[Congressional Record Volume 145, Number 1 (Wednesday, January 6, 1999)]
[Extensions of Remarks]
[Pages E1-E2]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    INTRODUCTION OF BILL TO TAKE THE AIRPORT AND AIRWAY, THE INLAND 
      WATERWAYS, AND THE HARBOR MAINTENANCE TRUST FUNDS OFF BUDGET

                                 ______
                                 

                            HON. BUD SHUSTER

                            of pennsylvania

                    in the house of representatives

                       Wednesday, January 6, 1999

  Mr. SHUSTER. Mr. Speaker, I am again standing before Congress 
requesting that the Transportation Trust Funds be treated fairly. The 
bill I am introducing today, referred to as the ``Truth in Budgeting 
Act,'' is a bill I have introduced in the past. With the support of 
many members of Congress and of course, my colleague, Congressman Jim 
Oberstar, the Transportation and Infrastructure Committee was 
successful last Congress in passing into law the appropriate budget 
treatment for the Highway Trust Fund.
  This Congress, we are asking that the remainder of the transportation 
trust funds be treated fairly. In short, the taxes which transportation 
users pay should be spent on the intended purposes.
  During the past decade, aviation taxes have increased dramatically. 
In 1990, airline passengers and other users of the air transportation 
system paid $3.7 billion in taxes and fees for their use of that 
system. By 1995, taxes had increased to $5.5 billion. Now, in 1999, it 
is estimated that aviation users will pay over $10 billion in aviation 
taxes and fees, almost triple the amount that they paid at the 
beginning of the decade and almost double what they paid just 4 years 
ago.
  This increase is partly due to the increase in passengers and 
aviation activity. But it is also due to the fact that the tax rates 
have been dramatically increased over the past few years.
  All these taxes go into a Trust Fund that was created in 1970. When 
this aviation trust fund was created, it was designed primarily to pay 
for improvements in the aviation infrastructure, such as airport 
improvements and the modernization of air traffic control equipment.
  The problem is that this Trust Fund is part of the unified budget. As 
a result, it does not operate like a true trust fund. Under current 
budget rules, there is no assurance that tax revenues deposited in the 
trust fund will actually be spent on aviation infrastructure needs. 
Arbitrary budget caps often limit the amount that can be spent.
  In fact, over time, aviation infrastructure needs have been 
dramatically underfunded. And, on occasion, money has been taken out

[[Page E2]]

of the aviation trust fund to pay FAA salaries or meet general budget 
needs. More often, the money is not spent, in order to offset increased 
spending for other programs unrelated to aviation.
  As a result, by the end of this year, it is expected that the 
uncommitted surplus in the Trust Fund will be $6.9 billion and the cash 
balance will be $12.6 billion. It would be even higher if not for the 
fact that the taxes temporarily expired a few years ago. In 10 years, 
if nothing is done, CBO projects that the uncommitted balance will 
balloon to $57 billion and the cash balance to $63 billion!
  This is clearly unacceptable. If the government is not going to spend 
the money then it should not be collecting the tax. The only thing 
worse than paying taxes is paying the tax and then not getting the 
promised benefit from it.
  Unfortunately, the same type of problem exists with the Inland 
Waterways Trust Fund and the Harbor Maintenance Trust Fund. Both are 
part of the unified budget and both are accumulating unacceptable 
surpluses in the face of enormous infrastructure needs.
  The Inland Waterways Trust Fund helps to finance improvements to the 
nation's navigable waterways, including locks and dams. Notwithstanding 
the significant cost of keeping these arteries of commerce open and 
functioning, the trust fund's surplus continues to grow. As of October 
1, 1998, the Inland Waterway Trust Fund balance was $342.3 million.
  The Harbor Maintenance Trust Fund, which helps to finance navigation 
needs at the nation's ports and harbors, has an even larger surplus. As 
of October 1, 1998, the fund's balance was $1.29 billion. Harbor 
maintenance is critical to jobs, economic development and international 
trade. There is growing concern about the failure to adequately meet 
port infrastructure needs. There is also concern about the Supreme 
Court's March 1998 decision that the Harbor Maintenance Tax is 
unconstitutional as it relates to exports and the possibility it 
violates international commitments relating to imports. Both concerns 
emphasize the need for truth in budgeting.

  Last year, we were confronted by the same problem in surface 
transportation. People who used the roads were paying gas taxes into a 
trust fund with no assurance that the money would be spent. We fixed 
that problem in the TEA-21 legislation by creating ``firewalls'' to 
ensure that all the gas tax money would be spent on road and transit 
improvements.
  1999 will be the year of aviation. By that I mean, at a minimum, that 
we intend to do the same thing for aviation that we did for surface 
transportation last year. We intend to unlock the Trust Fund to ensure 
that the money can be spent to meet aviation infrastructure needs.
  The needs are significant. Airports estimate, and GAO agrees, that 
meeting airport infrastructure needs will require about $10 billion per 
year. Currently airports have access to only about $7 billion per year 
from all sources. Therefore, there is about a $3 billion airport 
infrastructure funding gap that we need to close.
  Over the last 5 years, the number of passengers in the U.S. has grown 
37% to 655 million. It is expected to grow to 995 million in 10 years.
  Daily aircraft delays were 19% higher in 1996 than in 1995. Mitre 
estimates that a 60% increase in airport capacity will be needed by 
3015 just to prevent delays from increasing above current levels.
  FAA's air traffic control facilities and equipment are also very old 
and badly in need of upgrades. The towers, TRACONs and centers that 
house air traffic controllers have building design lives of 20 years. 
Yet the average age of the towers and TRACONs is already 20 years and 
the Centers are on average 40 years old.
  The FAA is still using computers that are so old that they are no 
longer used anywhere else in the world and replacement parts are no 
longer manufactured. When the old equipment breaks down, flights must 
be delayed to prevent endangering passengers.
  The FAA is trying to expand airport capacity and modernize the air 
traffic control system. But this will take money, in many cases, a 
great deal of money. That money is in the Aviation Trust Fund and could 
be used if it were not for the current budget caps that are unrelated 
to the Trust Fund revenue.
  Therefore, today, on a bipartisan basis, I am introducing legislation 
that will take the Aviation Trust Fund off budget. This will ensure 
that aviation tax revenue can be spent on aviation needs without regard 
to any arbitrary budget caps. To the extent the needs are demonstrated 
and the money is in the fund, it could be spent under this legislation.
  I recognize that this will be controversial and we are prepared to 
work with the aviation community and others to perfect it.
  As we do so, one of the things that will be absolutely vital to the 
final legislative package will be the assurance that the general fund 
payment will continue. I am not undertaking this effort merely to 
convert general fund obligations to trust fund spending. The general 
fund now pays a certain portion of the FAA's budget in lieu of taxes to 
compensate the FAA for government and military aircraft use of the 
system. In addition, the general fund payment is justified by the 
benefit aviation provides to the general economic well being of this 
country.
  In TEA-21, the general fund payment for transit is within the 
``Firewalls'' and is therefore guaranteed. I am committed to the same 
sort of treatment of the general fund in aviation.
  I am also committed to ensure that the aviation needs are met using 
existing Trust Fund taxes and fees. I cannot conceive of a circumstance 
where I would support an increase in federal taxes. The current tax 
structure, coupled with the general fund contribution, provides enough 
money to meet aviation needs. If it is fully utilized, there will be no 
need for any new federal taxes.
  The only possible exception involves the passenger facility charge 
(PFC). There, I am prepared to consider an increase if we unlock the 
Trust Fund and it does not provide enough for airport improvements. It 
is my hope that the airlines and airports would work together on this 
to ensure that airports needs are met while airline interests are 
respected.
  The legislation also provides a unique opportunity to consider 
fundamental structural reform at the FAA. It is not enough for the FAA 
to spend more money. We also want them to spend it wisely. I look 
forward to working with the aviation community, the Administration, and 
others on this.
  Finally, I want to thank Congressman Oberstar for his support for 
this effort. He has been a proponent of aviation infrastructure 
spending and water infrastructure for a long time. Under this 
Chairmanship, the Airport Improvement Program achieved one of its 
highest funding levels ever. I look forward to working with him, 
Subcommittee Chairman Duncan, and ranking member Lipinski as we carry 
this legislation to a successful conclusion. I also look forward to 
working with Chairman Boehlert and ranking member Borski of the Water 
Resources and Environment Subcommittee as they consider water resources 
development and infrastructure financing proposals.

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