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Executive Summary #1298es on Federal Budget

June 22, 1999

June 22, 1999 | Executive Summary on Federal Budget

Executive Summary: Crafting a Responsible Budget: Avoiding Transportation Appropriation Chicanery

This year, Congress has demonstrated its commitment to fiscal discipline in various budget resolutions, subcommittee funding allocations, and committee-reported appropriations legislation. Many of its most difficult decisions, however, lay ahead. Funding critical programs and sticking to the spending caps agreed to in the Balanced Budget Agreement of 1997 may not be possible without raiding the Social Security surplus--unless Congress can achieve further savings in bills already reported out of the House and Senate Appropriations Committees. Unfortunately, action thus far by the appropriations committees on transportation spending will make the task only more difficult in later bills.

The annual lament from both Congress and the White House regarding the restrictive budget system would sound somewhat more sincere if Congress and President Bill Clinton were not the joint authors of the current transportation funding system. For example, the House recently passed the Aviation Investment and Reform Act for the 21st Century (H.R. 1000, known as AIR-21) by a vote of 316 to 110. This bill repeats last year's fiscal fiasco in the Transportation Efficiency Act (TEA-21) by making many aviation programs mandatory and placing billions of dollars in federal aviation spending forever beyond the reach of the appropriations committees. TEA-21 passed the House by a vote of 297 to 86 and sailed through the Senate by a vote of 85 to 5, and was signed by President Clinton within days of reaching his desk. As a result, less than $14 billion of $50 billion in projected transportation spending now is subject to the appropriations review process.

Proponents of making transportation programs mandatory and moving them off budget usually point to highway and aviation trust funds as dedicated revenue sources that should not be raided to pay for general government programs. They rarely mention that removing these programs from annual review by the appropriations process makes it much easier to raid these accounts for low-priority home district pork-barrel projects.

Although the House already has acted to break the spending caps, it must continue to find savings in discretionary programs. Unfortunately, because of the ill-advised decision last year to make most transportation programs mandatory, this year's transportation appropriation bill does not offer many opportunities for substantial savings. Nevertheless, because Congress has committed itself to reserving 100 percent of the off-budget surplus for Social Security and 100 percent of any on-budget surplus for tax relief, every effort must be made to identify savings, however limited, within the transportation appropriation bill.

The Department of Transportation funds many programs that have fulfilled their purpose and no longer are needed, or have made a culture of costly management deficiencies, or are of the variety in which the federal government simply should not be involved. The bills now before Congress provide a good opportunity to stop wasting money. Eliminating obsolete programs, removing the federal government from private-sector activities, and shrinking or eliminating agencies or programs that have a history of chronic mismanagement are good avenues to take.

A careful examination of the line items in the transportation budget shows there are programs that would make good candidates for savings. For example:

  • Within the Office of the Secretary of Transportation, many positions and offices could be consolidated to reduce funding by $5 million below the level recommended by the House Appropriations Committee and $2 million below the level recommended by the Senate Appropriations Committee.

  • Limited savings also could be achieved within the Federal Railroad Administration, which oversees Amtrak, that amount to $5 million below the level recommended by the House and $2 million below the level recommended by the Senate.

  • The appropriations committees of the House and Senate both recommended combining the Office of the Administrator with the Rail Safety Office to reduce administrative overhead. The committees also recommended, however, a funding level for the new operations and safety account that is nearly 11 percent greater than the two offices have spent separately.

Congress can, and should, restrain federal spending on transportation programs by reestablishing the distinctions between national and local roles, responsibilities, and priorities. The national highway system envisioned by President Dwight D. Eisenhower in the 1950s is largely completed and could be maintained by local departments of transportation. Most mass transit systems serve local metropolitan areas using existing infrastructure. Airport operations could be handled by the private sector, which already has taken over most commercially viable railroad operations.

Congress cannot protect Social Security and stop the growth of federal government and taxes if it engages in budget chicanery to mask the true size of government. The U.S. Department of Transportation funds many programs that have fulfilled their original purposes and no longer are needed, that feature costly management deficiencies, and in which the federal government should not have become involved in the first place. The transportation appropriation bills now before Congress offer a good opportunity to stop wasting taxpayers' dollars in these ways.

Peter Sperry is a former Federal Budget Policy Analyst in The Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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