[Congressional Record Volume 142, Number 139 (Tuesday, October 1, 1996)]
[Senate]
[Pages S12115-S12117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  ALLOCATION OF THE HIGHWAY TRUST FUND

  Mr. DOMENICI. Mr. President, I seek the floor today just to make the 
record complete before the year ends with reference to what happened to 
the allocation of the highway trust fund or what is about to happen to 
it.
  First, I want to put in the Record all of the States of the Union and 
the 1996 actual allocation, the percent and the dollar loss or gain 
from the 1996 allocation to the 1997 allocation. The minimum amount 
that States lost because of this new allocation is found in the last 
column of this chart. I ask unanimous consent that this chart be 
printed in the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. DOMENICI. Mr. President, what I understand and what I think 
happened is that the administration, principally through the Secretary 
of the Treasury's office, made a major error in calculating the flow of 
money into the Highway Transportation Trust Fund, and that means that 
the Federal money for projects in States like mine of New Mexico will 
drop $20 million--I should say at least $20 million--from last year's 
$169 million that we received.
  Actually, the reason I say ``at least'' is because we did increase 
the obligational authority. So actually a State like mine and a State 
like the one of the Senator presiding here in the Senate should 
probably have received more in the 1997 allocation than they did in 
1996. So this chart is just saying, if we would have received the same 
overall obligational authority --that is the big pot of money to be 
distributed--our respective States should have gotten at least what 
they got in 1996. Instead, they are getting less.

  Now, the first point, Congress in that year did not change the 
formula. The formula was a multiyear operational formula that told the 
administration, between the Secretary of the Treasury which reports the 
receipts of the gasoline tax, and the Secretary of Transportation, to 
allocate pursuant to that multiyear formula.
  Now, something happened because, as a matter of fact, more money was 
taken in, the formula was not changed, and we get less money--
substantially less money. Now, it is very interesting.
  On the other hand, it is almost incomprehensible to the Senator from 
New Mexico because some States got huge amounts of new money. For 
instance, New York gets $111 million less than this minimum I have been 
describing that they probably should have received. I have told the 
Senate about New Mexico. Then, if we look down and say, well, what 
happened to California? Well, California gets $122 million more than 
they would have received if we would have had a 1996 allocation of the 
same amount of money in 1996, even though we got more going into this 
formula now. And, interestingly enough, the State of Texas--I do not 
know how this all happened, it is almost some kind of phenomenal 
event--apparently for no real reason, the State of Texas got a $182 
million increase. The State of Massachusetts, a $73 million decrease.
  Now, frankly, I believe this error should have been corrected by this 
administration. In fact, ten Senators sent a letter to the Secretary of 
Transportation well before any drop-dead date with reference to sending 
the money out, urging that the Secretary of Transportation correct the 
error. We sent that letter on September 20th.
  I ask unanimous consent that the letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                               Washington, DC, September 20, 1996.
     Hon. Federico Pena,
     Secretary of Transportation, Department of Transportation, 
         Washington, DC.
       Dear Mr. Secretary: We are writing regarding the Department 
     of Transportation's decision to use data from the Treasury 
     Department that includes a $1.6 billion accounting error in 
     the calculation of highway apportionments for fiscal years 
     1996 and 1997.

[[Page S12116]]

       The Department of Transportation's decision to use the data 
     without first correcting the error unfairly disadvantages our 
     states. Therefore, we are requesting an explanation as to why 
     the Department of Transportation has used this error in its 
     apportionment formulas. At this point in time, it is still 
     not clear why your Department has not been able to address 
     this issue administratively.
       Attached to this letter is a short list of questions which 
     we hope will improve our understanding. The answers to these 
     questions will be necessary to respond to inquires from our 
     respective states. We also expect that the answers to these 
     questions will help us to determine how a similar situation 
     could be avoided in the future.
       The states affected by this error will receive their 
     apportionments on October 1, 1996. We, therefore, request a 
     response to this letter by Wednesday, September 25. Thank you 
     for your prompt attention to this matter.
           Sincerely,
         John H. Chafee, Pete V. Domenici, Max Baucus, Jeff 
           Bingaman, Larry Pressler, Joe Biden, Tom Daschle, 
           Alfonse D'Amato, Daniel P. Moynihan.
  Mr. DOMENICI. We attached to it the fundamental questions to the 
Secretary of Transportation regarding this incorrect allocation, this 
lowering of some States and increasing of some States, without any 
change in the national formula, which is the law, and with an increase 
in the total amount we had to spend.
  The error in the distribution of the 1997 funds to all States came 
about through an error of the Treasury Department in calculating the 
highway trust fund. Then we proceeded to ask several questions.
  I also ask unanimous consent the questions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Questions Regarding DOT Decision To Implement Highway Formulas With 
                     $1.6 Billion Accounting Error

       (1) Given the significant implications of the accounting 
     error, did the Department request an ``official'' correction 
     that could be used in the apportionment formulas?
       (2) To help gain an understanding of why the error could 
     not be addressed administratively, please provide a copy of 
     decision memos, legal opinions and other supporting materials 
     and tables that led to the Department's decision to apportion 
     funds based on incorrect data.
       (3) Did the Department consult with the Office of 
     Management and Budget (OMB) in making this decision? Did the 
     1997 budget baseline for the Department of Transportation 
     assume that the error was corrected? Please describe any OMB 
     policy guidance in this area.
       (4) Does the Department have any recommendations to avoid a 
     similar situation in the future?

  Mr. DOMENICI. Interestingly enough, we have not heard from the 
Secretary of Transportation. This is an urgent request. They are in the 
middle of making final decisions which will cost my State a very big 
percentage of its highway trust fund, which will cost New York $111 
million, which will cost States like New Jersey a very large amount of 
money.
  Now, I am here because all I want is fairness. I cannot understand 
nor comprehend how the same old formula that is mandatory that they 
have to use, how it could turn out 1 year later to totally change what 
each State gets, when it has been applied for 4 consecutive years, and 
we could look at those averages, and nothing like this has happened.
  Now, I have come to the Senate because I urge that the Secretary of 
Transportation fix this. I do not have any hopes that he will. In fact, 
I do not believe politically that they can. That does not make it 
right.
  Can you imagine the Secretary of Transportation taking this money 
that I just described away from California, after they told them that 
is what they will get--even though it is wrong? Can you imagine the 
President saying, essentially, through his Transportation Secretary, to 
Texas that they should get what is the right number, instead of what is 
the wrong number--when they have already been telling them how much 
more they get? I could go on State by State.
  I believe it should be fixed. I do not think the States which have 
been adversely effected by this should take this sitting down. We 
cannot fix this. That is the prerogative of the House of 
Representatives. They did not want to fix it. That does not mean it is 
right, nor does that add any strength to the fact that they are wrong. 
That does not make their numbers right because Congress did not take 
action in the waning days. That is obvious, as a matter of law that 
that is not the case.
  Frankly, I hope the States that have been denied their fair 
proportion under errors in calculations by the Secretary of the 
Treasury, that were then forwarded to Transportation and apparently are 
about to be acted upon, that does not make those right. I believe 
States should take a look at it. They ought to look and see what their 
rights of action are.
  This is a very, very, big mistake. For some States, it will never be 
corrected. I cannot tell New Mexico--we are a small State; $20 million 
is a small amount of money, big percentage, one of the highest 
percentage of reductions. The State of Rhode Island got a small amount 
but a big reduction. The State of Montana, small amount of money, but a 
big reduction--I cannot tell them come January, February, March, ``We 
will fix this and give you the money you lost by the error.''
  I do not think I can promise that, for probably by then it will 
require we put a whole bunch of new money in the trust fund or that we 
allocate some extra money because, what about the States that think 
they can rely upon what the Federal Government has told them they will 
get. I submit they ought not be relying on it. I hope they have people 
keeping tab up here because I do not think they can rely on that money 
because I do not think it is theirs. I think it was erroneously 
allocated through a misapplication of a formula that is clear and 
precise and applied either the wrong numbers, wrong receipts--and they 
had plenty of time to fix it in the executive branch of Government.
  Mr. President, while we are closing down tonight, I hope the 
Secretary of the Treasury's people that are watching, as they probably 
do from time to time, understand this may not be over with. I am urging 
States to do something about it themselves. I think they might look at 
whether they have a cause of action against the Federal Government. I 
am urging they take a look as to whether they can even get an 
injunction against the U.S. Government for misallocating this money and 
ask it be held up long enough for them to seek justice within the court 
system. That is just my thought. That is nobody else's. I do not hold 
anybody to it.
  I tell you, this error is over $1 billion. That means, erroneously, 
States have been denied over $1 billion, and it has been funneled to 
other States, of the formula that they should have applied, was voted 
on up or down, and prevailed with a handsome majority when that formula 
was put in. I happen to know about that. I was not on the committee but 
I think I know how the formula came about. In fact, I know how the 
formula came about 5 years before that. It is very similar.
  The point of it is, the formula has not been changed, the dollars to 
be distributed are higher, and 28 States get less. Now, that just does 
not jibe. It just does not make for good sense. Something is awry, 
amiss, gone wrong, and I hope it gets fixed. I hope the Secretary of 
Transportation takes a look. It has taken them about 10 days to answer 
the letter. That is pretty unusual. It has taken 5 days to answer a 
phone call where I asked him about this, and he will get back to me.
  We will see tomorrow, 1 day before we go out, if we get something 
from them.

TECHNICAL ASSISTANCE--U.S. DEPARTMENT OF TRANSPORTATION, FEDERAL HIGHWAY ADMINISTRATION: COMPARISON OF ESTIMATED
                                     FISCAL YEAR 1997 OBLIGATION LIMITATION                                     
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                         Fiscal year                               Dollar loss/ 
                        State                            1996 actual     Conference     Percent        gain     
----------------------------------------------------------------------------------------------------------------
Alabama..............................................         270,610         329,746         22          59,136
Alaska...............................................         203,994         182,075        -11        (21,919)
Arizona..............................................         196,433         244,013         24          47,580
Arkansas.............................................         175,359         205,117         17          29,758

[[Page S12117]]

                                                                                                                
California...........................................       1,406,489       1,528,545          9         122,056
Colorado.............................................         199,342         198,171         -1         (1,171)
Connecticut..........................................         353,689         316,202        -11        (37,487)
Delaware.............................................          77,484          69,282        -11         (8,202)
District of Columbia.................................          78,920          73,582         -7         (5,338)
Florida..............................................         598,880         711,991         19         113,111
Georgia..............................................         403,493         526,148         30         122,655
Hawaii...............................................         121,729         108,983        -10        (12,746)
Idaho................................................         105,691          98,510         -7         (7,181)
Illinois.............................................         660,503         589,620        -11        (70,883)
Indiana..............................................         341,554         390,495         14          48,941
Iowa.................................................         197,960         177,316        -10        (20,644)
Kansas...............................................         205,052         183,204        -11        (21,848)
Kentucky.............................................         225,745         286,319         27          60,574
Louisiana............................................         235,699         265,287         13          29,588
Maine................................................          91,559          84,182         -8         (7,377)
Maryland.............................................         265,587         262,322         -1         (3,265)
Massachusetts........................................         690,634         617,531        -11        (73,103)
Michigan.............................................         467,061         491,589          5          24,528
Minnesota............................................         252,289         219,855        -13        (32,434)
Mississippi..........................................         183,481         203,112         11          19,631
Missouri.............................................         356,657         402,267         13          45,610
Montana..............................................         154,849         133,659        -14        (21,190)
Nebraska.............................................         139,084         124,262        -11        (14,822)
Nevada...............................................         104,575         105,029          0             454
New Hampshire........................................          85,554          76,434        -11         (9,120)
New Jersey...........................................         478,929         434,884         -9        (44,045)
New Mexico...........................................         169,082         149,360        -12        (19,722)
New York.............................................       1,044,890         933,790        -11       (111,100)
North Carolina.......................................         399,218         446,693         12          47,475
North Dakota.........................................         102,064          91,086        -11        (10,978)
Ohio.................................................         594,508         575,591         -3        (18,917)
Oklahoma.............................................         227,795         258,883         14          31,088
Oregon...............................................         202,782         204,437          1           1,655
Pennsylvania.........................................         660,889         671,171          2          10,282
Rhode Island.........................................          85,850          71,582        -17        (14,268)
South Carolina.......................................         211,129         263,985         25          52,856
South Dakota.........................................         111,380          99,417        -11        (11,963)
Tennessee............................................         325,654         371,667         14          46,013
Texas................................................         984,970       1,167,763         19         182,793
Utah.................................................         125,684         121,489         -3         (4,195)
Vermont..............................................          78,511          70,155        -11         (8,356)
Virginia.............................................         341,432         393,580         15          52,148
Washington...........................................         324,150         291,059        -10        (33,091)
West Virginia........................................         158,810         141,509        -11        (17,301)
Wisconsin............................................         291,760         296,896          2           5,136
Wyoming..............................................         111,281          99,388        -11        (11,893)
Puerto Rico..........................................          76,122          73,648         -3         (2,474)
                                                      --------------------------------                          
      Subtotal.......................................      15,956,846      16,432,881                           
Administration.......................................         529,843         521,119                           
Federal lands........................................         416,000         426,000                           
Reserve..............................................         647,311         620,000                           
                                                      --------------------------------                          
      Total..........................................      17,550,000      18,000,000                           
                                                                                                                
----------------------------------------------------------------------------------------------------------------
Estimated apportionments provided by HPP-21.                                                                    


  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________