This Statement of Administration Policy provides the Administration's
views on the Transportation and Related Agencies Appropriations Bill, FY
1998, as reported by the House Appropriations Committee. Your
consideration of the Administration's views would be appreciated.
The Administration is pleased with many aspects of the Committee bill,
particularly funding support provided for transportation safety and
transportation infrastructure programs. As discussed below, the
Administration will seek restoration of certain of the Committee's
reductions from the President's request. We recognize that it will not be
possible in all cases to attain the Administration's full request and will
work with the House toward achieving acceptable funding levels.
The Administration is committed to working with the House to identify
reductions in the bill in order to find offsets for the restoration of
funds that the Administration seeks. The Administration suggests that
virtually all of its priorities could be funded through limited reductions
in infrastructure programs for which the Committee's funding levels are in
excess of the Administration's requests. We urge the House to reduce
funding for lower priority programs, or for programs that would be
adequately funded at the requested level, and to redirect funding to
programs of higher priority.
The Administration realizes that the Committee has not funded several
requested programs because they have not yet been authorized as part of the
National Economic Crossroads Transportation Efficiency Act (NEXTEA). The
Administration reiterates its support for State Infrastructure Banks, the
Transportation Credit Enhancement program, and the Access to Jobs and
Training program. These programs will significantly increase the impact of
Federal transportation investment and help to make "welfare to work" a
reality. They can be accommodated within the overall funding levels agreed
to by the Committee.
Federal Aviation Administration
The Administration is concerned that the overall funding level
provided by the Committee for the Federal Aviation Administration (FAA)
Operations account is $36 million less than requested. Although the
Committee has attempted to target its reductions to administrative and
non-safety areas, certain reductions could indirectly affect safety-related
programs. For example, the shortfall in contract maintenance funding would
likely be absorbed within base resources, possibly to the detriment of
other critical activities. In addition, the reduction to the Chief
Counsel's office would eliminate the new positions established in 1997, in
the aftermath of the Valujet accident, to implement the Dangerous Goods and
Cargo Security initiative. To ensure that the FAA has adequate resources
to maintain the safe and efficient operation of the Nation's airspace
system, it is important that the request for FAA Operations be fully
The Committee's $15 million reduction to Research, Engineering,
and Development could delay deployment of explosive detection and
anti-terrorism technology needed to assure the security of the traveling
public at airports nationwide. In addition, for the Facilities and
Equipment account, the House is encouraged to provide FY 1998 funding to
accelerate the deployment of security enhancement equipment, with offsets
from excess infrastructure funding. The Administration urges the House to
provide the $100 million in advance appropriations requested for this
equipment in FY 1999 so that continuity can be assured in the procurement
The Administration is deeply concerned about the level of funding
provided for Amtrak. While we applaud the Committee's decision to provide
Amtrak with total funding at a level close to the President's request, we
strongly urge the House to reallocate some of those funds from capital to
operating grants to address Amtrak's critical need for operating support as
indicated in the President's FY 1998 Budget.
The budget justification prepared by the Department of Transportation
notes that Amtrak requires $344 million in operating grants, plus $445
million in capital assistance, to meet its financial obligations and to
continue reducing its need for operating grants. The Committee's decision
to provide Amtrak with only $283 million in operating grants falls $61
million short of the amount needed. The Administration strongly supports
the funding levels proposed in the President's budget, which are not
affected by certain technical scoring issues raised during markup.
The Federal operating subsidy supports Amtrak's day-to-day operations.
Even at the funding levels proposed by the President, Amtrak will be able
to remain solvent only by further increasing revenues and reducing costs.
If Congress appropriates an amount for operating grants that is less than
the $344 million requested by the President, it is questionable whether
Amtrak would have cash reserves sufficient to meet its obligations. In
light of these considerations, we strongly urge the House to provide Amtrak
with operating grants of $344 million in FY 1998.
The Administration is concerned with provisions of the Committee bill
that would authorize an Amtrak Commission to review and recommend changes
to Amtrak's route structure. Amtrak has cut routes substantially in the
recent past, and enactment of the Administration's current reform proposal
("Amtrak Restructuring Act of 1997") would allow Amtrak even greater
flexibility to restructure its operations as necessary.
The Administration objects to the Committee bill's prohibition against
using Amtrak capital funds to pay debt service. As noted in the
Administration's NEXTEA proposal, funds for capital investment are
appropriately used to pay for expenses related to debt service (i.e.,
principal and interest).
The Administration commends the Committee for not funding highway
demonstration projects. However, the Administration objects to the
Committee's earmarking of 42 transit projects for which Full Funding Grant
Agreements (FFGAs) have neither been signed nor are expected to be signed.
More than half of these projects have yet to complete required planning and
engineering studies to determine their costs and benefits. The Federal
share of the cost to complete only those projects for which cost data is
available would be more than $4 billion, and the cost for all of the
projects could be as much as $29 billion. This is in addition to the $3.7
billion outstanding Federal share of projects with existing FFGAs. Such
earmarking obviously risks creating expectations that may be difficult to
meet under a balanced budget.
The Committee has provided substantial funding to conduct several
earmarked operational tests within the Intelligent Transportation Systems
(ITS) program. The Administration has requested funding in NEXTEA to
support operational tests and would prefer that, rather than setting aside
funds for specific projects, these projects compete on an equal basis with
other potential proposals. Furthermore, the ITS program's focus is
shifting from operational testing to integrated deployment. NEXTEA
provides $100 million for a new Deployment Incentives program to encourage
integrated deployment. The operational tests funded by the Committee could
be duplicative of previous tests.
The Administration opposes the provision of the Committee bill that
would prevent the use of funds by the FAA for the Flight 2000 demonstration
program. The Flight 2000 program was recommended by the White House
Commission on Aviation Safety and Security to demonstrate the efficiencies
and expanded aviation capacity that can result from the use of new
technologies to manage air traffic.
The Administration also opposes the language in the Committee bill
that would prohibit any funds from being used for the FAA to plan,
finalize, or implement any regulation that would promulgate new aviation
user fees not specifically authorized by law. The Administration considers
cost-based user fees to be a viable and appropriate means of financing the
FAA. Restricting the FAA from developing new user fee proposals is a
threat to responsible planning for the future financing of the agency.
Finally, the Administration opposes the provision of the Committee
bill that would prohibit any funds from being used for changes in the
Corporate Average Fuel Economy (CAFE) standards. The provision would
effectively dictate that any CAFE rulemaking not deviate from existing
standards. The Administration believes that any rulemaking related to CAFE
standards should be addressed in an open proceeding in which relevant
issues are considered and in which all interested persons and parties are
able to participate in fashioning the appropriate outcomes.
Additional Administration concerns with the Committee bill are
contained in the attachment.