[Budget of the U.S. Government]
[VI. Investing in the Common Good: The Major Functions of the Federal Government]
[19. Transportation]
[From the U.S. Government Publishing Office, www.gpo.gov]


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                           19.  TRANSPORTATION

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                           Table 19-1.  FEDERAL RESOURCES IN SUPPORT OF TRANSPORTATION                          
                                            (In millions of dollars)                                            
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                                                                            Estimate                            
            Function 400                1996   -----------------------------------------------------------------
                                       Actual      1997       1998       1999       2000       2001       2002  
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Spending: \1\                                                                                                   
  Discretionary Budget Authority...     13,628     13,782     13,534     14,566     14,722     14,978     15,236
  Mandatory Outlays:                                                                                            
    Existing law...................      2,501      2,450      2,381      2,329      2,151      2,031      1,954
    Proposed legislation...........  .........  .........         35         22          6        -51       -651
Credit Activity:                                                                                                
  Direct loan disbursements........         47        216        591        791        863        879        879
  Guaranteed loans.................        826      1,065        477        477        477        477        477
Tax Expenditures:                                                                                               
  Existing law.....................      1,320      1,365      1,405      1,455      1,505      1,560      1,620
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\1\ This table excludes spending subject to obligation limitations.                                             

  ----------------------------------------------------------------------
   America's transportation network moves people through a combination 
of public and private systems, financed by Federal, State, and local 
governments and the private sector. Maintaining and improving these 
systems requires infrastructure investment, safe operations, and new 
technology.
   Though the Federal Government plays a major role in each of these 
areas, it does not act alone in any of them. With just a few exceptions, 
Federal transportation programs are designed to promote transportation 
access for all citizens, ensure the safe design and movement of 
privately-owned and operated vehicles, help a struggling segment of the 
transportation industry, or advance transportation research. In total, 
Federal transportation spending comes to about $39 billion a year.

 Infrastructure Investment

   America has four million miles of roads, 580,000 bridges, 123,000 
miles of railway, 5,500 public-use airports, 6,000 transit systems, and 
25,000 miles of commercially-navigable waterways. This extensive, multi-
modal network is essential to the Nation's commerce, and a more 
efficient system would help the economy.
   The Federal Government has helped develop large parts of the system, 
with much of the help financed by user fees and transportation taxes. 
Total Federal investment in transportation represents about half of 
total public investment--that is, $27 billion of the $54 billion of 
Federal, State, and local spending on transportation infrastructure in 
1993.

   Highways and Bridges: About 950,000 miles of roads and all bridges 
are eligible for Federal support, including the Interstate highway 
system, urban freeways, urban and rural principal and minor arterials, 
defense highways, and Federal lands roads. In 1998, the Federal 
Government plans to spend $19.8 billion to maintain and expand these 
roads, with the Federal funds financed by motor fuels taxes, mainly the 
gasoline tax. The Federal gas tax is 18.4 cents a gallon, of which 12 
cents finances formula grants to States for highway-related repair and 
improvement.
   State and local governments provide 56 percent of total highway and 
bridge infrastructure spending, most of which they generate 

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through their own fuel and vehicle taxes. The average State gasoline tax was 
19.3 cents per gallon in 1995. State and local governments also are 
accelerating their infrastructure projects by using debt financing, such 
as bonds and revolving loan funds. Under the new State Infrastructure 
Banks program, the Federal Government is providing funds to States to 
help underwrite debt issuance for highway and transit projects. In 
addition, the new Transportation Infrastructure Credit Program promises 
to provide similar financing innovations for nationally significant 
projects.
   The Interstate highway system is virtually complete, with 45,481 of 
the 45,500-mile system open to the public. Its completion marks the end 
of America's largest-ever public works project, begun during the 
Eisenhower Administration as a ``grand plan'' to meet the transportation 
needs of a rapidly growing Nation.

   Transit: As with highways, the Federal Government plays a partnership 
role with State and local governments on mass transit. Two cents a 
gallon of the Federal gas tax goes to fund transit grants to 
municipalities and States. Federal capital grants comprise about half of 
the total spent each year to maintain and expand the Nation's 6,000 bus, 
rail, trolley, van, and ferry systems. Together, States and localities 
invest over $3 billion a year on transit infrastructure and equipment, 
including funds to ``match'' Federal grants.
   In 1998, the Federal Government plans to spend $4 billion on transit 
capital. The Federal role is especially important to finance capital-
intensive urban rail systems and low-volume rural bus and van networks. 
About 80 million Americans depend on public transportation due to age, 
disability, or income. Furthermore, transit use by commuters eases 
roadway congestion and reduces polluting emissions.

   Passenger Rail: The Federal Government will invest about $424 million 
in 1998 to support the passenger rail system's infrastructure and 
equipment needs. The extension of the Northeast Corridor high-speed rail 
to Boston highlights the partnership between the Federal Government and 
private sector to improve passenger rail. The Federal Government funds 
the electrification of the rail line, while the private sector helps to 
finance the high-speed trainsets that will begin operating in late 1999, 
introducing three-hour service between New York City and Boston.
   Airports: The Airport Improvement Program (AIP) provides grants to 
States, localities, and airport authorities to maintain and enhance 
airport safety, preserve airport infrastructure, and expand capacity and 
efficiency throughout the system. The AIP typically funds a fourth to a 
third of all capital development at public use airports, while airport 
revenues (e.g., concession revenues, landing fees, passenger facility 
charges) finance the rest.
   Other Transportation: With regard to commercial shipping 
infrastructure, Federal loan guarantees facilitate the construction of 
new vessels and the renovation of existing vessels. Port development is 
left largely to State and local authorities, which have invested over 
$14 billion in infrastructure improvements over the past 50 years. Of 
America's 541 private freight railroads, the largest 11 moved over one 
trillion ton-miles of freight in 1994--about a third of the total ton-
miles shipped. Freight railroads finance their own infrastructure, 
spending over $7 billion a year to upgrade and maintain track and 
structures.

 Safe Operations

   The Federal Government works with State and local governments and 
private groups to mitigate the safety risks inherent in the 
transportation system. It regulates motor vehicle design and operation, 
inspects commercial vehicles, educates the public about safe behavior, 
directs air and waterway traffic, and rescues boaters in danger.
   A broad range of Federal activities are designed to cut the number of 
deaths and injuries from highway crashes, which number about 41,000 and 
five million a year, respectively. Due to Federal, State, local, and 
private efforts, safety belt usage reached an all-time high of 68 
percent in December 1995. Federal programs reach out to State and local 
partners, including health care professionals, to identify the causes of 
crashes in each community and develop new strategies to reduce deaths, 
injuries, and the resulting medical costs. These programs will be 
increas-

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ingly important as the number of young drivers grows. In addition 
to coordinating national traffic safety campaigns, the National Highway 
Traffic Safety Administration (NHTSA) regulates the design of 
automobiles and light trucks, investigates reported safety defects, and 
distributes traffic safety grants to States. The budget proposes $333 
million for NHTSA, a 10-percent increase over 1997.
   The Federal Government's most visible safety function is operating 
the air traffic control and air navigational systems. The Federal 
Aviation Administration (FAA) handles about two flights a second, moving 
1.5 million passengers to where they want to go each day. The FAA also 
uses its regulatory and certification power to ensure that every aspect 
of aviation is safe--from aircraft design and maintenance to the flight 
crew. In 1996, the FAA performed over 300,000 inspections to ensure 
compliance with safety regulations. To meet safety needs in 1998, the 
Administration plans to spend $7.2 billion on FAA operations and 
capital, five percent more than in 1997.
   The Federal Government also plays an operational role on major 
waterways. The Coast Guard places and maintains waterborne aids-to-
navigation, operates radio navigation and distress systems, guides 
vessels through busy ports, and regulates vessel design and operation. 
The Coast Guard helps ensure safety on minor waterways and inland lakes 
by providing boating safety grants to States, and by supporting a 
35,000-member voluntary auxiliary that performs complimentary boat 
safety inspections and educates boaters about safety. In 1998, the Coast 
Guard will invest $3.1 billion in its operating and capital programs, 
which are mainly dedicated to safety.
   The National Motor Carriers Program, for which the budget proposes 
$100 million in 1998, provides grants to States to enforce Federal and 
compatible State standards for commercial motor vehicle safety 
inspections, traffic enforcement, and compliance reviews. Uniform 
standards help coordinate law enforcement activities, and simplify the 
safety requirements of interstate trucking. Federal grants are designed 
to help States boost safety.

 Research and Technology

   The Federal Government has long led efforts to advance transportation 
technology. Federal transportation research has focused on building 
stronger roads and bridges, designing safer cars, and reducing human 
error in operating vehicles of all types. Today, the increasing 
congestion of roadways and airways is colliding with Federal budget 
constraints and with environmental and land-use concerns. Consequently, 
transportation planners believe that better management of the existing 
infrastructure is a cost-effective alternative to building more highways 
and airports. In 1998, the Federal Government will spend over $1 billion 
on transportation research and technology.
   The Federal Highway Administration's Intelligent Transportation 
Systems (ITS) program is developing and deploying technologies that will 
help States and localities improve traffic flow and safety on their 
streets and highways. These technologies include intelligent cruise 
control, passive tolling and inspection, and automated highways. The 
private sector, which works closely with the ITS program, will initially 
deploy many of the technologies developed with ITS funding.
   The FAA's research, engineering, and development programs help 
improve safety, security, capacity, and efficiency in the National 
Airspace System. For instance, the advanced traffic management system 
and the early introduction of satellite navigation capabilities will 
improve the aviation industry's competitiveness and the FAA's 
efficiency. In general, FAA research focuses on the causes of human 
error; aircraft safety and fire protection methods; aviation weather 
research; quieter engines and reduced aircraft emissions; and security 
and explosives detection systems.
   The National Aeronautics and Space Administration's Aeronautical 
Research and Technology program funds partnerships with industry that 
may revolutionize the next generation of airplanes, making them faster, 
more efficient, and more compatible with the environment. These 
activities include programs to advance the capabilities of sub-sonic 
aircraft, to help develop large, high-speed civilian airplanes, and to 
enhance the performance 

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of aeronautics-related computing and communications facilities.

 Regulation of Transportation

   Federal rules greatly influence transportation. Over the past two 
decades, deregulation of the domestic railroad, airline, and interstate 
trucking industries has contributed to the Nation's economic growth. 
More recently, deregulation has continued. In 1993, for example, the 
Federal Government deregulated intrastate trucking, saving shippers and 
consumers an estimated $3 billion to $8 billion a year.
   The Federal Government also issues regulations to spur safer, cleaner 
transportation. The regulations improve safety--of cars, trucks, trains, 
and airplanes--leading to substantial reductions in transportation-
related deaths and injuries. In addition, they help reduce the number of 
oil spills and provide a faster response when spills occur.
  The Government has taken other regulatory steps to meet 
transportation-related environmental and safety goals in a cost-
effective manner. For example, between now and 2015, the costs of oil 
shipments to the United States will fall by hundreds of millions of 
dollars due to ``lightering zone'' regulations that permit older, 
single-hull vessels in the Gulf of Mexico to off-load oil. The Federal 
Government is also making its regulations parallel with those of other 
countries. An agreement on aviation safety rules--now under negotiation 
with the European Community--promises to save airlines at least $100 
million, and possibly $1 billion, over 10 years.

 Tax Expenditures

  Employer-provided parking and transit passes are, for the most part, 
not subject to income taxes, costing the Government an estimated $6.9 
billion from 1998-2002; the estimate does not include the value of 
employer-owned parking. To finance infrastructure, State and local 
governments issue tax-exempt bonds whose costs to the Federal 
Government, in lost revenues, are reflected in the General Government 
and Community and Regional Development functions.