[Budget of the United States Government]
[V. Preparing For the 21st Century]
[5. Investing in Infrastructure]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                     5.  INVESTING IN INFRASTRUCTURE

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   I think it's important also to point out that as we invest in . . . 
bridges and roads and transit systems, we are also building a bridge to a 
cleaner environment. We're building a bridge from welfare to work. We're 
building a bridge to sustainable communities that can last and grow and 
bring people together over the long run.
                                      President Clinton                                                        
                                      March 1997                                                              

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   For America to continue prospering in the 21st Century, its 
transportation infrastructure must be safe, integrated, and efficient 
enough to serve the Nation's growing commerce and mobility demands.
   This Nation has the world's most extensive transportation system, 
with a transportation infrastructure that includes 3.9 million miles of 
public roads, 180,000 miles of railroad track operated by freight 
railroads, 25,000 miles of commercially navigable waterways, 5,500 
public use airports, 1.4 million miles of privately operated oil and gas 
pipelines, and over 6,000 transit systems.
   Investment in infrastructure is good for America, spurring economic 
growth; improving safety and public health; enhancing U.S. 
competitiveness globally; increasing mobility, access, and 
transportation choice for all Americans; and supporting our national 
security. To ensure that our national transportation system can meet the 
demands of the 21st Century, we must build upon the infrastructure we 
have today and improve its quality to meet tomorrow's need for a system 
that is intermodal, cleaner, and safer, and that promotes sustainable 
and inclusive communities. And we must focus our resources through 
innovative mechanisms, such as the President's new Transportation Fund 
for America.

Creating the Transportation Fund for America

   The budget proposes a new Transportation Fund for America to 
highlight the importance of investing in transportation and maintaining 
the Administration's record levels of transportation spending. The Fund 
includes all of the Transportation Department's highway, highway safety, 
transit, and air transportation programs.
   Highways and Bridges: The Fund includes $21.5 billion for the 
          Federal-aid Highways program to maintain and improve the 
          nearly 955,550 miles of eligible roads and bridges. The 
          increased highway and bridge funding in recent years has kept 
          pace with maintenance requirements and reversed the 
          deterioration of our transportation system. On the Interstate 
          system, for example, both pavement and bridge conditions have 
          improved in the 1990s. In addition to traditional grant 
          programs, the Fund provides the resources for innovative 
          approaches to address infrastructure needs. Under the State 
          Infrastructure Banks program, the Federal Government helps 
          States underwrite debt issuance for highway and transit 
          projects. The new Transportation Infrastructure Credit 
          Enhancement Program provides grants to improve the financing 
          for nationally significant projects, including public-private 
          partnerships.
   Environment: The Federal Highway Administration's 
          Transportation Enhancements and Congestion Mitigation and Air 
          Quality Improvement Programs, for which the Fund includes a 
          combined $1.8 billion, address the environmental impacts of 
          transportation by funding bike trails, transit projects, 
          pedestrian facilities, historic preservation projects, water 
          pollution mitigation, beautification projects, and more. These 
          efforts can improve air quality and

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          help reduce the number of days when air pollution exceeds 
          National Ambient Air Quality Standards.
   Highway Safety: The Fund includes $406 million for the 
          National Highway Traffic Safety Administration (NHTSA), a 22-
          percent increase over the 1998 level, which will fully fund 
          the Presidential Initiative to Increase Seat Belt Use Nation-
          wide; the President's Initiative on Drugs, Driving and Youth; 
          and the President's Partnership for a New Generation of 
          Vehicles. These programs help fulfill the President's goal of 
          promoting public health and safety by reducing transportation-
          related deaths and injuries, and the proposed funding will 
          enable NHTSA to expand the Federal Government's partnership 
          with other levels of government, private organizations, and 
          citizens. NHTSA will continue to work with the medical and 
          health communities to focus on the significant public health 
          implications of highway fatalities and injuries and the 
          associated economic costs to society.
   Transit: The Fund provides $4.6 billion for transit 
          infrastructure, including $3.7 billion in formula grant funds 
          to maintain and expand transit systems in urban, small urban, 
          and rural areas. Nation-wide, the elderly, people with 
          disabilities, and economically disadvantaged individuals rely 
          heavily on these systems. The Fund includes $876 million for 
          major capital investments, providing the resources to meet the 
          Administration's full funding grant commitments to construct 
          new, or expand existing, transit systems.
   Air Transportation: The Fund includes $9.7 billion for 
          Federal Aviation Administration (FAA) programs, a seven-
          percent increase over the 1998 level. It includes $5.6 
          billion, a six-percent increase, to continue operating the 
          world's safest air traffic control system; $2.1 billion, a 14-
          percent increase, to buy next generation equipment for the 
          system; and $290 million, a 46-percent increase, to research 
          ways to make the system safer, more secure, and more 
          efficient. It also provides $1.7 billion in grants to improve 
          the Nation's airports.

Building an Intermodal System

   Americans do not view transportation through the lens of individual 
modes, such as highways, trains, or marine or air travel. Rather, they 
expect transportation to deliver results--moving people and goods from 
point to point. Infrastructure investment builds and maintains the 
individual links in the transportation chain and forges them together 
into an effective intermodal network.
   The budget proposes a record Federal investment of nearly $30 billion 
in transportation infrastructure--airports, highways, transit, and 
trains--continuing the trend of rising investments in infrastructure 
under this Administration. In 1999, infrastructure investment would rise 
to a level that is 42 percent higher than the annual average of $21.1 
billion from 1990 to 1993, and 13 percent higher than the annual average 
of $26.6 billion from 1994 to 1998 (see Table 5-1). These increases have 
helped address demands arising from the greater movement of people and 
goods in a growing economy.
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                                           Table 5-1.  AVERAGE ANNUAL TRANSPORTATION INFRASTRUCTURE INVESTMENT                                          
                               (Appropriations, obligation limitations and exempt obligations; dollar amounts in millions)                              
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                                                1990-1993  1994-1998             Percent Change: 1990-1993 Average    Percent Change: 1994-1998 Average 
                                                  Annual     Annual     1999                    to 1999                              to 1999            
                                                 Average    Average   Proposed                                                                          
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Infrastructure Investment.....................     21,145     26,575    29,982                    +42%                                 +13%             
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   Surface Transportation: Surface transportation programs account for 
much of the Federal, State, and local transportation infrastructure 
investment dollar. The 1991 Intermodal Surface Transportation Efficiency 
Act (ISTEA) broke new ground by giving States and localities more 
flexible and innovative funds for these programs. Over the past six 
years, the results have become clear:
   The percentage of pavement in poor condition on the National 
          Highway System fell from 11.3 percent in 1993 to 8.9 percent 
          in 1996.
   State and local officials have used flexible funds to target 
          improvements in mobility, economic development, and air 
          quality through projects that selectively foster pedestrian, 
          bicycle, and transit-supportive land uses. Local decisions 
          have directed $3.2 billion into transit investments--funds 
          that might otherwise have been restricted to highways, 
          regardless of local needs.
   Overall, the expansion of transit systems and purchase of 
          transit vehicles expanded transit capacity by 3.5 percent from 
          1993 to 1995. Transit investments also have leveraged local 
          development and redevelopment by improving public access to 
          major job centers and fostering land use that supports 
          commercial activity. Transit also eases congestion and 
          pollution by slowing the rate of growth of auto traffic.
   The Administration's proposed National Economic Crossroads 
Transportation Efficiency Act (NEXTEA) builds on these successes and 
significantly enhances the Nation's ability to promote intermodal 
development. NEXTEA authorizes $175 billion for surface transportation 
programs from 1998 to 2003, and increases core highway program 
authorizations by more than 30 percent over ISTEA levels. NEXTEA 
provides even greater flexibility for States and localities to target 
funds to projects--such as passenger rail, intercity bus, and transit--
that best meet community needs.
   The budget and reauthorization proposals for the Federal Highway 
Administration give State and local officials maximum flexibility to 
meet their local priorities. The budget provides $22.4 billion to 
maintain the highways critical to interstate transportation. In 
addition, it proposes $250 million to leverage private financing for new 
transportation infrastructure projects. Of the $250 million, $150 
million would capitalize State Infrastructure Banks that enable States 
to underwrite bonds, enhance credit, and make loans. The other $100 
million would fund the Infrastructure Credit Enhancement grants to 
improve the financing of public-private projects of national 
significance. The Alameda Corridor, first funded in 1997, is an example 
of a public-private project that will improve national competitiveness 
by contributing to efficiency in domestic handling of international 
shipments in and out of the Ports of Los Angeles and Long Beach.
   The budget also proposes a $4.6 billion investment in transit 
infrastructure. Relying on the NEXTEA program structure, the 
Administration proposes to combine the Discretionary Bus and Fixed 
Guideway Modernization programs with the Formula Grants program, giving 
transit properties maximum flexibility to meet their capital needs. Of 
the transit investments, $100 million would go for the new Access to 
Jobs and Training Program, designed to establish partnerships between 
transportation and human service providers to support new transportation 
links to entry-level jobs.

   Border Gateway Pilot Program: In NEXTEA, the Administration proposes 
a special border program to improve transportation at international 
border crossings and along major trade transportation corridors. The 
proposed $540 million Border Gateway Pilot Program ($90 million a year) 
would develop and implement coordinated, comprehensive border crossing 
plans and programs, thus promoting the efficient and safe use of border 
crossings within defined international gateways.
   Passenger Rail: Investments in passenger rail are a critical piece of 
our Nation's transportation infrastructure. The Administration proposes 
over $600 million to fund the National Railroad Passenger Corporation, 
known as Amtrak. This discretionary funding, combined with over $2.2 
billion available to Amtrak under the Taxpayer Relief Act, represents

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historic levels of Federal capital support for passenger rail.
   The 1998 Amtrak Reform and Accountability Act, Amtrak's first 
reauthorization since 1992, provides for its most comprehensive 
restructuring since the early 1980s. Amtrak is a vital component of our 
national transportation services in densely populated corridors, such as 
the Northeast; on medium- and short-haul routes; and on trans-
continental routes linking cities across the Nation. In many areas of 
rural America, it is the only transportation alternative to the 
automobile. With the available funds, Amtrak would be able to make 
needed capital improvements, including replacing its aging car fleet, 
upgrading its tracks, and rehabilitating stations and maintenance 
facilities Nation-wide. With these improvements, Amtrak would be able to 
attract new customers and better serve the ones it has. The budget also 
maintains the Administration's commitment to end Federal operating 
assistance to Amtrak by the year 2002.
   New high-speed operations in the Northeast corridor between Boston 
and Washington are a key part of this greatly improved rail service. As 
part of its $621 million request for Amtrak, the Administration proposes 
$200 million for the Northeast Corridor Improvement Project to 
significantly expand the flexibility that travelers enjoy. By the end of 
1999, with the completion of electrification between New Haven and 
Boston, the entire Boston-to-Washington corridor would operate as high-
speed rail. In 2000, the Washington-New York market would have two-hour-
and-45-minute service, while the New York-Boston market would have 
three-hour service, compared to current service times of three hours and 
four-hours-and-20-minutes, respectively. Travelers accustomed to the 
surface-airport-surface intermodal connections to and from urban centers 
along the Northeast corridor would have a realistic alternative of walk-
aboard, business-center-to-business-center rail service.

   Air Transportation--National Airspace System (NAS) Modernization: As 
air travel grows from 600 million to an estimated one billion passengers 
a year by 2010, demand for air traffic control (ATC) services will 
outstrip the NAS' current capacity. At the same time, equipment for the 
ATC system, although still safe, is reaching the end of its useful life. 
As a result, ATC modernization is one of the Administration's highest 
transportation infrastructure priorities.
   In its February 1997 report to the President, the White House 
Commission on Aviation Safety and Security, led by Vice President Gore 
and known as the Gore Commission, highlighted the need for increased 
aviation investment. It noted that ``inefficiencies in the system cost 
airlines in excess of $3 billion in 1995--costs ultimately paid by 
passengers.'' To address these inefficiencies, the Commission 
recommended that a ``modernized system (be) fully operational by the 
year 2005.''
   The budget is an important step toward achieving this goal. It 
proposes about 10 percent average annual increases in aviation capital 
modernization funding over the next five years. For 1999, the budget 
invests $2.1 billion in modernization, compared to the $1.9 billion that 
Congress enacted in 1998. It supports continued replacement of air 
traffic control computers at the Nation's busiest airports and en-route 
centers, and maintains the safety and integrity of existing systems 
until they are replaced. It also promotes the development of prototype 
software tools to allow air traffic controllers to route traffic more 
efficiently. By 2003, the projected capital modernization budget totals 
$3.2 billion (see Table 5-2).
   The budget makes longer-term investments in developing advanced 
navigation, communications, and decision support technology in pursuit 
of a revolutionary operational concept known as ``free-flight.'' It 
includes more than $300 million over five years for the Flight 2000 
Demonstration Program to test and validate the equipment and procedures 
needed to shift from traditional ground-based air traffic control to 
more collaborative air traffic management. Also, as the Gore Commission 
recommended, the budget proposes $100 million in 1999 to purchase 88 
explosives detection systems, 125 trace detection devices, 85 carry-on-
baggage x-ray machines, and as many as 100 hardened cargo containers for 
passenger jets.

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                Table 5-2.  FEDERAL AVIATION ADMINISTRATION MODERNIZATION AND OPERATIONS FUNDING                
                                 (Budget authority, dollar amounts in millions)                                 
----------------------------------------------------------------------------------------------------------------
                                                                                               Dollar    Percent
                                                        1997      1998      1999      2003     Change:   Change:
                                                       Actual   Estimate  Proposed  Proposed   1998 to   1998 to
                                                                                                1999      1999  
----------------------------------------------------------------------------------------------------------------
Modernization.......................................     1,938     1,875     2,130     3,185      +255      +14%
Operations..........................................     4,953     5,337     5,631     6,839      +294       +6%
----------------------------------------------------------------------------------------------------------------

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   In addition, the budget proposes significant increases for FAA 
operations. It increases funding by six percent, to $5.6 billion, to 
ensure the continued safe and efficient operation of the National 
Airspace System and fully fund Gore Commission recommendations (see 
Table 5-2). The budget provides funds for 185 new air traffic 
controllers, 150 new maintenance technicians, and 45 more safety 
inspectors, and more funds to operate and maintain newly acquired 
systems, expand the aging-aircraft inspection program to cover non-
structural systems, develop a standard safety database to share 
information in accident prevention programs, and perform airport 
vulnerability assessments.
   As aviation funding rises in the next five years, the budget assumes 
that direct user fees will support more of this investment. Over time, 
excise taxes will give way to more efficient service-based charges. By 
2003, direct user fees, which encourage better system management and 
more accurately reflect system use, would fund the NAS completely.

   Airport Grants: About 3,300 large and small airports are eligible for 
Federal capital grants to help build runways and make other capital 
improvements that enhance capacity, safety, security, and noise 
mitigation. The budget proposes $1.7 billion for the Airport Grants 
Program that, along with State and local funds, supplements airport 
revenues that fund 84 percent of the development costs of commercial 
service airports. These revenues include about $1.1 billion a year in 
local passenger facility charges, authorized in 1990 and paid by 
passengers to improve the aviation facilities they use. The collections 
go directly to the local airports for improvement projects.

Promoting a Cleaner and Safer America

   In recent years, the Nation has recognized that we have limited 
ability to add new physical capacity to our transportation system. 
Furthermore, the effects of new physical capacity on the environment and 
the quality of our lives are often unacceptable: air and noise 
pollution, congestion, community disruption, and loss of land for 
alternate uses are just a few examples. We also must ensure that, as our 
transportation system expands, we improve the way we protect our 
families from the hazards of travel.

   Safer Roads: Transportation safety, an Administration priority, is an 
integral component of investment in our highway transportation system. 
The highway and vehicle safety programs that NHTSA administers reduce 
fatalities and injuries. The economic cost to society of motor vehicle 
crashes is an estimated $150 billion a year, according to an analysis of 
1994 NHTSA data. NHTSA's programs have played a significant role in 
saving over $30 billion of additional economic costs that would 
otherwise accrue.
   The budget increases funding for NHTSA programs by 22 percent above 
1998 levels, fully funding the Presidential Initiative for Increasing 
Seat Belt Use Nation-wide. This Initiative is designed to increase seat 
belt use from the current 68 percent to 85 percent in 2000 and 90 
percent in 2005. It reflects a broadened, more intensive public 
education program involving public and private partnerships, and more 
State participation in enacting strong laws and effectively enforcing 
them. NHTSA's outreach program and State participation are designed to 
reduce alcohol and drug-related fatalities and injuries. Further,

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NHTSA's research and vehicle programs employ engineering and marketing 
approaches to improve vehicle safety and enhance our highway safety and 
infrastructure.

   Intelligent Transportation Systems (ITS): In our surface modes, the 
broad range of technologies that the Administration is developing, 
testing, and installing under the ITS program hold the promise of 
meeting greater traffic demand with existing facilities; reducing 
congestion; and improving safety. ITS programs can also increase 
personal mobility, cut freight costs, and allow firms to develop 
customized transportation solutions. Together with the local flexibility 
that ISTEA offers, these programs helped hold peak-hour congestion 
growth on urban interstate highways to 2.5 percent from 1990 to 1995, 
despite greater annual increases in vehicle travel.
   Congestion Mitigation and Air Quality Improvements (CMAQ): To make 
America's transportation system more environmentally sensitive, the 
budget proposes $1.3 billion for the CMAQ program, which funds many 
innovative infrastructure projects to improve the Nation's air quality 
and reduce congestion. Transit investment and bicycle- and pedestrian-
oriented infrastructure projects have provided commuting and recreation 
alternatives in many of our heavily populated urban areas, and 
coordinated responses to congestion have enabled local communities to 
reduce emissions.
   Maritime Efficiency: America's roads and railways stop at the border, 
but our economic and national security interests extend across the 
globe. Our ports and waterways tie America to the rest of the world. The 
Coast Guard is developing the Port and Waterway Safety System to improve 
shipping control and increase safety in major U.S. ports. Investments in 
maritime Differential Global Positioning Systems and in the national 
VHF-FM communication system will move vessels more safely and 
efficiently through our waterways. The Coast Guard is also modernizing 
its capital assets by replacing 37 World War II-era buoy tenders with 30 
technically advanced, minimally-manned vessels that can more efficiently 
maintain our 50,000 public navigational aids as well as respond to oil 
spills.
   Further, the Maritime Administration administers the Title XI loan 
guarantee program that, since 1994, has guaranteed the construction of 
296 ships and six shipyard modernization projects, totaling over $2.1 
billion. The budget, which proposes over $500 million for Title XI loan 
guarantees, reflects the Administration's support for this valuable 
program and represents the President's continued commitment to maintain 
a strong, viable U.S. merchant marine and shipbuilding industry.

Investing in Sustainable and Inclusive Communities

   Americans use their transportation system more and more because our 
infrastructure investment, in the form of transit, passenger rail, and 
bus systems, gives them a host of options. It particularly benefits 
those who cannot travel by automobile or other private vehicle due to 
income, disability, or age.

   Community-Oriented Transportation: Since 1993, the Administration has 
provided $52 million in transit funding to 21 communities in order to 
foster community-oriented, customer-friendly transportation facilities 
and services. The Livable Communities Initiative (LCI) enhances the 
impact of transportation investments by leveraging State and local 
funds, using flexible highway funds and other eligible sources. For 
example:
   One successful LCI initiative in Atlanta led to better 
          pedestrian access to transit stations and the construction of 
          three new gateways to the Atlanta University Center, improving 
          ridership, safety, and access to jobs, and providing new 
          community service and educational opportunities.
   Another LCI project, the Los Angeles Neighborhood Initiative, 
          led to transit-related improvements that attracted 
          neighborhood investment, played a leading role in the city's 
          redevelopment, and helped cut the crime rate by 19 percent.
   In addition, from 1994 to 1998, the Administration has provided $2.1 
billion to the States to fund Transportation Enhancement projects, and 
the budget proposes $561 million for 1999. This funding supports 
transportation-related recreational trails, historic preservation, water 
pollution mitigation, and economic development activities designed to im

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prove the quality of life in our communities. Other Federal grants will 
continue to relieve aircraft noise problems by helping to soundproof or 
relocate residences and public buildings in runway approach zones.

   Welfare-to-Work: Transportation infrastructure plays a critical role 
in welfare reform. The Administration seeks to strengthen the vital 
connection between transportation and employment through its Access to 
Jobs and Training Initiative. The budget provides $100 million to 
develop new and supplementary transportation to enhance the access that 
welfare recipients and other economically disadvantaged persons have to 
jobs and support activities. More generally, the Administration seeks to 
forge public-private partnerships that can help get people to the jobs 
that may lie outside their immediate neighborhoods.