STATEMENT OF THE

HONORABLE JAMES M. INHOFE

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

JANUARY 24, 2002

Thank you Mr. Chairman. As you have indicated, today is the first of series of hearings to prepare us for reauthorization of the Federal Highway Program. I look forward to working with you and our colleagues to further the progress made in TEA21 for greater flexibility and allowing states to keep more of their gas tax dollars. As we begin the reauthorization process, I am anxious to hear from our state and local partners how we at the federal level can assist them in meeting their unique transportation needs.

One such need that is universally felt is mobility. Not only is it important to increase mobility for personal travel, but we must also address the critical congestion choke points affecting freight movements. Continue economic growth depends on an efficient and cost effective transportation system, which includes the movement of people, goods and services.

The challenge before us will be to increase capacity without increasing costs by making better use of existing resources. Nothing better illustrates this point than the announcement on January 18^th that the President=s budget for FY03 will report a negative RABA. [Revenue Aligned Budget Authority] As devised, RABA=s purpose is to protect the principal that every dollar into the Highway Trust Fund is spent on highway transportation projects as opposed to accumulating large balances as was the practice prior to TEA21. Up until this point, we have enjoyed a positive RABA which has meant more spending on transportation infrastructure than estimated by TEA21. Just as RABA provides for windfall it also means we could have a situation where TEA21 estimates overstate actual revenues received. It would appear that is the case for FY2003.

Not surprisingly many questions have been asked about the calculations used to determine the FY03 RABA number. These are legitimate questions that need serious examination and thought. Certainly if we can soften the extreme negative effect of RABA for FY03, I would be supportive as long as we operate with the parameters of the existing statute and do not use funds outside of the trust fund to offset the loss. I am certain that several needed improvements to the RABA will be identified during this process which will be part of our reauthorization deliberations. My concern is that we proceed carefully and make sure that any immediate response contemplated to the FY03 negative number does not tie our hands down the road.

Mr. Chairman I recognized that in an election year it will tempting to ignore RABA and merely Afix@ the problem through an infusion of cash from general revenue. However, I believe that would be a mistake because we need to protect the integrity of the Highway Trust Fund which means we should structure the program around the actual receipts of the fund, be they negative or positive.

I am anxious to hear from our witnesses representing state and local interests on how a negative RABA number will affect your highway program. Of course I am always pleased to hear from my good friend Norm Mineta. I doubt there is anyone who understands the current program better than Secretary Mineta. As one of the principle architects of ISTEA, he has a clear understanding of not only the policy imbedded in the program, but also the politics of bringing diverse interests together in a final bill. In that light, Norm, I want to give you fair warning that the number one issue for me in ISTEA, i.e., increasing donor state returns, will continue to be my number one issue in reauthorization of TEA21. I suspect we may have some spirited discussions on how to address this, but I look forward to working with you on writing a bill that we can all support.

Thank you Mr. Chairman and I look forward to working with you and Subcommittee Chairman Reid as we begin the reauthorization process.