Reauthorization of the Nation's surface transportation programs is a top
Administration priority. The Administration is pleased that H.R. 2400 is a
six-year bill that reflects many of the President's priorities. As the
President stated in his letter of March 28, 1998, however, he has
serious concerns that the extent of proposed new spending in this
transportation bill goes too far and could threaten both fiscal discipline
and the commitment to education and other critical investments in our
future. The Administration urges the House to reduce the spending
levels in H.R. 2400 and fully offset any new spending with acceptable
The Administration strongly supports the Spratt amendment, which would
extend the current highway and mass transit programs until July 1, 1998,
ensuring that important construction projects proceed uninterrupted. This
will provide sufficient time for completion of a budget resolution, making
clear the offsets required by the high levels of funding called for in this
We are pleased that BESTEA includes many of the provisions advanced by the
President last spring. There are significant and solid areas of agreement.
BESTEA builds upon the successes of ISTEA by retaining the basic program
structure for transit and core highway programs, including the bridge
program, as well as continuing the effective metropolitan and statewide
planning processes. The bill retains ISTEA's highly successful
environmental programs, and firmly supports Intelligent Transportation
Funding Levels and Off-Budget Treatment. H.R. 2400 would
increase surface transportation authorizations significantly above the
President's request -- increasing surface transportation outlays during
1998-2003 by at least $34.2 billion above the President's request. Yet
H.R. 2400 does not identify any offsets. Without offsets, severe cuts
in other domestic discretionary spending programs would be required over
the next five years in order to realize fully the authorized levels of
If this transportation bill is fully funded from discretionary spending,
it will force billions of dollars of additional cuts -- beyond those
already required to live within the BBA. If such cuts were made, the
President's request for nondefense discretionary programs would be reduced
by $31 billion over five years -- with serious consequences. For example,
compared to the President's request 50,000 - 100,000 fewer children would
participate in Head Start over 5 years; WIC would be cut by $431 million
over 5 years, with an average of 100,000 fewer people assisted each year;
Superfund would be cut by $166 million over 5 years; 138,00 fewer
low-income students would receive Pell Grants over 5 years; 39,000 fewer
AIDS victims would be assisted through the Ryan White program over 5 years;
and an average of 572 fewer border patrol agents would hired each year.
It would be extremely difficult for the Congress to find acceptable offsets
for this additional spending. To illustrate, the Senate-reported Budget
Resolution identified $16 billion in mandatory offsets for transportation
spending -- offsets that the President had proposed for funding vital
initiatives in education, research, veterans' benefits, food stamps,
environmental programs, and other domestic discretionary programs. Even
these offsets would provide less than half the amount needed to pay for the
increases in H.R. 2400.
We have moved our Nation from a decade of enormous deficits into an era of
strong economic growth and budget surpluses -- due in part to the fiscal
discipline required when making critical resource tradeoffs under a unified
budget. We strongly oppose any provision that would drain anticipated
budget surpluses prior to fulfilling our commitment to save Social Security
first. The Administration also has serious concerns about the provision in
H.R. 2400 which would move the Highway Trust Fund off-budget.
Demonstration Projects. The Administration believes that
individual States are best able to define high priority transportation
projects. The Administration has serious concerns regarding the number of
earmarked projects in the bill and the unprecedented $9 billion in
mandatory spending over six years for so-called "high priority" projects.
This level of earmarked projects circumvents the usual State planning and
selection process, undercutting key themes of ISTEA, including public
participation, analysis of alternatives, and environmental review. This is
not an appropriate way to allocate billions of dollars of public resources.
Disadvantaged Business Enterprises. The Administration
strongly opposes the Roukema amendment, which would effectively repeal
ISTEA's disadvantaged business enterprise (DBE) goals for highway and
transit projects. First enacted in 1987, the DBE program sets out a 10
percent goal for all federal highway contracts to go to disadvantaged
business enterprises. It is essential to continue equal opportunity in
competition for transportation contracts.
Safety Concerns. The bill's safety provisions should be
strengthened by mandating a .08 percent blood alcohol level as the national
standard for drunk driving; enacting a strong companion program to combat
drugged driving; prohibiting open containers of alcohol in motor vehicles;
and encouraging States to improve their seat belt usage rates to 85 percent
or enact primary seat belt laws.
Environmental Concerns. The bill's provisions regarding the
National Environmental Policy Act (NEPA), which the Administration strongly
opposes, should be deleted. The Administration particularly opposes the
proposed pilot program delegating the statutory authorities of Federal
agencies to States. The Department of Transportation should continue to be
responsible for ensuring that the environmental impacts of projects are
considered from a national perspective. Moreover, these provisions would
have the negative effect of actually delaying project implementation and
reducing the opportunities for public participation. In addition, the bill
should extend Congestion Mitigation and Air Quality Improvement (CMAQ)
program funding eligibility to potential non-attainment areas that may
result from the recently promulgated Clean Air Act standards.
Other Major Concerns. The Administration will also seek
amendments to H.R. 2400 in the House or in Conference to address the
concerns described below and in the Attachment.
- The bill should increase the funding for, flexibility of, and number of
Access to Jobs projects. The current limits on the number and design of
projects and low funding levels will make it difficult for States and
communities to succeed in moving people from welfare to work.
- The bill should increase the ability of States to leverage their
transportation resources by including the State infrastructure bank and
credit enhancement provisions as proposed by the Administration. The
Administration, however, strongly opposes any provision that would permit
direct and indirect Federal guarantees of tax-exempt obligations and the
subordination of Federal loans for certain transportation projects in
contravention of longstanding Federal credit policies.
- The provision limiting transit preventive maintenance and small
urbanized area operating assistance to $400 million per year should be
- The bill should authorize the full $161 million requested for National
Park roads and parkways. The funding levels currently authorized in the
bill are inadequate to support these important programs.
- The bill should include a provision allowing employers to offer their
employees transit and vanpool benefits in lieu of compensation, thus making
the tax treatment of transit and vanpool benefits the same as for parking
benefits under the Internal Revenue Code.
- The bill should extend the excise tax incentives for ethanol (but
without phasing down the rates of the benefits), thereby supporting the use
of alternative fuels to improve our Nation's air quality.
H.R. 2400 would increase direct spending by $8.3 billion above the baseline
over six years. Most of this increase in mandatory spending would result
from the over 1,400 demonstration projects included in this bill. Without
any mandatory offsets, if this spending were scored on-budget as it should
be, the bill would result in a sequester of mandatory programs as required
by the Budget Enforcement Act. A sequester would result in
across-the-board cuts in programs such as Medicare, Guaranteed Student
Loans, programs of the Commodity Credit Corporation, Social Services Block
Grants, and Extended Unemployment Benefits.