Feb 07 2002

PROPOSED FY2003 DEPARTMENT OF TRANSPORTATION BUDGET
STATEMENT OF SENATOR RICHARD SHELBY

WASHINGTON, DC - U.S. Senator Richard C. Shelby (R-AL), Ranking Member of the Transportation Appropriations Subcommittee, today commented on the proposed FY03 budget for the Department of Transportation:

"While the Transportation budget request is fairly straightforward, it does rely in small part on some of the same tried and rejected budget gimmicks such as new user fee taxes. Although the transportation budget request avoided the wholescale reliance on new user fees taxes that characterized the last administration's submissions, somewhere the budget gnomes just couldn't let go completely."

"The request continues the proposal for $123 million in new user fee taxes for rail safety inspections and the hazardous materials safety program, even though these proposals have been submitted to Congress and dismissed for the past five or six years, and the request resurrects a Coast Guard navigational fee for $165 million that has also been rejected previously by the Congress. I would be surprised if they fare any better this year.

"Although the hole in the budget created by the user fees requests is smaller than in years past, even a small hole will have to be made up somewhere. Because of the funding distortions caused by special budgetary treatment for other capital accounts, closing this gap will likely come at the expense of just those accounts that have the greatest difficulty absorbing the shortfall.

"But the difficulties presented by the user fee taxes budget gimmick pale in comparison to the $8.5 billion dollar cut in Highways.

"In years past, I have contended that the special budgetary treatment of the highway, transit and aviation capital accounts puts pressure on FAA operations, Coast Guard operations, and Amtrak subsidies. This year, the special budgetary treatment for highways puts pressure on itself as well as all those other accounts.

"Clearly, restoring some level of reason to the highway account will be the biggest issue the transportation budget will face in fiscal year 2003. I understand that the budget request complies strictly with the law as articulated in TEA 21, but I'd actually hoped for a little more leadership on infrastructure investment than a blind devotion to a flawed highway authorization act.

"I believe that because of the mechanically derived highway number, this budget presents an enormous challenge for this Subcommittee – namely, how to find the resources for a more responsible level of highway infrastructure investment. That is by no means the only challenge in this request, but it is undoubtedly the most daunting from a budgetary resource perspective.

"What the $8.5 billion dollar cut to the highway program demonstrates to me is the folly of trying to set infrastructure investment on automatic pilot and how flawed the TEA 21 legislation was in trying to match annual gas tax receipts to annual highway infrastructure appropriations.

"If the goal of TEA 21 was to set the highway program on auto pilot, then the RABA adjustment this year caused what aviators refer euphemistically to as 'controlled flight into terrain.'

"Secretary Jackson, as you begin to formulate reauthorization proposals for highways and transit, I hope and trust that you will avoid mechanical approaches to establishing highway obligation limitation levels.

"One, if not the primary argument forwarded for linking highway gas tax receipts to highway spending levels was the need to provide state departments of transportation with a stable and certain level of highway investment. If that was the goal, this budget request shows how badly TEA 21 failed. This request represents the largest swing in the highway program in history. Such a swing would not have been possible without the lack of accountability that comes from the TEA 21 autopilot.

"To illustrate just how counterproductive this approach is, consider what drives the amount of receipts into the Highway Trust Fund which are derived from gas and excise taxes. The economy drives the receipts. When the economy stumbles, receipts into the highway trust fund decrease. Under the approach required by the TEA 21 black box fuzzy logic, investment in highways, and the immediate job creation that highway spending supports, contracts as the economy slows.

"Just at the time we should be increasing highway spending for short and long term economic stimulus, the TEA 21 autopilot would have us cut highway spending. This is misguided, shortsighted, and an abrogation of our prerogatives as elected officials. This committee should not, and I believe will not, be bound by funding levels derived in an artificially constrained process void of the public policy and economic concerns that must influence decisions regarding responsible investment in highway infrastructure.

"Moving to other good news in the budget, I note that the Administration provided $521 million of additional subsidy for Amtrak in Fiscal Year 2003. Once again, I wish the Administration had provided some greater leadership in this continuing crisis. Simply requesting the same level of appropriation as was requested for fiscal year 2002 does little to extricate the country from this failed experiment in passenger rail service.

"I note that Chairman Murray anticipates an Amtrak hearing in the near future and I will save my detailed comments and observations for that hearing. But, in short, it is time to stop ignoring reality with Amtrak and to start doing something that makes sense. The Administration must lead on the issue of Amtrak because, unfortunately, a majority of the Congress has demonstrated its inability to effectively address the chronic Amtrak problem for more than 20 years. Amtrak will not go away, get better, cheaper, or more viable if we pretend it isn't there.

"Last year, at our budget hearing, Secretary Mineta indicated that he anticipated spending 70 percent of his time on aviation matters. I suspect that his estimate turned out to be about right – although, at the time, I don't think he was referring to aviation security matters.

"The budget requests $4.8 billion for the Transportation Security Administration. I look forward to greater detail about how that money and the $1.25 billion appropriated for Fiscal Year 2003 will be used to enhance the security of our transportation systems.

"As critically important as the security and national defense issues are, I would urge you to make time for the Department 's other core missions and programs: In particular, the Coast Guard's Deepwater and National Distress and Response System Modernization project are two of the most expensive and the most challenging procurements that the Coast Guard, if not the Department, have ever undertaken.

"Like Deepwater, the National Distress and Response System Modernization project is slipping and deserves greater attention from OST and OMB than it has received to date. I was recently informed that the Coast Guard will postpone the awarding the Deepwater contract. This does not bode well for a procurement that has been considered as having a high risk schedule and acquisition strategy.

"We have a hearing next week on Coast Guard programs and I will go into more depth on those procurements and other issues at that time, but I wanted to bring them to your attention and to encourage you, Undersecretary Magaw, to look into the Deepwater procurement during this most recent delay and try to make some sense of it from a homeland security and transportation security standpoint. I'm always concerned when a program that is advertised as the perfect solution to one set of missions for the Coast Guard emerges with no modification as the new and improved perfect solution to a dramatically different set of missions. There's some soap being sold here, and it carries a $10 billion dollar price tag.

"In turn, the NHTSA effort to comply with the TREAD act faces some substantial challenges and has had difficulty in meeting the statutory deadlines. I urge you to provide the management oversight to get that effort on track; Every year, more than 40,000 Americans lose their lives on our roadways while less than 3,000 die in the rest of the system. Accordingly, whatever improvements we can make in highway fatality rates pay significant dividends in terms of lives saved.

"The Federal government is committing more resources than ever to improve highway safety, and I'm not convinced we are doing as well as we should. 'Click-it or Ticket,' or similar seat belt mobilization campaigns if applied on a national basis should have immediate and lasting safety benefits;

"Fiscal Year 2003 is an important one for reauthorization proposals for highways, transit and aviation. I encourage you to review the things that have worked and those that have not before you formulate the administration's reauthorization proposals. Clearly in the aftermath of 9-11 and with the draconian cuts to the highway program necessitated by TEA 21, there is a need to substantially reassess the appropriateness of the lack of flexibility in our infrastructure investment programs.

"What I'm trying to say is that you have a lot of challenges facing you at the Department, and you must constantly resist only reacting to the crises of the moment. It is imperative that you keep a long term view of all the missions of the Department as well as manage the immediate challenges.



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