Extending programs “at current levels” sounds like the safe option. On surface transportation it isn’t, because the Infrastructure Investment and Jobs Act layered general-fund advance appropriations on top of Highway Trust Fund contract authority. Extend only the trust fund and you’ve quietly cut the program roughly in half.
That’s what’s in front of the Senate. Republicans failed to reach agreement Tuesday, August 4, on a bill that would fund the government through December 11 while extending Highway Trust Fund programs at fiscal 2026 levels without continuing the IIJA advance appropriations, worth roughly $38.6 billion a year. The American Public Transportation Association calculates the effect as a 20% reduction in public transit investment and an 83% reduction in passenger rail.
Eighty-Three Percent Is Not a Trim
APTA President and CEO Paul Skoutelas wrote to House and Senate leadership on July 31 warning that dropping the advance appropriations would “immediately disrupt and delay ongoing planning, engineering, and construction of surface transportation projects across the nation.”
Advance appropriations are the specific mechanism that made the IIJA different from an ordinary reauthorization. They guaranteed money years ahead so agencies could let multi-year contracts against known funding. State DOTs and transit agencies built five-year program plans on the combined number. Strip the advance half and you’re back to annual discretionary levels no owner can program against.
The Calendar Is the Bigger Problem
Senate Majority Leader John Thune said at an August 4 press conference that “we intend to accomplish” government funding “between now and the end of this week, or however long we’re here,” and that he wants a package before FY2026 expires on September 30. Even if the Senate moves, the House doesn’t return until August 31. That leaves about four weeks.
The American Traffic Safety Services Association took the pragmatic line, calling the extension “a necessary measure” while its CEO Stacy Tetschner noted that “an extension is a bridge, not a destination.” That’s trade-association politeness for a decade of deferred reauthorization, and it’s a fair reading. A clean extension does keep roadway safety programs alive and does beat a shutdown.
The skeptical read is that neither chamber has any incentive to write a real multi-year bill before the FY2027 cycle, so contractors should plan for serial short-term patches rather than a grand bargain.
Practically: verify which of your backlog is funded by advance appropriations versus contract authority, because those are not the same risk. Agencies that let contracts against IIJA money should re-check obligation authority before issuing notices to proceed this fall. Expect owners to front-load obligations ahead of September 30 and slow-walk anything that can’t be obligated in time. Passenger rail contractors are the most exposed, and at 83% the exposure isn’t a margin question. It’s a program stoppage. Large state-let projects with mixed federal funding, like Oklahoma’s $408 million US-70 Roosevelt Bridge replacement, are the ones where obligation timing decides whether a notice to proceed goes out this fall.