Order Code IB10032
Issue Brief for Congress
Received through the CRS Web
Transportation Issues
in the 107th Congress
Updated May 3, 2002
Glennon J. Harrison, Coordinator
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
Budget
Transportation Budgeting
Highway Finance, FY2003: The RABA Dilemma
Department of Transportation Appropriations
Transportation Security
Transportation Security in the Aftermath of the September 11 Attack
Aviation Security
Transportation Security Funding
Surface Transportation Security
Aviation
FAA’s Airport Improvement Program (AIP)
Airline Industry Financial Turmoil
The Airbus A380 Trade Dispute
Surface Transportation
Oversight of the Environmental Provisions of TEA21
Traffic Congestion
Amtrak Funding
Amtrak Oversight
High Speed Rail Infrastructure Funding
Railroad Safety Reauthorization
Hazardous Materials Transportation Safety
Pipeline Safety
Maritime
Harbor Maintenance Funding
Reauthorizing the Coast Guard


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Transportation Issues in the 107th Congress
SUMMARY
This issue brief identifies key transporta-
Transportation Safety and System
tion issues facing the 107th Congress.
Stabilization Act (P.L. 107-42) to provide
airlines access to up to $15 billion in short-
Transportation Budgeting. Under the
term assistance. The first $5 billion, now
Transportation Equity Act for the 21st Century
largely paid out, provided direct aid for
(TEA21), spending for highway and transit
industry losses associated with the Sept. 11th
programs is linked directly to revenue
attacks.
collected. Since the enactment of TEA21,
additional highway funds have been provided
The Airbus 380 trade dispute again raises
through a mechanism called “Revenue
the issue of European subsidies for aircraft
Aligned Budget Authority” (RABA). RABA
projects that compete directly against non-
funds accrue to the trust fund as a result of
subsidized U.S. products.
increased trust fund revenues. For FY2003,
revenues will decrease, with an estimated
Amtrak. Amtrak’s current authorization
year-over-year $8.6 billion drop in the
expires at the end of FY2002. Its previous
availability of highway obligational funding.
authorizing legislation, the Amtrak Reform
The DOT Appropriations for FY2002 is
and Accountability Act of 1997 (P.L. 105-
$59.6 billion.
134), requires Amtrak by the end of FY2002
to cover its operating expenses out of
On Nov. 19, 2001, the President signed the
revenues. One issue is whether Amtrak can
Aviation and Transportation Security Act
operate without using federal funds to cover
(ATSA), establishing a new Transportation
operating expenses. In recent years, Amtrak
Security Administration. Congress is expected
has run operating deficits of about $900
to continue to pay close attention to the
million. Various bills have been introduced in
security of aviation and other modes of
the 107th Congress to reauthorize Amtrak.
transportation as the ATSA is implemented.
Some would increase Amtrak’s funding
Transportation security funding has been
significantly; others would restructure
authorized through FY2005. The major issue
Amtrak. Rail Safety programs have not been
for all modes is what reasonable transportation
reauthorized since they expired at the end of
security measures can be taken without
F Y 1 9 9 8 . H a z a r d o u s M a t e r i a l s
excessively inhibiting commerce and travel.
Transportation Safety was not reauthorized
during the 106th Congress. Pipeline Safety
The enacted FY2002 transportation
measures are under active consideration in the
appropriations bill funded the Airport
107th Congress.
Improvement Program at the fully
authorized level of $3.3 billion. Airline
Coast Guard Reauthorization. Major issues
Industry Financial Turmoil. Following
include replacing aging vessels and addressing
September 11th, Congress and the
expanded operational responsibilities.
Administration moved quickly to pass the Air
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
TEA21 linked spending for highway programs directly to revenue collections for the
highway trust fund and created a protective “firewall” around highway and mass transit
spending programs. Through a mechanism called “Revenue Aligned Budget Authority”
(RABA), trust fund revenues that were greater than anticipated would be made available to
states for highway obligational funding. For FY2000-FY2002, RABA revenues provided
states with almost $9 billion in additional spending. In FY2001, revenues unexpectedly
decreased. This decrease requires that a RABA adjustment be made to the federal highway
obligational authority in the FY2003 budget. The RABA adjustment in FY2003 is a negative
$4.965 billion. Core highway program year-over-year obligational authority for FY2003
will be reduced by $8.6 billion, to approximately $23.3 billion. This issue has been the
subject of hearings in the House and Senate and legislation, the Highway Funding
Restoration Act (H.R. 3694/S. 1917), has been introduced to restore highway funding to its
authorized level of $27.7 billion for FY 2003. The House bill has 308 cosponsors, while the
Senate bill has 68 cosponsors. A second bill, H.R. 3900, would restore the program to its
authorized level, but would do so by abolishing the RABA mechanism.

BACKGROUND AND ANALYSIS
Introduction
This issue brief provides an overview of key issues on the transportation agenda of the
107th Congress. The issues are organized under the headings of budget, aviation, surface
transportation, and maritime, with the author of each issue identified. Relevant Congressional
Research Service (CRS) reports are cited in the text. Consult the CRS Home Page
[http://www.crs.gov/] or the Guide to CRS Products, or call CRS on (202) 707-5700 to
obtain the cited reports or identify materials in other subject areas.
Budget
Transportation Budgeting
During the 105th and 106th Congresses, major legislation changed the relationships
between the largest transportation trust funds and the federal budget. The Transportation
Equity Act for the 21st Century (TEA21)(P.L. 105-178) linked spending for highway
programs directly to revenue collections for the highway trust fund. In addition, core highway
and mass transit program funding were given special status in the discretionary portion of the
federal budget by virtue of the creation of two new budget categories. The Act thereby
creates a virtual “firewall” around highway and mass transportation spending programs. The
funding guarantees are set up in a way that makes it difficult for funding levels to be altered
as part of the annual budget/appropriations process. Additional highway funds can be
provided annually by a mechanism called “Revenue Aligned Budget Authority” (RABA).
RABA funds accrue to the trust fund as a result of increased trust fund revenues. For
FY2003, however, the RABA adjustment would lead to a significant and unexpected drop
in the availability of highway obligational funding. It now appears that Congress will restore
at least some of this funding.

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The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
(FAIR21 or AIR21)(P.L. 106-181) provides a so-called “guarantee” for Federal Aviation
Administration (FAA) program spending. The guarantee for aviation spending, however, is
significantly different from that provided by TEA21. Instead of creating new budget
categories, the FAIR21 guarantee rests on adoption of two point-of-order rules for the House
and the Senate. Supporters of FAIR21 believe the new law requires significant new spending
on aviation programs; and, for at least the FY2001 appropriations cycle, new spending was
significantly higher. Most observers view the FAIR21 guarantees, however, as being
somewhat weaker than those provided by TEA21. Congress can, and sometimes does, waive
points-of-order during consideration of legislation. Enactment of TEA21 and FAIR21 means
that transportation appropriators have total control over spending for the Coast Guard, the
Federal Railroad Administration (including Amtrak), and a number of smaller DOT agencies.
All of these agencies are concerned about their funding prospects in a constrained budgetary
environment. For more information, see CRS Report 98-749E, The Transportation Equity
Act for the 21st Century (TEA21) and the Federal Budget
and CRS Report RS20177, Airport
and Airway Trust Fund Issues in the 106th Congress.
(CRS contact: John Fischer.)
Highway Finance, FY2003: The RABA Dilemma
According to estimates by the Department of Transportation (DOT), revenues (fuel
taxes and other fees) accruing to the Highway Trust Fund decreased in FY2001 as a result
high fuel prices and the onset of the recession. Most of the decrease in the transportation
sector seems to be related to problems in the trucking industry. The RABA process created
by TEA21 requires that federal highway obligational authority be adjusted accordingly. In
simple terms, this means that the RABA adjustment for FY2003 is a negative $4.369 billion.
Core highway program obligational authority for FY2003 will therefore be limited to
approximately $23.3 billion, a $8.6 billion reduction from the FY2002 level.
This is an unexpected and unwelcome development for state and local governments
whose long-term transportation improvement plans (TIPs) are largely predicated on
continued growth in the federal contribution to highway-program funding. The RABA
situation is equally unwelcome among those interests that build roads or associated
transportation infrastructure and those who support continued highway improvements.
Concern has been expressed that DOT’s estimates are incorrect. Some national travel
indicators do not indicate any significant falloff in travel. The House Committee on
Transportation and Infrastructure has already asked that the General Accounting Office
(GAO) investigate how DOT and the Office of Management and Budget (OMB) arrived at
the $5 billion negative RABA figure. The effects of the RABA reduction would not be felt
immediately; highway construction is a multi-year process. DOT is suggesting that the
RABA reduction would reduce the government’s ability to spend on highway projects by
only 1.8% in FY2003. Longer term, however, the effects of this decrease would be dramatic.
Hearings on this issue have already been held on this issue in both the House and the
Senate. At this time legislation that would restore the highway program to its authorized level
of $27.7 billion by raising the existing limitation on obligations has been introduced, H.R.
3694 and S. 1917. A majority of both the House and Senate have signed on as cosponsors
of this legislation. An amended version of H.R. 3694 was reported out of the House
Committee on Transportation and Infrastructure on May 1st. A second legislative approach
introduced more recently, H.R. 3900 would also restore the program to its authorized level,
but would do so by eliminating the entire RABA program for FY2003. Finally, the House

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Budget Committee has passed a budget that allows sufficient new outlay authority to for the
program to operate at the $27.7 billion level. A bill passed by the Senate Budget Committee
would raise the FY2003 spending level by an additional $1.3 billion over the House level.
(CRS contact: John Fischer.)
Department of Transportation Appropriations
Appropriations for the Department of Transportation (DOT) (Function 400 in the
federal budget) provide funding to a variety of programs that include regulatory, safety,
research, and construction activities.
Money for over half of DOT programs comes from highway fuel taxes, which are
credited to the highway trust fund. In turn, the trust fund supports two accounts: the federal-
aid highway account and the mass transit account. Aviation programs are also supported, in
part, by fuel taxes but rely more heavily on other user fees such as the airline ticket tax. The
DOT annual appropriations also include significant monies from Treasury general-fund
revenues.
Table 2. Department of Transportation Appropriations
(for selected agencies, in millions)
Agency
Enacted Requested
House
Senate
Enacted
FY2002
FY2003
Passed
Passed
FY2003
Federal Highway Administration
33,081
24,694
Federal Aviation Administration
13,512
13,582
Federal Transit Administration
6,871
7,226
United States Coast Guard
5,240
5,893
Transportation Security Administration
2,200
4,800
Federal Railroad Administration
840
652
National Highway Traffic Safety
423
425
Administration
Office of the Secretary
155
141
Office of the Inspector General (OIG)
52
57
Surface Transportation Board (STB)
18
18
Source: Figures in Table 2 are drawn from tables provided by the House Committee on Appropriations. Some figures
include offsetting collections. Enacted FY2002 figures have been adjusted to reflect the emergency supplemental,
rescissions, additional appropriations, transfers, and carry-overs.
The FY2002 enacted appropriation (P.L. 107-87) for DOT is $59.6 billion. This is 2.5%
above the $58.1 billion provided for FY2001 and 1% above the $59.0 billion requested by
the Bush Administration. Table 2 shows, for selected agencies and offices that receive
funding under the DOT appropriations act each year, the amounts enacted for FY2002, as
well as the FY2003 amounts proposed by the Bush Administration.
Following the September 11 terrorist attack Congress quickly passed the 2001
Emergency Supplemental Appropriations Act for Recovery from and Response to Terrorist
Attacks on the United States (P.L. 107-38). The Act provided $40 billion for a variety of
responses to the attacks, including “providing for increased transportation security.” P.L.
107-38 provided roughly $1.9 billion for transportation security purposes, most of which
went to the new Transportation Security Administration.

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On February 4, 2002, President Bush submitted his FY2003 budget request. For DOT,
the budget requests just over $59 billion (the Administration figure includes some proposed
user fees and offsets normally not included in Appropriations Committee figures). This
would represent a slight decrease from FY2002; however, this decrease is not evenly spread.
The features of the budget that have generated the most interest are the impact of the $4.369
billion RABA reduction on highway spending, the large increase in the Transportation
Security Administration budget, and the record increase for the Coast Guard. For more
information see CRS Report RL31008, Appropriations for FY2002: Department of
Transportation and Related Agencies
. (CRS contact: D. Randy Peterman.)
Transportation Security
Transportation Security in the Aftermath of the September 11
Attack

The September 11, 2001 hijacking of four airliners from three different airports and the
enormous loss of life that resulted from terrorist attacks using those aircraft as weapons has
focused concerns in Congress on aviation security and on the security of the other modes of
transportation in the United States. The overarching issue for all modes is what reasonable
transportation security actions can be taken without excessively inhibiting commerce and
travel. For aviation security in particular, the issue is implementation of recently passed
transportation security legislation within the tight deadlines set forth in the Act.
On November 19, 2001, President Bush signed the Aviation and Transportation Security
Act (ATSA). The Act establishes a new Transportation Security Administration (TSA)
headed by an Under Secretary of Transportation Security. The Under Secretary is responsible
for the security of all modes of transportation. On January 7, 2002, President Bush
announced the recess appointment of John Magaw as Under Secretary for Transportation
Security. (CRS contact: Bob Kirk.)
Aviation Security. There are three overall areas of concern in aviation security: the
screening of passengers and baggage and cargo; the security of restricted areas at an airport
(access to the aprons, taxiways, runways, baggage and cargo processing areas, etc.); and
security measures on board the aircraft (stationing of air marshals, securing of cockpit doors,
cabin video cameras, etc.). ATSA provides for a one-year transition during which federal
workers will be phased in to replace contract screeners. For the next two years federal
workers will provide all screening activities at all commercial service airports (except at five
pilot program airports that would contract private screening services under federal oversight).
After the two years (i.e. three years after enactment), airports will have the option of ending
this arrangement and contracting private companies. The Act requires the screening of all
individuals, goods, property, vehicles, and other equipment seeking access to secure areas
at airports. ATSA provides for the transfer of a greatly expanded Federal Air Marshal
program to the TSA. The marshals may be deployed on every passenger flight but must be
deployed on every flight determined to present a high security risk. ATSA also requires the
strengthening of cockpit doors and limits cockpit access to authorized persons. As of this
writing, TSA maintains that, to date, it has successfully implemented the ATSA’s provisions
within the time-line required by the Act. Despite this success so far, most observers argue
that the most difficult deadlines are the upcoming November 19, 2002 deadline to have all
federal screener personnel in place at all commercial service airports and the December 31,

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2002 deadline for having all checked baggage screened by explosive detection systems
(EDS). (See Aviation Security [http://www.congress.gov/brbk/html/ebter116.html] in the
CRS Terrorism Electronic Briefing Book as well as CRS Report RL31151, Aviation Security
Technology and Procedures: Screening Passengers and Baggage
, and CRS Report
RL31150, Selected Aviation Security Legislation in the Aftermath of the September 11
Attack).
(CRS contacts: John Fischer and Bob Kirk.)
Transportation Security Funding. ATSA authorizes such sums as may be
necessary for aviation security for FY2002, FY2003, FY2004, and FY2005. To pay the costs
of the new and expanded aviation security programs, ATSA authorizes a passenger fee of
$2.50 per enplanement (capped at $5 per one-way ticket). Additional funds may be
appropriated or come from a fee imposed on air carriers. The Act authorizes a total of $1.5
billion for FY2002 and FY2003 to reimburse airport operators and on-airport service
providers for the cost of post-September 11 FAA security mandates. ATSA also authorizes
$500 million for air carriers to defray the costs of security enhancements to aircraft such as
fortifying cockpit doors or installing video surveillance cameras. In addition, the eligibility
of Airport Improvement Program and Passenger Facility Charge grants for security purposes
is expanded significantly.
The 2001 Emergency Supplemental Appropriations Act for Recovery from and
Response to Terrorist Attacks on the United States (P.L. 107-38) provided $40 billion for
anti-terrorism security including for transportation security purposes. As of this writing,
roughly $1.9 billion has been approved for transfer to DOT. Included in the transfers are:
$94.8 million for the TSA (mostly for seaport security); $209 million for the U.S. Coast
Guard; $1.145 billion for FAA; $6 million for FRA; $100 million for Amtrak; $175 million
for FHWA; $133.5 million for FTA; and $2.5 million for RSPA. In addition, on March 21,
2002, the Bush Administration requested an FY2002 emergency supplemental appropriation
of $27.1 billion that included $4.3 billion for TSA, $225 million for the Coast Guard, $19.3
million for the Federal Motor Carrier Safety Administration’s Border Enforcement Program,
and $3.5 million to upgrade and convert the DOT’s Crisis Management Center into a new
Transportation Information Operations Center. For FY2003, President bush has proposed
a TSA budget of $4.8 billion. Some observers argue that this proposed level will be
insufficient and predict that supplemental appropriations will be needed. (CRS contact:
Bob Kirk.)

Surface Transportation Security. The September 11 attack has led to increased
concerns about the security of rail, highway, pipeline, transit, and maritime transportation.
World-wide, roughly one-third of terrorist attacks target transportation systems; the most
common transportation mode attacked is public transit. Because transit systems’
effectiveness depends on ease of access to the system, security measures common in aviation
are difficult to nearly impossible to apply. Likewise, the many miles of rail, highway, and
pipeline networks are impossible to guard thoroughly. Of particular concern are the daily
shipments by rail and truck of hazardous materials (especially flammable and poisonous
gases). Seaports, which are typically located in large urban areas, are also vulnerable to
attack as are the inland cities to which containers are shipped, often without inspection.
DOT has asked the domestic transportation industry to assume a heightened state of
alert and to take security measures accordingly. The President’s creation of the White House
Office of Homeland Security, to coordinate the federal government’s response to terrorism,
may have an impact on the policy treatment of surface transportation security; at present, one
impact has been frustration on the part of some in Congress with the refusal of the director

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of Homeland Security to appear before Congress to discuss the Administration’s priorities
and funding requests. The creation, in the House of Representatives, of the Select
Subcommittee on Terrorism and Homeland Defense may also have an impact on surface
transportation security policy. Section 1012 of Public Law 107-56 specifies that a state may
not issue to any individual a license to operate a motor vehicle transporting hazardous
materials unless the Secretary of Transportation has determined that the individual does not
pose a security risk warranting denial of the license.
Legislation introduced in Congress to address transportation security includes the
Preparedness Against Domestic Terrorism Act (H.R. 525) and the Port and Maritime
Security Act (S. 1214). S. 1991 authorizes $1.4 billion to Amtrak for rail security
improvement in FY2003. S. 1871 creates a Rail Security Fund and authorizes $150 million
in both FY2003 and FY2004 for freight railroads’ security improvements. S. 1739 creates
an Over-the-Road Bus Security Fund and authorizes $200 million in both FY2002 and
FY2003 to over-the-road bus operating companies for security improvements. H.R. 3609
seeks to strengthen federal regulations regarding the security of the pipeline infrastructure.
S. 517, as amended, includes the previously passed Senate pipeline safety bill (S. 235) plus
a new provision seeking a balance between the release of information to meet “community
right to know” interests and the withholding of security-sensitive data about pipeline
vulnerabilities. H.R. 3555 authorizes funds to assess pipeline vulnerability and to
demonstrate good security practices. H.R. 3929 authorizes $20 million for each of FY2002
through FY2006 for a cooperative federal program for research, development, and
demonstrations related to pipeline security.(See Surface Transportation Systems
[http://www.congress.gov/brbk/html/ebter151.html] in the CRS Terrorism Electronic
Briefing Book) (CRS contacts: Transit-D. Randy Peterman; Railroads and Seaports-
John Frittelli; and Highways and Pipelines-Paul Rothberg.)

Aviation
FAA’s Airport Improvement Program (AIP)
The Airport Improvement Program (AIP) provides federal grants for airport
development and planning. AIP grants are usually spent on capital projects that support
airport operations including runways, taxiways, aprons, and noise abatement. A number of
issues that could be subject to congressional scrutiny in the 107th Congress include: whether
the pattern of spending of both AIP grants and Passenger Facility Charge (PFC) revenues
encourage competition or benefit incumbent carriers; how well FAIR21's spending
guarantees hold up; the effectiveness of aircraft noise mitigation at or near airports; the
earmarking of dollar amounts for airports identified in the report language of the FY2001 and
FY2002 conference reports (H. Rept. 106-940; H. Rept. 107-308) and impact this extensive
earmarking on the FAA’s grant application process; and the impact of the use of AIP grants
to defray post-September airport security costs on the availability of funding for AIP’s other
traditional priorities of assuring safety, stimulating capacity and mitigating airport noise.
President Bush’s FY2002 budget called for funding AIP at the fully authorized level of
$3.3 billion. The enacted FY2002 DOT appropriations bill (P.L. 107-87) provides this
amount. In addition, the FY2002 Department of Defense Appropriations Act (P.L. 107-117)
provides $175 million of funds made available under the 2001 Emergency Supplemental
Appropriations Act (P.L. 107-38) for reimbursement to airports for direct costs associated

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with additional or revised security requirements since September 11. For FY2003, the
President has requested the fully authorized $3.4 billion for AIP.
The September 11 terrorist attack led to increased interest in using AIP and PFC funds
for security projects. Following the attack FAA lifted some policies that restricted AIP
funding to broaden its use for security improvements. AIP and PFC funds can be used a
broad range of security projects including, blast fences, bomb detection dogs and kennels,
cameras, security lighting, body armor, reconstruction of terminals to isolate threats, cargo
area security equipment or facilities, and others. Items that remained ineligible included,
personnel costs, utility costs, maintenance costs, and operational costs. Provisions in ATSA
(P.L. 107-71) broaden eligibility for FY2002 to cover the costs to airports of post-September
11 security mandates. Also eligible in FY2002 are payment for debt service to certain airport
sponsors under certain conditions. For non-primary airports affected by post-September 11
airspace restrictions, FY2002-FY2003 AIP apportionments can be used to defray any costs
incurred while the restriction was in effect. For more information on AIP, see CRS Issue
Brief IB10026, Airport Improvement Program. (CRS contact: Bob Kirk.)
Airline Industry Financial Turmoil
Congress and the Bush Administration moved swiftly to provide the airline industry
with federal financial support in the wake of the events of September 11, 2001. The Air
Transportation Safety and System Stabilization Act (P.L. 107-42) signed into law on
September 22, 2001, gives the airlines access to up to $15 billion in short-term assistance.
The first $5 billion, now largely paid out, provides direct aid to pay for industry losses
associated with the results of the World Trade Center and Pentagon attacks. Access to the
remaining $10 billion, available as guaranteed loans, is subject to approval by the Air
Transportation Stabilization Board and to stringent regulatory requirements established by
the Office of Management and Budget. To date, the Board has approved a single loan for
America West Airlines. Only a few other smaller airlines have applied for loan funds.
In the time since the attacks, significant airline employee layoffs and scheduled-flight
reductions have taken place. United and American, for example, both announced layoffs of
20,000 employees and both announced schedule reductions of approximately 20%. Other
airlines made similar announcements, and layoffs industry-wide exceed 100,000. As many
as 750 to 1,000 aircraft are likely to be retired and/or put in storage for at least the short term.
The actions of the airlines are obviously affecting related industries. Boeing announced
layoffs of up to 30,000 employees by the end of 2002, and expects to reduce production of
new aircraft proportionately. Airline service providers, such as caterers, airports, and the
travel industry, are also losing revenue.
The airline industry was already in financial trouble before the attacks. Most Wall Street
analysts were projecting an overall financial loss for the industry in the range of $1-$2 billion
for 2001. Following the attacks, the same projections range from $4-$8 billion, and, in some
instances, even more. Losses are now expected to continue well into 2002. There are
concerns that continued financial problems could lead to airline business failures and to a
new round of airline mergers in the foreseeable future.
Even with the Air Transportation Stabilization Board in place, the issue of how aid will
ultimately be distributed remains an issue. This is because of a clear desire amongst
policymakers to limit aid to a level needed to stabilize the industry, but not to pay for losses
incurred by the industry before September 11. Further, there is concern that the industry

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remain competitive after its financial stabilization. This means making sure that any aid
distribution scheme ensures that a sufficient number of airlines survive the current
turmoil.(CRS contact: John Fischer.)
The Airbus A380 Trade Dispute
The events of September 11 have dramatically affected the market for commercial jet
aircraft. Many airlines are cancelling and/or delaying new aircraft orders placed with both
Boeing and Airbus. It would seem, therefore, that a major retrenchment of this industry is in
the offing. It is still to early to tell how this retrenchment will play out in regards to the
competition between Boeing and Airbus. It will almost certainly effect the possible dispute
over the Airbus A380 program discussed below.
On December 19, 2000, Airbus Industrie announced that it had formally launched a
program to construct the world’s largest commercial passenger aircraft, the newly numbered
Airbus A380. This long expected launch reopened a long-standing trade dispute between the
United States and Europe about subsidization of aircraft projects that compete directly with
non-subsidized U.S. products, in this case the Boeing 747 series aircraft. Several Members
of Congress were expected to call for hearings and other possible actions on this issue during
the 107th Congress.
The Airbus A380 will be offered in several versions seating between 500 and 800
passengers. The project is expected to cost at least $10.7 billion and might cost significantly
more. Airbus has over 50 firm orders for the aircraft and an additional 42 options. Airbus
expects that its member firms will produce 60% of this sum, with the remaining 40% coming
from subcontractors. State-aid, which by a 1992 Agreement on Government Support for
Civil Aircraft between the United States and the EU, is limited to one-third of the project’s
total cost would be used to assist the Airbus partner firms. Boeing does not perceive that an
adequate market exists to justify the large expenses needed to develop an aircraft of this size,
and has instead decided to pursue a totally different strategy by developing a new class of fast
mid-sized aircraft (approximately 250 seats) known as the sonic cruiser.
At issue is at least $2.5 billion in already identified direct loans to be provided to Airbus
member firms by the governments of France, Germany, Spain, and the United Kingdom.
Additional funds are likely to be provided to subcontractors by other European nations such
as Belgium and Italy. The United States is concerned that the level of state-aid needed for
this project could violate the aforementioned bilateral agreement. There are also concerns,
expressed by then-President Clinton and the U. S. Trade Representative (USTR), that these
loans will not be at commercial rates and that they might be forgiven if the A380 Airbus is
a commercial failure. The European Union disputes these claims. (CRS contact: John
Fischer.)

Surface Transportation
Oversight of the Environmental Provisions of TEA21
Several oversight hearings have been held during the 107th Congress to examine the
Department of Transportation’s implementation of environmental provisions in TEA21, and
oversight will likely continue as the debate over the reauthorization of the law proceeds.
TEA21 authorized funding for federal highway and mass transit programs from FY1998 to

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FY2003, and set aside approximately $12.5 billion for several programs to protect the
environment. Most of this funding is reserved for air quality projects to assist states in
complying with federal air quality standards. The law also increased funding for
environmentally related transportation enhancements and established several new programs,
as well as requiring that the environmental review process for highway projects be
streamlined. (CRS Report 98-646 ENR, Transportation Equity Act for the 21st Century (P.L.
105-178): An Overview of Environmental Protection Provisions
, describes each of these
programs and indicates authorized funding levels.)
Thus far in the 107th Congress, oversight of TEA21's environmental provisions has
focused on the implementation of requirements to streamline the environmental review
process for highway projects. While TEA21 did not specify a deadline by which
implementation must occur, some Members of Congress have expressed concerns over the
pace at which implementation has proceeded. While final regulations to implement the
environmental streamlining requirements under TEA21 have not been issued to date, the
FHWA has proposed regulations for a coordinated environmental review process that address
some of the provisions of TEA21, signed a National Memorandum of Understanding with
six other federal agencies, and established a pilot program to gain practical experiences in
exercising the principles of streamlining. The President’s budget proposal includes $6
million to support the FHWA’s streamlining initiatives in FY2003, over $3 million more
than in FY2002. In addition to federal efforts, numerous states have initiated practices
intended to streamline the review process as well.
The FHWA’s proposed streamlining regulations have been at the center of the oversight
debate. Some Members of Congress have criticized the proposal for not fully addressing the
streamlining requirements under TEA21, and for addressing other planning and regulatory
issues not required under the law. Some of the principal criticisms are that there is no
requirement for environmental reviews to be conducted concurrently, rather than
sequentially, and to be completed within a cooperatively determined time period. Thus far,
this requirement has only been addressed outside of the regulatory process through a
memorandum of understanding with the federal agencies that are responsible for performing
environmental reviews. Some Members also have criticized the proposal for not fulfilling
the law’s requirement to develop procedures for resolving disputes when federal agencies do
not complete their reviews within mutually agreed upon time frames. To address this
requirement, the FHWA has been working with the U.S. Institute for Environmental Conflict
Resolution, and has issued a discussion draft for dispute resolution procedures, which the
Administration expects to complete by the end of 2002. The Department of Transportation
reports that its proposal lacked regulatory requirements to establish time frames for review,
and to resolve disputes, due to its absence of authority over other federal agencies and a
concern that “one-size-fits-all” approaches could limit flexibility. A decision on how to
proceed with the proposed regulations has not been made to date. For additional information
on this issue, refer to CRS Report RS20841, Environmental Streamlining Provisions in the
Transportation Equity Act for the 21st Century: Status of Implementation
. (CRS contact:
David Bearden.)

Traffic Congestion
The Economist and others estimate that delays caused by congestion cost the United
States $100 billion per year. Most of these estimates are predicated on assigning a dollar
value to time lost by individuals and businesses as a result of people and products being
stuck in traffic. Sometimes these estimates also include energy and pollution costs. By

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necessity these estimates are very generalized. Nonetheless, these estimates are illustrative
of a massive problem for American society. There are few individuals living near major
urbanized areas who could honestly claim to be unaffected by congestion-caused delays.
In the last several decades there have been numerous attempts to reduce traffic
congestion, primarily at the state, local, and regional levels. DOT has often provided funding
for specific projects, and has offered the expertise of its employees in the battle against
congestion. The crux of federal transportation spending, however, has been and continues
to be aimed at overall infrastructure improvement, while air quality improvement, congestion
improvement, and other issues essentially have been secondary goals. There is a sense that
there is no one good solution to congestion problems and that successful congestion
reduction strategies require multiple remedies. New infrastructure alone, at the level currently
being constructed, has not been able to stay ahead of the congestion problem. Efforts aimed
at alleviating congestion by changing individual travel behaviors have also been largely
unsuccessful.
During the 107th Congress, discussion will begin on how, or whether, to modify the
Transportation Equity Act for the 21st Century (TEA21). Congestion issues can be expected
to play a major role in this discussion, especially as regards changes to specific federal
initiatives such as the Congestion Mitigation and Air Quality program (CMAQ), whose
purpose is to fund projects and programs in air quality nonattainment and maintenance areas
for ozone, carbon monoxide (CO), and small particulate matter (PM-10) which reduce
transportation related emissions. The House Committee on Transportation and Infrastructure
has already held several hearings on this subject. (CRS contact: John Fischer.)
Amtrak Funding
Amtrak earns around $2 billion a year. Unfortunately, it spends nearly $3 billion a year,
producing operating deficits of around $900 million in recent years. In addition, it has
around $3 billion in long-term debt and capital lease obligations, and nearly $6 billion in
capital maintenance work backlogged, as a result of which trains are experiencing more
delays. In the summer of 2001, Amtrak mortgaged part of its Pennsylvania Station in New
York City to raise $300 million to cover operating expenses until the start of FY2002. At
that time, the Secretary of Transportation observed that it was clear that Amtrak would not
be able to cover its operating expenses without federal support by December 2002, as is
called for by the Amtrak Reform and Accountability Act of 1997 (P.L. 105-134). This
observation was formalized by the Amtrak Reform Council in November 2001, when it
declared that Amtrak will not meet the deadline set by the Act; in accordance with the Act,
the Reform Council submitted a plan to restructure Amtrak on February 7, 2002. Amtrak’s
authorization expires at the end of FY2002.
The Administration’s FY2003 budget requests $521 million for Amtrak, while noting
that figure is only a placeholder while the Administration develops a proposal for Amtrak
reauthorization. Amtrak’s former President testified in February 2002 that if Amtrak did not
receive at least $1.2 billion in FY2003, it would have to curtail its long-distance routes;
Amtrak has since laid off several hundred people, its President left that job to return to his
former employer, and a new President was appointed on April 28th.
Four Amtrak reauthorization bills have been introduced. The National Defense Rail Act
(S. 1991) would authorize $14.5 billion for Amtrak over the next five years and remove the
requirement that Amtrak be operationally self-sufficient after December 2002. It would also

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direct the Secretary of Transportation to develop a national high-speed rail transportation
policy and provide for federal support in both planning and implementing high-speed rail
corridors; it would authorize $9.3 billion over six years for that purpose. It would also
increase the authorization for the Rail Revitalization and Regulatory Reform Act of 1976 to
$35 billion. This bill was reported out of the Senate Commerce Committee on April 18,
2002.
The Rail Passenger Service Improvement Act (S. 1958) would authorize $1 billion for
operations, $3.6 billion for capital improvements, and $1.4 billion for safety and security
improvements for Amtrak over the next four years. It would require Amtrak to divide itself
into three separate subsidiaries with transparent accounting systems, and these organizations
would be privatized within four years of passage of the bill. The bill would also allow
competition for passenger rail operations through franchising of various routes. Amtrak
would turn over control of the Northeast Corridor to the Department of Transportation, and
by October 1, 2002, would cease operating any route whose revenue does not cover its
expense unless Amtrak has an agreement with some entity that will cover the deficit.
The Railroad Advancement and Infrastructure Law for the 21st Century (S. 1530; RAIL-
21) would remove the requirement that Amtrak operate without federal support for operating
costs by December 2002 that was created by the Amtrak Reform and Accountability Act of
1997. It would also reauthorize Amtrak for one year (at $1.2 million); authorize $3.2 billion
in emergency spending on security personnel, infrastructure improvements and new
equipment for Amtrak over the next two years; and increase the authorization for the
Railroad Rehabilitation and Infrastructure Financing loan and loan guarantee program to $35
billion. No action has been taken on this bill.
H.R. 4545 would reauthorize Amtrak for one year at $1.9 billion; it would also require
that Amtrak’s appropriation be administered by the Department of Transportation, rather than
being given to the corporation directly. This provision is controversial; supporters say it
would increase Amtrak’s accountability.
After September 11th, Amtrak ridership rose nationwide as some travelers sought
alternatives to flying. Also, heightened airline security increased the amount of time required
for air travel, making train travel more competitive in some corridors. However, this surge
in ridership proved temporary; by November, Amtrak’s ridership declined as Americans cut
back on travel. Moreover, while Amtrak revenues rose in the weeks after September 11th,
so did its security costs. S. 1550, the Rail Security Act of 2001, would provide $1.77 billion
in emergency assistance to Amtrak for security needs, including both new security personnel
and equipment and life-safety improvements to the escape routes of tunnels in New York.
It also calls for a DOT study of security improvements needed for rail transportation. S.
1991 would authorize $1.3 to Amtrak for security and life-safety needs. These bills have
been passed out of committee. (CRS contact: D. Randy Peterman.)
Amtrak Oversight
Amtrak’s current authorization expires at the end of FY2002. Its previous authorizing
legislation, the Amtrak Reform and Accountability Act of 1997 (P.L. 105-134), requires
Amtrak to operate without using federal funds to cover operating expenses by the end of
FY2002; that is, to be able to cover its operating expenses out of revenues. The Amtrak
Reform Council, a creation of the Act, is to notify the Congress if it judges that Amtrak will
not meet that goal. On November 9, 2001 the Council formally declared that Amtrak would

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not meet the deadline. However, the Act does not prescribe any penalty if Amtrak fails to
meet that goal. The Act provides that the Council is to present a plan for a restructured
national intercity rail passenger system to Congress within 90 days of that finding (i.e., by
February 7, 2002); the Act also calls for Amtrak to present a plan to liquidate itself to
Congress by the same date. After receipt of these plans, the Act gives Congress 90 working
days to pass a restructuring plan; failing that, a liquidation disapproval resolution is to be
introduced in the Senate. However, nothing is prescribed in the Act in case that resolution
passes or fails. Also, a provision in the FY2002 Defense Appropriation Act conference
committee report (H.Rept. 107-350, p. 448) prohibits Amtrak from using any of its own
revenues or appropriated funds to develop a liquidation plan until after enactment of an
Amtrak reauthorization act.

The Amtrak Reform Council’s restructuring plan, submitted to Congress on February
7, 2002, recommends separating Amtrak into three components–operations, infrastructure,
and policy planning–and increasing federal capital spending on passenger rail. It also
encourages the idea of introducing competition by franchising the operation of trains and
Northeast Corridor maintenance through competitive bidding.1 The notion is to put
passenger rail service in a situation comparable to other transportation modes, where
infrastructure is a government responsibility and operations are a commercial responsibility.
For more information on Amtrak, see CRS Report RL30659, Amtrak: Overview and Options.
(CRS contact: D. Randy Peterman.)
1 The report is available at [http://www.amtrakreformcouncil.gov]

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High Speed Rail Infrastructure Funding
In the first session of the 107th Congress, Amtrak and its congressional supporters
sought, but failed to achieve, the passage of the High-Speed Rail Investment Act of 2001
(107th Congress: S. 250, H.R. 2329). Under the bill, Amtrak would be allowed to raise up
to $12 billion over the next 10 years by issuing up to $1.2 billion in bonds each year to pay
for track improvements in the 11 high-speed rail corridors designated by the Department of
Transportation.2 The bonds would not pay interest; instead the bondholders would be
eligible to deduct from their taxes an amount equivalent to interest on the bonds. The
General Accounting Office and the Congressional Budget Office have estimated the total
cost of these bills, over the 30-year life of the program, at between $7 and $10 billion in 2001
dollars, while estimating that they would raise around $8 billion in 2001 dollars.3
Participating states would provide a 20% match, which would be used to redeem the bonds.
Given the uncertainty about Amtrak’s financial and institutional future, it is unclear how
attractive bonds offered by Amtrak would be to the market right now. Critics also observe
that $12 billion, divided among the 11 federal high-speed corridors, is only a fraction of the
amount needed to make high-speed rail service a reality. Also, some critics are not
convinced that Amtrak should be the one to manage such investments. An alternative
approach to funding, providing financial assistance for high-speed passenger rail
infrastructure through states rather than through Amtrak, is proposed in H.R. 2950, the “Rail
Infrastructure Development and Expansion Act for the 21st Century” (RIDE-21). It would
authorize states or groups of states to issue up to $36 billion in tax-exempt bonds over 10
years to develop high-speed rail corridors. In addition, RIDE-21 would increase the
authorization for the Railroad Rehabilitation and Infrastructure Financing loan and loan
guarantee program from $3.5 billion to $35 billion (recipients of loans can include state,
groups of state, and rail operators, including Amtrak as well as freight rail companies). Thus,
this bill would make up to $71 billion available for rail improvements, at an estimated cost
to the federal government of $6 billion.4
The reason RIDE-21 could provide so much more money than the High-Speed Rail
Investment Act of 2001 at less cost to the federal government is that most of the money
would come from the states. Critics observe that states already have the power to issue tax-
exempt bonds to pay for improvements to rail infrastructure; what holds them back is not the
limit on the amount of bonds they have outstanding, which this bill would raise, but rather
the question of where the money to pay off the bonds would come from, especially at a time
when state revenues are falling. No action has been taken on this bill.
The National Defense Rail Act (S. 1991) would require the Secretary of Transportation
to develop a national high-speed rail transportation policy and allow the Secretary to provide
both planning and implementation assistance to states in developing high-speed rail
corridors. The federal share for such projects would be 100 percent. The bill would authorize
2 For a map of the high-speed rail corridors, see [http://www.fra.dot.gov/o/hsgt/states/index.htm]
3 General Accounting Office, The High-Speed Rail Investment Act of 2001 (S. 250); GAO-01-756R,
June 25, 2001; Congressional Budget Office, A Financial Analysis of H.R. 2329, The High-Speed
Rail Investment Act of 2001
, September 2001.
4 The cost estimate appears in a September 25, 2001, press release from the House Committee on
Transportation and Infrastructure, “Historic Rail Infrastructure Legislation Introduced In U.S.
House,” available at http://www.house.gov/transportation/

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$1.55 billion annually for FY2003-FY2008 for these purposes. (CRS contact: D. Randy
Peterman.)

Railroad Safety Reauthorization
The Federal Railroad Administration (FRA) is the primary federal agency that promotes
and regulates railroad safety. The development of new or revised regulations, the assessment
of the safety operations of railroads, and the promotion of compliance with the federal safety
regulations form the core of FRA’s safety program. The combined impact of FRA’s
activities, billions of dollars of investment in railroad infrastructure, as well as many other
industry and labor initiatives, have yielded improvements in the long-term safety record of
the railroad industry, especially during the last 20 years. Nevertheless, a tragic and
well-publicized train crash historically occurs every few years that heightens interest in
railroad safety. Further improvements in both rail safety and FRA’s safety regulations and
programs are possible, but each approach has its own potential benefits and costs.
The last railroad safety reauthorization statute was enacted in 1994, and its funding
authority expired at the end of FY1998. FRA’s safety programs continue using the authorities
specified in existing railroad safety law and the funds that are appropriated annually. The
reauthorization process provides an opportunity to review federal policies and programs, to
consider the current state of railroad safety, and to explore various options intended to further
improve the long-term safety record. Some of the issues likely to be debated as part of the
reauthorization process include: Should railroads be required to implement operator fatigue
management plans? Should the hours-of-service regulations be extended to cover additional
railroad workers? What should be done, if anything, to deal more effectively with alleged
harassment and intimidation of railroad workers? What might be done to further reduce death
and injury at highway-rail grade crossings? Should FRA’s current safety program simply be
reauthorized without any new authorities or regulatory mandates? Forging new legislation
in the railroad safety arena is difficult, especially when a balance is sought among the
interests of public safety, railroad labor, and management. For more information, see CRS
Issue Brief IB10030, Federal Railroad Safety Program and Reauthorization Issues. (CRS
contact: Paul Rothberg.)

Hazardous Materials Transportation Safety
The 107th Congress is likely to consider several bills that would reauthorize the
Hazardous Materials Transportation Act (HMTA), as amended (including P.L. 93-633 and
P.L. 101-500). That body of law specifies the broad purposes and operating authorities for
DOT’s hazardous materials (hazmat) safety program. Although hearings were held during
the 106th Congress, none of the committees of jurisdiction reported out a reauthorization bill.
Among the key issues under consideration are: the level of funding to support DOT’s hazmat
emergency preparedness grant program; development of cost-effective strategies to improve
further hazmat safety; proposed exemptions for various industries from the safety
regulations; and the appropriate role of DOT in the regulation of hazmat transportation.
Similar issues are likely to be debated during the 107th Congress. For additional information
see: CRS Report RS20580, Hazardous Materials Transportation Safety–Federal Program
and Legislative Issues
. (CRS contact: Paul Rothberg.)

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Pipeline Safety
The 107th Congress is considering legislation that would amend federal pipeline safety
law, which directs the U.S. Secretary of Transportation to regulate pipeline transportation
and storage of natural gases and hazardous liquids. Those bills also would authorize funding
for the Office of Pipeline Safety (OPS) of the U.S. Department of Transportation (DOT),
which is charged with implementing federal pipeline safety law. Among the topics discussed
as part of the process of reauthorizing the OPS program are: qualification requirements for
pipeline operators, integrity management of pipelines, funding amounts to support OPS and
the grant programs it administers, state versus federal roles in pipeline safety, and increased
community involvement in pipeline safety. The terrorists attacks of September 11, 2001,
have placed increased emphasis on pipeline security. S. 235, as amended, the “Pipeline
Safety Improvement Act of 2001,” passed the Senate on February 8, 2001. Several pipeline
safety/security reauthorization bills have been introduced in the House. For additional
information, see CRS Report RS20640, Pipeline Safety: Federal Program and
Reauthorization Issues.
(CRS contact: Paul Rothberg.)
Maritime
Harbor Maintenance Funding
User fees for deepening harbor channels for ships and for maintaining current depths
by dredging were established in 1986. The fees cover the federal contribution to the cost of
such services. Prior to 1986, the federal contribution came from the General Fund of the U.S.
Treasury. On March 31, 1998, the U.S. Supreme Court declared the portion of the user fees
levied on exports to be unconstitutional, and such collections were discontinued. Fees on
imports continue to be collected. However, these have generated opposition from foreign
countries, which oppose import fees on the basis that such fees unfairly discriminate against
imports. On August 24, 1998, the Clinton Administration proposed a new user-fee system
based on the cargo-carrying capacity of the vessel, the type of ship, and the number of times
the ship enters or leaves a port. The Administration included the proposal again as part of its
FY2001 budget, but the new user fee was not approved during the 106th Congress. It was
opposed by most shipping groups, including representatives of ports, because they prefer
using monies obtained from the General Fund of the U.S. Treasury rather than levying a user
fee to pay for harbor maintenance. In August, 2001, Representative Borski introduced the
Support for Harbor Investment Program (SHIP) Act (H.R. 2737). The bill would repeal the
user fee and fund dredging from the General Fund. For additional information, see CRS
Report RL31264, Harbor Maintenance Funding. (CRS contact: John Frittelli.)
Reauthorizing the Coast Guard
In the 107th Congress, a major issue is how effectively the Coast Guard is managing its
increased responsibilities to protect the U.S. and interdict illegal drugs and immigrants while
continuing its traditional functions of search and rescue and aiding navigation. Coast Guard
capital needs are at the core of this issue. Congress generally authorizes funds for the Coast
Guard for 2-year periods and appropriates these monies annually in the DOT appropriations
bill. Issues for the 107th Congress include how the agency is operationally responding to new
demands and managing plans to replace many of its aging vessels and aircraft.

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The Coast Guard’s major acquisition program, the “Integrated Deepwater System,”
would require an estimated $9.6 billion to fund acquisitions over 20 years beginning in
FY2002. Planning funds only were provided in FY2000 and FY2001 appropriations. On
March 1, 2000, at a hearing of the House Committee on Appropriations’ Subcommittee on
Transportation and Related Agencies, DOT’s Inspector General reported that the Coast
Guard planned to request $350 million in FY2002 and $500 million annually over the next
19 years to implement its acquisition strategy.
The House passed under suspension an FY2002 authorization bill, H.R. 3507, on
December 20, 2001. It would authorize Coast Guard programs at $5.9 billion. Another bill,
H.R.1099, the Coast Guard Personnel and Maritime Safety Act, has already passed the House
and has been referred to the Senate. A Senate authorization bill, S. 951, introduced May 24,
2001, would authorize Coast Guard programs at $5.2 billion. It was reported October 31,
2001 (S.Rept. 107-89) by the Senate Committee on Commerce, Science, and Transportation.
Another House bill, H.R. 2481 reported (H.Rept 107-243) on October 16, 2001, by the
Committee on Transportation and Infrastructure, includes numerous provisions on Coast
Guard operations. The Senate passed a port security bill S. 1214 (S.Rept. 107-64) on
December 20, 2001. On April 11, 2002, the House Committee on Transportation and
Infrastructure reported a similar bill, H.R. 3983 (H.Rept. 107-345), which would authorize
$225 million to improve security at U.S. ports. ( For further discussion, see CRS Report
RS21079 Maritime Security: Overview of Issues)
The Administration requested $5.056 billion for Coast Guard funding in FY2002. The
final version, P.L. 107-87 (H.Rept. 107-308, ) included $5.03 billion for the Coast Guard.
P.L. 107-20 (H.R. 2216), the FY2001 emergency supplemental appropriations bill, increased
FY2001 Coast Guard funding by $92 million. A terrorism FY2001 supplemental of
September 21, 2001, P.L. 107-38, included $18 million in additional FY2001 funds for the
recall of Coast Guard reservists, search and rescue. The terrorism supplemental, P.L. 107-118
(H.R. 3338, Division B), included $209 million in FY2002 supplemental funds for Coast
Guard terrorism-related activities.
The Administration requests budget authority of $7.275 billion for Coast Guard funding
in FY2003. Compared to the $5.702 billion appropriated in FY2002, the FY2003 request
would be $1.573 billion, or 28%, more. Planned increases of $733 million for Coast Guard
operating expenses, $92 million for acquisitions, and a new $736 retirement fund payment
account for most of the proposed increase. The chief current issue is how Coast Guard is
handling heightened security responsibilities with its many other responsibilities such as
search and rescue, and enforcement of laws and treaties. The planned $733 million increase
for operating activities is to be allocated among Homeland Security and these traditional
activities. For further discussion on Coast Guard-related legislation, see CRS Report
RS20924, Coast Guard Legislation in the 107th Congress. (CRS contact: Martin Lee.)