VIEWS AND ESTIMATES
OF THE
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
FOR FY 2004
This year will be a pivotal one for transportation policy in the United States. Both the Transportation Equity Act for the 21st Century (TEA 21) and the Aviation Investment and Reform Act for the 21st Century (AIR 21) must be reauthorized for fiscal year (FY) 2004 and beyond. The reauthorization of these Acts will set the course for highway, highway safety, truck safety, public transit and aviation programs for the remainder of this decade.
One of the Committee’s highest priorities during the upcoming reauthorization of these Acts will be to continue to ensure the integrity of the Highway and Aviation Trust Funds, and the ability of these trust funds to meet our nation’s transportation infrastructure needs, a process that was begun in TEA 21 and AIR 21.
In enacting TEA 21 and AIR 21, Congress simply did the right thing – it required that the dedicated user fees paid by American motorists and airline passengers be invested for their intended purposes, not diverted to other uses. By unlocking the Highway and Aviation Trust Funds, these Acts freed billions of dollars in dedicated user fees for critically needed highway, transit, and aviation improvements.
The increased investment in transportation infrastructure that has resulted from these Acts will have far-reaching impacts on the quality of life in our communities, our nation’s economy, and our competitiveness in the world marketplace. Each day, every American and every business will benefit from shortened travel times, increased productivity, and improved safety.
Throughout our nation’s history, economic growth, prosperity, and opportunity have followed investments in the nation’s infrastructure. From the “internal improvements” of the early 1800’s – canals, locks, and roads – to the Interstate Highway System of today, infrastructure investment has been our foundation for economic growth. For example, between 1980 and 1991, almost one-fifth of the increase in productivity in the U.S. economy was attributable to investment in highways.
Our nation’s highways, transit and rail systems, pipelines, airports, harbors, and waterways not only provide the backbone of our economy by moving people and goods, they also employ millions of workers and generate a significant share of total economic output. Transportation-related goods and services generated 10 percent of our total Gross Domestic Product in 2001. Economic growth and vitality are also dependent upon high quality water and wastewater infrastructure systems.
In addition to facilitating economic growth, our transportation system has a direct and significant impact on the daily lives of nearly all Americans. The average household spends 19 percent of its income on transportation, more than on any other expense except housing, and the average person travels 43 miles each day.
To the average American, higher Federal investment in transportation infrastructure will mean:
· Shorter commutes that save time, fuel, and reduce pollution.
· Better access to work, school, health care, and recreation.
· Lives saved – many of the more than 42,000 highway fatalities each year could be prevented by building better roads and improving the safety features of existing roads.
· Safer systems to accommodate the transport of hazardous materials, estimated at more than 800,000 shipments per day and an annual movement of 3.1 billion tons.
· Fewer delays for the estimated 680 million passengers who will travel by air next year.
· Facilities to accommodate the projected increase in air passengers -- from 680 million to nearly one billion passengers -- that will occur in the next decade.
Despite the importance of transportation to both our economy and the quality of life in our communities, many of our nation’s transportation infrastructure needs are going unmet. This has resulted in, among other things, an alarming increase in congestion.
Congestion is a major national problem, and is increasing in cities of all sizes. According to the Texas Transportation Institute, traffic congestion cost motorists in the nation’s 75 largest urban areas a staggering $67.5 billion in 2000 in terms of wasted time and fuel. This $67.5 billion total cost equates to an average annual cost per peak road traveler of about $1,160.
From 1982 to 2000, the average annual delay per peak road traveler increased by 288 percent, from 16 hours to 62 hours. This problem is not restricted to the largest cities. In areas with fewer than one million people, delay more than quadrupled over these same years, indicating that even smaller areas are not able to keep pace with rising demand.
In 2000, 5.7 billion gallons of fuel were wasted due to traffic congestion in these cities alone. This amount of fuel would fill 570,000 gasoline tank trucks that -- if placed back-to-back -- would stretch from New York to Las Vegas and back again.
The slowing economy and the tragic events of September 11, 2001, reduced aviation congestion in 2001 and 2002, but this reduction is expected to be temporary. Since the aviation system remains the nation’s most efficient means of medium and long-distance transportation, air passenger traffic is projected to rebound as the economy strengthens and as passenger concerns over security recede. According to the Federal Aviation Administration’s (FAA) forthcoming aviation forecast (to be published in March 2003), air passenger traffic will return to the record-high 2000 levels by 2005. The passenger traffic levels in 2000 (696 million passengers) resulted in airline delays that were the worst in history and cost the airlines an estimated $6.5 billion.
The FAA also forecasts that, over the ten-year period from 2004 through 2014, aviation passenger traffic is expected to increase by 47 percent, to nearly one billion passengers. This growth will place even greater demands on a system that was already delay-plagued at the passenger traffic level experienced in 2000.
According to the Commission on the Future of the U.S. Aerospace Industry, estimates of the cost of aviation delays to the U.S. economy range from $9 billion in 2000 to more than $30 billion annually by 2015. Without improvement, the combined economic cost of delays from 2000-2012 will total an estimated $170 billion.
To alleviate congestion and reap the economic benefits of an efficient transportation system, our transportation infrastructure needs must be met. These needs are significant:
· $53.6 billion a year for the federal highway and transit programs just to maintain existing highways, bridges, and transit systems at their current conditions, or $74.8 billion a year to improve conditions.
· $15 billion a year in airport capital needs, excluding new security costs, which are expected to total roughly $4 -5 billion.
· $3 billion per year from FYs 2004 - 2008 to meet the capital needs of the Federal Aviation Administration, including modernization of the air traffic control system.
· Between $6-7 billion over the next 15 years to restore the rail corridor between Washington, D.C., and New York City to a good state of repair.
· Up to $6.9 billion to upgrade shortline and regional railroads to accommodate heavier rail cars.
· $2.4 billion per year in federal and nonfederal funds to improve ports.
· $3.6 billion to finishcurrentlyauthorized inland waterway construction needs.
The nation’s commercial shipping ports, which handle 95 percent of our international trade, face severe access problems on both the water-side and land-side. With more than one billion tons of cargo, valued at $750 billion, passing through our nation’s ports each year, we must ensure adequate infrastructure to meet the growing demands of international trade. Investments of $2.4 billion per year are needed by federal and nonfederal sources to improve ports and keep pace with the growth of commerce.
The nation’s inland waterways contain a series of outdated and antiquated locks and dams that, unless rehabilitated or improved, will continue to hinder the movement of coal, grain, and other bulk products. Forty-nine percent of the lock chambers on the system have exceeded their 50-year design lives. With the use of the aging inland waterway system expected to increase, delays are likely to continue to rise.
Immediate construction needs for the inland waterway system are valued at $3.6 billion, but we are currently investing at a pace that will see us falling further behind these needs. Additional investment of hundreds of millions of dollarswill be needed each year for modernization and replacement of the nation’s locks and dams to meet the demands of the inland waterway system.
Our wastewater infrastructure also is facing substantial funding needs in order to meet and maintain clean water restoration goals. October 2002 marked the 30th anniversary of the passage of the Federal Water Pollution Control Act Amendments of 1972, but communities throughout the United States continue to struggle financially to meet their ever-increasing wastewater treatment infrastructure needs. EPA recently reported that a failure to increase investment in wastewater treatment infrastructure would erode many of the water quality achievements of the past 30 years.
The nation’s failure to adequately restore and maintain the integrity of its waters can have devastating effects on the economy. Commercial fishing and shellfish harvesting, tourism, recreation, and many sectors of industry rely on the availability of clean, safe water supplies.
Estimates of the nation’s clean water infrastructure needs over the next 20 years exceed $400 billion. The needs are especially urgent for areas trying to remedy the problem of combined sewer overflows and sanitary sewer overflows and for small communities lacking sufficient independent financing ability. Drinking water infrastructure needs are estimated at nearly $500 billion over the next 20 years. Current spending by all levels of government is one-half of the estimated needs. Increased investment by federal, State, and local governments, as well as the private sector, will be needed to close the gap between current spending and projected needs.
We are also under-investing in our federal courthouses and public buildings. According to current Judicial Conference estimates, more than 166 new courthouses will be needed to meet the projected demand for courtroom space. The General Services Administration (GSA), in cooperation with the Judicial Conference, has developed a rolling five-year plan that has funded 53 of the highest priority new courthouses, at a cost of $4.5 billion. The remaining 113 courthouses will require a future commitment by Congress, the Administration, and the Judiciary. To meet the space needs of the Judiciary, the Committee recommends fiscal year (FY) 2004 funding for 20 courthouse projects in conjunction with the 5-year plan, at an estimated cost of $962 million.
The GSA controlled inventory of 1,860 existing federal buildings is aging, and requires extensive repair and renovation to ensure that federal employees are housed in safe, modern facilities. These GSA-controlled facilities have a functional replacement value of $35 billion. GSA, because of its aging inventory, will require $1.02 billion in FY 2004 to perform needed improvements. These funds are necessary because the Federal Buildings Fund (FBF), an intragovernmental fund financed by the collection of rent from federal agencies, has inadequate reserves to meet the investment needed to modernize older federal buildings. The Public Building Service estimates a $5.6 billion backlog of investment needs to repair and modernize existing Federal buildings. At the current level of funding, every building will receive a major overhaul once every 100 years, which is unacceptable. Such basic needs as elevator replacement, roof repairs, and fire and life safety programs have all been affected by the shortfall in the FBF.
To help meet some of the infrastructure investment needs discussed above, Congress, over time, established a series of trust funds to collect user fees and then invest those funds on capital improvements. Specifically, the funds are the Highway Trust Fund, the Airport and Airway Trust Fund, the Inland Waterways Trust Fund, and the Harbor Maintenance Trust Fund. One of this Committee’s highest priorities is to ensure that the user fees deposited into these trust funds are in fact used for their intended purposes – to rebuild our nation’s infrastructure.
Each of these trust funds has the following characteristics: 1) wholly self-financed by the users; 2) dedicated revenue sources; 3) self-supporting, operating on a pay-as-you-go basis; 4) deficit proof; and 5) invests in infrastructure programs. With the general exception of the Harbor Maintenance Trust Fund, each of the transportation trust funds also finances long-range construction programs that benefit from certainty in funding.
These trust funds represent a contract between the government and the user. This contract specified that certain user fees would be levied on the users of highways, airports, inland waterways, and ports. In return, the government pledged to use the receipts to build transportation infrastructure for the taxpayer’s use.
While TEA 21 and AIR 21 upheld the contract for the Highway and Aviation Trust Funds, balances in the two remaining funds continue to be held hostage to a budget process that fails to recognize the unique nature of these funds. At the end of FY 2002, the Inland Waterways balance was $412 million and the Harbor Maintenance balance was $1.85 billion. The President’s Budget proposes to expand the uses of these two funds to include work currently funded with general revenues. Expanding the uses of the Inland Waterways Trust Fund to include maintenance would cause the balance in that Trust Fund to drop to $287 million by the end of FY 2004 and would eliminate all money in the Trust Fund within three years. Revenues into the fund would not be sufficient to meet the expanded uses without further delays in needed waterways improvements. Under the proposal to expand the use of the Harbor Maintenance Trust Fund to include the construction of harbor improvements the balance would continue to rise to a level of $1.97 billion by the end of FY 2004. However, this balance is rising because the Budget proposes to eliminate the maintenance of many harbors. The Committee does not support expanding the uses of the Inland Waterways and Harbor Maintenance Trust Funds when currently authorized waterways construction and harbor maintenance needs are not being met. The Committee supports the continued maintenance of all authorized ports and harbors, and the Harbor Maintenance Trust Fund contains sufficient funds to do so.
Similar to the reforms achieved in TEA 21 and AIR 21 for the Highway and Aviation Trust Funds, the Inland Waterways and Harbor Maintenance Trust Funds should be made available to serve their intended purpose - meeting our infrastructure needs.
Given the Transportation and Infrastructure Committee’s commitment to achieving budget reforms for the transportation trust funds, other budget process legislation, including the extension of the discretionary spending caps, is of significant interest to this Committee. The Transportation and Infrastructure Committee is strongly opposed to any extension of the spending caps beyond FY 2002 that is done in a manner that could prejudice the reauthorization of TEA 21. We are prepared to work with the Budget Committee on legislation to extend both the discretionary and the TEA 21 spending caps to ensure that the principles of AIR 21 and TEA 21 are maintained in the future. In addition, we will work with the Budget Committee to ensure that the guaranteed nature of highway, highway safety, and transit funding is continued through an extension of the budgetary firewalls in section 8103 of TEA 21.
In addition to the infrastructure investment needs discussed above, the Committee is also concerned about Coast Guard funding needs. Among the issues are whether the requested funds are adequate to support heightened Homeland Security activities, including the requirements contained in the Maritime Transportation Security Act of 2002, and whether traditional functions, such as search and rescue and fisheries law enforcement will be sustained as priorities. The President’s FY 2004 budget request for the U.S. Coast Guard substantially addresses the traditional demands placed on the Coast Guard budget resulting from enactment of new and expanded military entitlement programs as well as the effort to re-establish a balance between the service’s safety and security missions. However, the Administration’s $500 million FY 2004 request for the Coast Guard’s Integrated Deepwater System recapitalization project reflects only the annual acquisition cost in 1998 dollars and does not account for the annual inflation since that time.
Due to increased responsibilities within the Department of Homeland Security and the need to sustain core mission effectiveness, the recapitalization of the Coast Guard’s inventory of major cutters, aircraft, and their supporting systems is a near-term national priority, and is now more critical than ever. Therefore, in addition to supporting the amount requested in the President’s FY 2004 Budget, the Committee strongly endorses a minimum level of $875 million in Capital Acquisitions funding to accommodate a total of $578 million for the Integrated Deepwater System in order to sustain on-time delivery of these important assets.
The detailed views and estimates presented below will urge that the Congressional Budget Resolution meet the important needs discussed above, to improve our nation’s infrastructure and transportation safety and ensure that vital services, such as those provided by the Coast Guard, are maintained. Many of these needs can be met by allowingthe transportation trust funds to invest all revenues collected for their intended purposes. Adhering to this principle will permit us to begin to improve much of our decaying infrastructure.
This report was circulated to all members of the Committee on Transportation and Infrastructure for their review and comment, and was approved in a Full Committee meeting on February 26, 2003. While the report reflects a bipartisan effort, the Committee wishes to emphasize that not all Members of the Committee necessarily agree with every aspect. Accordingly, the Committee reserves its flexibility to determine program needs and recognizes the potential for funding changes as the Committee and Congress work their will through the legislative process.
Transportation Security
The President’s Budget requests $4.81 billion for the Transportation Security Administration (TSA) in FY 2004, a $1.34 billion decrease from the $6.16 billion in obligations that TSA plans to incur in FY 2003.[1] Of the $4.81 billion requested, $2.49 billion is estimated to be derived from aviation security fees and $2.32 billion is to be appropriated from the general fund.
The majority of TSA’s budget continues to be focused on aviation security, which represents $4.21 billion or 88 percent of the total request. This $4.21 billion will be used to continue to provide passenger and baggage screeners; law enforcement personnel at airports; Federal air marshals; maintenance of security equipment; and research on advanced screening technologies.
No funds are requested in the FY 2004 Budget for purchase or installation of Explosives Detection Systems /Explosives Trace Detection equipment, or for airport modifications to integrate explosives detection systems (EDS) into in-line baggage screening systems, which is estimated by an airport trade association to ultimately cost $4 – $5 billion.
On February 12, 2003, the Department of Transportation Inspector General testified before the Aviation Subcommittee of the Transportation and Infrastructure Committee that “a major issue for airports is funding the next phase of explosives detection systems (EDS) integration. Thus far, nearly all EDS equipment has been lobby-installed or stand-alone. The Transportation Security Administration’s planned next step (integrating the EDS equipment into airport baggage systems) is by far the most costly aspect of full implementation.”
The Committee views the TSA budget as the appropriate source of funding for this next phase of EDS integration. Therefore, the Committee considers the FY 2004 budget request to be insufficient, and recommends that it be increased significantly by appropriating additional amounts from the general fund.
The Committee may consider an alternative approach to funding EDS integration costs. Section 367 of Division I of the FY 2003 Omnibus Appropriations Act authorizes a “Letter of Intent” (LOI) program for Airport Security Improvement Projects. This LOI program is intended to smooth out the Federal funding stream for EDS integration projects. Rather than increasing Federal funding by $4 – $5 billion in a single year to meet these costs, Section 367 authorizes the TSA to issue LOIs to airports undertaking EDS integration projects. With a LOI issued by TSA, airports would then raise funds needed for EDS integration in the private capital markets. Based on discussions with investment rating agencies, private capital markets would be more likely to lend airports money with a LOI that is backed by a multi-year commitment of Federal funds. Therefore, to increase the effectiveness of the program authorized by section 367, the Committee may consider authorizing $400 million in contract authority for FY 2004, and $2 billion for the five-year period from FY 2004 - 2008, to create a multi-year funding stream that would increase the ability of airports to issue bonds based on these LOI’s.
Three years ago, Congress enacted the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21) to reauthorize Federal Aviation Administration (FAA) programs and unlock the Airport and Airway (Aviation) Trust Fund. AIR 21 established the principle that the revenues contributed by aviation users into the Airport and Airway Trust Fund should be fully invested for its intended purpose of developing the aviation system, and that these funds should not be diverted to supporting other programs. The Committee intends to build upon this principle in its reauthorization of Federal aviation programs this year.
Since airline deregulation in 1978, air travel has become an essential form of travel for much of the nation. The annual number of commercial air travelers grew to 696.3 million in 2000, a 123 percent increase from the number of travelers in 1980.
This unprecedented usage pushed our nation’s air traffic control system and over-crowded airports to the brink of gridlock in 2000, when one in every four commercial flights was delayed, cancelled, or diverted. The slowing economy and the terrorist attacks of September 11, 2001, have since caused the number of travelers to decline, but this is a temporary reprieve. As the economy strengthens and passengers’ fears about security fade, traffic will rebound. The FAA’s forthcoming aviation forecast (to be published in March 2003) will show passenger traffic returning to the 2000 levels in 2005, and reaching nearly one billion by 2014. Absent further improvements in aviation system capacity and efficiency, delays will quickly return to the unbearable levels experienced in 2000.
Improvements in aviation system capacity and efficiency will require capital investment in both our airports and air traffic control system. The FAA’s National Plan of Integrated Airport Systems (NPIAS) estimates total airport development costs for projects that are eligible for Federal assistance under the Airport Improvement Program (AIP). The most recent FAA NPIAS indicates that airports must invest about $9.2 billion annually from 2001 through 2005 to meet AIP-eligible capital needs. This estimate was developed prior to the September 11th terrorist attacks.
A more comprehensive assessment of airport capital needs was made by a recent survey of U.S. airports by an airport trade association. The survey estimates total airport capital development costs – including the cost of non-AIP-eligible projects – to be about $15 billion per year from 2002 through 2006. This compares to the average annual capital funding available to airports (mostly from airport bonds) of about $12 billion, resulting in an annual investment gap of $3 billion.
This investment gap does not include significant additional airport security costs that must be funded in the near future. Neither the trade association’s nor FAA’s estimate includes funding for terminal modification projects that are needed to integrate the new explosives detection systems (EDS) into baggage screening systems. In-line installation of EDS will be necessary in the long run for reasons of throughput rate, screener productivity, airport lobby space, and passenger security and convenience. The trade association estimates that such terminal modifications will cost about $4 - $5 billion. The FY 2004 President’s Budget for the Transportation Security Administration requests no funds for such terminal modifications, leaving these costs unfunded.
Since September 11th, airport security projects in general have claimed an increasing share of AIP funds, crowding out the capacity-enhancing projects that are needed to avoid the return of unbearable passenger delays once aviation traffic recovers to year 2000 levels. According to the General Accounting Office (GAO), during FY 2002 the FAA awarded a total of $561 million, 17 percent of total AIP funding, to airports for security projects related to the events of September 11, 2001. This is the largest amount awarded to airports for security projects in a single year since the program began in 1982. In contrast, FAA awarded an average of less than 2 percent of total AIP funds to security projects for fiscal years 1982 through 2001. The $561 million awarded in FY 2002 is a $504 million increase above the amount awarded in FY 2001. The AIP program’s ability to address airport safety and capacity needs will be dangerously undermined should this trend continue. Security costs such as those borne by airports since September 11th are national security costs. The appropriate source of funding for national security activities is general fund appropriations, not the AIP program or airport revenues.
Therefore, the Committee recommends that airport security costs be funded outside of the AIP program, from the general fund of the U.S. Treasury. This would allow the AIP program to begin to address the investment gap in airport safety and capacity needs with relatively modest funding increases. Specifically, the Committee recommends AIP funding increases of at least $100 million each year, beginning with a funding level of $3.5 billion in FY 2004, and totaling $18.5 billion for the five-year period from FY 2004 – 2008.
The Committee also recommends the FAA’s Facilities and Equipment (F&E) program be funded at least at the President’s request level of $2.916 billion to ensure that our nation’s air traffic control system remains safe and efficient. The FAA’s capital investment program, which includes air traffic control modernization, calls for investment to grow from $2.916 billion in FY 2004 to $3.177 billion in FY 2008, for a total investment of $15.2 billion over the five-year period from 2004-2008.
The Committee recommends the FAA Operations and Maintenance account be funded at least at the President’s request of $7.59 billion. Increased funding in this account is necessary not only to maintain current operations, but also to improve system efficiency and reduce delays, increase safety oversight, hire additional air traffic controllers, and return management of the internal security and hazardous materials program from the Transportation Security Administration to the FAA.
The Committee recognizes that greater efforts must be made to ensure that scarce resources are used as effectively as possible. Toward that end, the Committee included in AIR 21 several management reforms that were intended to improve the FAA’s performance, especially with regard to the acquisition and distribution of air traffic control equipment and services. These reforms included the establishment of a Chief Operating Officer position responsible for day-to-day operations of an Air Traffic Services Performance Based Organization, and creation of an Air Traffic Services Subcommittee, which is part of the FAA’s Management Advisory Council, to oversee the FAA’s management of the air traffic control system. The Committee intends to redefine the role of the Chief Operating Officer and make other modifications to the structure of the FAA so these reforms will work as intended and ensure the FAA meets its mission to provide a safe and efficient air traffic control system.
The current economic climate and weak financial condition of the major airlines have exacerbated a problem that has been a concern since airline deregulation – lack of service to small communities. The benefits of airline deregulation have been significant, but they have not been evenly distributed. In certain small- and medium-sized communities, the lack of competition among airlines has resulted in significantly higher fares. In many instances, the airline fares in these communities are so high that businesses are choosing to relocate to areas with more affordable airfares. Section 203 of AIR 21 addressed this problem by establishing a pilot program to help underserved communities develop public-private partnerships to promote service to their communities. This pilot program received $20 million in the FY 2002 Department of Transportation Appropriations Act. Demand for these funds far exceeded the amount available. The Department of Transportation (DOT) received 180 applications totaling over $142.5 million from communities in 47 states. By December 2002, the Department had awarded about $20 million in grants to 40 small communities to implement air service improvement programs. The FY 2003 Omnibus Appropriations Act provided $20 million for the program. The Administration did not request funding for this program in FY 2004. The Committee recommends this pilot program be continued in FY 2004 at the FY 2003 authorized level of $27.5 million.
The weak economy and financial condition of the airlines have also increased the demands on the Essential Air Service (EAS) program. As of July 2002, DOT subsidized service to 114 communities. Between September 2001 and September 2002, carriers had notified DOT of their intent to discontinue service to 15 subsidy-eligible communities. The EAS program received $113 million in funding in each of FYs 2002 and 2003. The FY 2004 Budget request of $50 million represents a significant cut, and is insufficient to meet communities’ air service needs. During the upcoming reauthorization of AIR 21, the Committee intends to examine the EAS program and the reforms the Administration has proposed. However, even if the Committee reforms the program, we believe that significantly more than $50 million will be required to sustain a revised EAS program.
The President requests $6.8 billion in FY 2004 for U.S. Coast Guard activities, which is a $618 million, or 10 percent, increase over the total amount requested for FY 2003. This request reflects three primary objectives for the Coast Guard in FY 2004: (1) recapitalize Coast Guard legacy assets and infrastructure; (2) build-out homeland security capabilities; and (3) sustain non-homeland security missions near pre-September 11, 2001 levels. Approximately $541 million of this increase is provided for mandatory entitlement programs, including retirement pay and benefits, and enhanced Coast Guard operations. The remaining increase of $77 million largely funds increased costs for replacement of capital assets and training of Coast Guard Reserve forces.
Prior to September 11, 2001, the Coast Guard experienced budgetary shortfalls due to increased personnel costs and substantial growth in all of its missions. As a result of these shortfalls, the Coast Guard has had to rely on numerous supplemental appropriations in the past 11 years. These shortfalls have also resulted in the Coast Guard not operating its assets at optimal levels. The President’s Budget includes a $411 million increase for Coast Guard operating expenses and a $50 million increase in acquisition funds. These increases will continue to restore and sustain Coast Guard readiness and improve the security and safety of the American public. The Coast Guard is not planning to close any of its facilities nor reduce any of its operations levels during fiscal year 2004.
The Committee believes it is imperative that the Coast Guard receives the resources to protect America’s maritime homeland security while maintaining core missions such as search and rescue, fisheries law enforcement, drug interdiction, migrant interdiction, pollution prevention, and boating safety. The President’s Budget provides for an additional 1,976 Coast Guard personnel, including 437 personnel to staff search and rescue stations and command centers, including the new search and rescue stations in Washington, D.C. and Boston; 153 boat crew members; 51 sea marshals for armed vessel escorts; 226 maritime intelligence personnel; and 438 maritime safety and security team members. The Committee strongly supports the request for these clearly identified 1,305 additional personnel and believes the Coast Guard will be unable to sustain its mission requirements without this influx of resources. However, the Committee reserves its full endorsement of the remaining increase of 671 personnel until the Coast Guard communicates their designation to the Committee.
The President has requested $797 million for capital acquisitions, including $500 million for continued funding of the Coast Guard’s Integrated Deepwater System, which is a major vessel and aircraft acquisition project to replace the Coast Guard’s aging fleet of vessels and aircraft employed more than 50 miles from U.S. shores. The Committee recommends that there be no delay in the scheduled delivery of 35 long-range, land-based Maritime Patrol Aircraft. The Deepwater project is vital to the Coast Guard’s future operational effectiveness, therefore the Committee supports $578 million in FY 2004 funding for Deepwater and a total of $875 million for the capital acquisitions account. The President’s acquisitions request also includes $134 million for the Coast Guard to continue modernizing the National Distress and Response System (NDRS). The NDRS modernization project, called “Rescue 21,” will increase the Coast Guard’s ability to intercept maritime distress calls and respond to search and rescue emergencies. The Committee believes this program is vital to respond to the inadequacies of the current Coast Guard communications system.
The President has modified the accounting structure and presentation of the FY 2004 Coast Guard budget request. The President’s request consolidates six Coast Guard accounts, which previously were requested individually, into two accounts. The Operating Expenses, Environmental Compliance and Restoration, and Reserve Training accounts are now subsumed under one single Operating Expenses account. The new Capital Acquisitions account includes funding previously requested in the Acquisition, Construction, and Improvement; Research, Development, Test and Evaluation; and Alteration of Bridges accounts. The Committee takes note of this change in accounting procedure and will seek to determine the Administration’s rationale in making this adjustment.
The Committee is deeply concerned that any reduction below the President’s FY 2004 Budget will adversely affect maritime homeland security and erode the effectiveness of the Coast Guard’s core missions. The Committee strongly believes the overall level of funding requested in the President’s FY 2004 Budget should be increased by $78 million in the Capital Acquisitions account to ensure the Coast Guard’s vital Deepwater recapitalization effort is adequately funded. These extra funds will ensure timely delivery of scheduled assets.
Economic Development, Public Buildings, and Emergency Management
The Committee has jurisdiction over five existing economic development programs: the Appalachian Regional Commission (ARC); the Economic Development Administration (EDA); the Denali Commission; the Delta Regional Authority (DRA); and the Northern Great Plains Regional Authority.
Congress reauthorized the Appalachian Regional Commission during the 107th Congress, increasing its authorized funding level to $88 million for FY 2004. The Administration’s FY 2004 funding request for the ARC is $33 million, a 50 percent decrease from last year’s request and 38 percent of the authorized level. The Committee supports full funding for this important economic development program, 50 percent of which goes to Appalachian counties that are economically distressed. The Committee will be reauthorizing the Appalachian Development Highway System during the 108th Congress, and supports continued funding for this program.
The Committee supports increased funding of $364 million for EDA’s program budget for FY 2004. Concurrently, the Administration’s request lowers the funding levels of regional development authorities for economic development activities by approximately $98 million, shifting the responsibility to EDA. The Administration’s request would significantly change the primary focus of regional development authorities from infrastructure investment in economically distressed communities to planning and coordination activities. The Committee supports increased funding for EDA programs for economic development and trade adjustment assistance.
The Administration has requested $9.5 million for the Denali Commission for FY 2004, in addition to $11 million from the Trans Alaska Pipeline Liability Fund. The Committee supports funding the Denali Commission at a minimum of $30 million, equal to the FY 2003 budget request. This minimal funding will allow the Commission to continue with effective sustainability and development programs.
The Administration has requested $2 million for the Delta Regional Authority (DRA). The Committee recommends funding the DRA at $30 million for FY 2004, equal to the authorized level.
The President’s budget did not include any funding for the Northern Great Plains Regional Authority, which will play a vital role in the economic renewal of the Great Plains region. The Committee recommends funding the Authority at $30 million for FY 2004, equal to the authorized level.
In the area of public buildings, the Committee intends to address a number of issues concerning the Public Buildings Service of the United States General Services Administration (GSA).
The Federal Buildings Fund (FBF), the primary source of funding for GSA’s capital investment program, continues to show weaknesses in performing its core mission of providing funding for construction of new federal buildings, and the repair of existing buildings. The Committee recommends that FY 2004 funding for all new construction should be at least $1.4 billion. The Administrative Office of the United States Courts five-year priority plan identifies an FY 2004 budget need of $962 million for new courthouse construction. With the absence of courthouse funding in two of the past six years, and with no funds requested for FY 2004, the space needs of the Judiciary will not be met and will not keep up with an ever expanding case load. In addition, every project on the five-year priority plan will experience delay and increased costs. The possibility of sustaining a courthouse construction program that addresses the needs of the Judiciary is not at all possible. The Committee recommends funding new courthouse construction at $962 million in FY 2004. The decision to suspend courthouse construction funding in FY 1998, FY 2000, and now in FY 2004, will lead to drastic increases in construction costs.
The Committee continues to monitor the status of existing courthouse projects to ensure that the program continues to deliver the expected cuts in construction costs, and better utilization of court space.
GSA’s repair and alteration program in previous years has failed to meet projected demand for the modernization of GSA’s aging inventory of federal buildings. The functional replacement value of GSA’s 1,860 managed buildings is $35 billion. A significant investment will be necessary to make these buildings modern and efficient places to work. This year’s repair and alteration request is $1.2 billion, a slight increase from last year’s request, which was an increase from the previous year’s request. However, the Public Building Service within GSA estimates unmet repair and alteration needs at $5.6 billion. Given these needs, major renovation may not reach all older buildings for many years to come. The Committee recommends funding the FY 2004 repair and alteration program to support the Administration’s request of $1.2 billion. The increased renovations to federally owned buildings would allow GSA to locate more federal employees in government-owned space, which will ultimately reduce amount of office space being rented.
The Committee will continue to monitor GSA’s leasing program. For years the Committee has been concerned about the rise in the amount of leased space to meet the requirements of the civilian branch of the government where Federal facilities are not available. Leasing costs for the GSA FY 2004 budget account for $3.4 billion or 49 percent of the total budget. The leasing program is increasing from year to year, as a result of the scoring rules under the Budget Enforcement Act of 1990, which force GSA into short-term, expensive leases, to avoid the budget impact of a capital lease. These rules also restrict GSA from pursuing ownership options for facilities, since financing mechanisms are not available.
In its FY 2004 budget request, the Administration has included the programs of the Federal Emergency Management Agency within the larger Department of Homeland Security budget request. In an effort to streamline the budget request, many of FEMA’s programs no longer have their own line item. What follows is the Committee’s views and estimates on several programs for which specific data was provided by the Administration.
The Committee supports the Administration’s request for $500 million to support America’s firefighters. The Administration’s budget request commingles these funds with first responder grant funding within the Border and Transportation Directorate of the Department of Homeland Security. However, the Committee believes that this support should flow through the existing Fire Investment and Response Enhancement (FIRE) Grant Program, established by P.L 106-398. The purpose of the FIRE grant program is to ensure that local and volunteer fire departments have the ability to conduct training, acquire basic firefighting equipment, and conduct fire prevention activities. The Committee recommends separately funding this program at its FY 2004 funding level of $500 million, in addition to $3.06 billion provided for other first responder training programs.
The Administration has requested $300 million for a competitively awarded grant program for pre-disaster mitigation. Pre-disaster mitigation is an effective tool to reduce the loss of life and property that occurs during a disaster. In addition, effective pre-disaster mitigation spending reduces the costs incurred in managing the consequences of natural disasters. The Committee strongly supports funding for pre-disaster mitigation, and will review the best way to distribute such funds.
For disaster relief programs administrated by FEMA, the Committee recommends funding sufficient to meet the needs of communities as authorized. The Administration’s request of $4.218 billion is consistent with the five-year average of obligations (not including the response to September 11th). Of the request, only $1.956 billion is for new budget authority. FEMA is expected to contribute $3.183 billion from unobligated balances carried forward from previous years, and $600 million from recoveries of prior year unspent obligations. The Committee supports the Administration’s request and will closely monitor FEMA’s ability to recover previous grants to meet the needs of the disaster relief program.
The Administration has requested $200 million for flood map modernization. This request is 33 percent lower than the FY 2003 budget request and $100 million lower than the authorized level of $300 million. Over the past several years, FEMA has engaged in an aggressive plan to modernize the nation’s flood maps, and this decrease in funding could hamper those efforts. The Committee supports fully funding this program at its authorized level to ensure that communities across the country have the most accurate information possible for planning.
While no specific information was provided by the Administration, the Committee supports full funding for each of the other programs not individually identified by the President’s budget request, including the United States Fire Administration; Urban Search and Rescue Program; and Emergency Management Planning and Assistance Grants.
The Administration’s FY 2004 Budget requests an obligation limitation of $29.3 billion for the Federal-aid highway program. This is $2.3 billion less than the FY 2003 enacted level of funding. The Transportation Equity Act for the 21st Century (TEA 21) provided a 40 percent increase in funding over the previous authorization bill. The Administration has made a FY 2004 budget request of $7.226 billion for Federal Transit Administration (FTA) programs, the same level as guaranteed in TEA 21 for FY 2003. These proposed funding levels are insufficient.
To improve the conditions and performance of our nation’s highway, bridge and transit infrastructure, DOT data indicate the need for a combined federal highway and transit program of $74.8 billion. We cannot hope to reach this funding level by the end of the next authorization cycle unless the program is increased substantially in FY 2004. The Committee believes that a combined federal highway and transit program funding level of $48 billion for FY 2004 will put us on track to meet the goal of improving our nation’s highways, bridges, and transit systems.
We must strive to improve these systems and not just maintain the status quo. The average driver is losing more than a week and a half of work (62 hours a year) sitting in gridlock. Currently 32 percent of our major roads are in poor or mediocre condition and 28 percent of our bridges are either structurally deficient or functionally obsolete. Deteriorating roads and bridges and traffic gridlock will continue to get worse unless there are substantial increases in infrastructure investment, for both highways and transit.
A major accomplishment of TEA 21 was reestablishing trust with the taxpayer by creating a budgetary mechanism to ensure that the user fees deposited in the Highway Trust Fund become available to be spent for their intended purpose. Maintaining these budgetary firewalls and spending guarantees are a top priority for the Committee.
The Administration’s 2004 Budget proposes to increase funding for the Federal Motor Carrier Safety Administration (FMCSA) about 45 percent above the FY 2003 request from $307.5 million in FY 2003 to $447 million in FY 2004. The FY 2004 request removes the three accounts used in FY 2003, Motor Carrier Safety, National Motor Carrier Safety Program, and Border Enforcement Program, and replaces them with two new accounts, Motor Carrier Safety Operations and Programs, and Motor Carrier Safety Grants.
The President’s FY 2004 Budget requests $539 million for the National Highway Traffic Safety Administration (NHTSA) from the Highway Trust Fund, an increase of four percent above the FY 2003 level. These amounts include $222 million of TEA 21 resources for the Sections 157 and 163 grant programs formerly appropriated to the Federal Highway Administration. (The Administration requests an additional $126 million for NHTSA from the General Fund.)
Motor vehicle crashes (including commercial vehicles) are the leading cause of death and disability for Americans aged 35 and under. The Committee recommends a combined funding level of at least $1.1 billion for FMCSA and NHTSA in FY 2004 to make improvements in highway and motor vehicle safety. (This estimate excludes General Fund amounts for NHTSA programs.)
The Committee supports the President’s FY 2004 budget request of $132 million to fund the Research and Special Programs Administration (RSPA), which is an $11 million increase from FY 2003 levels. Of this amount, the pipeline safety program will receive an increase of $3 million to $67 million and the hazardous materials safety program will receive an additional $2 million for a total of $25 million. The increased funds will support the Administration’s ongoing efforts to improve oversight, inspection and research to reduce the likelihood of pipeline and hazardous materials accidents.
The Committee reauthorized RSPA’s pipeline safety program in 2002 (the Pipeline Safety Improvement Act of 2002, Public Law 107-355), which continues to finance the program through collection of pipeline safety user fees and appropriations from the Oil Spill Liability Trust Fund. The Committee intends to consider reauthorization of the hazardous materials safety program in the 108th Congress.
Railroads
Enactment of high-speed rail and rail infrastructure legislation is one of the Committee’s priorities for the first session of the 108th Congress. The legislation, H.R. 2950, as reported by the Subcommittee on Railroads in the 107th Congress, would make funding available for high-speed passenger rail infrastructure through federal authority to issue tax-exempt and tax-credit bonds, through direct loans and loan guarantees through an expanded Railroad Rehabilitation and Infrastructure Financing (RRIF) loans, and through General Fund appropriations for pre-construction activities. The Committee’s proposal will provide an incentive for freight railroads to cooperate in the development of high-speed rail by substantially increasing the size of the RRIF loan program and expediting the loan approval process. Loans made to freight railroads could be paired with bond proceeds to develop passenger corridors, separate passenger trains from freight tracks, and thereby increase freight rail capacity, while eliminating operational problems and chokepoints associated with running freight and passenger trains on the same track.
Similarly, the Subcommittee on Railroads will be considering legislation to reauthorize the Federal Railroad Administration’s rail safety program, the prior authorization having expired at the end of FY98. The President’s Budget proposes $132 million for FRA safety and operations programs. The Committee supports at least the President’s request level.
The President’s FY 2004 Budget proposes $23.2 million for the FRA high-speed rail development program, originally authorized in the Swift Rail Development Act and reauthorized in TEA 21. That authorization ($10 million annually for corridor development and $25 million annually for high-speed rail technology development) expired at the end of FY 2001. Reauthorization of these programs will be included in the Committee’s high-speed rail infrastructure legislation at the level of at least $70 million annually for corridor development and $30 million for technology development. The Committee requests these funding levels be accommodated in the FY 2004 Budget Resolution.
The President’s Budget proposes $36 million for FRA research and development programs. The Committee supports at least the President’s request level.
For the Surface Transportation Board (STB), the President’s Budget proposes $19.521 million for FY 2004. The Committee supports a current services level of general fund appropriations for the Board. The Committee notes that DOT does not provide the Board with generic support services such as payroll processing, which are the legal obligation of the Department from its own funds under the ICC Termination Act [49 U.S.C. 725]. Compliance with this requirement would free additional STB resources for matters within the Board’s jurisdiction. The Subcommittee on Railroads will be considering legislation to reauthorize the Surface Transportation Board (STB). The prior authorization expired at the end of FY 1998, and the STB has been receiving unauthorized appropriations in each subsequent year. The Committee supports a current services funding level from the general fund for the STB.
Finally, for Amtrak, the President’s Budget proposes $900 million in appropriations for FY 2004. Amtrak’s annual authorizations, at a level of $955 million, expired at the end of FY 2002. The Committee will be considering Amtrak reauthorization legislation in the first session of the 108th Congress. The FY 2003 Omnibus Appropriations Act provided $1.05 billion in Amtrak funding, and deferred repayment of the $100 million 2002 DOT loan to Amtrak to the end of the fiscal year.
Water Resources and Environment
Corps of Engineers
The President’s Budget includes $4.194 billion for the Civil Works programs of the Corps of Engineers. This is 9.4 percent below the enacted levels of FY 2003 and continues a trend of declining budget requests for the Corps. The Committee supports increases in the Civil Works program to a level of funding sufficient to address future needs and to ensure that the civil works mission of existing aging infrastructure is adequately maintained. With a growing backlog of Corps construction and maintenance projects, and given the importance of these water resource projects to the economy, the Committee believes that the Corps should be funded at $5.5 billion for FY 2004, which is its capability.
With trade expanding and highways congested, efficient water navigation must be provided and maintained. The ports and waterways constructed and maintained by the Corps program also assist in the movement of military equipment for overseas deployment. While much has been done to discourage development in floodplains there are still many areas where floods create tremendous economic and personal hardship.
The vast array of navigation and flood damage reduction infrastructure is important to the Nation’s economy and a secure economy is a necessary part of a secure Nation. But this infrastructure has suffered from many years of inadequate funding for maintenance and replacement. The capital stock value of Corps water resources infrastructure has been decreasing since the late 1970s. Significant increases in investment for maintenance of existing facilities and the construction of modern ones is urgently needed.
The Corps must conduct new studies to
determine where there is federal interest in water resource development
including environmental restoration.
The proposed funding in the FY 2004 President’s Budget to conduct studies is substantially below
any recently enacted amounts. It is 26 percent below the FY 2003 enacted
level. At the requested level,
the continued development of justified projects is severely jeopardized. The Committee supports funding in the
General Investigations account that will maintain a steady flow of good
investment options that will provide economic benefits and protect and restore
the aquatic environment.
The President’s Budget for project construction is 23 percent below the enacted FY 2003 level. The reduced construction account draws out the construction period for most projects and delays the start of new investments. The Committee recommends increased funding levels to minimize the cost of completing projects and to accelerate the national economic benefits these investments provide. The Committee supports additional funding in the Construction General account that would allow for completing more projects in an efficient manner.
There are growing surpluses in the Harbor Maintenance and Inland Waterways Trust Funds. Under the proposed budget, the surplus in the Harbor Maintenance Trust Fund will grow to $1.97 billion by the end of FY 2004. The surplus in the Inland Waterways Trust Fund would also grow except for the proposal to use the fund for additional purposes. These funds are supplied by taxes paid by users of ports and waterways and are meant to pay for harbor maintenance and waterways improvements to the nation's water navigation system. For years, more funds have been collected than have been appropriated and large surpluses have accumulated. This problem has not been caused by a lack of meritorious lock and dam construction projects or needed port maintenance dredging. To the contrary, the Corps of Engineers has had the capability to execute a far greater amount of work on nationally significant water projects authorized by Congress. The constraint on the performance of this valuable work has been the limited level of funding appropriated from these water funds. The result has been unnecessary cost increases, significantly delayed completion dates, and delays in realizing transportation savings.
The President’s Budget proposes expanded uses for the Harbor Maintenance Trust Fund and the Inland Waterways Trust Fund. While the surplus in the Harbor Maintenance Trust Fund would continue to grow under this proposal, the Inland Waterways Trust Fund surplus would be completely eliminated in about three years and the revenues from the fuel tax would be insufficient to meet the expanded use requirement. The Committee opposes expanded uses of these trust funds and supports spending down the existing surpluses by appropriating the funds for their originally intended purposes.
While the President’s Budget proposes operation and maintenance funds at close to the FY 2003 enacted level, this amount includes substantial new costs associated with additional security requirements that will diminish the Corps’ ability to do dredging, repairs, and other traditional operation and maintenance activities. With much of the nation’s inland navigation infrastructure at or past its design life, the Committee supports funding that is sufficient for addressing the growing backlog of maintenance projects and for constructing authorized improvements. Sustained reduced funding may compromise the competitiveness of our ports and waterways, reduce flood damage reduction benefits and hydropower production, and imperil environmental benefits.
The Committee supports full funding for the Florida Everglades restoration projects authorized by WRDA 2000 (P.L. 106-541), but this funding should not come at the expense of other Corps projects and missions. Enacted funding levels for construction of Corps projects should not decrease, notwithstanding any separate funding to support Florida Everglades restoration. The Committee notes that the $145 million is budgeted for projects related to the Everglades. The Committee believes there are additional projects worthy of this same level of commitment and the Nation’s economy would be well served by these investments.
In the past decade, the Corps program has expanded beyond such traditional areas as flood control and navigation to include environmental restoration and protection and other improvements to water-related infrastructure. The Committee does not support any proposals in the President’s Budget that may undermine Congressional priorities without full consideration by the authorizing Committee.
The Committee intends to consider a Water Resources Development Act in 2003 that will authorize important projects and programs and supports appropriations levels for FY 2004 and beyond that can meet current and future needs.
For water infrastructure programs administered by the Environmental Protection Agency, the Committee recommends levels adequate to address the increasing needs for capitalization grants for Clean Water State Revolving Funds and core programs under the Clean Water Act. This will require an increase in the authorization levels and accompanying appropriations. The Committee intends to move water infrastructure legislation in this Congress to address these needs, with increased authorization levels beginning in FY 2004.
For FY 2004, the Committee supports funding the Clean Water State Revolving Funds at no less than $2 billion, the funding level set forth in H.R. 3930, the Water Quality Financing Act of 2002, approved by the Committee in the 107th Congress. In addition, for FY 2004, the Committee supports maintaining funding for State water quality programs under Section 106 of the Clean Water Act at no less than the requested level of $200.4 million and funding for nonpoint source programs under Section 319 of the Clean Water Act at no less than the FY 2003 enacted level of $240 million.
The President’s Budget requests $20 million for a new Environmental Protection Agency watershed program to protect and restore watersheds at twenty pilot project locations. The Committee does not support funding the creation of new, unauthorized programs through the President’s Budget and recommends this funding be used to support already authorized watershed programs such as the total maximum daily load program under section 303(d) of the Clean Water Act and the wet weather watershed pilot projects authorized under section 121 of that Act.
For the Superfund program administered by the Environmental Protection Agency, the Committee recommends funding at a level commensurate with current program needs and as necessary to maintain the average number of construction completions over the past 10 years. As with the Corps of Engineers Civil Works Program, the Committee recommends funding for the Superfund program at a level that matches its capability, so that no cleanup projects fail to advance due to lack of funding, delaying public health and environmental benefits, as well as economic benefits derived from returning sites to productive use. The President's Budget proposes to increase remedial funding by $150 million. The Committee supports this increase.
The President’s Budget proposes $210.8 million for brownfields programs. Of this total, $60 million is requested out of the State & Tribal Assistance Grants (STAG) account for grants to States to fund State voluntary cleanup programs, $120.5 million is requested out of the STAG account to fund grants and loans for brownfield site assessments and cleanup revolving loan funds, and $30.3 million is requested out of the Environmental Program and Management Account to fund 150 full-time equivalent employees (FTEs). The recently-enacted Small Business Liability Relief and Brownfields Revitalization Act (P.L. 107-118) authorizes $200 million annually for brownfield site assessments and cleanup revolving loan funds and $50 million annually for State voluntary cleanup programs. The Committee recommends full funding of these authorizations. Accordingly, $10 million of the $60 million proposed for State voluntary cleanup programs should be used to fund site assessments and cleanup revolving loan funds. Moreover, the Small Business Liability Relief and Brownfields Revitalization Act authorizes no funding for increasing EPA FTEs. The Committee recommends the funding to support those FTEs be used instead to support full funding of brownfield site assessments and cleanup revolving loan funds.
[1] TSA estimates a $6.16 billion program level in FY 2003 based on estimated new budget authority of $5.15 billion plus $1.02 billion in unobligated funds carried forward from FY 2002.