Performance and Accountability: Transportation Challenges Facing 
Congress and the Department of Transportation (06-MAR-07,	 
GAO-07-545T).							 
                                                                 
A safe, efficient, and convenient transportation system is	 
integral to the health of our economy and quality of life. Our	 
nation's vast transportation system of airways, railways, roads, 
pipelines, transit, and waterways has served this need, yet it is
under considerable strain from (1) increasing congestion, (2) the
large costs to maintain and improve it, and (3) the human cost of
over 44,000 people killed and over 2.5 million injured each year 
in transportation-related accidents. The Department of		 
Transportation implements national transportation policy and	 
administers most federal transportation programs. For fiscal year
2008, the department has requested $67 billion to carry out these
and other activities. While the department carries out some	 
activities directly, such as employing about 15,000 air traffic  
controllers to make certain that planes stay a safe distance	 
apart, it does not have direct control over the vast majority of 
activities that it funds, such as local decisions on the priority
and placement of airports, public transit, and roads. In other	 
cases, such as railways and pipelines, the infrastructure is	 
owned and operated by industry. This statement presents GAO's	 
views on major transportation challenges facing Congress and the 
department. It is based on GAO products, including		 
recommendations made, and the products of others.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-545T					        
    ACCNO:   A66494						        
  TITLE:     Performance and Accountability: Transportation Challenges
Facing Congress and the Department of Transportation		 
     DATE:   03/06/2007 
  SUBJECT:   Accountability					 
	     Federal aid for transportation			 
	     Financial management				 
	     Internal controls					 
	     Public roads or highways				 
	     Safety regulation					 
	     Safety standards					 
	     Strategic planning 				 
	     Transportation					 
	     Transportation safety				 
	     Policies and procedures				 
	     GAO High Risk Series				 

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GAO-07-545T

   

     * [1]Background
     * [2]Transportation Challenges Facing Congress and the Department

          * [3]Financing the Nation's Transportation System
          * [4]Improving Mobility through Intermodal and Modal Approaches
          * [5]Improving Transportation Safety
          * [6]Managing the Transition to the Next Generation Air Transport
          * [7]Building Human Capital Strategies
          * [8]Fostering Improved Departmental Financial Management
          * [9]Improving Transportation Security and Emergency Preparedness

     * [10]GAO Contacts and Staff Acknowledgement

          * [11]Financing the Nation's Transportation System
          * [12]Improving Mobility through Intermodal and Modal Approaches
          * [13]Improving Transportation Safety
          * [14]Managing the Transition to the Next Generation Air Transport
          * [15]Building Human Capital Strategies
          * [16]Fostering Improved Financial Management
          * [17]Improving Transportation Security and Emergency Preparedness

     * [18]GAO's Mission
     * [19]Obtaining Copies of GAO Reports and Testimony

          * [20]Order by Mail or Phone

     * [21]To Report Fraud, Waste, and Abuse in Federal Programs
     * [22]Congressional Relations
     * [23]Public Affairs

Testimony

Before the Subcommittee on Transportation, Housing and Urban Development,
and Related Agencies; Committee on Appropriations; House of
Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 2:00 p.m. EST

March 6, 2007

PERFORMANCE AND ACCOUNTABILITY

Transportation Challenges Facing Congress and the Department of
Transportation

Statement of Patricia A. Dalton, Managing Director Physical Infrastructure
Issues

GAO-07-545T

Mr. Chairman and Members of the Subcommittee:

We appreciate the opportunity to participate in this hearing today to
discuss transportation challenges facing Congress and the Department of
Transportation. These issues are important for three reasons. First, the
nation's economic vitality and its citizens' quality of life depend
significantly on the soundness, safety, and security of its vast
transportation system. This system fuels the nation's economic engine,
facilitating the movement of goods and people. Second, transportation
solutions are typically expensive, and the federal government's financial
condition and fiscal outlook are worse than many may understand.^1 This
calls for a reexamination of the goals of transportation policy, how we
hold stakeholders accountable for results, and how programs are financed.
Finally, as an implementer of congressional policy, the Department of
Transportation must be a high-performing agency--one that innovates,
delivers results, is fiscally prudent, and has a workforce that can meet
21st century challenges.^2

My remarks today focus on four primary transportation challenges and some
that are continuing concerns. (See fig. 1.) Some are solely within the
Department of Transportation's purview; some require congressional action
as well. For the most part, these challenges are the ones that we
identified in 2003 as part of our series of reports of performance and
accountability challenges facing the federal government.^3 This is not
because little or no progress has been made. In many cases there has been
progress. Rather, it is because some of these challenges--such as
improving mobility and transportation safety--are so vast, and the
department's ability to address them is so indirect, that years of focused
efforts will be needed to see measurable improvements. In addition to our
completed work on these issues, we have a body of ongoing work that should
be of use to Congress and the department as our country moves forward to
improve the design of transportation programs, delivery of services, and
accountability for results (See app. I and a list of related GAO products
at the end of this statement).

^1GAO, Fiscal Stewardship: A Critical Challenge Facing Our Nation,
[24]GAO-07-362SP (Washington, D.C.: January 2007).

^2GAO, 21st Century Challenges: Reexamining the Base of the Federal
Government, [25]GAO-05-325SP (Washington, D.C.: February 2007).

^3GAO, Major Management Challenges and Program Risks: Department of
Transportation, [26]GAO-03-108 (Washington, D.C.: January 2003). See
http://www.gao.gov/pas/2005/dot.htm for a 2005 update.

Figure 1: Major Challenges Facing Congress and the Department of
Transportation

My statement is primarily based on work that we have completed over the
past several years for Congress. We also reviewed assessments of the
Department of Transportation's activities prepared by its Office of
Inspector General and key departmental documents, such as its budget,
strategic plan, and performance and accountability report. Finally, we
discussed these issues with selected senior officials within the
department. We conducted our work in February 2007 in accordance with
generally accepted government auditing standards.

In summary:

           o Financing mechanisms for the nation's transportation system are
           under stress. The efficiency of the nation's transportation
           infrastructure is threatened by increasing demand for
           transportation services, and revenue from traditional funding
           mechanisms may be unable to keep pace at current tax rates.
           Revenues to support the Highway Trust Fund--the major source of
           federal highway and transit funding--are eroding, with recent
           estimates forecasting a negative balance of more than $14 billion
           by the end of fiscal year 2012. For aviation, there is concern
           that with the current funding system, the costs of providing and
           modernizing air traffic control services might increase without a
           corresponding increase in revenues collected from users. In the
           future, freight traffic is projected to grow substantially,
           putting strain on our nation's transportation systems, but current
           planning and financing mechanisms impede public strategies to
           address needs, and industry's ability to fund its capacity
           increases to meet growth is largely uncertain. As a result of
           these concerns, we designated financing the nation's
           transportation infrastructure as a high-risk issue this year.^4 
           o The challenges in reforming transportation finance systems are
           critical to maintaining and improving our nation's mobility. The
           nation's infrastructure is under great strain; congestion across
           modes is significant and expected to worsen. However, federal
           funding levels are not linked to specific performance-related
           goals and outcomes, resulting in limited assurance that federal
           funding is being channeled to the nation's most critical mobility
           needs. Furthermore, federal funding is often tied to a single
           transportation mode, which may limit the use of federal funds to
           finance the greatest improvements in mobility. It is also unlikely
           that mobility can be enhanced unless major modes--air, highway,
           rail, transit, and water--are well connected. However, intermodal
           connections, such as multimodal passenger terminals and roads that
           link freight terminals and major highways, are among the
           transportation system's weakest links.

           The department is implementing a number of new initiatives aimed
           at mitigating congestion, including providing funds to local
           governments to test innovative ideas for curbing congestion and
           new funding for projects that have national or regional benefits.
           In the aviation arena, the Federal Aviation Administration (FAA)
           is leading a multiagency effort to transform the air traffic
           control system in order to safely handle the projected growth in
           the demand for air travel. While these steps are encouraging,
           successfully addressing the nation's mobility needs requires
           strategic and intermodal approaches and solutions.

           o Improving transportation safety is an imperative. Each year over
           44,000 people are killed and over 2.5 million are injured in
           transportation-related accidents. Of particular concern is the
           limited progress in improving safety on our nation's roads, where
           about 95 percent of all transportation fatalities occur. Projected
           increases in congestion across modes, as a result of population
           and economic growth, could cause deterioration in transportation
           safety despite vigorous efforts to reduce accidents. To address
           these problems, the department is carrying out a number of
           initiatives related to improving aviation, commercial motor
           carrier, highway, railroad, and pipeline safety. However, certain
           areas require increased attention. In particular, improvements in
           data, performance measures, and evaluations are needed to
           determine whether programs are achieving intended results. For
           example, agencies need to develop better measures of the direct
           results of their efforts--such as safety improvements made as a
           result of enforcement of safety standards--that contribute toward
           reductions in accidents. This information can also hold agencies
           accountable for the performance of their programs and support
           congressional oversight.
           o FAA has worked with the Joint Planning and Development Office
           (JPDO) to design and plan the Next Generation Air Transportation
           System (NextGen) and will face challenges as it moves toward
           implementation and integration of NextGen systems.^5 This
           transition from the current air traffic control system to the
           broader and modernized NextGen system will be one of the
           Department of Transportation's most complex undertakings. In
           previous years, FAA has faced systemic management and acquisition
           problems that led us to designate its air traffic control
           modernization program as high risk. FAA has made significant
           progress in its handling of air traffic control acquisitions, but
           a key challenge going forward will be to institutionalize these
           improvements and to continuously improve in this area. FAA and
           JPDO also need to provide Congress with a valid and comprehensive
           estimate of the costs of the NextGen system, including the
           identification and costs of necessary research, development, and
           demonstration projects. One limited, preliminary estimate
           concluded that FAA's budget under a NextGen scenario would average
           about $15 billion per year through 2025, or about $1 billion more
           annually (in today's dollars) on average than FAA's fiscal year
           2006 appropriation. JPDO has estimated that failure to achieve a
           timely transition to NextGen could result in a gap between the
           demand for air transportation services and available capacity that
           could cost the U.S. economy billions of dollars annually.
           o In addition, the department and the transportation sector as a
           whole face persistent human capital challenges that put their
           mission performance at risk. Both face an impending shortage of
           people with the skills and competencies they will need in the
           future. Furthermore, while the department has made significant
           improvements in recent years in its financial management, it
           received a qualified opinion on its 2006 financial statements
           because of material weaknesses related to certain FAA activities.
           Finally, the department has retained some responsibilities and
           involvement in transportation security and emergency preparedness
           and response and is working with the Department of Homeland
           Security to further clarify its role.
			  
			  Background

           The safe, efficient, and convenient movement of people and goods
           depends on a vibrant transportation system that meets those needs.
           Our nation has built a vast transportation system of roads,
           airways, railways, pipelines, transit, and waterways that
           facilitate commerce and improve our quality of life. The flow of
           people and goods is enormous: the nation moved about 5 trillion
           ton miles of freight and 5 trillion passenger miles of people in
           2004.^6 Spending for commercial, personal, and government
           transportation represents about 11 percent of the gross domestic
           product. Yet there is a price for this system:

           o Increasing congestion on the ground and in the air delays the
           arrival of people and freight at their destinations and imposes
           economic losses. According to Department of Transportation
           estimates, congestion costs Americans roughly $200 billion each
           year.
           o The system is expensive to maintain and improve. Total federal,
           state and local transportation expenditures are close to $200
           billion annually.
           o There is a human cost: over 44,000 people are killed in
           transportation-related accidents and over 2.5 million are injured
           each year.

           The transportation system is under considerable strain from these
           factors, and this strain is expected to increase as the demand to
           move people and goods grows resulting from population growth,
           technological change, and the increased globalization of the
           economy. For example, according to the Transportation Research
           Board, an expected population growth of 100 million people could
           double the demand for passenger travel by 2040. Moreover, this
           population growth will be concentrated in certain regions and
           states, further intensifying the demand for transportation in
           these areas.^7

           The Department of Transportation implements national
           transportation policy and administers most federal transportation
           programs. Its responsibilities are considerable and reflect the
           extraordinary scale, use, and impact of the nation's
           transportation system. The department has multiple
           missions--primarily focusing on mobility and safety--that are
           carried out by several operating administrations. (See table 1.)

^4GAO, High-Risk Series: An Update, [27]GAO-07-310 (Washington, D.C.:
January 2007).

^5In 2003, Congress authorized the creation of the JPDO, housed within
FAA, to plan for and coordinate the transition to the Next Generation Air
Transportation System. It operates in conjunction with seven partner
agencies. NextGen involves airport-curb-to-airport-curb modernization and
encompasses security screening and environmental issues, as well as
projects to augment the global positioning system to aid in approaches and
landings and to provide new displays and data processing for air traffic
controllers.

^6One ton-mile is the movement of one ton of freight for one mile. One
passenger mile is the movement of one person for one mile. Statistics are
for both interstate and intrastate travel.

^7Transportation Research Board, Critical Issues in Transportation
(Washington, D.C.: 2006).

Table 1: Primary Missions of the Department of Transportation

                                               Responsible entity within the  
Mission                                     department                     
Enhancing the quality and performance of    Federal Highway Administration 
the nation's highway system and intermodal                                 
connectors                                                                 
Promoting the safety and efficiency of the  Federal Aviation               
national airspace system                    Administration                 
Supporting locally planned and operated     Federal Transit Administration 
public mass transit systems                                                
Reducing motor vehicle crashes and their    National Highway Traffic       
associated deaths and injuries              Safety Administration          
Reducing commercial motor vehicle-related   Federal Motor Carrier Safety   
(large trucks and buses) fatalities and     Administration                 
injuries                                                                   
Improving safety on the nation's rail       Federal Railroad               
systems and providing grants for intercity  Administration                 
passenger rail activities                                                  
Maintaining the safety and integrity of the Pipeline and Hazardous         
nation's pipeline transportation system and Materials Safety               
the safety of transporting hazardous        Administration                 
materials                                                                  
Strengthening the nation's maritime         Maritime Administration        
transportation system, including                                           
infrastructure, industry, and labor                                        

Source: GAO presentation of Department of Transportation information.

For fiscal year 2008, the President's budget requested $67 billion to
carry out these and other activities. This budget request would support
about 55,000 full-time-equivalent employees.

The department carries out some activities directly, such as employing
more than 15,000 air traffic controllers to coordinate air traffic to make
certain that planes stay a safe distance apart. However, the vast majority
of its activities are not under its direct control. For example, in recent
years the Federal Highway Administration (FHWA) has provided state
governments nearly $34 billion each year to build and improve roads and
bridges and meet other transportation needs. However, for the most part
state and local governments decide which transportation projects have high
priority within their political jurisdictions. Similarly, while the
National Highway Traffic Safety Administration (NHTSA) encourages the use
of safety belts by the motoring public as a means of saving lives and
reducing injuries, states determine whether and how to punish
noncompliance. In other cases--notably most freight railways and
pipelines--the infrastructure is owned and operated by private companies
and the Department of Transportation regulates the safety of their
transportation operations.

Transportation Challenges Facing Congress and the Department of Transportation

In our view, Congress and the Department of Transportation face four major
transportation challenges--financing the nation's transportation system,
improving mobility, improving safety, and managing the transformation of
the air traffic control system. Another three issues are of continuing
concern: building human capital strategies, fostering improved
departmental financial management, and improving transportation security
and emergency preparedness and response.

Financing the Nation's Transportation System

The efficiency of the nation's transportation infrastructure is threatened
by increasing demand for transportation services, and revenue from
traditional funding mechanisms may be unable to keep pace at current tax
rates. In addition, the nation's long-term fiscal challenges^8 will
constrain decision makers' ability to use other revenue sources for
transportation needs. As a result of these concerns, we designated
financing the nation's transportation infrastructure as a high-risk issue
this year.

Revenues to support the Highway Trust Fund--the major source of federal
highway and transit funding--at the current fuel tax rate are eroding.
While receipts for the Highway Trust Fund, which are derived from motor
fuel and truck-related taxes, are growing, the federal motor fuel tax rate
of 18.3 cents per gallon has not been increased since 1993 and inflation
has eroded purchasing power. In addition, increased fuel efficiency and
the advent of alternative-fuel vehicles will further erode trust fund
receipts. While increases in vehicle travel will increase fuel tax
revenues, funding already authorized in recently enacted highway and
transit program legislation is expected to outstrip the growth in trust
fund receipts. According to recent estimates from the Congressional Budget
Office and the President's budget, the trust fund balance will steadily
decline and reach a negative balance of more than $14 billion by the end
of fiscal year 2012. (See fig. 2.) To help remedy this situation, a
commission--chaired by the Secretary of Transportation--will report later
this year on recommendations to place the trust fund on a sustainable
path. In addition, the Department of Transportation's strategic plan
suggests exploring tolling projects and private sector involvement to
address funding constraints--ideas that some state and local governments
are currently exploring.

^8 [28]GAO-05-325SP .

Figure 2: Highway Trust Fund Year-End Balance Forecasts

Federal aviation programs are also facing growing infrastructure demands
with constrained resources, and a disruption in the flow of funds may
jeopardize FAA's ability to carry out its improvement programs. Demand for
air travel has increased in recent years, with over 740 million passengers
flying in fiscal year 2006. Failing to meet infrastructure challenges in
aviation may have significant consequences, since aviation is an integral
part of the economy. To meet anticipated increases in commercial aviation
travel, FAA and aviation stakeholders are developing new systems to
modernize and increase capacity, but it is uncertain whether the current
funding system can generate sufficient revenues to meet these budgetary
needs.^9 FAA and some stakeholders have concerns that the costs of
providing and modernizing air traffic control services might increase
without a corresponding increase in revenues collected from users. Under
one preliminary estimate of modernization costs, FAA's budget requirements
would, on average, exceed fiscal year 2006 appropriation levels by
approximately $1 billion a year (in today's dollars) through 2025. To
better connect FAA's revenues with the cost of air traffic control
services that it provides, the President's budget for fiscal year 2008 has
proposed replacing, in fiscal year 2009, FAA's current excise tax
financing system, built largely around purchases of tickets and aviation
fuel, with a cost-based user fee system. This new system would aim to
recover the costs of providing air traffic control services through user
fees for commercial operators and aviation fuel taxes for general
aviation. However, some stakeholders believe that the current structure
has been effective in funding FAA and can be successful in the future,
although some modifications may be necessary. In addition, the President's
budget has proposed cutting and reallocating federal funds for developing
projects at the nation's 3,400 airports. FAA estimates the total cost for
planned airport projects eligible for funding at approximately $42 billion
(in nominal dollars) for fiscal years 2007 through 2011. FAA is also
proposing that Congress allow airports to collect more revenue from other
sources to help offset any reductions. Adding to uncertainty, the current
excise taxes that largely fund FAA revenue are scheduled to expire at the
end of September 2007, unless there is congressional action to renew them
or provide an alternative source of funding to avoid a lapse of revenue in
fiscal year 2008.

^9 [29]GAO-07-310 .

Freight traffic is projected to grow substantially, putting strain on
ports, highways, railroads, and airports, but current public planning and
financing impede strategies to address capacity investment, and industry's
ability to fund its capacity increases to meet growth is largely
uncertain.^10 Freight mobility--the ability to move goods--is a driver of
economic growth, and increasing congestion and unreliability of
transportation systems can have severe economic consequences. In the
future, Congress is likely to receive funding requests for additional
freight projects and face decisions about the federal role in the nation's
freight infrastructure.

Improving Mobility through Intermodal and Modal Approaches

While the federal government has made huge investments in our nation's
transportation infrastructure in the last 50 years, the expansion of this
infrastructure has not kept pace with needs and the system is currently
under great strain. Congestion across modes--estimated to cost $200
billion per year--is significant and is projected to worsen. For example,
travel on roads is expected to increase by about 25 percent from 2000 to
2010, freight traffic is expected to increase by 92 percent from 2002 to
2035, and demand for air travel is expected to climb by about 35 percent
from 2006 to 2015. To help address congestion concerns, the federal
government spends billions of dollars each year to build, maintain,
operate, and improve the nation's aging transportation system. As
congestion increases, federal policymakers face the challenge of ensuring
that funds are used efficiently in order to prevent congestion from
overwhelming the system. However, currently there is little assurance that
the projects selected and funded best meet national goals for meeting the
nation's mobility needs.

^10GAO, Freight Railroads: Industry Health Has Improved, but Concerns
about Competition and Capacity Should be Addressed, [30]GAO-07-94
(Washington, D.C.: Oct. 6, 2006) and Freight Transportation: Strategies
Needed to Address Planning and Financing Limitations, [31]GAO-04-165
(Washington, D.C.: Dec. 19, 2003).

The department and Congress have recently taken a number of new actions to
address this major threat to our nation's economic growth and quality of
life. In May 2006, the department announced a national strategy that will
provide $175 million to local governments to demonstrate and test
innovative ideas for curbing congestion. Certain large-scale pilot
projects would be chosen based on their sponsors' willingness to implement
a comprehensive congestion reduction strategy, including congestion
pricing,^11 commuter transit services, and commitments from businesses to
expand flexible work schedules. The strategy also includes initiatives to
encourage private sector investment in transportation infrastructure,
promote the use of operational and technological improvements, address
major freight bottlenecks, and accelerate major aviation capacity
projects, among other things. The department is also implementing a number
of new initiatives to mitigate congestion that were called for in the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy
for Users (SAFETEA-LU), including programs to allow states to monitor, in
real-time, traffic conditions on major highways and new funding for
projects that have national or regional benefits. In addition, SAFETEA-LU
established a commission that will report on ways to raise revenue for
highway and transit projects and also reduce the costs of congestion.
Finally, in the aviation arena, FAA is the primary implementer of a
multiagency effort to transform the air traffic control system in order to
safely handle projected growth in the demand for air travel. I will
further discuss this effort later in my statement.

^11Congestion pricing involves charging surcharges or tolls to drivers who
choose to travel during peak periods when their use of the roads increases
congestion.

While these steps are encouraging, successfully addressing the nation's
mobility challenges requires strategic and intermodal approaches and
solutions.^12 The nation faces a growing fiscal crisis that challenges it
to fundamentally reexamine existing government programs and commitments
and to make tough choices in setting priorities and linking resources to
results. In particular, the Highway Trust Fund--the largest source of
federal funding for transportation--was created in 1956 for the purpose of
constructing the interstate highway system and, although that system is
now complete, the basic construct of the program, in terms of financing
and delivery mechanisms, has not changed. In addition, this and other
federal transportation programs do not have mechanisms to link funding
levels with the accomplishment of specific performance-related goals and
outcomes related to mobility. Most highway grant programs are apportioned
by formula, without regard to the needs or capacity of recipients. In
addition, the preponderance of evidence suggests that federal-aid highway
grants have influenced state and local governments to substitute federal
funds for state and local funds that otherwise would have been spent on
highways. State and local governments have broad flexibility to select
most projects that receive federal funding. As such, there is little
assurance that the projects selected and funded best meet national goals
for addressing the nation's mobility needs.^13 Intercity passenger rail
service is also at a critical juncture, with the existing system in poor
condition and federal subsidies--over $1 billion annually in recent
years--not targeted to the greatest public benefits, including congestion
relief.^14

Furthermore, transportation programs and funding mechanisms are largely
stovepiped by modes of transportation. For example, while passenger and
freight travel occurs on all modes, federal funding and planning
requirements focus largely on highway, transit, and aviation passenger
travel. This framework makes it difficult for intermodal projects and
other modal projects (e.g., freight or passenger rail) to be integrated
into the transportation system. We have found, for example, that the
limited visibility that freight projects receive in the process for
planning and prioritizing transportation projects as well as the lack of a
comprehensive evaluation approach, such as a cost-benefit framework,
impedes the implementation of improvements to better ensure that
systemwide, multimodal solutions are considered and adopted where
appropriate. It is unlikely that mobility can be enhanced unless major
modes--air, highway, rail, transit, and water--are well connected.
However, intermodal connections, such as multimodal passenger terminals
and roads that link freight terminals and major highways, are among the
transportation system's weakest links.^15

12 [32]GAO-05-325SP .

^13GAO, Highway and Transit Investments: Options for Improving Information
on Projects' Benefits and Costs and Increasing Accountability for Results,
[33]GAO-05-172 (Washington, D.C.: Jan. 24, 2005); Federal-Aid Highways:
Trends, Effect on State Spending, and Options for Future Program Design,
[34]GAO-04-802 (Washington, D.C.: Aug. 31, 2004) and Surface and Maritime
Transportation: Developing Strategies for Enhancing Mobility: A National
Challenge, [35]GAO-02-775 (Washington, D.C.: Aug. 30, 2002).

^14GAO, Intercity Passenger Rail: National Policy and Strategies Needed to
Maximize Public Benefits from Federal Expenditures, [36]GAO-07-15
(Washington, D.C.: Nov. 13, 2006).

The critical issues facing Congress and the department to effectively
address congestion problems and enhance the nation's mobility include:

           o How narrowly or broadly should the federal role be defined?
           o Should federal programs be more closely aligned with specific
           national interests and purposes, such as interstate freight
           mobility?
           o Should formulas be revised to better consider need, performance,
           capacity, and effort by states and localities?
           o Can intermodal solutions be effectively carried out within the
           existing federal modal program framework, or is another model
           needed?

           Finally, a high priority should be maximizing the benefits of
           federal investments in transportation infrastructure and ensuring
           accountability for results. Each year, FHWA distributes billions
           of dollars--$34.2 billion in fiscal year 2006--to state
           governments for projects aimed at improving the nation's highway
           systems.^16 However, we have found that often formal analyses are
           not used in deciding among alternative projects, projects often do
           not meet anticipated outcomes, and evaluations of outcomes are not
           typically conducted.^17 Furthermore, we have reported on the need
           for improving accountability for results in FHWA's oversight of
           projects, through goals and performance measures, for example.^18
           The agency has made progress in this area, partly in response to
           mandated improvements in SAFETEA-LU, but a continued focus on
           efforts to improve accountability will be important. Finally, FAA
           provides funds to airport operators to provide increased capacity
           at the nation's airports and has estimated that the total cost for
           planned projects eligible for federal grants for fiscal years 2007
           through 2011 will be $42 billion. While changes the Administration
           is proposing may reduce the amount FAA provides, it will be
           essential to ensure that public benefits from these investments
           are maximized.
			  
			  Transportation Challenges Facing Congress and the Department of
			  Transportation

           Each year, tens of thousands of people are killed and millions are
           injured in transportation accidents in the United States. In 2005
           alone, over 44,000 people were killed and over 2.5 million were
           injured in highway, aviation, railroad, transit, and pipeline
           accidents.^19 (See fig. 3.) Motor vehicle crashes, in particular,
           exact an enormous personal and economic toll on this country and
           are the leading cause of death for people aged 3 through 33. While
           transportation safety has improved considerably over the past 4
           decades, in recent years, fatalities have plateaued.^20 Since the
           highest pay-off actions--such as improvements in vehicle
           crashworthiness and increases in seat belt use--have occurred,
           future progress will be more difficult. Of particular concern is
           the limited progress in improving safety on our nation's roads,
           where about 95 percent of all transportation fatalities occur.
           Furthermore, motorcycle fatalities have steadily increased over
           the past decade (to over 4,500 in 2005). While nonhighway modes of
           travel are much safer, safety in these modes--such as aviation and
           rail--is also a major concern because when accidents occur, they
           can have catastrophic consequences. Projected increases in
           congestion across modes, as a result of population and economic
           growth, could cause a deterioration in transportation safety in
           the future despite vigorous efforts to reduce accidents.

           Figure 3: Fatalities by Transportation Mode, 2005

           Note: Aviation figures are preliminary. Of the 602 aviation
           fatalities, 562 occurred in general aviation, which covers all
           civil aircraft not flown by commercial airlines or the military.

           To address these problems, the department has designated improving
           safety as its highest priority. Its efforts to improve surface
           transportation safety are wide-ranging and include programs to
           change driver behaviors--such as alcohol use and speeding--that
           cause accidents; enhance motor vehicle safety; improve the safety
           of highway and intersection infrastructure; and improve safety
           performance in the motor carrier, railroad, transit, and pipeline
           industries. SAFETEA-LU established an incentive grant
           program--which has been quite successful--to encourage states to
           pass primary seat belt laws.^21 SAFETEA-LU also mandated a number
           of other promising new initiatives, including a grant program for
           highway safety that provides states with flexibility to target
           funds to their most critical safety needs. Under this program,
           states are required to prepare strategic highway safety plans,
           based on an analysis of safety data, and to assess results. FAA
           focuses on improving safety in commercial aviation, in which
           accidents are rare but have the potential for a large loss of
           life, as well as in general aviation. The agency's safety
           activities include air traffic control as well as certification
           and inspection of various participants in the aviation industry,
           such as commercial airlines, flight schools, and aircraft
           manufacturers.

           While the department's many efforts to improve transportation
           safety are to be commended, certain areas require increased
           attention. In particular, improvements in data, performance
           measures, and evaluations are needed to determine whether programs
           are achieving intended results. For example, in reviewing certain
           programs of the Federal Motor Carrier Safety Administration aimed
           at improving driver behavior, we found that, in some cases, funds
           were being directed to initiatives that lacked information on
           whether they worked and that evaluations of program impacts were
           not planned for a number of years.^22 In reviewing a NHTSA grant
           program to help states improve the quality of their traffic safety
           data, we found that the agency did not have an effective process
           in place for monitoring progress.^23 We have also found that the
           effectiveness of the department's efforts to oversee and improve
           the safety performance of airlines, truck companies, pipeline
           companies, and railroads is unclear because of limitations in
           data, performance measures, and evaluation.^24 For example,
           agencies need to develop better measures of the direct results of
           their efforts--such as safety improvements made as a result of
           enforcement of safety standards--that contribute toward reductions
           in accidents. Performance measures and evaluations, supported by
           appropriate data, provide managers with information on program
           results that helps them make decisions that can improve
           performance, including decisions to refine programs and adjust
           policies and priorities. This information can also hold agencies
           accountable for the performance of their programs and support
           congressional oversight. While agencies have been making progress
           in this area in response to our recommendations as well as some
           mandated improvements in SAFETEA-LU, it is important that the
           department continue to improve information on the performance of
           its safety programs to have greater assurance that they are
           producing desired effects.

           Furthermore, the department's ability to maintain the high level
           of safety in the aviation industry will depend to a large extent
           on FAA's ability to hire, train, and deploy its primary workforce,
           including safety inspectors and air traffic controllers. FAA must
           overcome several key challenges in this area. Planned changes in
           the agency's oversight approach for air carriers will result in
           workload shifts for its inspectors that will make it important for
           FAA to improve its staffing process. In addition, the agency plans
           to hire almost 12,000 new air traffic controllers by 2015 to
           replace retiring controllers and accommodate increases in air
           traffic and will need to train these new controllers and
           incorporate them into its workforce.^25
			  
			  Managing the Transition to the Next Generation Air Transportation
			  System

           The current approach to managing air transportation is becoming
           increasingly inefficient and operationally obsolete. In 2003,
           Congress authorized the creation of the JPDO, housed within FAA,
           to plan for and coordinate the transition to NextGen, a complex
           and ambitious multiagency undertaking that is intended to upgrade
           the system by 2025 to safely accommodate increased air traffic. As
           the primary implementer of the transition to NextGen, FAA faces
           challenges in moving from planning to implementation, including
           institutionalizing management reforms it has made in recent years,
           obtaining financial and technical resources and expertise, and
           collaborating with JPDO on planning efforts.^26 If FAA does not
           meet these challenges, the realization of NextGen goals could be
           severely compromised. Without a timely transition to NextGen
           capabilities, JPDO officials estimate a future gap between the
           demand for air transportation and available capacity that could
           cost the U.S. economy billions of dollars annually.

           FAA has had systemic management and acquisition problems that have
           led us to designate its air traffic control modernization program
           as high-risk since 1995. However, FAA has made significant
           progress in recent years. For example, FAA established the Air
           Traffic Organization to operate and modernize the air traffic
           control system. This organization is headed by a Chief Operating
           Officer who has focused on implementing more businesslike
           management and acquisition processes to address cost, schedule,
           and performance shortfalls that plagued air traffic control
           modernization in the past. FAA has reduced organizational
           stovepipes, increased accountability for costs, and begun
           investment reviews of major acquisitions. FAA has reported meeting
           its acquisition cost and schedule goals for the last 3 years.

           JPDO has completed some initial planning necessary for
           implementing NextGen. For example, JPDO has been developing an
           enterprise architecture, or technical blueprint, that it expects
           will provide more clarity regarding its expectations for NextGen,
           thereby facilitating (1) coordination among JPDO's partner
           agencies^27 and private sector manufacturers, (2) alignment across
           agencies of research and development activities with the
           blueprint, and (3) integration of modernized systems in a way that
           minimizes overlap and duplication and maximizes integration. As we
           reported in November 2006, a limited, preliminary cost estimate
           concluded that FAA's budget under a NextGen scenario would average
           about $15 billion per year through 2025, or about $1 billion more
           annually (in today's dollars), on average, than FAA's fiscal year
           2006 appropriation.^28

           Despite its progress, as the key implementer of NextGen, FAA needs
           to institutionalize improvements made and continuously improve.
           For example, we recommended that, before making decisions to fund
           systems already in service, FAA re-evaluate projects' alignment
           with strategic goals and objectives, but FAA's acquisition
           management guidance does not clearly indicate if this is yet the
           case. The agency developed a cost estimating methodology, but has
           yet to implement it, as well as a framework for improving system
           management capabilities, but has yet to institutionalize it.
           Additionally, we recently recommended that FAA examine its
           strengths and weaknesses with regard to the technical expertise
           and contract management expertise necessary to transition to
           NextGen.^29 In response, FAA is considering convening a blue
           ribbon panel to make recommendations, which we believe could help
           the agency begin to address this concern.

           JPDO faces challenges in coordinating agencies and continuing
           planning necessary for implementation of NextGen. For example,
           work remains to synchronize NextGen's enterprise architecture with
           the partner agencies' planning documents and to keep the necessary
           research and development on track. In addition, JPDO has yet to
           provide Congress with a valid, comprehensive estimate of the costs
           to JPDO partner agencies for the required research, development,
           systems acquisitions, and systems integration.^30 Finally,
           continuing collaboration between JPDO and the Office of Management
           and Budget is needed to allow the budget agency to make funding
           decisions based on a unified NextGen program. The Congressional
           Research Service has pointed out that Congress may examine options
           to align the budgets of the agencies involved, given that JPDO
           does not have authority over funding, personnel, and resources.^31
			  
			  Building Human Capital Strategies

           The department and the transportation sector as a whole face
           persistent human capital challenges that put their mission
           performance at risk. Building human capital strategies that will
           allow the department and the transportation sector to attract,
           hire, and retain an effective workforce is an overarching issue
           that directly affects their ability to respond to the challenges I
           have outlined today.^32 In particular, both are confronted with an
           impending shortage of skilled people that threatens to have
           serious short- and long-term consequences. For example, FAA alone
           expects to lose about 10,000, or 70 percent, of its air traffic
           controllers over the next 10 years, mostly due to retirement. For
           the department and the transportation sector as a whole, the
           growing demand for transportation services will collide with the
           reality of fewer people entering transportation-related fields.
           Further complicating this shortage, changes in intergovernmental
           responsibilities for delivering transportation services, new
           travel patterns, advances in technology, and changed public
           expectations are redefining the competencies and skills that are
           needed. Increasingly, transportation will require more diverse,
           sophisticated management and technical competencies than ever
           before.

           The department has acknowledged that accomplishing its mission
           depends on a strategic approach to human capital, and it is taking
           steps to adopt such an approach. For example, in 2005, the agency
           piloted a program to expand entry-level hiring in mission-critical
           occupations. Also, in 2006, the agency increased its investments
           in human capital by 48 percent. Furthermore, the agency is working
           to align its human capital initiatives to meet the President's
           Management Agenda. In the department's current performance and
           accountability report, the Office of Management and Budget awarded
           the department top marks for current and prospective progress on
           its human capital initiative. However, the department has not
           convinced its workforce about these results. In the results of the
           2006 federal employee human capital survey, the employees scored
           the department lower in each of the four broad areas than they did
           in 2004, when the survey was last conducted. Among the 36 federal
           agencies surveyed, the department finished in the bottom 10 for
           talent management and job satisfaction and in the bottom 3 for
           fostering a results-oriented performance culture and for
           leadership and knowledge management. The department will need to
           take further actions to address these issues, to improve its
           ability to respond to the challenges it faces.

           Across the transportation sector, transportation agencies are also
           taking steps to improve human capital practices, by identifying
           organizational and staff competency needs, as well as other gaps.
           They are also beginning to investigate nontraditional sources for
           qualified employees, such as highly qualified retirees from other
           organizations, as well as ways to develop individual competencies
           by training the existing workforce. While these efforts are
           promising, these agencies vary widely, and although each has its
           own unique capabilities and resources to address workforce needs,
           all have limited resources. Furthermore, few have addressed their
           future workforce needs comprehensively, which further complicates
           efforts to predict how many people in specific job categories for
           each type of agency will be needed in 5 or 10 years.^33
			  
			  Fostering Improved Departmental Financial Management

           In 2003, we cited financial management as a major challenge facing
           the Department of Transportation, specifically, identifying
           weaknesses in the accuracy and reliability of FAA's financial
           information.^34 In recent years, the department has made
           significant progress in managing its finances, including
           substantial improvements in FAA's financial management systems and
           practices. Improvements have included installing a departmentwide
           financial system, including a new general ledger system and
           integrated property systems at FAA, as well as receiving
           unqualified opinions on its financial statements from auditors for
           several fiscal years in a row. As a result of this progress, in
           2005, we removed FAA's financial management from our high-risk
           list.

           While progress has been made, work remains to ensure that the
           Department of Transportation soundly manages its finances and
           accounts for its use of federal and other funds. For fiscal year
           2006, the department received a qualified opinion on its financial
           statements and the auditors cited two material internal control
           weaknesses.^35 This qualified opinion resulted from a material
           weakness at FAA relating to management's inability to support the
           accuracy and completeness of a $4.7 billion account used for
           equipment and facility projects. The department's Office of the
           Inspector General has reported that correcting this deficiency
           will be critical for FAA to meet its stated goal of sound
           financial management.^36 The other material weakness involves the
           financial management, reporting, and oversight of the Highway
           Trust Fund agencies.^37 During fiscal year 2006, trust fund
           agencies implemented significant improvements over several
           previously reported deficiencies. However, weaknesses remained in
           several areas, including a lack of policies and procedures to
           ensure more timely correction of any abnormal account balances and
           concerns with the preparation and analysis of financial
           statements. The Inspector General has listed several additional
           steps to further improve oversight of the trust fund, including
           better detection of improper payments and development of realistic
           project cost estimates.^38
			  
			  Improving Transportation Security and Emergency Preparedness and
			  Response

           The size and interconnectedness of the nation's transportation
           systems make it highly difficult to secure against attack. In
           2003, we cited transforming transportation security as a major
           challenge facing the Department of Transportation.^39 In recent
           years, Congress has shifted many of the department's security
           responsibilities to the Department of Homeland Security, which now
           has primary responsibility for securing the nation's
           transportation infrastructure, including aviation, railroad,
           pipeline, and other systems. The Department of Transportation has
           retained some involvement in securing transportation
           infrastructure, in part, due to overlap with its safety efforts
           involving freight, including the transportation of hazardous
           materials, and passenger rail. In light of these changes, the
           department faces the challenge of working with the Department of
           Homeland Security to clarify its remaining role in securing the
           nation's transportation infrastructure. The sheer number of
           stakeholders involved in securing transportation modes can
           sometimes lead to communication challenges, duplication of effort,
           and confusion about roles and responsibilities. For example, the
           department's safety standards have at times conflicted with the
           Department of Homeland Security's security standards. Both
           departments have begun efforts to strengthen coordination and
           cooperation to promote the security of the transportation system.
           The departments have signed a memorandum of understanding to
           define broad areas of responsibility for each department and to
           delineate specific security related roles, responsibilities,
           resources, and commitments for mass transit, rail, and other
           matters.^40 However, the departments' coordination efforts in this
           area are ongoing.

           The department also coordinates with the Department of Homeland
           Security in developing protective measures affecting
           transportation and has statutory roles related to emergency
           preparedness, response, and recovery. This encompasses programs
           like FHWA's Emergency Relief program, which provides funding to
           states to repair or reconstruct highways and roads damaged or
           destroyed in disasters.^41 During times of disaster, the
           department plays a significant role as the lead and supporting
           agency for coordinating transportation support. In this role, it
           is primarily responsible for coordinating the provision of federal
           and civil transportation services, as well as the recovery and
           restoration of transportation infrastructure, among other things.
           In the future, the department will be tasked to further clarify
           its roles and responsibilities with the Department of Homeland
           Security in planning for and providing evacuation assistance.
           Catastrophic disasters like Hurricane Katrina demonstrate the
           importance of transportation preparedness and response to ensure
           the safe evacuation of citizens in emergencies when state and
           local governments are overwhelmed.^42 Yet the department's
           responsibilities in providing evacuation assistance have not been
           entirely clear. In addition, despite recent progress by the
           federal government in providing evacuation assistance, gaps
           remain. For example, the Department of Homeland Security has not
           yet clarified, in the federal government's plan for disaster
           response, the leading, coordinating, and supporting federal
           agencies to provide evacuation assistance when state and local
           governments are overwhelmed, and what their responsibilities are.
           One White House report recommended that the Department of
           Transportation be designated as the agency responsible for
           developing the federal government's capability to carry out mass
           evacuations when state and local governments are overwhelmed.^43

           Mr. Chairman, this concludes my prepared statement. I would be
           pleased to respond to any questions that you or other Members of
           the Subcommittee might have.
			  
			  GAO Contacts and Staff Acknowledgement

           For further information on this statement, please contact Patricia
           Dalton at (202) 512-2834 or [email protected] . Individuals
           making key contributions to this testimony were Matthew Cail, Judy
           Guilliams-Tapia, Marietta Mayfield, Margaret Vo, and James
           Ratzenberger.

^15See [110]GAO-07-94 ; [111]GAO-04-165 ; Intermodal Transportation:
Challenges to and Potential Strategies for Developing Improved Intermodal
Capabilities, [112]GAO-06-855T (Washington, D.C.: June 15, 2006); and
Intermodal Transportation: Potential Strategies Would Redefine Federal
Role in Developing Airport Intermodal Capabilities, [113]GAO-05-727
(Washington, D.C.: July 26, 2005).

^16Once FHWA distributes funds to the states, funds are available to be
obligated by the states for construction, reconstruction, and improvement
of highways and bridges on eligible federal aid-highway routes and for
other purposes authorized in law.

^17 [114]GAO-05-172 .

^18See GAO, Federal-Aid Highways: FHWA Needs a Comprehensive Approach to
Improving Project Oversight, [115]GAO-05-173 (Washington, D.C.: Jan. 31,
2005). The Department of Transportation's Inspector General has also found
that a top management challenge for the department is making the most of
federal resources for surface infrastructure improvements through
continued emphasis on project oversight. See Office of the Inspector
General, U.S. Department of Transportation, Department of Transportation's
Fiscal Year 2007 Top Management Challenges, PT-2007-004 (Washington, D.C.:
2006).

^19In addition, according to the Bureau of Transportation Statistics, in
2004, 769 people were killed in waterborne transportation accidents and,
in 2003, 4,666 were injured in these types of accidents. These are the
latest years for which these data are available. In 2003, the Coast Guard,
which is responsible for maritime safety, was transferred from the
Department of Transportation to the Department of Homeland Security.

^20Motor vehicle fatalities, adjusted for the level of travel, have shown
some improvement over the last decade, falling from 1.7 deaths per 100
million vehicle miles traveled in 1995 to 1.5 in 2005.

^21Primary enforcement seat belt laws allow police officers to stop
vehicles and write citations whenever they observe violations of safety
belt laws. Since SAFETEA-LU was signed into law, three states have enacted
primary seat belt laws, bringing the total number of states with such laws
to 25.

^22GAO, Truck Safety: Share the Road Safely Pilot Initiative Showed
Promise, but the Program's Future Success Is Uncertain, [116]GAO-06-916
(Washington, D.C.: Sept. 8, 2006) and Federal Motor Carrier Safety
Administration: Education and Outreach Programs Target Safety and Consumer
Issues, but Gaps in Planning and Evaluation Remain, [117]GAO-06-103
(Washington, D.C.: Dec. 19, 2005). In addition, in reviewing NHTSA's
grants to states for reducing alcohol-impaired driving, the department's
Inspector General has found that the agency's ability to gauge the
effectiveness of these programs would be improved if states had
established performance measures. See PT-2007-004.

^23GAO, Highway Safety: Improved Monitoring and Oversight of Traffic
Safety Data Program Are Needed, [118]GAO-05-24 (Washington, D.C.: Nov. 4,
2004).

^24GAO, Aviation Safety: FAA's Safety Oversight System Is Effective but
Could Benefit from Better Evaluation of Its Programs' Performance,
[119]GAO-06-266T (Washington, D.C.: Nov. 17, 2005); Large Truck Safety:
Federal Enforcement Efforts Have Been Stronger Since 2000, but Oversight
of State Grants Needs Improvement, [120]GAO-06-156 (Washington, D.C.: Dec.
15, 2005); Natural Gas Pipeline Safety: Integrity Management Benefits
Public Safety, but Consistency of Performance Measures Should be Improved,
[121]GAO-06-946 (Washington, D.C.: Sept. 8, 2006); and Rail Safety: The
Federal Railroad Administration Is Taking Steps to Better Target Its
Oversight, but Assessment of Results Is Needed to Determine Impact,
[122]GAO-07-149 (Washington, D.C.: Jan. 26, 2007).

^25GAO, Federal Aviation Administration: Challenges Facing the Agency in
Fiscal Year 2008 and Beyond, [123]GAO-07-490T (Washington, D.C.: Feb. 14,
2007) and Aviation Safety: FAA's Safety Efforts Generally Strong but Face
Challenges, [124]GAO-06-1091T (Washington, D.C.: Sept. 20, 2006).

^26GAO, Next Generation Air Transportation System: Progress and Challenges
Associated with the Transformation of the National Airspace System,
[125]GAO-07-25 (Washington, D.C.: Nov. 13, 2006).

^27In addition to FAA, these agencies include the Departments of
Transportation, Commerce, Defense, and Homeland Security; the National
Aeronautics and Space Administration; and the White House Office of
Science and Technology Policy.

^28This preliminary estimate--developed by the Research, Engineering and
Development Advisory Committee, an advisory committee to FAA--indicates
that costs for a status quo scenario (i.e., no NextGen) would also be
about $15 billion per year through 2025. This is due primarily to the
expectation that, under the NextGen scenario, capital expenditures would
be higher than under the status quo scenario in the near term, but
operations costs would be lower because of productivity improvements in
the longer term.

^29 [126]GAO-07-25.

^30GAO-07-490T.

^31Congressional Research Service, Reauthorization of the Federal Aviation
Administration: Background and Issues for Congress (Washington, D.C.:
January 29, 2007).

^32We added strategic human capital management as a governmentwide
high-risk area in 2001 because federal agencies lacked a strategic
approach to human capital management that integrates human capital efforts
with agency mission and program goals. See [127]GAO-07-310 .

^33Transportation Research Board, The Workforce Challenge: Recruiting,
Training, and Retaining Qualified Workers for Transportation and Transit
Agencies, Special Report 275 (Washington, D.C.: 2003).

^34 [128]GAO-03-108 .

^35A material weakness can involve one or more of the following
categories: significant weakness of safeguards against waste, loss,
unauthorized use, or misappropriation of funds, property, or other assets;
violates statutory authority; results in a conflict of interest; deprives
the public of significant services, or seriously affects safety or the
environment; impairs the fulfillment of the agency's mission, and/or would
result in significant adverse effects on agency credibility.

^36Department of Transportation Office of the Inspector General,
PT-2007-004

^37Agencies using Highway Trust Fund funds include the Federal Highway
Administration, National Highway Traffic Safety Administration, Federal
Transit Administration, Federal Railroad Administration, Federal Motor
Carrier Safety Administration, and Research and Innovative Technology
Administration.

^38Department of Transportation Office of the Inspector General,
PT-2007-004.

^39 [129]GAO-03-108 .

^40GAO, Passenger Rail Security: Federal Strategy and Enhanced
Coordination Needed to Prioritize and Guide Security Efforts,
[130]GAO-07-459T (Washington, D.C.: Feb. 13, 2007).

^41GAO, Highway Emergency Relief: Reexamination Needed to Address Fiscal
Imbalance and Long-Term Sustainability, [131]GAO-07-245 (Washington, D.C.:
Feb. 23, 2007).

^42GAO, Transportation-Disadvantaged Populations: Actions Needed to
Clarify Responsibilities and Increase Preparedness for Evacuations,
[132]GAO-07-44 (Washington, D.C.: Dec. 22, 2006).

^43White House Homeland Security Council, The Federal Response to
Hurricane Katrina: Lessons Learned (Washington, D.C.: Feb. 2006).
			  
			  Appendix I: Ongoing GAO Work Related to Transportation Challenges

Description (expected completion)          GAO contact                     
Transportation financing                                                   
      o Airport capital development funding   Gerald Dillingham (202)         
      (early 2007)                            512-2834 [email protected]    
      o Federal role in overseeing and        JayEtta Hecker (202) 512-2834   
      funding railroad bridge and tunnel      [email protected]                 
      projects (mid 2007)                                                     
      o GAO forum on transforming                                             
      transportation policy (mid 2007)                                        
      o The Federal Transit Administration's  Katherine Siggerud (202)        
      New Starts program (mid 2007)           512-2834 [email protected]      
Mobility                                                                   
      o The Federal Transit Administration's  Kay Brown (202) 512-2834        
      implementation and oversight of the New [email protected]                 
      Freedom program (TBD^a)                                                 
      o Operational, capacity, and safety     Gerald Dillingham (202)         
      issues associated with the Airbus A380  512-2834 [email protected]    
      (early 2007)                                                            
      o Introduction of very light jets into  Susan Fleming (202) 512-2834    
      the national airspace system (mid 2007) [email protected]                
      o Approaches to the efficient use of    JayEtta Hecker (202) 512-2834   
      existing transportation infrastructure  [email protected]                 
      (mid 2007)                                                              
      o Freight bottlenecks (late 2007)                                       
      o Public-private partnerships in                                        
      transportation (late 2007)                                              
      o Restructuring the federal-aid highway                                 
      program (TBD^a)                                                         
      o Trends and performance of state                                       
      contracting with the private sector                                     
      (TBD^a)                                                                 
      o Port preparedness and mobility of     Katherine Siggerud (202)        
      goods during natural disasters (early   512-2834 [email protected]      
      2007)                                                                   
      o Barriers in addressing intermodal                                     
      solutions to transportation mobility                                    
      challenges (mid 2007)                                                   
      o Corporate Average Fuel Economy                                        
      program policy options (mid 2007)                                       
      o Surface transportation compliance                                     
      with the Americans with Disabilities                                    
      Act of 1990 (late 2007)                                                 
Safety                                                                     
      o The public safety impact of the       Cathleen Berrick (202) 512-3404 
      Transportation Security                 [email protected]                
      Administration's modifications to the                                   
      prohibited items list (early 2007^b)                                    
      o Implementation progress of the        Kay Brown (202) 512-2834        
      Uniform Carrier Registration program    [email protected]                 
      (TBD^a)                                                                 
      o Operational, capacity, and safety     Gerald Dillingham (202)         
      issues associated with the Airbus A380  512-2834 [email protected]    
      (early 2007)                                                            
      o Airport runway safety and the role of                                 
      the Federal Aviation Administration                                     
      (late 2007)                                                             
      o Identification of motor carriers that Susan Fleming (202) 512-2834    
      pose a high risk for crashes (mid 2007) [email protected]                
      o Federal Motor Carrier Safety                                          
      Administration identification and                                       
      monitoring of unsafe motor carriers                                     
      (mid 2007)                                                              
      o Safety standards for older drivers    Katherine Siggerud (202)        
      (early 2007)                            512-2834 [email protected]      
      o Emerging trends in and challenges to                                  
      preventing highway fatalities (late                                     
      2007)                                                                   
Next generation air transportation system                                  
      o Survey of Joint Planning and          Gerald Dillingham (202)         
      Development Office stakeholders (mid    512-2834 [email protected]    
      2007)                                                                   
      o The Federal Aviation Administration's                                 
      air traffic control modernization                                       
      program (mid 2007)                                                      
Human capital strategies                                                   
No ongoing work                                                            
Financial management                                                       
      o The Federal Aviation Administration's Gerald Dillingham (202)         
      financial management efforts (mid 2007) 512-2834 [email protected]    
      o Highway transit funding authority     Katherine Siggerud (202)        
      (mid 2007)                              512-2834 [email protected]      
Security and emergency preparedness and                                    
response                                                                   
      o Research and development of aviation  Cathleen Berrick (202) 512-3404 
      passenger checkpoint screening          [email protected]                
      technologies (mid 2007^b)                                               
      o Planning and implementation efforts                                   
      to ensure the security of commercial                                    
      vehicles (TBD^a,b)                                                      
      o Vulnerabilities of tank vessels to    Stephen Caldwell (202) 512-9610 
      terrorist attack (early 2007^b)         [email protected]               
      o Port preparedness and mobility of     Katherine Siggerud (202)        
      goods during natural disasters (early   512-2834 [email protected]      
      2007)                                                                   
      o The Federal Transit Authority's                                       
      emergency assistance for transit                                        
      agencies (TBD^a)                                                        

           Source: GAO.

           aTo be determined

           bThis report may not be publicly available at this time because it
           may contain security sensitive information.
			  
			  Related GAO Products

           The following are the most pertinent GAO products to the topics
           discussed in this hearing statement since our 2003 report on
           management challenges facing the Department of Transportation.
           Other products can be found at GAO's Website at www.gao.gov .
			  
			  Financing the Nationï¿½s Transportation System

           Intercity Passenger Rail: National Policy and Strategies Needed to
           Maximize Public Benefits from Federal Expenditures. [39]GAO-07-15
           . Washington, D.C.: November 13, 2006.

           Freight Railroads: Industry Health Has Improved, but Concerns
           about Competition and Capacity Should Be Addressed. [40]GAO-07-94
           . Washington, D.C.: October 6, 2006.

           Aviation Finance: Observations on Potential FAA Funding Options.
           [41]GAO-06-973 . Washington, D.C.: September 29, 2006.

           National Airspace System Modernization: Observations on Potential
           Funding Options for FAA and the Next Generation Airspace System.
           [42]GAO-06-1114T . Washington, D.C.: September 27, 2006.

           Highway Finance: States' Expanding Use of Tolling Illustrates
           Diverse Challenges and Strategies. [43]GAO-06-554 . Washington,
           D.C.: June 28, 2006.

           Highway Trust Fund: Overview of Highway Trust Fund Estimates.
           [44]GAO-06-572T . Washington, D.C.: April 4, 2006.

           Federal Aviation Administration: An Analysis of the Financial
           Viability of the Airport and Airway Trust Fund. [45]GAO-06-562T .
           Washington, D.C.: March 28, 2006.

           Freight Transportation: Short Sea Shipping Option Shows Importance
           of Systematic Approach to Public Investment Decisions.
           [46]GAO-05-768 . Washington, D.C.: July 29, 2005.

           Highlights of an Expert Panel: The Benefits and Costs of Highway
           and Transit Investments. [47]GAO-05-423SP . Washington, D.C.: May
           6, 2005.

           Airport and Airway Trust Fund: Preliminary Observations on Past,
           Present, and Future. [48]GAO-05-657T . Washington, D.C.: May 4,
           2005.

           Highway and Transit Investments: Options for Improving Information
           on Projects' Benefits and Costs and Increasing Accountability for
           Results. [49]GAO-05-172 . Washington, D.C.: January 24, 2005.

           Federal-Aid Highways: Trends, Effect on State Spending, and
           Options for Future Program Design. [50]GAO-04-802 . Washington,
           D.C.: August 31, 2004.

           Surface Transportation: Many Factors Affect Investment Decisions.
           [51]GAO-04-744 . Washington, D.C.: June 30, 2004.
			  
			  Improving Mobility through Intermodal and Modal Approaches

           Transportation-Disadvantaged Populations: Actions Needed to
           Clarify Responsibilities and Increase Preparedness for
           Evacuations. [52]GAO-07-44 . Washington, D.C.: December 22, 2006.

           Federal Transit Administration: Progress Made in Implementing
           Changes to the Job Access Program, but Evaluation and Oversight
           Processes Need Improvement. [53]GAO-07-43 . Washington, D.C.:
           November 17, 2006.

           Intercity Passenger Rail: National Policy and Strategies Needed to
           Maximize Public Benefits from Federal Expenditures. [54]GAO-07-15
           . November 13, 2006.

           Freight Railroads: Industry Health has Improved, but Concerns
           about Competition and Capacity Should Be Addressed. [55]GAO-07-94
           . Washington, D.C.: October 6, 2006.

           Commercial Aviation: Programs and Options for the Federal Approach
           to Providing and Improving Air Service to Small Communities.
           [56]GAO-06-398T . Washington, D.C.: September 14, 2006.

           Public Transportation: New Starts Program Is in a Period of
           Transition. [57]GAO-06-819 . Washington, D.C.: August 30, 2006.

           Public Transportation: Preliminary Information on FTA's
           Implementation of SAFETEA-LU Changes. [58]GAO-06-910T .
           Washington, D.C.: June 27, 2006.

           Intermodal Transportation: Challenges to and Potential Strategies
           for Developing Improved Intermodal Capabilities. [59]GAO-06-855T .
           Washington, D.C.: June 15, 2006.

           Commuter Rail: Commuter Rail Issues Should Be Considered in Debate
           over Amtrak. [60]GAO-06-470 . Washington, D.C.: April 21, 2006.

           Transportation Services: Better Dissemination and Oversight of
           DOT's Guidance Could Lead to Improved Access for Limited
           English-Proficient Populations. [61]GAO-06-52 . Washington, D.C.:
           November 2, 2005.

           Intermodal Transportation: Potential Strategies Would Redefine
           Federal Role in Developing Airport Intermodal Capabilities.
           [62]GAO-05-727 . Washington, D.C.: July 26, 2005.

           Federal-Aid Highways: FHWA Needs a Comprehensive Approach to
           Improving Project Oversight. [63]GAO-05-173 . Washington, D.C.:
           January 31, 2005.

           Highway and Transit Investments: Options for Improving Information
           on Projects' Benefits and Costs and Increasing Accountability for
           Results. [64]GAO-05-172 . Washington, D.C.: January 24, 2005.

           Federal-Aid Highways: Trends, Effect on State Spending, and
           Options for Future Program Design. [65]GAO-04-802 . Washington,
           D.C.: August 31, 2004.
			  
			  Improving Transportation Safety

           Underinflated Tires in the United States. [66]GAO-07-246R .
           Washington, D.C.: February 9, 2007.

           Rail Safety: The Federal Railroad Administration Is Taking Steps
           to Better Target Its Oversight, but Assessment of Results is
           Needed to Determine Impact. [67]GAO-07-149 . Washington, D.C.:
           January 26, 2007.

           Aviation Safety: FAA's Safety Efforts Generally Strong but Face
           Challenges. [68]GAO-06-1091T . Washington, D.C.: September 20,
           2006.

           Natural Gas Pipeline Safety: Integrity Management Benefits Public
           Safety, but Consistency of Performance Measures Should Be
           Improved. [69]GAO-06-946 . Washington, D.C.: September 8, 2006.

           Natural Gas Pipeline Safety: Risk-Based Standards Should Allow
           Operators to Better Tailor Reassessments to Pipeline Threats.
           [70]GAO-06-945 . Washington, D.C.: September 8, 2006.

           Truck Safety: Share the Road Safely Pilot Initiative Showed
           Promise, but the Program's Future Success Is Uncertain.
           [71]GAO-06-916 . Washington, D.C.: September 8, 2006.

           Rail Transit: Additional Federal Leadership Would Enhance FTA's
           State Safety Oversight Program. [72]GAO-06-821 . Washington, D.C.:
           July 26, 2006.

           Federal Motor Carrier Safety Administration: Education and
           Outreach Programs Target Safety and Consumer Issues, but Gaps in
           Planning and Evaluation Remain. [73]GAO-06-103 . Washington, D.C.:
           December 19, 2005.

           Large Truck Safety: Federal Enforcement Efforts Have Been Stronger
           Since 2000, but Oversight of State Grants Needs Improvement.
           [74]GAO-06-156 . Washington, D.C.: December 15, 2005.

           Highway Safety: Further Opportunities Exist to Improve Data on
           Crashes Involving Commercial Motor Vehicles. [75]GAO-06-102 .
           Washington, D.C.: November 18, 2005.

           Aviation Safety: FAA's Safety Oversight System Is Effective but
           Could Benefit from Better Evaluation of Its Programs' Performance.
           [76]GAO-06-266T . Washington, D.C.: November 17, 2005.

           Aviation Safety: System Safety Approach Needs Further Integration
           into FAA's Oversight of Airlines. [77]GAO-05-726 . Washington,
           D.C.: September 28, 2005.

           Vehicle Safety: Opportunities Exist to Enhance NHTSA's New Car
           Assessment Program. [78]GAO-05-370 . Washington, D.C.: April 29,
           2005.

           Highway Safety: Improved Monitoring and Oversight of Traffic
           Safety Data Program are Needed. [79]GAO-05-24 . Washington, D.C.:
           November 4, 2004.
			  
			  Managing the Transition to the Next Generation Air Transportation
			  System

           Federal Aviation Administration: Challenges Facing the Agency in
           Fiscal Year 2008 and Beyond. [80]GAO-07-490T . Washington, D.C.:
           February 14, 2007.

           Next Generation Air Transportation System: Progress and Challenges
           Associated with the Transformation of the National Airspace
           System. [81]GAO-07-25 . Washington, D.C.: November 13, 2006.

           Next Generation Air Transportation System: Preliminary Analysis of
           Progress and Challenges Associated with the Transformation of the
           National Airspace System. [82]GAO-06-915T . Washington, D.C.: July
           25, 2006.

           Air Traffic Control Modernization: Status of the Current Program
           and Planning for the Next Generation Air Transportation System.
           [83]GAO-06-653T . Washington, D.C.: June 21, 2006.

           Next Generation Air Transportation System: Preliminary Analysis of
           the Joint Planning and Development Office's Planning, Progress,
           and Challenges. [84]GAO-06-574T . Washington, D.C.: March 29,
           2006.

           National Airspace System: Transformation will Require Cultural
           Change, Balanced Funding Priorities, and Use of All Available
           Management Tools. [85]GAO-06-154 . Washington, D.C.: October 14,
           2005.

           National Airspace System: FAA Has Made Progress but Continues to
           Face Challenges in Acquiring Major Air Traffic Control Systems.
           [86]GAO-05-331 . Washington, D.C.: June 10, 2005.

           Federal Aviation Administration: Stronger Architecture Program
           Needed to Guide Systems Modernization Efforts. [87]GAO-05-266 .
           Washington, D.C.: April 29, 2005.
			  
			  Building Human Capital Strategies

           Aviation Security: TSA's Staffing Allocation Model Is Useful for
           Allocating Staff among Airports, but Its Assumptions Should Be
           Systematically Reassessed. [88]GAO-07-299 . Washington, D.C.:
           February 28, 2007.

           Aviation Safety: FAA Management Practices for Technical Training
           Mostly Effective; Further Actions Could Enhance Results.
           [89]GAO-05-728 . Washington, D.C.: September 7, 2005.

           Human Capital: Agencies Need Leadership and the Supporting
           Infrastructure to Take Advantage of New Flexibilities.
           [90]GAO-05-616T . Washington, D.C.: April 21, 2005.

           Federal-Aid Highways: FHWA Needs a Comprehensive Approach to
           Improving Project Oversight. [91]GAO-05-173 . Washington, D.C.:
           January 31, 2005.
			  
			  Fostering Improved Financial Management

           FAA Budget Policies and Practices. [92]GAO-04-841R . Washington,
           D.C.: July 2, 2004.

           Federal Aircraft: Inaccurate Cost Data and Weaknesses in Fleet
           Management Planning Hamper Cost Effective Operations.
           [93]GAO-04-645 . Washington, D.C.: June 18, 2004.
			  
			  Improving Transportation Security and Emergency Preparedness and
			  Response

           Highway Emergency Relief: Reexamination Needed to Address Fiscal
           Imbalance and Long-Term Sustainability. [94]GAO-07-245 .
           Washington, D.C.: February 23, 2007.

           Passenger Rail Security: Federal Strategy and Enhanced
           Coordination Needed to Prioritize and Guide Security Efforts.
           [95]GAO-07-459T . Washington, D.C.: February 13, 2007.

           Aviation Security: Progress Made in Systematic Planning to Guide
           Key Investment Decisions, but More Work Remains. [96]GAO-07-448T .
           Washington, D.C.: February 13, 2007.

           Transportation-Disadvantaged Populations: Actions Needed to
           Clarify Responsibilities and Increase Preparedness for
           Evacuations. [97]GAO-07-44 . Washington, D.C.: December 22, 2006.

           Passenger Rail Security: Evaluating Foreign Security Practices and
           Risk Can Help Guide Security Efforts. [98]GAO-06-557T .
           Washington, D.C.: March 29, 2006.

           Undeclared Hazardous Materials: New DOT Efforts May Provide
           Additional Information on Undeclared Shipments. [99]GAO-06-471 .
           Washington, D.C.: March 29, 2006.

           Passenger Rail Security: Enhanced Federal Leadership Needed to
           Prioritize and Guide Security Efforts. [100]GAO-05-851 .
           Washington, D.C.: September 9, 2005.

           General Aviation Security: Increased Federal Oversight is Needed,
           but Continued Partnership with the Private Sector Is Critical to
           Long-Term Success. [101]GAO-05-144 . Washington, D.C.: November
           10, 2004.

           Transportation Security: Federal Action Needed to Help Address
           Security Challenges. [102]GAO-03-843 . Washington, D.C.: June 30,
           2003.

           Transportation Security Research: Coordination Needed in Selecting
           and Implementing Infrastructure Vulnerability Assessments.
           [103]GAO-03-502 . Washington, D.C.: May 1, 2003.
			  
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Related GAO Products

Financing the Nation's Transportation System

Improving Mobility through Intermodal and Modal Approaches

Improving Transportation Safety

Managing the Transition to the Next Generation Air Transportation System

Building Human Capital Strategies

Fostering Improved Financial Management

Improving Transportation Security and Emergency Preparedness and Response

(541029)

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www.gao.gov/cgi-bin/getrpt?GAO-07-545T .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact Patricia Dalton at (202) 512-2834 or
[email protected].

Highlights of [134]GAO-07-545T , a testimony before the Subcommittee on
Transportation, Housing and Urban Development, and Related Agencies;
Committee on Appropriations; House of Representatives

March 6, 2007

PERFORMANCE AND ACCOUNTABILITY

Transportation Challenges Facing Congress and the Department of
Transportation

A safe, efficient, and convenient transportation system is integral to the
health of our economy and quality of life. Our nation's vast
transportation system of airways, railways, roads, pipelines, transit, and
waterways has served this need, yet it is under considerable strain from
(1) increasing congestion, (2) the large costs to maintain and improve it,
and (3) the human cost of over 44,000 people killed and over 2.5 million
injured each year in transportation-related accidents.

The Department of Transportation implements national transportation policy
and administers most federal transportation programs. For fiscal year
2008, the department has requested $67 billion to carry out these and
other activities.

While the department carries out some activities directly, such as
employing about 15,000 air traffic controllers to make certain that planes
stay a safe distance apart, it does not have direct control over the vast
majority of activities that it funds, such as local decisions on the
priority and placement of airports, public transit, and roads. In other
cases, such as railways and pipelines, the infrastructure is owned and
operated by industry.

This statement presents GAO's views on major transportation challenges
facing Congress and the department. It is based on GAO products, including
recommendations made, and the products of others.

Financing mechanisms for the nation's transportation system are under
stress. Our nation's transportation infrastructure is threatened by
increasing demand for transportation services, and revenue from
traditional funding mechanisms for the nation's highway and aviation
systems may be unable to keep pace at current tax rates. In addition,
freight traffic is projected to grow substantially, but current planning
and financing mechanisms impede public strategies to address needs.

Our nation's mobility is threatened because the nation's infrastructure is
under great strain. Congestion across modes (e.g., aviation, highways, and
rail) is expected to worsen. However, funding by mode and the lack of
performance-related goals result in little assurance that funds are being
channeled to the most critical mobility concerns and that intermodal
approaches can be integrated into the transportation system.

Improvements in transportation safety are needed to reduce the number of
deaths and injuries from transportation accidents--about 95 percent of
which occur on our nation's roads. Increases in congestion across modes as
a result of population and economic growth could cause deterioration in
transportation safety despite departmental and state efforts to reduce
accidents.

The transition from the current air traffic control system to a broader
and modernized system will be one of the department's most complex
undertakings. In previous years, FAA has faced systemic management and
acquisition problems that led us to designate its air traffic control
modernization program as high risk. While the agency has made significant
progress in recent years, a key challenge going forward will be to
institutionalize these improvements and to continually improve.

In addition, the department and the transportation sector face persistent
human capital challenges due to an impending shortage of skilled people to
meet changing transportation needs. Furthermore, despite recent
improvements in financial management, the department received a qualified
opinion on its 2006 financial statements. Finally, the department is
working to clarify its role in transportation security and emergency
preparedness and response.

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