Feb 14 2001


2:00 P.M., SD-124

Welcome to the first hearing held by the subcommittee on transportation in 2001. This morning's hearing has a different focus than most hearings held by this committee. Normally, the Appropriations Committee responds to the Administration's budget proposal with a series of hearings and submitted record questions that are designed to get more information about the budget, to compare the new request to ongoing efforts by the Administration, and to justify new initiatives proposed by the President. This information helps the Committee make informed decisions as it develops appropriations legislation. However, there is another side to the responsibilities of the Appropriations Committee _ oversight of the federal agencies that we fund. It is imperative to ensure that federal taxpayer dollars are spent wisely and well. While we await the Administration's fiscal year 2002 budget request, I thought it would be useful to assess how the Department is doing and where there is room for improvement.

Proper management of federal funds cannot be taken for granted. That's the reason federal agencies have inspectors general, to audit and investigate agency management and detect cases of fraud, waste or abuse. The General Accounting Office, an investigative arm of the Legislative Branch, also performs audits and evaluations of government programs and activities, often at the direction of Congress.

Today, we are joined by John Anderson, Managing Director for Physical Infrastructure at the General Accounting Office, and by Ken Mead, the Department of Transportation Inspector General. Both GAO and the IG have published recent reports on management issues at the Department of Transportation.

The January 18, 2001 Inspector General report, titled "Top Ten Management Challenges _ Department of Transportation", sets out ten top priority management issues. The report closely parallels prior reports with only slight modifications to last year's list and with the notable establishment of the "Departmental Business Practices" challenge that incorporates and broadens a range of administrative activities at the department.
The last two years, the Congress has provided substantial supplemental funds to the U.S. Coast Guard for operations and for capital acquisition. I'm becoming more concerned about this practice _ it seems to me a poor practice to get into the habit of always providing additional funds for operations through supplemental appropriations acts. This practice leads to expectations on the part of the Coast Guard that they will always get bailed out of funding shortfalls and provides a disincentive to manage operations and personnel to the annually appropriated funding level. In addition, it could actually encourage the Coast Guard to neglect those programs that provide the strongest case for supplemental funding. I'm committed to funding Coast Guard operations, but I'm increasingly troubled by how that funding is cobbled together during the course of the year. It is one thing to address an unanticipated funding shortfall, but the recent addiction to supplemental funding for routine operations is not good for the Coast Guard.
No management challenge hearing would be complete without some reference to the financial condition of Amtrak. In November 1998, an independent assessment of Amtrak's financial requirements was published, as required by the Amtrak Reform and Accountability Act. The Inspector General's office closely monitored the assessment process, and probably has the clearest view of Amtrak's current financial condition, and of whether the projections on which the railroad has based its plan to reach self- sufficiency by 2002 are realistic and achievable. The GAO has prepared many reports on Amtrak's financial and operating performance, including the May 1998 report on the financial performance of Amtrak's 40 routes nationwide, which showed that only one route, the Metroliner, actually makes a profit, and that overall, Amtrak's expenses are almost twice as great as its revenues. This is a management issue, a labor issue, and a political issue _ and it's an issue that has cost the American taxpayers over $23.7 billion over the last 30 years.
Oversight is an important part of the Appropriations Committee's responsibilities. The Committee allocates federal funds based on informed decision making. This requires a close examination of the administration's budget, and oversight of how funds, once allocated, are managed. I hope that today's hearing will help us better perform this duty, by exploring together some management challenges that have been raised by both the executive and legislative branch investigative bodies.
In addition, I hope that an oversight hearing of this breadth helps our new subcommittee members and our new ranking subcommittee member, Senator Murray of Washington State, get a flavor for the scope and focus of the subcommittee.