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The President’s Proposal:
The Department's Major Challenges:

Department of Transportation
Norman Y. Mineta, Secretary     202–366–4000
Number of Employees: 59,189
2003 Spending: $52.3 million
Major Assets: 10 operating administrations, including the Federal Aviation Administration, the Federal Highway Administration, and the Federal Motor Carrier Safety Administration.

   The Department of Transportation (DOT) helps ensure the safety and economic effectiveness of the roads, railways, pipelines, airways, and seaways upon which the nation’s economy depends.  Established in 1967, DOT sets federal transportation policy and works with state, local, and private sector partners to promote a safe, secure, efficient, and interconnected national transportation system.  DOT’s operating administrations have wide-ranging duties related to the operation and regulation of transportation.  They share a commitment to fulfill the Department’s national performance objectives of safety and mobility.  Late in 2002, the Congress passed and the President signed a bill transferring the Coast Guard and the Transportation Security Administration (TSA) to the new Department of Homeland Security.  It will be a major task for DOT to complete this transfer in 2003.  The President's Budget proposals concerning those organizations are discussed in the Department of Homeland Security chapter. 


   DOT's five key performance goals—improve safety, increase mobility in support of the nation’s economy, protect the human and natural environment, achieve organizational excellence, and support the national security strategy—form the basis for the 2004 Budget request.

   Transportation safety is the Department’s top priority.  To support this effort, the budget proposes increases for the Federal Motor Carrier Safety Administration (FMCSA) and the National Highway Traffic Safety Administration (NHTSA).  In addition, the Federal Aviation Administration (FAA), Federal Railroad Administration (FRA), and the Federal Highway Administration (FHWA) will increase their focus on their safety goals.  To increase mobility, the budget continues support for programs that improve the condition of the federal highway system, enhance the condition of the nation’s transit system, and increase air space capacity.  The Department also is undertaking several initiatives aimed at protecting the environment, including a FHWA partnership with the Environmental Protection Agency (EPA) to reduce air pollution.   To achieve organizational excellence, the Department is redoubling its efforts to enhance program effectiveness and improve responsiveness to its customers. 

Improving Transportation Safety

Increase Seatbelt Use 

To increase seatbelt and child safety seats use, NHTSA’s Safety Grant Program provides funds for safety awareness campaigns. For example, the District of Columbia (D.C.) has used NHTSA funds for its Project Safe Child program, which has nine child safety seat fitting stations geographically convenient to D.C. residents.  At the sites, seats are available at a low cost, and technicians help correctly install the newly-purchased seats and provide educational information to parents and caregivers. 

   Because the human toll and economic cost of transportation accidents are massive, promoting public health and transportation safety is the first objective of all DOT agencies.  To achieve this objective, the Department works with communities to educate the public about safety requirements and establishes safety standards for transportation industries.  The budget proposes $12.7 billion for transportation safety programs to meet the Department’s safety mission.  In addition, as a “stretch goal,” the Secretary has established an overall Departmental benchmark to reduce highway deaths from 1.5 to 1.0 fatalities for every 100 million vehicle miles traveled by 2008. 

Air Safety

   Commercial aviation is the form of transportation with the fewest human lives lost per mile traveled, according to National Transportation Safety Board data.  The nation’s airspace system includes 15,238 air traffic controllers, 3,364 significant airports, and 393 air traffic control facilities.  The 2004 Budget supports FAA’s efforts to provide the safest possible system through additional investments in personnel and airspace safety technology to prevent runway incursions.  The budget seeks $14 million for 328 additional controllers and safety inspectors.  Since 1993, 37 runway safety systems have been installed at busy airports. These investments will contribute to FAA’s goal of reducing the air carrier fatal accident rate by 80 percent between 1996 and 2007.  

Starting in 2004, DOT inspectors will use decals to ensure that only safe new entrant trucking companies may operate in the United States.

Surface Transportation Safety

   In 2002, 42,116 lives were lost in traffic accidents.  The economic cost of motor vehicle crashes is estimated to be more than $230 billion annually.  Since 1992, the rate of traffic fatalities has fallen as the number of fatalities has remained relatively flat and the number of vehicle miles traveled on the nation’s roads has increased.  This reflects the successes of federal, state, and local safety and enforcement programs and the greater public awareness of safety issues.

   Within DOT, FMCSA and NHTSA are the two agencies focused primarily on surface transportation safety.  Created in 2000, FMCSA regulates the safety of the large truck industry and seeks to cut the number of highway deaths attributable to truck crashes.  The agency is committed to helping reduce fatalities per 100 million vehicle miles traveled from 2.8 in 1996 to 1.6 in 2008.  FMCSA will concentrate on increasing the number of inspections at road-sides and other locations, improving the Commercial Driver Licensing program, and implementing a hazardous materials (HAZMAT) security program.  In 2004, $223 million is proposed to help states implement highway safety programs, and $224 million will support oversight of HAZMAT transportation, federal safety enforcement programs, and border safety inspections. 

   The Department will continue to concentrate its truck safety program on the southern border as the nation fulfills its commitment under the North American Free Trade Agreement to allow Mexican trucks to travel on U. S. highways.  In addition, the Department will begin to implement a New Entrant Program, in which every new commercial motor carrier company—Canadian, Mexican, or American—that applies to operate within the United States will be subjected to a safety audit in the first 18 months of operation before it receives a permanent safety decal.  Studies show that new entrants are less likely to comply with safety regulations and are more likely to be involved in crashes than well-established motor carriers.  Consequently, conducting new entrant safety inspections is an important step toward reducing truck-related accident fatalities and increasing highway safety.

Crash dummies and vehicle testing—NHTSA putting safety first.

   To help reduce highway fatalities and injuries, NHTSA is striving to increase seat belt usage from 69 percent in 1997 to 79 percent in 2004 and to lower the alcohol-related highway fatality rate from .63 per 100 million vehicle miles traveled to .51 per 100 million vehicle miles traveled in 2004.  In support of these goals, the budget supplies $218 million for safety operations and research programs, including $10 million for a crash causation study.  It provides another $447 million for grants to states for targeted highway safety programs to counter drugged and drunk driving and to enforce safety belt use.

   FHWA works to improve highway safety by promoting increased use of road-side safety features and conducting research into improved road design.  Likewise, FRA focuses on safety and security of the national rail system, primarily through inspectors who check the condition of the rail infrastructure.  In light of potential new risks, the budget recommends funds for new staff to inspect railways associated with the transportation of hazardous materials.

   Currently, a network of two million miles of pipelines transports natural gas to nearly 60 million residential and commercial customers in the United States.  The Research and Special Programs Administration (RSPA) operates the Department's national regulatory program to assure the safe transportation of natural gas, petroleum, and other hazardous materials by pipeline.  In 2004, RSPA will study ways to improve the performance of controllers who monitor pipeline operations.  

Improving Transportation Mobility

   DOT strives to improve mobility within the United States, recognizing that a safe, efficient transportation infrastructure is a key national asset crucial to the nation’s economy and defense.

   Over the last 20 years, travel and congestion have increased for all modes of transportation.  In response, the Department has targeted alleviating congestion on the roads and in the air.  To address congestion—as well as enhance infrastructure conditions—the Department is focusing on smart technology and system improvements.  Initiatives supported in this budget include expanding “intelligent” highway system technology and modernization of the airspace control system.  Total requested spending on this goal is $37.7 billion in 2004. 

Air Mobility

Essential Air Service—Is it Worth the Cost? 

The Essential Air Service (EAS) program pays airlines to provide service to small communities that may otherwise lack such service.  The events of September 11th had a dramatic impact on aviation. They resulted in reductions in air travelers and service—especially in rural locations—while increasing the resources needed to maintain subsidized service. The cost of EAS has more than doubled in the past year.  As of July 2002, EAS provided subsidies to air carriers in 114 communities—including 35 in Alaska, Hawaii, and Puerto Rico. Of the 79 communities in the continental United States, 14 have subsidies that exceed $200 dollars per passenger.  DOT has begun to implement reforms and control costs.  For example, until 2002, Utica, New York, which had average daily enplanements of only 3.7 persons and received an annual subsidy of $1,133,415, had a per passenger subsidy of $495.  In contrast, one could rent a car for a week at $190 and drive 50 miles to Syracuse’s Hancock airport, which is served by eight carriers.  Clearly this was not the intent of the program.  The President’s Budget is proposing significant changes to EAS to target subsidies where they are most needed.  EAS will now provide subsidies to the most isolated communities and will require local support through matching funds.

   After the terrorist attacks of September 11th, demand for air travel dropped significantly, but FAA is forecasting a gradual recovery.  FAA is working on airspace system improvements to mitigate the effects of flying in bad weather and use the air space more efficiently, thus helping speed planes to their destinations.  The budget requests $1,952 million for investments in air traffic modernization equipment that will allow air traffic controllers to steer planes onto the quickest flight paths and allow faster landings in poor weather.  Past FAA investments in new equipment have successfully increased air space capacity.

   FAA also looks to speed aircraft takeoff and landings by building additional runways with funding from the Grants-In-Aid program.  In 2003, new runways will become operational at Denver, Miami, Houston, and Orlando. The aim is to increase daily arrival capacity at the nation’s airports to 47,000 landings per day by the end of 2004.

Rush Hour: Congestion remains a major problem at the nation's busiest airports during peak times—overall on-time arrivals have increased from 75 to 82 percent in 2002. 

   The Grants-In-Aid for Airports program currently provides funding to airports for infrastructure projects.  Additional runways, improved technology and a decline in air traffic activity have reduced flight delays.  In 2002, the annual on-time arrival rate was 82 percent—compared to 75 percent in recent years.  These improvements, coupled with the findings of a Program Assessment Rating Tool (PART) analysis, leads to a recommendation that infrastructure funding be focused on major capacity, safety and noise mitigation projects that provide the greatest benefits to the national system, while targeting airports with significant needs.

Essential Air Service—Growth in Average Subsidy Per Passenger
  Actual 2002
Percent Change
1995 1999
Continential United States $79 $133 $229 +190%
Alaska, Hawaii, Puerto Rico $13 $42 $99 +662%

Intelligent Highways 

Vehicle crashes are one of the primary causes of highway congestion.  DOT’s Intelligent Transportation Systems (ITS) program funds research and development projects that speed delivery of emergency services, which saves lives and reduces congestion.  Systems with sensors  embedded in roads, closed circuit television cameras, and variable message signs allow local governments to detect slowdowns caused by accidents and initiate responses within seconds of an incident occurring.  For example, an ITS pilot project in San Antonio, Texas, is estimated to have achieved:

Surface Mobility

   Improving the condition of highways and bridges is critical to transportation mobility.  The federally supported National Highway System (NHS) comprises the most important national routes for trade and commerce.  The system includes all interstates and over 84 percent of other principal arterials.  While it accounts for only 4.1 percent of total road mileage in the United States, it handles 44.3 percent of total vehicle miles traveled.  Consequently, the condition of the NHS significantly impacts congestion, wear-and-tear on vehicles, the comfort of travelers, and fuel consumption.  In the past decade, highway and bridge conditions have steadily improved.  Of all vehicle miles traveled on the NHS, 92 percent in 2002 were on pavements with acceptable ride quality.

   To continue improving the condition of highways and bridges, the 2004 Budget requests resources to allow greater use of innovative pavement technologies and high performance bridge materials.  The budget also requests funding for increased use of Transportation Asset Management (TAM) conceptsand practices.  TAM is a strategic approach to managing and investing in transportation infrastructure that bases spending decisions on performance goals and economic and engineering considerations. 

Intelligent Transportation Systems—Command and control of real time traffic condition information speeds accident response teams and eases congestion.

   To limit the growth rate of congestion, the budget proposes funding for a variety of measures that will address traffic congestion in critical areas, including carpool projects, operational enhancements on highways and bridges, improved incident management, and implementation of smart work zone technologies, such as traffic monitoring.  In addition, the budget requests funding for traffic analysis and modeling and long-term research in operations and intelligent transportation systems.  The budget also targets funds to begin building a more efficient freight transportation system.

   Communities are increasingly incorporating transit—rapid bus, commuter rail and intercity-bus—into their transportation plans in an effort to reduce congestion.  Overall transit passenger miles traveled increased by 32 percent since 1980.  The 2004 Budget supports transit programs that target resources to the most cost-effective and innovative projects for meeting communities’ needs.  The Federal Transit Administration (FTA) is also instituting a series of improvements in its oversight and management of transit projects.

New Freedom Initiative

The President’s New Freedom Initiative embraces the goal of improving mobility by providing additional tools to persons with disabilities seeking integration into the workforce and full participation in society.  The Rhode Island Public Transit Authority’s (RIPTA) Flex Service exemplifies the type of innovative service the President’s initiative hopes to expand.  A statewide survey revealed that 81 percent of individuals with disabilities living in the outer suburbs and rural communities cited a lack of reliable transportation as an obstacle to accepting a job.  In response, RIPTA has implemented five flexible service demonstration programs in Rhode Island’s low-density suburban and rural communities that provide people with a reliable transit alternative. 

The 2004 Budget includes $145 million to support the transit component of the New Freedom Initiative and to expand transportation mobility options available to individuals with disabilities beyond the standards set in the Americans with Disabilities Act.

Reordering Intercity Passenger Rail Service

   The Congress created the National Rail Passenger Corporation (Amtrak) in 1971 as a for-profit corporation providing a national rail passenger system.  In 1997, the Congress reaffirmed its intent that Amtrak become self-supporting with enactment of the Amtrak Reform and Accountability Act, which required Amtrak to operate without federal subsidy by 2003.  Nevertheless, it has never broken even financially and has grown increasingly dependent on government aid.  Since 1971, American taxpayers have given Amtrak more than $24 billion.  Without fundamental reform, Amtrak will not function without continued substantial subsidies. 

   In the past year, after the loss of access to private credit, Amtrak was nearly forced to suspend operations as it ran out of cash.  Only a special loan from the federal government and a supplemental appropriation averted a shutdown.

Train or Plane? 

One of the reasons behind Amtrak’s fiscal difficulties is its continued operation of several routes that regularly lose hundreds of dollars each time a passenger steps aboard.  Below are the routes with the largest losses per passenger in 2001:
For several of these trains, it would literally be cheaper for Amtrak to buy each passenger a plane ticket to the next destination.  For example, a round trip ticket for direct flights between San Antonio and Chicago (the Texas Eagle route) can be purchased for as little as $216.  

   Despite Amtrak’s financial difficulties, in a few areas of the country Amtrak is a significant factor in intercity travel.  In June 2002, Secretary Mineta set out the Administration’s principles for reforming Amtrak, including:

   Amtrak reform can wait no longer.  The 2004 Budget follows through on these ideas by proposing to eliminate underused and inefficient long-distance train routes and reducing overhead operations where other options could perform them more efficiently.  To facilitate these changes, the budget proposes $900 million to support operations, expand Amtrak’s capital and infrastructure maintenance programs, and begin to address structural reform through measures the Administration believes will improve Amtrak’s future viability.  In an effort to ensure that states play a major role in determining the route structure of a national passenger rail system, the Administration will encourage states to contribute to those routes they believe are critical to their transportation needs. 

Protecting the Human and Natural Environment

   Transportation contributes ozone, carbon monoxide, and particulate matter to the atmosphere.  Approximately two-thirds of transportation-related emissions of those pollutants originate from on-road motor vehicles.  Still, total on-road mobile source emissions declined from 87 million tons in 1988 to 64 million tons in 1999, which marks a 28-percent improvement in a little more than a decade.  To further curb emissions, the 2004 Budget seeks resources to implement air quality standards and to offer technical assistance to communities working with EPA.  The budget also proposes funding to continue the success of the Congestion Mitigation and Air Quality program, which promotes transportation projects that help reduce emissions.

Achieving Organizational Excellence 

The Springfield Interchange in suburban Washington, D.C. has become one of the most costly highway projects in the country.

   With more than 59,000 employees and hundreds of programs, DOT faces significant challenges regarding customer satisfaction, employee effectiveness, and organizational performance and productivity.  The Department plans to focus on improving its oversight of highway projects funded with federal-aid highway resources.  Until now, FHWA staff have primarily provided technical assistance to states, rather than ensuring states have well-managed highway programs and cost-effective and justified projects.  Over the last six years, combined federal, state, and local investment in highways and transit systems has exceeded $500 billion, meaning a one-percent increase in efficiency could have saved $5 billion.  FHWA will provide more direct oversight of those projects over $1 billion and hold states more accountable for delivering highway projects on time and within budget. 

High-Dollar Mixing Bowl 

The Springfield Interchange overhaul in suburban Washington, D.C., a.k.a. the Mixing Bowl, has grown into one of the most expensive highway construction projects in the country.  Cost estimates have increased by 180 percent from 1994.  Because of lax project oversight, the project is now expected to cost $677 million instead of the $241 million first projected.  To prevent more situations like the Springfield Interchange in the future, the Administration is seeking to strengthen FHWA’s oversight role and improve financial and project management. 

Performance Evaluation of Select Programs

   For further details on these programs, please see the DOT chapter in the Performance and Management Assessments volume.

Program Rating Explanation Recommendation
FAA: Grants-in-aid for Airports (Airport Improvement Program) Moderately Effective The Grants-in-Aid for Airports program has adequately met its goals, such as keeping at least 93 percent of active airfield pavement in fair or better condition.    The budget request continues to support major capacity, safety and noise mitigation projects that provide the greatest benefits to the national system, while targeting airports with significant needs.  
FMCSA: Federal Motor Carrier Safety Administration Adequate The number of fatalities and injuries involving large trucks has not been reduced in recent years.  Though the agency has made progress, actual performance is below the annual safety stretch targets. The budget provides increased funding for motor carrier safety grants to support FMCSA’s safety goals.  Through strategic planning, FMCSA is reviewing its long-term and annual performance goals and will adopt a more realistic plan for achieving long-term outcomes.
NHTSA: National Highway Traffic Safety Administration Grant Program Moderately Effective NHTSA has shown measurable progress toward achieving its performance goals.  The rate of highway fatalities has been declining steadily since the inception of the state and community safety grant program in the mid-1960s. The budget provides increased funding for traffic safety grants to improve performance.  Continued success depends in large part on the progress of the agency's partners—states, local jurisdictions, the private sector, and safety organizations.
FHWA: Highway Infrastructure Moderately Effective The highway infrastructure program has a clearly defined purpose and has made adequate progress in achieving its goals.  In recent years, FHWA has made efforts to strengthen its program management and oversight activities. The budget provides a funding level consistent with the Administration’s reauthorization proposal.  It also recommends improved program and project oversight of states, and directs program resources to more comprehensive evaluation activities, particularly on the state level.

Program Reauthorization

   Both the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR-21) and Transportation Equity Act for the 21st Century (TEA-21) expire at the end of 2003.  These laws authorize most of DOT’s major program activities, including highway system funding, FTA, and FAA.  The proposals contained in the 2004 Budget form the foundation of the Administration’s principles and priorities for reauthorizing these programs.  The Administration expects to provide full recommendations for reauthorization of highway, transit, and aviation programs early in 2003, which will build on the progress achieved in the expiring laws.  

   The President's Budget proposals will extend the funding approach of TEA-21 that links highway spending to Highway Account Trust Fund receipts.  The budget also directs all revenue from gasohol taxes to the Highway Trust Fund (previously, 2.5 cents per gallon in gasohol taxes were diverted to general revenues).  This proposal adds approximately $600 million annually to Trust Fund receipts available for highway spending.  In addition to these sums, the Administration proposes a new highway infrastructure performance and maintenance initiative funded at $1 billion per year for six years.  This initiative would be based on the Surface Transportation Program funding formula and targeted to “ready-to-go” highway projects that address traffic congestion and improve infrastructure condition.  States would be required to commit funds in the first half of each fiscal year.  Failure to obligate funds quickly would trigger a reallocation of these funds among states. 

   Other highlights of the highway reauthorization proposal include:

Update on the President’s Management Agenda

   More details on DOT's implementation of the President’s Management Agenda can be found in the Performance and Management Assessments volume.

  Human Capital Competitive Sourcing Financial Performance E-Government Budget and Performance Integration
DOT has shown substantial, sustained progress in each management agenda area.  Since last year, DOT adopted a comprehensive human capital plan.  It developed a competitive sourcing plan and began a major competition study for a portion of the FAA workforce.  DOT progressed significantly in deploying a compliant financial management system, issued department-wide capital planning and investment control guidance; and, submitted performance-based budget justifications for 2004.  DOT’s status ratings, however, remain unchanged.  While DOT reached major milestones, much of the subsequent implementation is pending. 

Department of Transportation
(In millions of dollars)
2003 2004
   Discretionary Budgetary Resources:      
      Office of the Secretary 137 121 178
      Federal Aviation Administration 13,803 13,582 14,007
      Federal Highway Administration 31,767 27,574 29,294
         NYC: repairs to highways and ferry service after September 11th 342
      Federal Motor Carrier Safety Administration 354 367 447
      National Highway Traffic Safety Administration 422 425 665
      Federal Rail Administration 944 710 1,089
         NYC: repairs to Amtrak tunnels after September 11th 100
      Federal Transit Administration 6,768 7,226 7,226
         NYC: repairs to transit after September 11th 1,900
      Highway "flex" funding transferred to transit 1,177
      Research and Special Programs Administration 98 107 118
      Maritime Administration 216 207 218
      All other programs 71 81 92
      User fees -52 -122 -49
   Total, Discretionary budgetary resources1,2 58,047 50,278 53,285
   Mandatory Outlays:      
      Federal Highway Administration 1,272 1,301 1,302
      Office of the Secretary 2,240 468 32
         (Airline recovery after September 11th) [non-add] 2,222 50
      All other programs      
         Existing law 80 -169 -294
         Legislative proposal, Federal-aid Highways Emergency Relief Program 27
   Total, Mandatory outlays 3,592 1,600 1,067
Credit activity      
   Direct Loan Disbursements:      
      Transportation Infrastructure Finance and Innovation Program 51 500 953
      Railroad Rehabilitation and Improvement Program 101 205 198
      All other programs 3 7 7
   Total, Direct loan disbursements 155 712 1,158
   Guaranteed Loans:      
      Transportation Infrastructure Finance and Innovation Program 120 160
      Maritime Guaranteed Loans (Title XI) 225 338
      Minority Business Resource Center 5 18 18
   Total, Guaranteed loans 230 476 178
1 Includes both discretionary budget authority and obligation limitations.
2 Includes $2.8 billion in 2002 supplemental funding, of which $2.3 billion was for New York City.

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