Statement of Senator Harry Reid

EPW Subcommittee on Transportation, Infrastructure and Nuclear Safety

Hearing on FY 2003 FHWA Budget

February 11, 2002

Welcome to today’s hearing on the Federal Highway Administration’s fiscal year 2003 budget proposal and budget issues related to the reauthorization of TEA-21, the Transportation Equity Act for the 21^st Century. The President’s budget raises some important short and long-term concerns and I welcome the opportunity to discuss these issues today with Federal Highway Administrator Mary Peters and our other distinguished witnesses.

I will get right to the point – the President’s budget cannot be sustained. A 27 percent cut in highway funding is a move in the wrong direction given our nation’s transportation needs. It will also mean the elimination of hundreds of thousands of good jobs and be a drag on our economic recovery.

I am pleased that Tom Stephens, our fine Director of the Nevada Department of Transportation, is here to testify on behalf of state Departments of Transportation across the nation. I am sure that Mr. Stephens will speak to the negative impact these cuts will have on Nevada. Nevada is the fastest growing state in the nation and we have huge needs for new road capacity, not to mention new transit and rail initiatives. A $50 million dollar spending cut in Nevada next year will force my state to cut back on critical transportation projects. The result will be more congestion, reduced productivity, worsened air quality, and lost jobs. This is not an acceptable outcome. My state has significant unmet transportation needs and these cuts cannot be allowed.

The Revenue Aligned Budget Authority – or RABA – mechanism was created to ensure that spending from the Highway Trust Fund was tied to revenues into the trust fund. This is a goal that I fully support. However, the RABA mechanism clearly needs to be fixed so that we can avoid the dramatic swings in spending that we have seen over the past few years.

One of the reasons that we authorized TEA-21 for six years and created the budget firewalls for highways and transit was to provide states with some certainty as to the level of funding they would receive each year. A stable and dependable funding stream is essential for states to develop long-term transportation plans and efficiently manage projects. I agree with the philosophy behind RABA -- that spending from the Highway Trust Fund should be connected to revenues, but I do not think it necessary for us to follow a broken mechanism off a spending cliff.

Regardless of the spending adjustment mandated by RABA, we cannot allow a 27 percent drop in highway funding next year. Adequate funding of our nation’s highways is important not only for obvious short-term economic stimulus and highway improvement needs, but for long-term reasons as well. This Subcommittee will be working with the chairman and ranking member of the full Environment and Public Works Committee to put together a TEA-21 reauthorization proposal early next year. One of my priorities is to ensure that adequate funding is available to meet our nation’s significant transportation needs.

With this in mind, it is important to understand that the funding level Congress enacts for FY 2003 will serve as the baseline from which our Committee’s reauthorization proposal will be scored. Therefore, if we base reauthorization on the President’s FY 2003 budget proposal, we will have $28 billion dollars less available to us than if FY 2003 spending equals the amount authorized in TEA-21.

A spending baseline that is $28 billion below the TEA-21 baseline would spell disaster for our transportation system. In fact, my focus is on doing just the opposite and finding a way to increase funding for all of the components of our surface transportation system – highways, transit, and rail. This is why the leaders of the Senate Environment and Public Works Committee have worked on a bipartisan and bicameral basis with the House Transportation and Infrastructure Committee to introduce the “Highway Funding Restoration Act.”

This legislation, which every member of this Committee cosponsored, will ensure that funding in fiscal year 2003 is at least at the level authorized in TEA-21. Rest assured that I will be advocating for the highest funding level possible, but I will not accept a penny less than the amount authorized in TEA-21.

I know that Administrator Peters shares some of my concerns about the impact of these proposed highway-funding cuts. Administrator Peters, welcome, and let me tell you how pleased I am that someone so familiar with the transportation challenges faced by fast growing western states is at the helm of the Federal Highway Administration. I look forward to working with you to develop a top-notch reauthorization bill.

I also welcome Assistant Secretary for Budget Donna McLean and look forward to further discussion on these important budget issues.