
