Appropriations for FY2004: Transportation, Treasury, Postal Service, Executive Office of the President, General Government, and Related Agencies

Congressional research reportMar 1, 2004

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CRS Report for Congress

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Appropriations for FY2004:

Transportation, Treasury, Postal Service,

Executive Office of the President, General

Government, and Related Agencies

Updated March 1, 2004

name redacted and name redacted

Coordinators

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget

resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and

budget reconciliation bills. The process begins with the President’s budget request and is

bound by the rules of the House and Senate, the Congressional Budget and Impoundment

Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current

program authorizations.

This report is a guide to one of the 13 regular appropriations bills that Congress considers

each year. It is designed to supplement the information provided by the Subcommittee on

Transportation, Treasury and Independent Agencies of the House Committee on

Appropriations the Subcommittee on Transportation, Treasury and General Government of

the Senate Committee on Appropriations. It summarizes the current legislative status of the

bill, its scope, major issues, funding levels, and related legislative activity. The report lists

the key CRS staff relevant to the issues covered and related CRS products.

This report is updated as soon as possible after major legislative developments, especially

following legislative action in the committees and on the floor of the House and Senate.

NOTE: A Web Version of this document with active links is

available to congressional staff at:

[http://www.crs.gov/products/appropriations/apppage.shtml].

Appropriations for FY2004:

Transportation, Treasury, Postal Service, Executive

Office of the President, General Government, and

Related Agencies

Summary

For FY2004 Congress began providing, in a single bill, appropriations for the

Departments of Transportation and the Treasury, the United States Postal Service, the

Executive Office of the President, and Related Agencies, as well as General

Government provisions.

On January 23, 2004, President Bush signed the Consolidated Appropriations

Act, 2004 (H.R. 2673; P.L. 108-199), which included the conference version of the

FY2004 Transportation, Treasury and Independent Agencies Appropriations bill. On

September 9, 2003, the House passed H.R. 2989, the FY2004 Transportation,

Treasury and Independent Agencies Appropriations bill, which provided $85.8

billion. The major financial change from the Administration’s request was to

recommend an additional $4.4 billion in highway spending (another major change,

the deletion of the $3.4 billion for grants-in-aid to airports, was a procedural change;

funding may be restored in conference). On October 23, the Senate passed its version

of the bill, which provided $91.0 billion, adding $4.5 billion in highway funding to

the Administration’s request. Conferees agreed on $89.8 billion on November 25th.

The conference version of the bill was added to the Consolidated Appropriations bill,

which the House passed on December 8, 2003. The Senate adjourned for the year

without voting on the bill; they approved the bill on January 22, 2004. The

Consolidated Appropriations Act contains a 0.59% across-the-board rescission; the

figures in this report do not reflect the impact of that rescission. They also do not

reflect the $55 million in transportation projects and $1 billion for election reform

grants projects located in the “Miscellaneous Appropriations” Division at the end of

the Act.

Prior to passage of P.L. 108-199, FY2004 funding for agencies and programs

in the Transportation, Treasury, and Independent Agencies appropriations bill was

provided, at FY2003 levels, through January 31, 2004 by a series of continuing

resolutions.

Key issues in the FY2004 appropriations bill included: pay for federal civilian

employees (the White House proposed a 2% raise; the bill provides a 4.1% raise for

federal civilian employees, in line with the military pay raise); outsourcing of federal

work (the bill restricts the Administration’s plan to increase outsourcing, but the

broader restrictions contained in both House and Senate bills were dropped due to

veto threats); “cash balance” pension plans (the bill prohibits the Treasury

Department from finalizing rules affecting conversion of traditional pension plans to

cash balance basis); and Cuba (the conference bill omitted provisions contained in

both House and Senate bills that constrained enforcement of travel restrictions to

Cuba). This report will not be updated.

Key Policy Staff

CRS

Telephone

Division

Area of Expertise

Name

Airport Improvement Program

Bob Kirk,

John Fischer

RSI

7-....

7-7766

Amtrak

Randy Peterman

RSI

7-....

Aviation Safety

(name redacted)

E-Government

Harold Relyea

G&F

7-....

Executive Office of the President

Barbara Schwemle

G&F

7-....

Federal Aviation Administration

John Fischer

RSI

7-....

Federal Child Care

(name redacted)

Federal Election Commission

Joseph Cantor

G&F

7-....

Federal Employee Health Care Policy

Health Section

DSP

7-....

Federal Employee Pension Policy

(name redacted)

DSP

7-....

Federal Employee Workers’

Compensation (FECA)

Edward Rappaport

DSP

7-....

Federal Highway Administration

Bob Kirk

John Fischer

RSI

7-....

7-7766

Federal Railroad Administration

(name redacted)

Federal Transit Administration

Randy Peterman

RSI

7-....

General Provisions

Mitchell

Sollenberger

G&F

7-....

General Services Administration

(name redacted)

G&F

7-....

Highway, Railroad, & Vehicular Safety

Paul Rothberg

RSI

7-....

Homeland Security

Sharon Gressle

G&F

7-....

Independent Agencies

Sharon Gressle

G&F

7-....

Internal Revenue Service

(name redacted)

G&F

7-....

National Archives

Harold Relyea

G&F

7-....

Office of Government Ethics

(name redacted)

Office of Personnel Management

Barbara Schwemle

Postal Service

(name redacted)

Presidential Salary

Sharon Gressle

G&F

7-....

Procurement

(name redacted)

G&F

7-....

Real Estate Brokerage Regulation

William Jackson

G&F

77834

Surface Transportation Board

(name redacted)

Transportation Infrastructure Policy

John Fischer

Treasury Department

(name redacted)

DSP = Domestic Social Policy

G&F= Government & Finance

RSI = Resources, Science, and Industry Division.

RSI

DSP

RSI

G&F

RSI

7-....

RSI

7-....

G&F

7-....

Contents

Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Legislative Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Data note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

FY2003 Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

FY2004 Budget Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Major Funding Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Title I: Transportation Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Federal Aviation Administration (FAA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Operations and Maintenance (O&M) . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Facilities and Equipment (F&E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Research, Engineering, and Development (RE&D) . . . . . . . . . . . . . . . 8

Essential Air Service (EAS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Grants-in-Aid for Airports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Federal Highway Administration (FHWA) . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The Administration Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

The House Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The Senate Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The Consolidated Appropriations Act, 2004 (P.L. 108-199) . . . . . . . . 11

Project Earmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

The TEA-21 Funding Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Federal Motor Carrier Safety Administration (FMCSA) . . . . . . . . . . . . . . . 12

Administrative and Operations Expenses . . . . . . . . . . . . . . . . . . . . . . 13

Grants to States and Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 13

National Highway Traffic Safety Administration (NHTSA) . . . . . . . . . . . . 14

Federal Railroad Administration (FRA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Railroad Safety and Research and Development . . . . . . . . . . . . . . . . . 16

Next Generation High-Speed Rail R&D . . . . . . . . . . . . . . . . . . . . . . . 18

Amtrak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Federal Transit Administration (FTA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Maritime Administration (MARAD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Research and Special Programs Administration (RSPA) . . . . . . . . . . . . . . 24

Title II: Treasury Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Department of the Treasury Budget and Key Policy Issues . . . . . . . . . . . . . 26

Internal Revenue Service (IRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Title III: Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Title IV: Executive Office of the President (EOP) and Funds Appropriated

to the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

EOP Offices Funded Through Treasury and

General Government Appropriations . . . . . . . . . . . . . . . . . . . . . . 39

Compensation of the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

White House Office (WHO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Office of Homeland Security (OHS) . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Executive Residence (White House) Operation and Care . . . . . . . . . . 41

Special Assistance to the President (Office of the Vice President) . . . 42

Official Residence of the Vice President . . . . . . . . . . . . . . . . . . . . . . . 42

Council of Economic Advisers (CEA) . . . . . . . . . . . . . . . . . . . . . . . . 43

Office of Policy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

National Security Council (NSC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Office of Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Office of Management and Budget (OMB) . . . . . . . . . . . . . . . . . . . . . 45

Office of National Drug Control Policy (ONDCP) . . . . . . . . . . . . . . . 47

The Counterdrug Technology Assessment Center (CTAC) . . . . . . . . 47

Federal Drug Control Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Other Federal Drug Control Programs (formerly

The Special Forfeiture Fund) . . . . . . . . . . . . . . . . . . . . . . . . 51

Unanticipated Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Title V: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Federal Election Commission (FEC) . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Federal Labor Relations Authority (FLRA) . . . . . . . . . . . . . . . . . . . . . 55

General Services Administration (GSA) . . . . . . . . . . . . . . . . . . . . . . . 56

Federal Buildings Fund (FBF) . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Electronic Government Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

National Archives and Records Administration (NARA) . . . . . . . . . . 60

Merit Systems Protection Board (MSPB) . . . . . . . . . . . . . . . . . . . . . . 61

Office of Personnel Management (OPM) . . . . . . . . . . . . . . . . . . . . . . 62

Human Capital Performance Fund . . . . . . . . . . . . . . . . . . . . . . . . 66

Office of Special Counsel (OSC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Title VI: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Federal Personnel Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

General Schedule Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Federal Wage System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Senior Executive Service Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Human Capital Performance Fund . . . . . . . . . . . . . . . . . . . . . . . . 75

Members of Congress, Judges, and Other Officials . . . . . . . . . . . . . . 75

President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Federal Employees Workers’ Compensation Program (FECA) . . . . . 76

Competitive Sourcing of Federal Activities . . . . . . . . . . . . . . . . . . . . . . . . . 76

Cuba Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

List of Transportation Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Appendix 1: The Transportation Appropriations Framework . . . . . . . . . . . . . . . 85

Transportation Equity Act for the 21st Century (TEA-21) . . . . . . . . . . . . . . 85

Wendell H. Ford Aviation Investment and Reform Act for the

21st Century (FAIR21 or AIR21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

Appendix 2: Transportation Budget Terminology . . . . . . . . . . . . . . . . . . . . . . . . 87

List of Figures

Figure 1. Federal Aviation Administration Appropriations . . . . . . . . . . . . . . . . . 7

Figure 2. Federal Highway Administration Appropriations . . . . . . . . . . . . . . . . 10

Figure 3. National Highway Traffic Safety Administration Appropriations . . . 15

Figure 4. Federal Railroad Administration Appropriations . . . . . . . . . . . . . . . . . 17

Figure 5. Federal Transit Administration Appropriations . . . . . . . . . . . . . . . . . 20

Figure 6. Maritime Administration Appropriations . . . . . . . . . . . . . . . . . . . . . . . 23

List of Tables

Table 1. Status of FY2004 Departments of Transportation and Treasury

and Independent Agencies Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004 . . . 3

Table 3: Funding Trends for Transportation/Treasury Appropriations,

FY1999-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Table 4. Title I: Department of Transportation Appropriations . . . . . . . . . . . . . . 5

Table 5. FTA Appropriation, FY2003-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Table 6. Title II: Department of the Treasury Appropriations . . . . . . . . . . . . . . . 25

Table 7. Title III: United States Postal Service Appropriations . . . . . . . . . . . . . . 34

Table 8. Title IV: Executive Office of the President (EOP) and Funds

Appropriated to the President Appropriations . . . . . . . . . . . . . . . . . . . . . . . 36

Table 9. Title V: Related Agencies Appropriations . . . . . . . . . . . . . . . . . . . . . . . 53

Table 10. General Services Administration Appropriations . . . . . . . . . . . . . . . . 55

Table 11. Government-wide General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 68

Appropriations for FY2004: Transportation,

Treasury, Postal Service, Executive Office

of the President, General Government, and

Related Agencies

Most Recent Developments

On January 23, 2004, President Bush signed the Consolidated Appropriations

Act, 2004 (H.R. 2673; P.L. 108-199), which included the conference version of the

Transportation, Treasury and Independent Agencies Appropriations bill (Division F);

the House had passed the bill on December 8, 2003, the Senate on January 22, 2004.

Transportation-Treasury conferees agreed on a total of $89.8 billion; the Act includes

an across-the-board rescission of 0.59% (the figures in this report do not reflect the

impact of that rescission). The Act also includes an additional $1.1 billion in funding

for transportation and election reform projects, located in Division H (“Miscellanous

Appropriations and Offsets”).

On November 21, 2003, Congress passed the fourth continuing resolution for

FY2004 funding, extending funding for those programs whose FY2004

appropriations bills had not already been passed by Congress to January 31, 2004.

On October 23, the Senate passed its version of the FY2004 Transportation,

Treasury and Independent Agencies Appropriation bill.

The Committee

recommended $91.0 billion, $5.1 billion more than the Administration requested.

The major financial change from the Administration request was an additional $4.5

billion in highway funding.

On September 9, 2003, the House of Representatives passed H.R. 2989, the

FY2004 Transportation, Treasury and Independent Agencies Appropriation bill. The

bill provides $85.8 billion. Key financial differences from the Administration

request include an additional $4.4 billion in highway funding; another major

difference, the deletion of the $3.4 billion for grants-in-aid to airports, was the result

of a point of order against funding the administrative expenses of the program from

contract authority.

CRS-2

Overview

Legislative Status

Table 1. Status of FY2004 Departments of Transportation and

Treasury and Independent Agencies Appropriations

Subcommittee

Markup

House House Senate

Report Passage Report

House Senate

7/11/03 8/3/03

Senate Conf.

Passage Report

Conference

Report

Approval

House

7/30/03 9/9/03

H.Rept. 381-39

108-243

Public

Law

Senate

9/8/03 10/23/03 H.R. 12/8/03 1/22/04 108-199

S.Rept.

91-3

2673 242-176 65-28

108-146

H.Rept.

108401

Data note. Prior to FY2004, appropriations for the Department of

Transportation and the Department of the Treasury were in separate bills. Beginning

with the FY2004 budget, Congress is considering appropriations for the Department

of Transportation (DOT) and its related agencies, and the Department of the

Treasury, the Postal Service, the Executive Office of the President, and General

Government provisions, in a single appropriations bill. This change is a result of the

creation of a new federal department, the Department of Homeland Security, and the

reorganization of the subcommittee structure of the House and Senate Committees

on Appropriations, creating new subcommittees for Homeland Security and

combining the former Transportation and Treasury subcommittees into one

committee.

As part of the creation of the Department of Homeland Security (DHS), the

United States Coast Guard and the Transportation Security Administration were

transferred from the Department of Transportation to DHS. Also, the Bureau of

Alcohol, Tobacco, and Firearms, the Customs Service, and the United States Secret

Service were transferred from the Department of the Treasury to DHS, and the Office

of Homeland Security was transferred from the Executive Office of the President to

DHS. Budget numbers for years prior to FY2004 have been adjusted for comparing

previous years’ appropriations and FY2004 requested funding.

The House divides its appropriation bill into six titles, the Senate division has

only five titles (the Senate includes the Postal Service under its Independent Agencies

title, while the House gives the Postal Service its own title). This report follows the

House practice.

FY2003 Appropriations

The FY2003 Consolidated Appropriations Resolution (P.L. 108-7) included a

0.65% across-the-board rescission which applied to most accounts in the Department

of Transportation and Department of the Treasury and General Government

CRS-3

appropriations. The FY2003 figures in this report reflect the rescission, and so differ

slightly from the figures in P.L. 108-7.

FY2004 Budget Request

The Administration’s FY2004 budget request for the Departments of

Transportation and Treasury, the Executive Office of the President, and Related

Agencies was $85.9 billion, $740 million below the final comparable FY2003enacted figure (less than 1%). Table 2 shows the allocation of funding within the

overall request.

Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004

(millions of dollars)

Title

Final

FY2003

Enacted

FY2004

Request

FY2004

House

Passed

FY2004

Senate

Passed

**FY2004

Conference

**FY2004

Enacted

Title I: Department of Transportation

55,674

54,266

*54,940

58,947

58,794

Title II: Department of the Treasury

10,849

11,343

11,273

11,196

11,166

Title III: Postal Service

107

Title IV: Executive Office of the

President

777

791

777

735

787

Title V: Related Agencies

19,151

19,555

19,021

20,180

19,259

Title VI: General Provisions

279

—

86,588

85,863

85,819

91,028

89,845

Total, Transportation/Treasury

Appropriations

Source: FY2004 Transportation-Treasury Appropriations bill Conference Report Budget Authority table provided by the House

Committee on Appropriations and House Report 108-243, Table: Comparative Statement of Budget Authority, except “Senate

Reported” from Senate Committee on Appropriations, S.Rept. 108-146, Table: Comparative Statement of Budget Authority. “Total”

is from “Net grand total budgetary resources” line in table and reflects scorekeeping adjustments.

Note: The Senate divides the budget differently from the House, putting the Postal Service into the “Related Agencies” (“Independent

Agencies” in the Senate report) Title. The conference report table followed the Senate convention; therefore, in this table the Postal

Service appropriation has been subtracted from the Senate and Conference totals for Title V.

*During House deliberations on H.R. 2989, funding for two programs was struck on points of order, reflecting a dispute over some

aspect of the way the funds were being provided, rather than the funding itself: FAA’s Grants-in-Aid to Airports program ($3.425

billion) and the Federal Motor Carrier Safety Administration’s Border Enforcement program ($47 million). This reduced total

transportation funding in the bill by those amounts, from $58.4 billion to $54. 9 billion, and thus total funding in the bill dropped

from $89.3 billion to $85.8 billion.

**The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission is not reflected in

these figures.

CRS-4

Major Funding Trends

Table 3: Funding Trends for Transportation/Treasury

Appropriations, FY1999-FY2004

(billions of current dollars)

Department

FY1999 FY2000

FY2001 d

FY2002 FY2003 e

FY2004

Enactedf

Title I: Transportation a

43.9

46.2

51.9

57.4

55.7

54.3

Title II: Treasury b

9.9

10.5

10.8

11.3

Title III: Postal Service

0.1

0.7

0.1

Title IV: Executive

Office of the President

0.7

0.8

Title V: Related

Agencies c

14.6

15.8

16.8

19.2

19.6

Source: United States House of Representatives, Committee on Appropriations, Comparative Statement of

Budget Authority tables from fiscal years 1999 through 2004.

a. Figures for Department of Transportation appropriations for FY1999-FY2003 have been adjusted for

comparison with FY2004 figures by subtracting the United States Coast Guard, the Transportation

Security Administration, the National Transportation Safety Board, and the Architectural and

Transportation Barriers Compliance Board, and by adding the Maritime Administration.

b. Figures for Department of the Treasury appropriations for FY1999-FY2003 have been adjusted for

comparison with FY2004 figures by subtracting the Bureau of Alcohol, Tobacco, and Firearms, the

Customs Service, the United States Secret Service, and the Law Enforcement Training Center.

c. Figures for Related Agencies appropriations for FY1999-FY2003 have been adjusted by adding the National

Transportation Safety Board and the Architectural and Transportation Barriers Compliance Board.

d. FY2001 figures include 0.22% across-the-board rescission.

e. FY2003 figures include 0.65% across-the-board rescission.

f. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission

is not reflected in these figures.

Title I: Transportation Appropriations

Overview

The Administration’s FY2004 budget proposed a DOT budget of $54.3 billion

—2.6% below FY2003's comparable enacted level of $55.7 billion.1 The budget

request conformed to the basic outline of both the Transportation Equity Act for the

21st Century (TEA-21; P.L. 105-178) which authorizes spending on highways and

transit, and the aviation funding authorized in the Wendell Ford Aviation Investment

and Reform Act of the 21st Century (FAIR21 or AIR21; P.L. 106-181) (see Appendix

1 for more information on these authorizing acts). However, the request did propose

a few changes to the highway and transit funding structure, in line with the

This report relies on figures from tables provided by the House and Senate Committees on

Appropriations. Because of differing treatment of offsets, rescissions, and the structure of

appropriations bills, the totals will at times vary from those provided by the Administration.

The total FY2004 budget number for DOT is not directly comparable to those of previous

years due to the transfer of the Coast Guard and Transportation Security Administration to

the Department of Homeland Security during FY2003, as well as other changes.

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Administration’s reauthorization proposal; see the sections on the Federal Highway

Administration and Federal Transit Administration for details.

Table 4. Title I: Department of Transportation Appropriations

(in millions of dollars — totals may not add)

Department or Agency

(Selected Accounts)

Office of the Secretary of Transportation

Essential Air Service c

Federal Aviation Administration

Operations (trust fund & general

fund)

Facilities & Equipment (F&E)

(trust fund)

Grant-in-aid Airports (AIP) (trust

fund) (limit. on oblig.)

Research, Engineering &

Development (trust fund)

Federal Highway Administration

(Limitation on Obligations)

(Exempt Obligations)

Additional funds

(trust fund)

Additional funds d

(general fund)

Federal Motor Carrier Safety

Administratione

National Highway Traffic Safety

Administration f

Federal Railroad Administration

Amtrak g

Federal Transit Administration

Formula Grants

(general fund)

Formula Grants (trust fund)

Capital Investment Grants.

(general fund)

Capital Investment Grants (trust

fund)

St. Lawrence Seaway Development

Corporation

Maritime Administration

Research and Special Programs

Administration h

Office of Inspector General

Surface Transportation Board

Total, Department of Transportation i

Final

FY2004

FY2003

Request

Enacted

173

177

13,490

14,007

FY2004

House

Passed

159

10,540

FY2004

Senate Conference

Enactedb

Passed

172

166

13,971

13,930

7,023

7,591

7,532

7,536

7,531

2,942

2,916

2,900

2,916

2,880

3,378

3,400

—

3,400

147

32,409

31,593

884

100

30,225

29,294

931

108

34,873

33,385

931

119

34,768

33,843

931

119

34,692

33,843

931

119

34,692

33,843

931

—

400

—

187

—

157

150

125

305

447

427

483

366

434

1,261

1,043

7,179

665

1,089

900

7,226

435

1,087

900

7,231

449

1,568

1,346

7,305

451

1,455

1,225

7,309

451

1,455

1,225

7,309

763

3,051

—

5,615

768

3,071

768

3,071

768

3,071

768

3,071

603

1,214

599

628

2,413

321

2,507

2,512

2,510

230

219

228

222

105

55,674

118

54,266

111

*55,171

110

59,142

113

58,794

113

58,794

Note: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill Conference Report Budget Authority table

provided by the House Committee on Appropriations. Because of differing treatment of offsets, the totals will not always match the

Administration’s totals. The figures within this table may differ slightly from those in the text due to supplemental appropriations,

rescissions, and other funding actions. Columns may not add due to rounding or exclusion of smaller program line-items.

*During House deliberations on H.R. 2989, funding for two programs was struck on points of order, which reflected a dispute over

some aspect of the way the funds were being provided, rather than the funding itself: FAA’s Grants-in-Aid to Airports program

($3.425 billion) and the Federal Motor Carrier Safety Administration’s Border Enforcement program ($47 million). This reduced

total transportation funding in the bill by those amounts. Funding for these programs may be restored in conference.

a. These figures reflect the 0.65% across-the-board rescission included in P.L. 108-7.

b. These figures do not reflect the 0.59% across-the-board rescission included in H.R. 2673.

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c. These amounts are in addition to the $50 million annual authorization for the Essential Air Service program; thus, the total

FY2004 funding would be $102 million ($50 million + $52 million).

d. For Appalachian Development Highway System ($187 million).

e. While the FY2004 FMCSA appropriation was $81 million less than requested, Congress provided an additional $111.5 million

for grants to states for motor carrier safety activities under FHWA miscellaneous appropriations.

f. NHTSA’s FY2004 request includes $100 million transferred from FHWA; this funding was previously provided through the

FHWA but administered by NHTSA. Therefore, the difference between budgetary resources available to NHTSA for FY2003

and its FY2004 request is $131 million, not $231 million.

g. In addition to Amtrak’s FY2003 appropriation, Congress postponed Amtrak’s repayment of a $100 million loan from the DOT;

the FY2004 conference agreement would again postpone that repayment.

h. The figures do not reflect $14 million in permanent appropriations. Therefore, the total resources for RSPA for FY2003 may be

seen as $119 million, and the total funding for FY2004 as $132 million.

i. Rescissions of unobligated previous years’ contract authority have been subtracted from this total. Because rescissions of prior

years’ contract authority have no impact on the budgetary resources available for the current fiscal year, the total resources

available could be seen as $55.9 billion for FY2003 enacted.

Federal Aviation Administration (FAA)

[http://www.faa.gov/]

As reported the Consolidated Appropriations Act for FY2004(FY2004 Act)

(P.L. 108-199) provides the FAA with $13.93 billion in FY2004 (excluding an 0.59%

across-the-board rescission to be computed later by the Office of Management and

Budget). This is a $440 million increase in funding over the FY2003 enacted level

of $13.5 billion (this amount reflects a 0.65% rescission to which some parts of the

FAA budget were subjected). The amount also differs slightly from the amount

proposed in the House bill, H.R. 2989, just over $14 billion and in the Senate bill, S.

1589, that provided $13.97 billion. The majority of the increased funding in P.L 108199, and each of the other bills, would be used for Operations & Maintenance

(O&M) expenses. With the exception of some program adjustments there are

essentially no major new initiatives in any of the FY2004 legislative proposals.

The vast majority of FAA funding is provided from the Airport and Airway

Trust Fund. Only O&M funding uses a mix of trust fund and Treasury general fund

monies. In FY2002 a Treasury general fund contribution of $1.1 billion was

provided for O&M funding. The Administration proposed a general fund

contribution of almost $3.3 billion for FY2003. Whereas the general fund

contribution for FY2002 was on the low side historically, the Administration was

trying to return to a higher contribution level. In this effort they were successful,

with both the House and the Senate agreeing ultimately on $3.4 billion. For FY2004

the House Appropriations Committee initially suggested that $1.5 billion be provided

from the general funds. During Floor debate the bill was amended to raise the general

fund contribution to approximately $3.5 billion. The Senate bill provided general

funds at the $1.5 billion level. The FY2004 Act differs from both, however, and

raises the general fund contribution to $4.5 billion. Historically, this funding split

has been an important part of the annual FAA budget debate. The rationale behind

the general fund contribution has been that the public at large realizes some benefit

from aviation whether it uses the system or not.2

General fund appropriations have varied substantially, both in dollar terms and as a

percentage of FAA appropriations as a whole, from year to year. Over the last 12 years the

share has ranged from 0% to 47%. See table 1 in CRS Report RS20177, Airport and Airway

(continued...)

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Operations and Maintenance (O&M). The FY2004 Act provides $7.5

billion for FY2004 O&M spending. The same amount was included in both the

House and Senate bills. Each proposal represents a significant increase over the $7.1

billion level for FY2003 agreed to in P.L. 108-7. The majority of funding in this

category is for the salaries of FAA personnel engaged in air traffic control,

certification, and safety-related activities. Much of the increased funding called for

in the FY2004 request is for increased air traffic control system costs and safetyrelated activities.

Figure 1. Federal Aviation Administration Appropriations

Facilities and Equipment (F&E). P.L. 108-7 provided $2.96 billion for

this activity in FY2003. The FY2004 Act provides for slightly less, $2.91 billion,

and is in line with decreases in spending proposed in both the House and Senate. A

Senate proposal to transfer $100 million of F&E money to the Airport Improvement

(...continued)

Trust Fund Issues in the 106th Congress, by (name redacted).

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Program (AIP) was dropped in Conference. Unobligated F&E funds of $30 million

are subject to rescission in P.L. 108-199. F&E funding is used primarily for capital

investment in air traffic control and safety. There are no significant new F&E

spending initiatives in P.L. 108-199, although the bill does include new funding

direction through project earmarking.

Research, Engineering, and Development (RE&D). P.L. 108-199

expends $119.4 million on RE&D. This is more than the House proposal of $108

million and slightly more than the almost $119 million in the Senate proposal. The

enacted level is well below the $148.5 million level enacted in FY2003.

Essential Air Service (EAS). The EAS program is operated through the

Office of the Secretary of Transportation (OST), and receives its funding from

designated user fees collected from overflights of United States territory by foreign

aircraft. EAS has had an annual authorized funding level of $50 million for the last

several years. The overflight funding mechanism, however, has never provided this

much annual funding, so additional funding has been provided from other sources.

The EAS program continues to enjoy significant support in Congress. As a result,

$102 million was provided for this program in FY2003.

The FY2004 Act provides $102 million for EAS, $50 million from its regular

authorization and $52 million from the aviation trust fund. The Act does not rely on

the overflight fee as its principal funding mechanism. This is the same level of

funding as had been proposed by the Senate and $11 million less than had been

provided by the House. A major feature of the bill is a provision that precludes

funding of a pilot cost sharing program that is included in FAA reauthorization

legislation expected to be enacted shortly. In setting the $102 million program level

the FY2004 Act rejects the Bush Administration’s calls to reduce the size of the EAS

program by half and require a local contribution at each airport receiving EAS

service. Also absent in the FY2004 Act is a House provision requiring that DOT ask

each community receiving EAS assistance to report by March 1, 2004 on how

program coordination and funding could be improved.

Grants-in-Aid for Airports. The Airport Improvement Program (AIP)

provides grants for airport development and planning. The Bush Administration

FY2004 budget proposal requested $3.4 billion for AIP, roughly the same as enacted

for FY2003.

The House-reported bill recommended $3.425 billion for AIP, $25 million

above the Administration’s proposal. It also recommended that $20 million in AIP

funds be provided for the Small Community Air Service Program. The report

language for AIP discretionary grants directed that the FAA give priority to projects

at 171 listed airports, but did not set the grant amounts. During floor debate on the

bill the entire AIP provision was struck from the bill on a point of order.

Consequently, the House-passed bill, H.R. 2989, contained no funding for AIP.

The Senate-passed FY2004 appropriations bill (H.R. 2989 as amended by S.

1589; S.Rept. 108-146) provided $3.5 billion for AIP. This included a $100 million

transfer from the facilities and equipment (F&E) account. This transferred money

would not have been subject to the $3.4 billion obligation limitation. The report

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language for AIP discretionary grants directed the FAA to give priority to projects

at 241 airports named in the report. The bill included a prohibition against using AIP

grants for airport changes or improvements needed to install bulk explosive detection

systems.

The Consolidated Appropriations Act, 2004 (P.L. 108-199) provides $3.4

billion (prior to the 0.59% rescission) for AIP. The Act does not include the $100

million transfer from the F&E account included in the Senate-passed bill. P.L. 108199 prohibits the use of AIP grants to replace baggage conveyor systems,

reconfiguration of terminal baggage area or other airport improvements to

accommodate bulk explosive detection systems. It also prohibits the use of AIP or

any other funds in the bill to implement a ten-city Essential Air Service local

participation pilot program set forth in Section 408 of the recently passed FAA

reauthorization Act (VISION 100; H.R. 2115). The report language of the

conference report (H.Rept. 108-401) place-names, with dollar amounts, nearly 150

airports for airport projects totaling just under $258 million.

Federal Highway Administration (FHWA)

[http://www.fhwa.dot.gov]

The FHWA budget provides funding for the Federal-Aid Highway Program

(FAHP), which is the umbrella term for nearly all the highway programs of the

agency.

The Administration Request. For FY2004, the President requested $30.2

billion for FHWA. This would have represented a decrease of $2.2 billion (-7%)

from the FY2003 appropriation of $32.4 billion. The proposed obligation limitation,

which supports most of the FAHP, was set at $29.3 billion, significantly less than the

$31.6 billion enacted for FY2003. Funding for exempt programs (emergency relief

and a portion of minimum guarantee funding) was set at $931 million, up $38 million

from FY2003's $884 million.

The budget would have continued FHWA’s major programs but also proposed

some changes, that reflected the Administration’s surface transportation

reauthorization proposal. A new $1.0 billion Infrastructure Performance and

Maintenance initiative was one of the proposed changes. The program’s funds would

have been distributed, according to the Surface Transportation Program formula, for

use on “ready-to-go” projects that addressed congestion and improved infrastructure

conditions. States would have had to commit these funds during the first six months

of the fiscal year. Funds not obligated within this time frame would have been

reallocated among the states.

On the revenue side, the budget proposed to redirect revenues from the 2.5

cents-per-gallon excise tax on gasohol, that are now deposited in the Treasury’s

general fund, to the highway trust fund. This change has been projected to add

roughly $600 million to highway trust fund revenues in FY2004. This change would

require legislation in addition to the appropriations bill.

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The House Bill. The House-passed FY2004 Appropriations bill (H.R. 2989;

H.Rept. 108-243) provided for a total of $34.6 billion for FHWA. This would have

been $2.2 billion over the FY2003 enacted level and $4.4 billion above the

President’s request. The bill set the obligation limitation at $33.4 billion, $1.8 billion

above the FY2003 level and $4.1 billion above the President’s request. The overall

total included exempt obligations of $931 million (the same as the requested

amount). As has been common in recent years, the federal-aid highway discretionary

programs were heavily earmarked.

The Senate Bill. The Senate-passed FY2004 appropriations bill (H.R. 2989

as amended by S. 1589; S.Rept. 108-146) provided for a total of $34.8 billion for

FHWA. At $33.8 billion, the obligation limitation was set roughly $500 million

above the House bill. The $931 million for exempt obligations was the same as in

the House version. As is true with the House bill, the discretionary programs were

heavily earmarked by the Senate. The bill also directed that $175 million under the

limitation on administrative expenses be made available for surface transportation

projects earmarked in the report language of the bill.

Figure 2. Federal Highway Administration Appropriations

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The Consolidated Appropriations Act, 2004 (P.L. 108-199). The

enacted Consolidated Appropriations Act provides total budgetary resources of $34.7

billion (prior to the 0.59% rescission) for FHWA. This is slightly higher than the

House total and slightly lower than the Senate total. This is an increase of more than

6% over the FY2003 enacted total and more than 12% over the Administration’s

budget request. At $33.8 billion the limitation on obligations is similar to that of

both the House and Senate bills.

Project Earmarking. As had become the practice in most of the annual

appropriations bills during the TEA-21 authorization cycle, the enacted FY2004

conference agreement either completely or heavily earmarks all of the discretionary

programs that are under the nominal control of the FHWA. For example, the

Interstate Discretionary, Bridge Discretionary, Ferry Boats and Ferry Terminals,

Transportation and Community and System Preservation Pilot Program (TCSP), as

well as the National Corridor Planning and Development and Coordinated Border

Infrastructure Program (CORBOR) are all fully earmarked.

In what is a departure from traditional practice, however, the Consolidated

Appropriations Act, 2004 also earmarks funds under the core formula programs

(Interstate Maintenance Program (IM), National Highway System (NHS), Surface

Transportation Program (STP), Congestion Mitigation and Air Quality Improvement

Program (CMAQ), and the Highway Bridge Replacement and Rehabilitation

Program) that in the past were generally left free of earmarks and under the control

of the states. Section 115 of Division F in the Conference Report earmarks over $1

billion of unobligated core program funds. Funding for each project is to be drawn

from the state’s distributed core program funds under which the project is eligible.

Projects not eligible under any of the core programs are to be funded from the state’s

STP funds distribution. The funds are available for obligation until expended and the

federal share is 100%. Providing a 100% federal share for earmarked projects is also

a departure from past practice under which the federal share (usually 80% or 90%)

has generally been determined by the program under which the project was

earmarked.

In addition, under the heading, Miscellaneous Highway and Highway Safety

Programs, the act provides for the use of nearly $300 million unobligated core

formula funds for a combination of interagency transfers and project earmarks.3

Most of the money goes for transfers to the Federal Motor Carrier Safety

Administration ($111.5 million) and to the National Highway Traffic Safety

Administration ($150.5 million). In addition, $15 million is provided for

construction of Pennsylvania Avenue in front of the White House and $20 million

for Amber Alert grants. The funds are available until expended and have a 100%

federal share. The funds are subject to the obligation limitation only during FY2004

(Section 110 (g)).

Section 110 of Division F of the Act modifies the determination of the obligation limitation

distribution to include these funds in the initial account set aside. This has the effect of

reducing, by a like amount, the final remaining limitation that is distributed to the states via

the core formula programs.

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The act provides additional $150 million for the Appalachian Development

Highway System (ADHS), $75 million of which is earmarked. It also adds 65 miles

to the ADHS.

The TEA-21 Funding Framework. TEA-21 authorizing authority was

scheduled to expire on October 1, 2003. While Congress continues to consider

reauthorization proposals, all existing programs continue to operate on the basis of

an extension (P.L. 108-88, to February 29, 2004; P.L. 108-202, to April 30, 2004).

Any new authorizing legislation that emerges in the months ahead is expected to at

least retain a large part of the existing program funding framework. TEA-21 created

the largest surface transportation program in U.S. history. For the most part, however,

it did not create new programs. Rather, it continued most of the highway and transit

programs that originated in its immediate predecessor legislation, the Intermodal

Surface Transportation Efficiency Act of 1991 (ISTEA, P.L. 102-240).

There are several sets of highway programs within FHWA. Most of the funding

is reserved for the major federal-aid highway programs, which can be thought of as

the core programs. These programs are: National Highway System (NHS), Interstate

Maintenance (IM), Surface Transportation Program (STP), Bridge Replacement and

Rehabilitation (BRR), and Congestion Mitigation and Air Quality Improvement

(CMAQ). All of these programs are subject to apportionment on an annual basis by

formula and are not subject to program-by-program appropriation.

There is a second category of highway funding. This so called “exempt”

category consists of two elements: an additional annual authorization of minimum

guarantee funding ($639 million per fiscal year) and emergency relief ($100 million

per fiscal year). These funds are not subject to the annual limitation on obligations.

There is a further set of programs, known as the “allocated” programs (also

referred to as discretionary programs). These programs are under the direct control

of FHWA or other governmental entities. These programs include: the Federal Lands

Highway Program, High Priority Projects (former demonstration project category),

Appalachian Development Highway System roads, the National Corridor Planning

and Border Infrastructure Program, and several other small programs.

Federal Motor Carrier Safety Administration (FMCSA)

[http://www.fmcsa.dot.gov/]

The FMCSA was created by the Motor Carrier Safety Improvement Act of 1999

(MCSIA), P.L. 106-159.4 This agency became operational on January 1, 2000, and

assumed almost all of the responsibilities and personnel of DOT’s Office of Motor

During various hearings held in the first session of the 106th Congress, a number of

organizations, including DOT’s Inspector General, the General Accounting Office, and

many industry associations raised a variety of concerns regarding the effectiveness of the

federal truck and bus safety program. In response to these concerns, Congress created the

FMCSA.

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Carrier Safety.5 FMCSA issues and enforces the federal motor carrier safety

regulations that govern the operation and maintenance of interstate commercial truck

and bus operations and specify licensing requirements for commercial drivers.

FMCSA also administers several grants and programs to help states conduct various

truck and bus safety activities. Together with the states, FMCSA conducts

inspections of Mexican-domiciled commercial drivers and vehicles entering the

United States, advances Intelligent Transportation Systems for commercial

operations, and reviews thousands of carriers transporting property and passengers.

Most of the funds used to conduct FMCSA activities are derived from the federal

Highway Trust Fund.

The FMCSA appropriation has two primary components: FMCSA

administrative expenses (including operations) and research; and financial assistance

provided primarily to the states to conduct various truck and bus safety programs,

(grants and information systems). The FY2004 Administration request for the

FMCSA was $447 million. This was an increase of almost $134 million (43%) over

the FY2003 appropriation of $313.1 million. For FY2004, the conference committee

specified an FMCSA appropriation of $366 million: $176 million for administrative

expenses under the FMCSA limitation on administrative expenses account, and $190

million for motor carrier safety grants and information systems. The conference

agreement also provides for an additional $111.5 million for various other FMCSA

programs and activities under the FHWA miscellaneous appropriation.

Administrative and Operations Expenses. The President’s budget

request for FMCSA’s administrative and operations expenses in FY2004 was $224

million (up from $124 million in FY03), including funds for research and technology

(R&T) and regulatory development. The House approved $236.8 million, the Senate

approved $246 million, and the conferees agreed to $176 million. Some of the

activities that would be funded include: enforcement to reduce the number of unsafe

carriers and drivers; outreach efforts to help educate the motoring public on how to

share the road with commercial vehicles; and the establishment of a medical review

board to assist FMCSA. Some of the core FMCSA activities or expenses supported

by these funds include: rent, administrative infrastructure, personnel compensation

and benefits and other related staff expenses for more than 1,000 employees;

outreach efforts to help educate the commercial motor vehicle industry about the

federal safety regulations; and monies to advance truck and bus, as well as driver,

standards and oversight, including funds to establish a medical review board to assist

FMCSA. This account also funds agency information systems used to oversee the

safety of motor carriers.

Grants to States and Other Activities. The Administration’s FY2004

request for these activities was $223 million; the House approved $190 million, the

Senate approved $237 million, and the conferees agreed to $190 million. These

funds are used primarily to pay for the Motor Carrier Safety Assistance Program

(MCSAP), which provides grants to states to help them enforce commercial vehicle

DOT’s Office of Motor Carrier Safety, which operated from October 9 through December

31, 1999, replaced the Office of Motor Carriers of the Federal Highway Administration of

the DOT.

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safety and hazardous materials transportation regulations. MCSAP grants cover up

to 80% of the costs of a state’s truck and bus safety program. Some 10,000 state and

local law-enforcement officers conduct more than 2.6 million roadside inspections

of trucks and buses annually under the program. The Senate bill included an

additional $47 million for construction of border inspection stations for trucks. For

FY2004, the conference agreement includes $170 million dedicated to MCSAP (with

$1 million going to a crash causation study), and an additional $20 million for

information systems and strategic safety initiatives. Under the FHWA miscellaneous

appropriation, the conference agreement provides an additional $111.5 million for

such initiatives as: southern border inspection facilities ($47 million), southern

border operations grants ($23 million), and CDL improvement grants ($21 million).

National Highway Traffic Safety Administration (NHTSA)

[http://www.nhtsa.dot.gov/]

NHTSA funding supports behavioral (primarily driver and pedestrian actions)

and vehicle (primarily crash worthiness and avoidance) programs that are intended

to improve traffic safety. More specifically, NHTSA seeks to reduce impaired

driving, increase occupant protection, improve police traffic services, enhance

emergency medical responses to crashes, ensure compliance with various federal

vehicle safety regulations, and track and seek to mitigate emerging vehicle safety

problems. NHTSA also provides grants to the states for the implementation of

various highway traffic safety programs.

For FY2004, $665 million was requested by the Administration to carry out the

NHTSA mission. This Administration request was an increase was $231 million

above the FY2003 program level: this reflected an increase of $131million above the

FY2003 program level and the proposed transfer to NHTSA of $100 million in

funding for safety belt use and impaired-driving law incentive programs previously

allocated to the FHWA appropriation.6

Of the total amount requested by the Administration for FY2004, $447 million

was designated to support traffic safety incentive and performance grants to states,

primarily to encourage occupant protection measures and reduce impaired driving,

and $218 million was for NHTSA’s operations and research activities to reduce

highway fatalities and prevent injuries. Included in the Administration’s request was

funding in these major areas: research and analysis (e.g., collection of crash

statistics and research on vehicle performance and occupant damage during these

crashes); highway safety programs (e.g., developing improved countermeasures to

combat alcohol- or drug-impaired driving); safety assurance (e.g., testing of vehicles

to ensure compliance with federal motor vehicle safety standards and maintaining a

legislatively required database to track vehicle defects); and safety performance

http://www.dot.gov/bib2004/nhtsa.html. According to DOT, total funds requested for

NHTSA for FY2004: “Includes $222 million of TEA-21 resources for the Sections 157 and

163 grant programs formerly appropriated to FHWA. NHTSA has always administered

these funds; therefore, the budget proposes that the funding be appropriated directly to

NHTSA.”

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standards (e.g, conducting crash avoidance and crash-worthiness testing, and

evaluating child safety seats). The House approved $434.8 million, the Senate

approved $448.7 million, and the conference agreement recommends $451.1 million

for NHTSA: $225 million for highway traffic safety grants and $222.5 million for

operations and research.7

Figure 3. National Highway Traffic Safety Administration

Appropriations

Excluding funds for the National Driver Register.

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Federal Railroad Administration (FRA)

[http://www.fra.dot.gov]

For FY2004, the Administration requested $1.09 billion in funding for the FRA.

The House agreed to $1.09 billion, the Senate agreed to $1.57 billion; P.L. 108-199

provides $1.455 billion. Most of FRA’s funding is for Amtrak. The Administration

requested $900 million for Amtrak, $150 million less than provided in FY2003 and

$379 million more than the President requested in FY2003. The House agreed to

$900 million for Amtrak, the Senate agreed to $1.346 billion; P.L. 108-199 provides

$1.225 billion.

The Administration requested $131 million for railroad safety and operations,

which is $14 million more than provided in FY2003 and $13 million more than the

President requested for FY2003. The House agreed to $131 million; the Senate also

agreed to $131 million, and P.L. 108-199 provides $131 million. For railroad

research and development, the President requested $35 million, which is $6 million

more than funding for FY2003. The House agreed to $28 million, the Senate agreed

to $34 million; P.L. 108-199 provides $34 million. For next generation high-speed

rail, the President requested $23 million, $7 million less than last year; the House

agreed to $28 million; the Senate agreed to $29 million. Conferees agreed on $37

million.

Although most of the debate involving the FRA budget centers on Amtrak,

agency safety activities (which receive more detailed treatment following this

section), Next Generation High-Speed Rail, and how states might obtain additional

funds for high-speed rail initiatives are also issues.

Railroad Safety and Research and Development. The FRA is the

primary federal agency that promotes and regulates railroad safety. Increased railroad

traffic volume and density make equipment, employees, and operations more

vulnerable to adverse safety impacts. The Administration proposes $131.2 million

in FY2004 for FRA’s safety program and related administrative and operating

activities. This represents about a 13% increase over the $116.6 million provided in

the FY2003 DOT appropriations for rail safety and operations. The House

Committee on Appropriations recommended and the House approved $130.9 million,

and the Senate Committee recommended and the Senate approved $130.8 million.

The conference agreement provides $130.8 million. Most of the funds appropriated

are used to pay for salaries as well as associated travel and training expenses for

FRA’s field and headquarters staff and to pay for information systems monitoring the

safety performance of the rail industry.8 The funds requested support FRA’s goals

The funds also are used to conduct a variety of initiatives, including the Safety Assurance

and Compliance Program (SACP), the Railroad Safety Advisory Committee (RSAC), and

field inspections. SACP involves numerous partnerships forged by railroad management,

FRA personnel, and labor to improve safety and compliance with federal railroad safety

regulations. RSAC uses a consensus-based process involving hundreds of experts who work

(continued...)

CRS-17

of reducing rail accidents and incidents, reducing grade-crossing accidents, and

contributing to the avoidance of serious hazardous materials incidents.

Figure 4. Federal Railroad Administration Appropriations

The railroad safety statute was last reauthorized in 1994. Funding authority for

the program expired at the end of FY1998. FRA’s safety program continues using the

authorities specified in existing federal railroad safety law and funds provided by

annual appropriations. Though hearings have been held since 1994, the deliberations

have not resulted in agreement on funding for FRA’s regulatory and safety

compliance activities or change to any of the existing authorities used by FRA to

promote railroad safety. A reauthorization statute changing the scope and nature of

FRA’s safety activities would most likely affect budgets after FY2004.

To improve railroad safety, the FRA conducts research and development

(R&D) on an array of topics, including railroad employee fatigue, technologies to

(...continued)

together to formulate recommendations on new or revised safety regulations for FRA’s

consideration.

CRS-18

control train movements, and track dynamics. In reports accompanying House and

Senate transportation appropriation bills and in annual conference reports, the

appropriations committees historically have allocated FRA’s R&D funds among

various research categories pertaining to safety. The FY2003 DOT appropriation

provided $29.1 million for the R&D program. For FY2004, the Administration

requests $35 million for these activities. The House Committee recommended and

the House approved $28.2 million, and the Senate Committee recommended and the

Senate approved $34.2 million. The conferees recommend $34 million.

Next Generation High-Speed Rail R&D. This program supports work on

high-speed train control systems, track and structures technology, corridor planning,

grade crossing hazard mitigation, and high-speed non-electric locomotives. The

Administration requested $23.2 for this program in FY2004; this is $7.05 million

(23%) less than the FY2003 appropriation of $30.25 million. The House agreed to

$28.3 million. The difference was largely the House’s support for establishing the

compliance of diesel multiple units (a form of passenger rail car with its own engine

which is used in other countries but is not currently used in this country) with FRA

passenger safety regulations. The Senate agreed to $29.3 million. The difference

was largely the Senate’s support for additional high-speed corridor planning ($5

million for Florida’s high-speed corridor, $2.5 million for a few others) and for

maglev ($5 million for 4 maglev projects). P.L. 108-199 provides $37.4 million; the

increase came largely from combining the different projects contained in the House

and Senate bills, plus adding some new projects.

Amtrak

[http://www.amtrak.com]

The President requested $900 million for Amtrak for FY2004. This was $150

million below Amtrak’s FY2003 appropriation of $1,050 million9 and $900 million

less than the $1.8 billion Amtrak requested for FY2004. Amtrak said that it could

not survive FY2004 on $900 million; the DOT Inspector General agreed with that

assessment. The House agreed to $900 million, similar to the Administration

request. It also added a provision allowing states to apply to FHWA to transfer a

portion of their allocation of an appropriation of $267 million from the Highway

Trust Account to Amtrak.10 The Senate agreed to $1.346 billion for Amtrak, and

extended to all Amtrak routes the requirement (begun for FY2003) that Amtrak’s

long-distance routes be funded through the grant request process. P.L. 108-199

provides $1.225 billion, postpones repayment of a $100 million loan fro DOT,

continues the new funding structure begun in FY2003, and extends to all Amtrak

routes the requirement for funding through grant requests.

P.L. 108-199 adds a provision directing the Secretary of Transportation to

establish a procedure for competitive bidding by non-Amtrak operators for statesupported routes currently operated by Amtrak. If a state wishes to contract with an

For FY2003, Congress also deferred Amtrak’s repayment of a $100 million loan to the

DOT.

The provision is in the House Committee on Appropriations report (p. 72), not the bill.

CRS-19

operator other than Amtrak for service, the state may contract with Amtrak for use

of Amtrak’s equipment, facilities, and services necessary to enable the non-Amtrak

operator to provide the service. If Amtrak and the state cannot agree on terms for this

use, the Secretary of Transportation is given the power to compel Amtrak to provide

the equipment, facilities and services on terms and conditions set by the Secretary.

Beginning with Amtrak’s FY2003 appropriation, Congress began stipulating (in

P.L 108-7) that Amtrak’s appropriation would not go directly to Amtrak, but to the

Secretary of Transportation, who would provide funding to Amtrak quarterly through

the grant-making process. Congress also imposed several other requirements on

Amtrak in FY2003 which had the effect of reducing Amtrak’s discretion with its

federal funding. Among these was a requirement that Amtrak submit a 5-year

business plan to Congress, which it did on April 25, 2003. In this plan, Amtrak

requested average annual federal support of $1.6 billion for FY2004-FY2008 to both

maintain the current network and begin to address the estimated $6 billion in

backlogged maintenance needs. The plan did not propose expansion of the existing

rail network.

Amtrak’s authorization expired at the end of FY2002. Two bills have passed

out of committee that would reauthorize Amtrak in its current configuration: the

House Transportation and Infrastructure Committee has reported out H.R. 2572 that

would authorize Amtrak at $2 billion annually for three years, and the Senate

Commerce, Science, and Transportation Committee has approved a surface

transportation safety bill, S. 1978, that includes an amendment authorizing $2 billion

annually for Amtrak for six years.

Several bills have been introduced that would change the structure of federal

passenger rail policy. The Administration has submitted a plan for restructuring

Amtrak and passenger rail service (S. 1501) which would shift much of the planning

and financial responsibility for passenger rail service to the states. Sen. Hutchinson

and others have submitted a plan for restructuring Amtrak and passenger rail service

(S. 1505) that would give the federal government more responsibility for planning

and implementing passenger rail service, authorize $2 billion annually for 6 years for

Amtrak operations, and authorize $48 billion in bonds to finance capital

improvements to the nation’s passenger rail system. Sen. Hollings and others have

submitted a plan that would authorize $2 billion annually for 6 years for Amtrak, and

would authorize $30 billion in bonds to finance capital improvements to the nation’s

rail network (S. 1961). See CRS Report RL31743, Amtrak Issues in the 108th

Congress, for further information.

Federal Transit Administration (FTA)

[http://www.fta.dot.gov/]

President Bush’s FY2004 budget request for FTA was $7.226 billion, virtually

the same level as FTA’s FY2003 appropriation (FTA’s FY2003 $7.226 billion final

CRS-20

appropriation was reduced to $7.179 billion after the 0.65% rescission).11 The

Administration’s request also proposed changes to FTA’s program structure,

reflecting the Administration’s reauthorization proposal (the proposed changes are

described below). The House agreed to $7.231 billion, the Senate agreed to $7.305

billion; P.L. 108-199 provides $7.309 billion. Since the Administration’s

reauthorization proposal has not been approved, the proposed program changes are

not reflected in the FTA appropriations.

Figure 5. Federal Transit Administration Appropriations

These figures for FTA do not include any projections to account for possible flexible

funding transfers from FHWA to FTA. In FY2002 such transfers amounted to $1.1 billion.

CRS-21

For more information on FTA’s programs and funding structure, see CRS

Report RL31854, Transit Program Reauthorization in the 108th Congress.

Table 5. FTA Appropriation, FY2003-FY2004

(millions of dollars)

FY2004

Enacted

Conference*

FY2003

Enacted

FY2004

Request

FY2004

House

Passed

FY2004

Senate

Passed

Urbanized Areas Formula Program

(Section 5307)

3,407

3,521

3,429

Capital Investment Grants & Loans

Program (Section 5309) Total

3,016

2,729

3,107

3,140

3,138

New Starts Program

1,207

1,515

1,214

1,318

1,324

Fixed Guideway

Modernization Program

1,207

1,214

1,207

Bus Discretionary Program

603

—

678

607

**607

Non-Urbanized Areas Formula

Program (Section 5311)

237

359

239

Job Access & Reverse Commute

Program

149

—

125

Elderly & Individuals with

Disabilities Formula Program

(Section 5310)

Rural Transportation Accessibility

Incentive Program (Section 3038),

also known as the Over-the-Road Bus

Accessibility program

122

126

Program

FY2004

Planning & Research

121

Other

145

108

151

152

155

New Freedom Initiative

—

145

—

7,179

7,226

7,231

7,305

7,309

FTA Total

Note: numbers may not add due to rounding.

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill Conference Report Budget Authority table

provided by the House Committee on Appropriations.

* The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission is not reflected in these

figures.

** The Conference Report directs that this $607 million is supplemented with $70 million transferred from other FTA programs, for

a total of $677 million.

CRS-22

Maritime Administration (MARAD)

[http://www.marad.dot.gov]

MARAD’s mission is to promote the development and maintenance of a U.S.

merchant marine capable of carrying the Nation’s waterborne domestic commerce,

a portion of its waterborne foreign commerce, and to serve as a naval and military

auxiliary in time of war. MARAD administers programs that benefit U.S. vessel

owners, shipyards, and ship crews. For FY2004, the President requested a total of

$219 million for MARAD, which is about $12 million more than the President

requested, and about $11 million less than Congress appropriated, for FY2003. The

Consolidated Appropriations Act provides a total of $226.4 million for MARAD

which is about $7.8 million more than the House passed bill and $1.2 million less

than the Senate passed bill.

Much of the discussion concerning MARAD’s budget focuses on the Maritime

Guaranteed Loan Program (the “Title XI” program). This program provides

guaranteed loans for purchasing ships from U.S. shipyards and for the modernization

of U.S. shipyards. The purpose of the program is to promote the growth and

modernization of U.S. shipyards. Consistent with its budget requests in prior years,

the Administration has requested no funds for additional loans in FY2004, calling the

program a “corporate subsidy.” The Administration has, however, requested $4.5

million for the administration of existing loans. For FY2003, in the Consolidated

Appropriations Resolution (P.L. 108-7), Congress initially provided no funds for the

program other than $4 million for administrative expenses. However, in the Wartime

Supplemental Appropriations bill (P.L. 108-11), Congress provided $25 million for

the program. For FY2004, the Consolidated Appropriations Act agrees with the

President’s request, providing $4.5 million in administrative expenses.

The DOT Inspector General recently issued a report on the Title XI program

(CR-2003-031, March 27, 2003) calling on MARAD to review loan applications

more effectively, exercise more rigorous financial oversight of borrowers, and use

an external financial advisor in reviewing loan applications. The IG’s investigation

was prompted by the bankruptcy of American Classic Voyages, leaving MARAD

with $367 million in bad loans for the construction of two cruise ships. At a June 5,

2003 Senate Commerce Committee hearing on the Title XI program, the General

Accounting Office also identified weaknesses in the program and made

recommendations for improving the financial oversight of the program (GAO-03728T). The conference agreement notes MARAD’s cooperation with the IG’s office

in implementing management reforms in the Title XI program.

For operations and training, the Administration requested $104.4 million, about

$12 million more than Congress appropriated in FY2003. Of this amount, $52.9

million is requested for the U.S. Merchant Marine Academy in Kings Point, New

York; $9.5 million for state maritime academies; and $42 million for the operations

of MARAD. The Consolidated Appropriations Act provides $107 million for

operations and training. For the Maritime Security Program (MSP), the

Administration requested $98.7 million, virtually the same amount as Congress

provided last year. The Consolidated Appropriations Act agrees with the President’s

CRS-23

request. MSP is a fleet of 47 privately-owned U.S. flag commercial vessels engaged

in international trade that are available to support the Department of Defense in a

national emergency.

Figure 6. Maritime Administration Appropriations

For the disposal of obsolete vessels in the National Defense Reserve Fleet

(NDRF), the Administration requested $11.4 million, about the same amount

Congress appropriated in FY2003. There are over 130 vessels in the NDRF that are

awaiting disposal because of their age. These vessels have raised environmental

concerns due to the presence of asbestos and other hazardous substances. MARAD

has until 2006 to dispose of these surplus ships, most of which are located on the

James River in Virginia and in Suisan Bay, California. The Consolidated

Appropriations Act provides $16.2 million for ship disposal, which is $2.2 million

CRS-24

more than the House passed measure and $2.2 million less than the Senate passed

measure.

Research and Special Programs Administration (RSPA)

[http://www.rspa.dot.gov]

The Research and Special Programs Administration (RSPA) includes a variety

of operating entities, including the Office of Pipeline Safety and the Office of

Hazardous Materials Safety. RSPA also conducts a multimodal research program,

helps coordinate and plan for transportation research and technology transfer

activities, sponsors educational activities to promote innovative transportation, and

manages DOT’s transportation-related emergency response and recovery

responsibilities.

For FY2004, the Administration requested a budget of $118 million for RSPA;

most of this funding was for activities that promote transportation safety. For

RSPA’s pipeline transportation safety program, $67 million was proposed by the

Administration (an increase of $3 million over the FY2003 appropriation); for the

hazardous materials transportation safety program, $25 million was requested (an

increase of $2 million over the FY2003 appropriation). Much of the additional

funding requested was intended to enhance RSPA’s ability to ensure that the federal

hazardous materials transportation pipeline safety regulations are complied with and

to assist DOT in participating in the safety oversight of containment systems that will

be used to ship spent nuclear fuel and high-level radioactive wastes. The House

Appropriations Committee recommended and the House approved $111.3 million

for RSPA in FY2004, including $23.6 million for hazardous materials transportation

safety, and $64.1 million for pipeline safety. The Senate Appropriations Committee

recommended and the Senate approved $110.3 million for RSPA in FY2004,

including $22.8 million for hazardous materials transportation safety, and $67.6

million for pipeline safety. The Consolidated Appropriations Act, 2004 provides

$112.9 million for RSPA, including $23.7 million for hazardous materials

transportation safety and $66.3 million for pipeline safety. 12

The conference Agreement includes a limitation on obligations for emergency

preparedness grants of $14.3 million.

CRS-25

Title II: Treasury Appropriations

Table 6. Title II: Department of the Treasury Appropriations

(in millions of dollars)

Program or Account

FY200

Enacte

FY2004

Request

FY200

House

Passed

FY200

Senate

Passed

FY200

Confer

encea

FY2004

Enacte

Departmental Offices

158

167

176

175

176

Department-wide Systems

and Capital Investments

Office of Inspector General

—

Treasury Inspector General

for Tax Administration

124

—

128

Treasury Inspector General

—

135

—

Air Transportation

Stabilization Program

Treasury Building Repair

and Restoration

Financial Crimes

Enforcement Network

Interagency Crime and

Drug Enforcement

107

—

Financial Management

Service

221

229

Alcohol and Tobacco Tax

and Trade Bureau

Bureau of the Public Debt

189

174

Internal Revenue Service,

Total

9,835

10,437

10,352

10,276

10,245

Processing,

Assistance and

Management

3,930

4,075

4,038

4,048

4,033

Tax Law

Enforcement

3,705

3,977

4,221

4,173

4,196

Information Systems

1,622

1,670

1,629

1,591

Business Systems

Modernization

364

429

390

Health Insurance Tax

Credit Administration

10,840

11,343

11,273

11,196

11,166

Total,

Dept. of the Treasury

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill Conference Report

Budget Authority table provided by the House Committee on Appropriations.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission

is not reflected in these figures.

CRS-26

Department of the Treasury Budget and Key Policy Issues

In recent decades, the Treasury Department has performed four basic functions:

(1) formulating, recommending, and implementing economic, financial, tax, and

fiscal policies; (2) serving as the financial agent for the federal government; (3)

enforcing federal financial, tax, counterfeiting, customs, tobacco, alcoholic beverage,

and gun laws; and (4) producing postage stamps, currency, and coinage. With the

creation of the Department of Homeland Security (DHS) late in 2002 and its

assumption in March 2003 of the authorities transferred to it by executive order, this

functional profile has changed significantly. While Treasury still serves as one of the

federal government’s principal economic policymakers and its financial manager,

revenue collector, and producer of currency, coinage, and stamps, its role in law

enforcement is now much more limited.

At its most basic level of organization, the Department consists of departmental

offices and operating bureaus. The departmental offices are responsible for the

formulation and implementation of policy and the management of the Department as

a whole, while the operating bureaus carry out specific duties assigned to the

Department. The bureaus typically account for more than 95% of the Department’s

employment and funding.

With one notable exception, the bureaus can be divided into those having

financial responsibilities and those engaged in law enforcement. In recent decades,

financial responsibilities have been handled by the Comptroller of the Currency, U.S.

Mint, Bureau of Engraving and Printing, Financial Management Service, Bureau of

Public Debt, Community Development Financial Institutions Fund, and Office of

Thrift Supervision; and law enforcement has been done by the Bureau of Alcohol,

Tobacco, and Firearms (BATF), U.S. Secret Service, Federal Law Enforcement

Training Center, U.S. Customs Service, Financial Crimes Enforcement Network

(FinCen), and Treasury Forfeiture Fund. The exception to this dichotomy is the

Internal Revenue Service (IRS), which performs both financial duties and law

enforcement through its administration of federal tax laws.

The advent of DHS has greatly diminished the Department’s involvement in law

enforcement. Under the law establishing DHS (P.L. 107-296), the Secret Service,

Customs Service, and Federal Law Enforcement Training Center were transferred

from the Treasury Department to DHS, while the Treasury Forfeiture Fund and many

functions of BATF were transferred to the Justice Department (DOJ). On January

24, 2003, the Treasury Department announced the establishment of a new bureau to

administer laws related to the use of alcohol and tobacco and to implement

regulations formerly handled by BATF: the Alcohol and Tobacco Tax and Trade

Bureau. Its main duties include collecting alcohol and tobacco excise taxes and

classifying those products for tax purposes.

CRS-27

In its budget request for FY2004, the Bush Administration sought $11.408

billion in funding for the Treasury Department.13 This amount was 3.5% greater than

the amount enacted for FY2003 ($11.018 billion), after adjusting for the transfer of

functions to DHS and the Justice Department. According to budget documents, the

Administration’s top priorities for Treasury operations in FY2004 were to bolster

IRS’s efforts to monitor and enforce compliance with tax laws, improve the

Department’s overall efficiency by further streamlining operations, and elevate the

Department’s role in federal efforts to combat money laundering and disrupt financial

networks supporting international terrorist activities. Under the newly configured

Treasury accounts, the IRS accounts for 91.5% of the proposed Treasury budget,

followed by the Financial Management Service (2.0%), the Bureau of Public Debt

(1.6%), and Departmental Offices (1.5%).

The Administration’s budget request also sought an increase of $6 million in

funding for FinCen and an additional $4 million for the Department’s International

Technical Assistance program, which assists the efforts of countries torn by war or

political instability to improve their systems of economic governance. In addition,

the Administration proposed that the Treasury Inspector General for Tax

Administration (TIGTA) be merged with the Office of Inspector General (OIG) on

the grounds that many of the functions once handled by OIG had been transferred to

other agencies, especially DHS.

On July 24, 2003, the House Committee on Appropriations approved by voice

vote a measure (H.R. 2989) to provide funding for Treasury operations in FY2004.

The measure authorized $11.273 billion in funding, or $423.5 million more than the

amount enacted for FY2003 but $70 million less than the amount requested by the

Bush Administration for FY2004. According to the Committee’s report on H.R.

2989 (H.Rept. 108-243), most of the difference with the Administration’s request

concerned a smaller recommended budget for IRS operations.

More specifically, compared with the Administration’s request, H.R. 2989

provided $36.9 million less in funding for processing, assistance and management;

$6.4 million less in funding for tax law enforcement; and $41.3 million less in

funding for information systems. In addition, the measure provided $8.9 million

more in funding for Treasury’s departmental offices than the Administration had

requested. Most of this increase (89%) was spread among administrative costs

arising from the transfer of functions and personnel to the DHS (+$2.9 million), as

well as increased funding for the Office of International Affairs (+$2.7 million) and

the new Office of Terrorist Financing and Financial Crimes (+$2.3 million). H.R.

2989 also denied the Administration’s proposal to combine the functions of OIG and

TIGTA into a new Treasury Inspector General on the grounds that such a step would

have required “extensive new legislation that has yet to be enacted.” Instead, the bill

The Administration’s budget request for the Treasury Department in FY2004 is $65

million greater than the requested amounts being considered by the House and Senate

appropriations committees. This difference reflects funding for two programs administered

by Treasury but funded through separate appropriations accounts: the Community

Development Financial Institutions Fund (CDFI) and international technical assistance.

Funding for the former is covered under appropriations for the Department of Housing and

Urban Development, and for the latter under appropriations for foreign operations.

CRS-28

added $1.7 million to OIG’s budget for FY2003 and $3.8 million to TIGTA’s budget

for FY2003. But it matched the Administration’s requested funding for FinCen in

FY2004.

After consideration of numerous amendments introduced during the floor debate

on H.R. 2989, the full House approved the measure by a vote of 381 to 39 on

September 9, 2003. Two of the amendments were related to Treasury appropriations

for FY2004. One, introduced by Representative Jim Cooper, would have reduced

proposed funding from $100 million to $25 million for a controversial IRS pilot

program to require some taxpayers claiming the earned income tax credit to certify

the residency status of the qualifying child they plan to claim beginning with the

2004 tax year and divert the $75 million in savings to programs aimed at improving

compliance among large and medium-sized business taxpayers. It failed by a vote

of 219 to 192.

The other amendment was introduced by Representative Bernie Sanders and

would have barred the Treasury Department from using funds appropriated under

H.R. 2989 to “assist in overturning the judicial ruling” in a case known as Cooper v.

IBM. In July 2003, the federal judge in the case ruled that IBM’s cash benefit

pension plan violated a federal law proscribing discrimination on the basis of age

because the rate of benefit accrual under the plan declines as a participant’s age

increases.14 In December 2002, the IRS issued proposed regulations on the

application of age-discrimination rules to the conversion of traditional pension plans

to cash balance plans.15 Some Members of Congress feared that if the IRS were to

make those regulations final, IBM would have a better chance of prevailing if it were

to appeal the judge’s ruling.16 The amendment passed by a vote of 258 to 160.

Otherwise, the House-passed version of H.R. 2989 endorsed the recommended levels

of funding for Treasury departmental offices and operating bureaus approved by the

Appropriations Committee.

On September 4, 2003, the Senate Appropriations Committee unanimously

approved a bill (S. 1589) providing $11.196 billion in funding for the Treasury

Department in FY2004. This amount was $202 million more than the amount

enacted for FY2003 but $147 million less than the amount requested by the Bush

Administration and $77 million less than the amount approved by the House for

FY2004. According to the Committee’s report on the legislation (S.Rept. 108-146),

most of the difference between S. 1589 and the Administration’s budget request and

the House-passed version of H.R. 2989 was due to a smaller recommended budget

for IRS operations. More specifically, compared to the Administration’s request, S.

1589 provided $26 million less in funding for tax processing, assistance, and

management, and $79 million less in funding for IRS information systems.

CRS Report RL30196, Pension Issues: Cash Balance Plans, by Patrick J. Purcell, p. 15.

Ibid., pp. 15-16.

See Alan K. Ota, “Pension Amendment Unlikely on Transportation-Treasury Bill,” CQ

Weekly, Sept. 13, 2003, p. 2225, available at [http://www.cq.com].

CRS-29

The measure also would have merged the IRS accounts for tax law enforcement

and the earned income tax credit compliance (EITC) program, resulting in a drop in

recommended funding for the initiative in FY2004 of $55 million. In addition, S.

1589 would have spent nearly $8 million more than the Administration has requested

for Treasury’s departmental offices. A substantial share of this recommended

increase would have gone to the Office of International Affairs (+$2.7 million) and

the Office of Terrorist Finance and Financial Crimes (+$2.3 million). S. 1589 also

denied the Administration’s proposed merger of the OIG and the TIGTA into a new

office (known as the Inspector General for Treasury), but for a different reason than

the one expressed in the report on H.R. 2989.

The Senate Appropriations Committee opposed the merger mainly because the

duties and responsibilities of OIG and TIGTA “remain vastly different in substance

... and are not conducive to being integrated.” Instead, it recommended an increase

in funding for OIG of $1.6 million and for TIGTA of $3.8 million in FY2004. But,

like H.R. 2989, the bill matched the Administration’s recommended increase in

funding for FinCen of $6.1 million, in part to manage the new responsibilities taken

on by the bureau under the USA Patriot Act of 2001 (P.L. 107-56). Under the Act,

FinCen gains the status of a Treasury Department bureau and has the primary

responsibility for enforcing the Department’s regulations against money laundering

and collecting and sharing financial and other information useful in anti-terrorism

investigations.

On October 23, 2003, the Senate substituted the language of S. 1598 as reported

favorably by the Appropriations Committee as an amendment to H.R. 2989 and

passed it by a vote of 93 to 1. In the debate over the measure, it considered and

approved a number of amendments, several of which related to Treasury

appropriations. By voice vote, the Senate passed an amendment by Sen. Mary

Landrieu that requires the IRS to undertake a comprehensive study of a proposed

pilot program to pre-certify eligibility for the EITC. The study would focus on the

time and cost to program participants, the administrative cost to the IRS, and the

number of participants who are denied certification because of ineligibility or failure

to complete the required documents. In addition, the Senate passed by voice vote an

amendment by Sen. Tom Harkin to prevent the Treasury Department from

implementing a new regulation that would permit companies to convert traditional

pension plans to cash balance plans. It was similar in intent to an amendment to the

version of H.R. 2989 approved by the House. The principal differences in

appropriations for the Treasury Department between the Senate-passed and Housepassed versions of H.R. 2989 related to funding of IRS operations.

The House and Senate agreed to a conference to resolve the differences between

the two versions of H.R. 2989. On November 12, 2003, the conferees reached an

agreement, which was submitted to both houses for approval. Under the agreement,

funding for Treasury Department operations in FY2004 would total $11.166 billion.

This was $317 million greater than the amount enacted for FY2003 but $177 million

less than the amount requested by the Bush Administration, $107 million less than

the amount approved by the House, and $30 million less than the amount approved

by the Senate. In each instance, virtually the entire difference related to funding for

the IRS, which would account for 92% of total Treasury appropriations in FY2004.

Under the agreement, Treasury departmental offices would receive $176.1 million;

CRS-30

Treasury programs for capital investment, $36.4 million; the Office of Inspector

General, $13 million; TIGTA, $128 million; the Air Transportation Stabilization

Program, $2.5 million; the Treasury Building and Annex Repair and Restoration

Fund, $25 million; FinCen, $57.6 million; the Financial Management Service, $228.5

million; the Alcohol and Tobacco Tax and Trade Bureau, $80 million; the Bureau of

Public Debt, $173.6 million; and the IRS, $10.245 billion.

Leaders of the House and Senate agreed in late November to incorporate the

measure into an consolidated appropriations bill (H.R. 2673) covering seven separate

appropriations bills. The conference report on H.R. 2673 (H.Rept. 108-401) included

the language of the conference agreement on H.R. 2989. It also imposed an acrossthe-board cut of 0.59% on all discretionary spending approved in non-defense

appropriations bills, including those already enacted. This cut was not reflected in

the budget totals discussed above. On December 8, 2003, the House approved the

conference report by a vote of 242 to 176. The Senate did likewise on January 22,

2004. President Bush signed the measure into law the next day (P.L. 108-199).

Internal Revenue Service (IRS). The federal government levies individual

and corporate income taxes, social insurance taxes, excise taxes, estate and gift taxes,

customs duties, and miscellaneous taxes and fees. The federal agency responsible

for administering all these taxes and fees, except customs duties, is the IRS. In

discharging that duty, the IRS receives and processes tax returns and other related

documents, processes payments and refunds, enforces compliance through audits and

other methods, collects delinquent taxes, and provides a variety of services to

taxpayers to help them understand their rights and responsibilities and resolve

problems. In FY2002, the most recent year for which data are available, the IRS

collected $2,017 billion before refunds, the largest component of which was

individual income tax revenue of $1,038 billion.

The Bush Administration asked Congress for $10.436 billion to fund IRS

operations in FY2004. This amount was 6.1% greater than the $9.834 billion enacted

for FY2003 and 5.2% greater than the amount requested by the Administration for

FY2003. Of the requested budget for FY2004, $4.135 billion was to be used for

processing, assistance, and management; $4.086 billion for tax law enforcement;

$1.709 billion for information systems; $500 million for the business systems

modernization program (BSM); $251 million for a program aimed at curbing fraud

and abuse in claims for the earned income tax credit (EITC) known as the Earned

Income Tax Credit Compliance Initiative; and $35 million to administer the health

insurance tax credit. Two proposed enforcement initiatives for FY2004 aroused

concern or outright opposition among some Members of Congress. One would

allocate $100 million to a pilot program to require that some taxpayers certify the

residency status of the qualifying child before filing a claim for the EITC. Under the

second proposal, the IRS would spend $2 million to hire private collection agents to

collect overdue or unpaid taxes.

The proposed budget placed a high priority on improving compliance with tax

laws. It would set aside $133 million for a new program aimed at curbing five

sources of tax evasion: (1) the promotion of abusive tax schemes; (2) the misuse of

trusts and offshore accounts to hide or illegally lower taxable income; (3) the use of

abusive corporate tax avoidance schemes; (4) the under-reporting of income by

CRS-31

upper-income individuals; and (5) the failure of employers to file employment tax

returns and pay substantial amounts of employment taxes in a timely manner. The

Administration contended that such a program to curb tax evasion would lead to a

72% increase in the number of audits of tax returns for high-income individuals and

businesses. Nonetheless, some expressed concern that the Administration’s proposed

funding for IRS operations fell short of what would be needed to enable the IRS to

enforce the tax laws adequately.17

A key player in the annual appropriations process for the IRS is the IRS

Oversight Board, which originated with the IRS Restructuring and Reform Act of

1998. Under the Act, the Board is required to review the annual IRS budget request

prepared by the IRS Commissioner and submit its recommendations to the Secretary

of the Treasury. The President in turn is required to submit the Board’s budget

recommendations to Congress along with his own budget request for the IRS.

For FY2004, the Board recommended that the IRS be given a budget of $10.724

billion, or $287 million more that the amount requested by the Bush

Administration.18 It also recommended that the IRS hire an additional 2,120 full-time

employees in FY2004, compared to the 238 additional full-time employees included

in the Administration’s request. The Board’s budget recommendations were

intended to accomplish three goals. One was to achieve a real growth rate of 2% in

the next five years for the purpose of channeling adequate resources into efforts to

monitor and enforce compliance with tax laws. The second goal was to provide more

resources for the BSM, which the Board views as essential to the transformation of

the IRS into an efficient, fair, customer-friendly collector of revenue and enforcer of

tax laws. The third goal was to restore funds for customer service and tax law

enforcement that were diverted in recent years to cover unanticipated expenses, such

as unfunded increases in annual pay raises for federal civilian employees. Nearly

85% of the difference between the Administration’s budget request for FY2004 and

the Board’s recommended budget was due to funding for two accounts: processing,

assistance, and management; and business systems modernization.

On July 24, 2003, the House Committee on Appropriations passed by voice vote

a measure (H.R. 2989) providing appropriations for the IRS in FY2004. It funded

the agency at a level of $10.352 billion, or $517 million more than the amount

enacted for FY2003 but $85 million less than the amount requested by the Bush

Administration. More specifically, the measure provided $4.038 billion for

processing, assistance, and management; $4.221 billion for tax law enforcement;

$1.629 billion for information systems; $429 million for BSM; and $35 million for

administering the health insurance tax credit.

Alison Bennett, “Rossotti Details IRS Successes, Notes Much Work Remains for Years

Ahead,” Daily Report for Executives, Bureau of National Affairs, no. 210, Oct. 30, 2002,

p. G-6; and George Guttman, “Oversight Board Concerned About IRS Budget Situation,”

Tax Notes, vol. 97, no. 11, pp. 1404-1406.

For more details on the Board’s budget recommendations for FY2004, see the statement

made by Nancy Killefer, the chair of the IRS Oversight Board, before the House

Appropriations Subcommittee on Transportation and Treasury on May 7, 2003, available

at [www.nexis.com].

CRS-32

The lower level of funding approved by the Committee, relative to the

Administration’s budget request, was spread over three appropriations accounts:

processing, assistance, and management (-$36.9 million); tax law enforcement (-$6.4

million); and information systems (-$41.3 million). Among the IRS programs and

initiatives receiving favorable comment in the Committee’s report (H.Rept. 108-243)

were low-income taxpayer clinics (which would receive $8 million in funding), the

tax counseling program for elderly taxpayers (which would receive $4.25 million in

funding), the emerging partnership between the IRS and suppliers of tax-return

software in implementing the Free-File Alliance, a controversial pilot program for

pre-certifying persons eligible for the earned income tax credit (which would receive

$100 million in funding), and a controversial proposal to hire private collection

agencies to collect overdue or unpaid taxes.

The House overwhelmingly passed H.R. 2989 on September 9, 2003. Its

version endorsed the recommended funding levels for IRS accounts in FY2004

approved by the Appropriations Committee. Under an amendment adopted by the

House during floor debate on the measure, none of the funds appropriated in the

measure could be used to help overturn a federal judge’s recent ruling that IBM’s

cash balance pension plan violates a federal law barring age discrimination. The

sponsors of the amendment wanted to prevent the IRS from making final proposed

regulations it issued in December 2002 on the application of age-discrimination rules

to the conversion of traditional pension plans to cash balance plans it issued in

December 2002. They feared that such a step would strengthen IBM’s hand if it were

to appeal the judge’s ruling.

On September 4, 2002, the Senate Appropriations Committee unanimously

approved a measure (S. 1589) providing $10.276 billion in funding for IRS

operations in FY2004. This amount was $296 million more than the amount enacted

in FY2003 but $160 million less than the amount requested by the Administration

and $76 million less than the amount approved by the House.

More specifically, S. 1589 recommended spending $4.048 billion on processing,

assistance and management (or $26 million below the Administration’s request but

$10 million above the amount in H.R. 2989); $4.173 billion on tax law enforcement

(or $196 million above the Administration’s request but $48 million below the

amount in H.R. 2989); $1.591 billion on information systems (or $79 million below

the Administration’s request and $38 million below the amount in H.R. 2989); $429

million for BSM (or the same amount requested by the Administration and contained

in H.R. 2989); and $35 million to administer the health insurance tax credit (or the

same amount requested by the Administration and contained in H.R. 2989).

The Committee report (S.Rept. 108-146) on the bill praised two IRS programs:

the Tax Counseling Program for the Elderly and Low-Income Taxpayer Clinics. It

recommended that the former be funded at a level of $3.9 million and the latter at a

level of $7.0 million in FY2004. In addition, the report recommended that the IRS

manage its earned income tax compliance initiative as part of its budget for tax law

enforcement, and that the IRS “realign development activities funded under the

Information Systems account so that they are managed and integrated formally into

Business Systems Modernization activity.” It was unclear from the report how the

Committee viewed recent controversial proposals to pre-certify the eligibility of

CRS-33

certain taxpayers for the earned income tax credit and to hire private collection agents

to collect unpaid or overdue taxes.

On October 23, 2003, the Senate substituted the language of S. 1589 as an

amendment to the House-passed version of H.R. 2989 and passed the measure by a

vote of 93 to 1. It made no changes in the level of funding in FY2004 for IRS

operations approved by the Appropriations Committee. But the Senate did approve

by voice vote two amendments that related to the IRS. One would prevent the

Treasury Department from using any of the appropriated funds to implement a

recently issued IRS final regulation making it easier for companies to convert from

traditional pension plans to a cash balance plan. The second amendment would

require the IRS to undertake a comprehensive study of its proposed pilot program to

pre-certify the eligibility of thousands of taxpayers for the EITC. Among other

things, the study would examine the time and cost to program participants and the

administrative cost to the IRS, and the number of participants who are denied

certification because they are deemed ineligible or failed to complete the required

documents.

The version of H.R. 2989 passed by the House gave the IRS about $76 million

more in funding for FY2004 than the Senate-passed version. The difference was

distributed among three accounts: processing, assistance, and management (-$10

million); tax law enforcement (+$48 million); and information systems (+$38

million).

Leaders of the House and Senate agreed to a conference to resolve the

differences between the two versions of H.R. 2989. Under a conference agreement

reached on November 12, 2003, funding for the IRS in FY 2004 would total $10.245

billion, or $410 million more than the amount enacted for FY2003 but $192 million

less than the amount requested by the Bush Administration, $107 million less than

the amount approved by the House, and $31 million less than the amount approved

by the Senate. More specifically, the agreement provides $4.033 billion for

processing, assistance and management, of which $4.1 million must be used to fund

the Tax Counseling for the Elderly Program and $7.5 million is to be made available

to fund grants for low-income taxpayer clinics; $4.196 billion for tax law

enforcement; $1.591 billion for information systems; $390 million for BSM, none

of which may be spent without the prior approval of the House and Senate

Appropriations Committees; and $35 million to administer the health insurance tax

credit. Proposed funding for the BSM represented a reduction of $39 million in the

amounts approved by the House and the Senate and could be construed as an

expression of congressional dissatisfaction with the results of the program so far and

distrust of the ability of IRS managers to remedy known problems with it. The

problems reportedly include unanticipated cost increases, delays in the completion

of crucial projects, and poor management.

In addition, the conference agreement on H.R. 2989 prohibited the IRS from

using appropriated funds to issue final regulations lifting a 1999 moratorium on the

conversion of corporate pension plans from traditional defined-benefit plans to cashbalance plans. Cash-balance plans often result from the conversion of traditional

defined-benefit pension plans to defined-contribution pension plans. Instead, the

agreement required the agency to present to Congress within six months of its

CRS-34

enactment proposed legislation that would “provide transition relief for older and

longer-service participants affected by conversions of their employers’ traditional

pension plans to cash-balance pension plans.” The agreement also required the IRS

to submit to Congress by June 30, 2005 a final report examining various aspects of

any program established by the IRS to certify or pre-certify the eligibility of certain

taxpayers for the EITC, including the costs incurred by affected taxpayers in

participating in the program and the IRS in administering the program.

The conference agreement was incorporated into a consolidated appropriations

measure (H.R. 2673) covering seven separate appropriations bills. H.R. 2673

imposed an across-the-board cut of 0.59% in discretionary spending for all federal

programs outside of defense and military construction in FY2004. On December 8,

2003, the House approved the conference report for H.R. 2673 (H.Rept. 108-401) by

a vote of 242 to 176. The Senate followed suit on January 22, 2004. President Bush

signed the measure into law the next day (P.L. 108-199).

Title III: Postal Service

Table 7. Title III: United States Postal Service Appropriations

(in millions of dollars)

FY2003

Enacted

FY2004

Request

FY2004

House

Passed

FY2004

Senate

Passed

FY2004

Conference

FY2004

Enacted

Payment to the Postal

Service Fund

Advance Appropriation,

FY2002/2003

Advance Appropriation,

FY2004

Total, Postal Service

107

Program or Account

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill Conference Report Budget

Authority table provided by the House Committee on Appropriations.

Note: The Senate table of budget authority lists the Postal Service appropriation under the “Related Agencies”

(“Independent Agencies” in the Senate report) Title, rather than as a separate title. The Conference Report table follows

this convention.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission is not

reflected in these figures.

The U.S. Postal Service (USPS) generates nearly all of its funding—about $67

billion—annually through the sale of products and services. It does receive a regular

appropriation from Congress, however, to compensate for revenue it forgoes in

providing, at congressional direction, free mailing privileges for the blind and

visually impaired and for overseas voting. Under the Revenue Forgone Reform Act

of 1993, Congress is required to reimburse USPS $29 million each year until 2035,

for services performed but not paid for in the 1990s (for more information, see CRS

Report RS21025, The Postal Revenue Forgone Appropriation: Overview and

Current Issues). The terrorist attacks in the fall of 2001, however, including use of

the mail for delivery of anthrax spores to congressional and media offices, generated

new funding needs that USPS contends should be met through appropriations.

CRS-35

In FY2003, USPS received a revenue forgone appropriation of $59.6 million,

including $30.8 million for revenue forgone in FY2003 but not payable until October

1, 2003, and the $29 million ($28.8 after rescission) due annually under the Revenue

Forgone Reform Act of 1993.

In its FY2004 Budget, the Administration proposed an appropriation of $55.7

million for revenue forgone in fiscal 2004, and $29 million for the FY2003

installment under the Revenue Forgone Reform Act of 1993—reduced by $19.2

million as a reconciliation adjustment to reflect actual versus estimated free mail

volume in 2001—for a total of $65.5 million. Of this amount, $36.5 million would

not be available for obligation until October 1, 2004, which is in FY2005. However,

USPS will also have available for obligation during FY2004 the $31 million

provided for revenue forgone in fiscal 2002, for a total of $60 million. In its FY2002

Budget, the Bush Administration had proposed to “reverse the misleading budget

practice of using advance appropriations simply to avoid [annual] spending

limitations.” The Administration did not renew the proposal in its FY2003 or

FY2004 Budgets.

In its detailed justification of its FY2004 budget request, USPS asked Congress

for an additional $350 million (above the OMB proposal of $65.5 million) in

emergency response funds to protect the safety of employees and customers from

threats such as the 2001 anthrax attack. The funds would be used to continue

acquisition and deployment of ventilation and filtration equipment that was begun

with $762 million provided in FY2002 specifically for emergency response. Neither

the Administration’s FY2003 Budget nor its FY2004 Budget included any additional

funds for emergency preparedness for the Postal Service. As a condition to receiving

the largest part of its previous emergency response funding, on March 6, 2002 USPS

submitted to its oversight and appropriations committees an emergency preparedness

plan to combat the threat of biological and chemical substances in the mail.19 The

March 6, 2002 emergency preparedness plan did identify substantial needed

appropriations of $799.8 million for FY2003, and $897.5 million for FY2004.

Both the House and the Senate versions of the FY2004 bill (H.R. 2989)

mirrored the Administration’s request, providing $60 million for FY2004, made up

of $29 million for past revenue forgone, and $31 million payable in FY2004 though

appropriated in the FY2003 law. The House and the Senate also provided $36.5

million as an advance appropriation for revenue forgone to be payable in FY2005,

a provision carried through in the end-of-session consolidated appropriations bill.

Neither Committee’s report referred to the Postal Service’s supplementary request

for bio-terrorism prevention. Both versions of the bill and the final Consolidated

Appropriations Act, 2004 continue long-standing language forbidding USPS to

reduce service below the six-day delivery and rural delivery standards that have

prevailed since 1983, or to close rural or other small post offices during FY2004.

The end-of-session Consolidated Appropriations Act (H.R. 2673; P.L. 108-199) also

contained a provision (Division F, title V, section 541) amending 39 U.S.C. 414(h)

to extend the authorized sales period for the Breast Cancer Research semi-postal

stamp. Sales of the stamp, which fund research into a cure for breast cancer, had

See [http://www.usps.com/news/2002/press/pr02_pmg0313.htm ], visited Sept. 11, 2003.

CRS-36

been authorized only through December 31, 2003. The amendment extends the sales

authorization through December 31, 2005.

The Administration’s Budget also contained a proposal to correct an anticipated

over-funding of USPS obligations for the retirement benefits of postal workers under

the Civil Service Retirement System. Congress has passed legislation (P.L. 108-18)

to reduce the annual USPS contribution to the Civil Service Retirement and

Disability Fund, which will have the effect of saving USPS $2.9 billion in FY2003

and $2.6 billion in succeeding years. For more on this legislation, see CRS Report

RL31684, Funding Postal Service Obligations to the Civil Service Retirement

System.

Title IV: Executive Office of the President (EOP) and

Funds Appropriated to the President

Table 8. Title IV: Executive Office of the President (EOP) and Funds

Appropriated to the President Appropriations

(in millions of dollars)

FY2003

Enacted

FY2004

Request

FY2004

House

Passed

FY2004

Senate

Passed

FY2004

Conference

FY2004

Enacted

Compensation of the President

0.5

—

0.5

The White House Office

(salaries and expenses)

—

Homeland Security Council

—

Executive Residence at the

White House (operating

expenses)

—

White House Repair and

Restoration

—

Office

Council of Economic Advisors

—

Office of Policy Development

—

National Security Council

—

Office of Administration

—

The White House

—

184

—

Office of Management and

Budget

Office of National Drug

Control Policy (salaries and

expenses)

Office of National Drug

Control Policy Counterdrug

Technology Assessment Center

Federal Drug Control

Programs: High Intensity Drug

Trafficking Areas Program

225

206

226

Federal Drug Control

Programs: Other Programs

222

250

230

174

229

CRS-37

FY2004

House

Passed

FY2004

Senate

Passed

0.3

FY2003

Enacted

FY2004

Request

Office of the Vice President

(salaries and expenses)

Official Residence of the Vice

President (operating expenses)

0.3

Office

Total, EOP and Funds

Appropriated to the

President

777

791

776

735

FY2004

Conference

787

FY2004

Enacted

787

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill Conference Report Budget

Authority table provided by the House Committee on Appropriations.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of 0.59%; that rescission is not

reflected in these figures.

The Transportation, Treasury and General Government Appropriations bill

funds all but three offices in the Executive Office of the President (EOP). Of the

three exceptions, the Council on Environmental Quality and Office of Environmental

Quality, and the Office of Science and Technology Policy are funded under the

Veterans Affairs, Housing and Urban Development, and Independent Agencies

appropriations; and the Office of the United States Trade Representative is funded

under the Commerce, Justice, State, and the Judiciary and Related Agencies

appropriations.

The President’s FY2004 budget proposed to consolidate and financially realign

several annual EOP salaries and expenses appropriations that directly support the

President into a single annual appropriation, called “The White House.” This

consolidated appropriation would total $183.8 million in FY2004, a decrease of 3.0%

from the $189.4 appropriated in FY2003 for the accounts proposed to be

consolidated. The accounts included in the consolidated appropriation would be:

Compensation of the President

White House Office (including resources for the Office of Homeland

Security)

! Executive Residence/White House Repair and Restoration

! Office of Policy Development

! Council of Economic Advisers

! National Security Council

! Office of Administration

The budget stated that the consolidation “initiative provides enhanced flexibility

in allocating resources and staff in support of the President and Vice President, and

permits more rapid response to changing needs and priorities.”20 The Administration

proposed similar consolidations in the FY2002 and FY2003 budgets, but the

conference committees for the Treasury and General Government Appropriations

U.S. Executive Office of the President, Office of Management and Budget, Budget of the

United States Government Fiscal Year 2004 Appendix (Washington: GPO, 2003), p. 882.

(Hereafter referred to as FY2004 Budget, Appendix.)

CRS-38

Act, FY2002 (P.L. 107-67) and FY2003 (P.L. 108-7, Division J) agreed to continue

with separate appropriations for the EOP accounts. A concern of the Administration

has been the “needless complexity [of different accounts] that adds expense, that

adds burdens, that adds administrative hurdles that they must go through to

accomplish anything.”21 A concern of Congress about consolidation has been its

“legitimate needs and desires to have oversight over spending of public funds.”22

Included with the FY2004 budget request for consolidation is a proposal for a

Title VI general provision that would provide for a 10% transfer authority among the

following accounts:

The White House (Compensation of the President, White House

Office (including the Office of Homeland Security), Executive

Residence, White House Repair and Restoration, Office of

Administration, Office of Policy Development, National Security

Council, Council of Economic Advisers)

! Office of Management and Budget

! Office of National Drug Control Policy

! Special Assistance to the President and Official Residence of the

Vice President (transfers would be subject to the approval of the

Vice President)

! Council on Environmental Quality and Office of Environmental

Quality

! Office of Science and Technology Policy

! Office of the United States Trade Representative

According to the EOP budget submission, the transfer authority would “allow

the President to address, in a limited way, emerging priorities and shifting demands”

and would “provide the President with flexibility, improve the efficiency of the EOP,

and reduce administrative burdens.”24 The OMB director, or such other officer as the

President may designate, could, 15 days after giving notice to the Senate and House

Committees on Appropriations, transfer up to 10% of any appropriation to any other

appropriation, to be merged with, and available for, the same time and for the same

purposes as the appropriation to which transferred. An appropriation could not be

increased by more than 50% by such transfers.25

Representative Ernest Istook, then chairman of the Subcommittee on Treasury, Postal

Service and General Government of the House Committee on Appropriations, discussing

the FY2002 proposal for consolidation of the Executive Office of the President accounts.

Congressional Record, daily edition, July 25, 2001, p. H4570.

Ibid.

FY2004 Budget, Appendix, p. 882. U.S. Executive Office of the President, Fiscal Year

2004 Congressional Budget Submission (Washington: GPO, [Feb. 2003]), p. 11. (Hereafter

referred to as EOP Budget Submission.)

EOP Budget Submission, p. 11.

Ibid.

CRS-39

Both the House and the Senate Committees on Appropriations recommended

and the law provides that separate appropriations for the EOP accounts will be

continued and that the transfer authority proposal is not agreed to. According to the

committee report accompanying S. 1589:

Last year, the Committee gave this request considerable deliberation and

concluded that the existing structure served the Committee’s and the public’s

need for transparency in the funding and operation of these important functions

well. The existing structure also provides the executive branch with the

flexibility it needs to reprogram funds within accounts to address unforseen

budget needs upon the notification and approval of the Committee. As noted in

discussions with administration officials in past years, at no time has this

Committee rejected an administration’s request to reprogram existing funds

within accounts in this Title.26

EOP Offices Funded Through Treasury and General Government

Appropriations. The President’s FY2004 budget for EOP programs funded under

the Treasury and General Government appropriations proposed an appropriation of

$790.6 million, an increase of 1.7% over the $777.0 million appropriated in FY2003.

The FY2004 budget proposals for specific accounts are discussed below.

Compensation of the President. The President’s FY2004 budget proposed

an appropriation of $450,000, which includes an expense allowance of $50,000. This

is the same amount as was appropriated in FY2003. The salary of the President is

$400,000 per annum, effective January 20, 2001. The House and Senate Committees

on Appropriations recommended, the House and Senate passed, and the law provides

the same amount as the President requested. The law also amends 3 U.S.C. 102 to

provide that any unused amount of the expense allowance shall revert to the Treasury

pursuant to 31 U.S.C. 1552 and that no amount of the allowance shall be included in

the President’s gross income.

White House Office (WHO). This account provides the President with staff

assistance and administrative services. The President’s FY2004 budget proposed an

appropriation of $70.3 million, an increase of 39.5% over the $50.4 million

appropriated in FY2003.

The House Committee on Appropriations recommended and the House passed

an appropriation of $66.057 million, of which $8.65 million would be for

reimbursements to the White House Communications Agency. The amount is $4.2

million less than the President’s request. The reduction is taken from the Office of

Homeland Security funding which is included in the White House Office

appropriation (see below). The Committee again requests that the Executive Office

of the President, within 30 days of the Act’s enactment, provide “a detailed report on

the status of efforts to safely resume public tours of the White House.” Such a report

had been requested in the 2003 appropriations bill, but the committee report

accompanying H.R. 2989 states that the EOP “provided a cursory, four-sentence

S.Rept. 108-146, p. 132.

CRS-40

‘report’ that said very little about the status of efforts in this regard.”27 (This

provision is not included in the conference agreement as the report has been

submitted.)

The Committee also directs that both the House and Senate Committees on

Appropriations receive a report on the renovations of the Eisenhower Executive

Office Building no later than November 15, 2003. According to the committee report

accompanying H.R. 2989:

On repeated occasions, the Committee has sought specific answers to questions

about the use of non-federal funds for renovating and furnishing GSA facilities

occupied by agencies of the Executive Office of the President. In particular, the

Committee believes more information is needed on the use of non-federal

funding for renovation and furnishing efforts for the Eisenhower Executive

Office Building [EEOB], for which $65,757,000 is included in this bill. The

Committee directs EOP to review and report on the use of non-federal funds for

renovation and furnishings in the [EEOB] .... should identify the federal agency

that coordinated the work funded by non-federal sources, the specific sources and

amounts of non-federal funding used, a description of each project, and an

explanation of why non-federal funds were used in each specific instance.

Finally, the report should determine which agency’s gift authority was used to

accept the contribution of non-federal funds and whether this authority was used

properly. Given EOP’s reluctance to provide information on this subject thus far,

a provision is included in the bill prohibiting the obligation of more than

$35,000,000 on this project until this report is submitted to the Congress.28

The Senate Committee on Appropriations recommended and the Senate passed

an appropriation of $61.9 million, “a decrease of $8,331,000 below the budget

estimate as funds requested under this account for the Homeland Security Council

are provided in a separate account.”29 Of the total, $8.65 million would be available

for reimbursements to the White House Communications Agency.

The law provides an appropriation of $69.168 million. Of the total, $8.65

million would be available for reimbursements to the White House Communications

Agency.

Office of Homeland Security (OHS). This office provides support and

advice to the President and interagency coordination of all aspects of homeland

security, including the implementation of the National Strategy for Homeland

Security. The funding for OHS is included in the White House Office request. Of

the $70.3 million requested for the WHO for FY2004, $8.3 million is for the OHS.

The OHS FY2003 appropriation was $19.3 million. The Homeland Security Council

functions established in the Homeland Security Act of 2002, P.L. 107-296, are

supported by the OHS budget.

H.Rept. 108-243, pp. 163-164.

H.Rept. 108-243, p. 164.

S.Rept. 108-146, p. 132.

CRS-41

The House Committee on Appropriations recommended and the House passed

an appropriation of $4.1 million, which is $4.2 million less than the President’s

request of $8.3 million. The committee report accompanying H.R. 2989 explained

the recommendation as follows.

It is clear that most of [the responsibilities of OHS] have now been assumed by

the Secretary of the Department of Homeland Security [DHS]. Although the

Administration has changed the “Office of Homeland Security” to the

“Homeland Security Council,” it is not clear what work remains that cannot be

effectively performed by the [DHS]. Although the Committee understands the

President’s need for policy support and advice, it is not clear why that would

require 66 staff, given the existence and support of the [DHS].30

The Senate Committee on Appropriations recommended and the Senate passed

the same appropriation as the President requested. The Committee did not approve

funding for the council within the White House Office, believing that the council

“should be funded as a separate account, which is consistent with the budgetary

treatment of its predecessor, the Office of Homeland Security.”31

The law provides an appropriation of $7.231 million and funds the council

under the White House office.

Executive Residence (White House) Operation and Care. These

accounts provide for the care, maintenance, and operation of the Executive Residence

and its repair, alteration, and improvement.

The President’s FY2004 budget proposed an overall appropriation of $16.7

million for this account, an increase of 25.4% over the $13.3 million appropriated in

FY2003. For the executive residence, the budget proposed an appropriation of $12.5

million, an increase of 2.9% over the $12.3 million appropriated in FY2003. For

repair and restoration of the White House, the budget proposed an appropriation of

$4.2 million, an increase of 254.4% over the $1.2 million appropriated in FY2003.

The EOP budget submission states that the repair and restoration funding would be

used to renovate various specific electrical, mechanical, and control system

components; replace two power servers; and complete the second phase of the

restoration of the East and West Wing exterior.32

Maintenance and repair costs for the White House are also funded by the

National Park Service as part of that agency’s responsibility for national monuments.

Entertainment costs for state functions are funded by the Department of State.

Reimbursable political events in the Executive Residence are to be paid for in

advance by the sponsor, and all such advance payments are to be credited to a

Reimbursable Expenses account. The political party of the President is to deposit

$25,000 to be available for expenses relating to reimbursable political events during

the fiscal year. Reimbursements are to be separately accounted for and the

H.Rept. 108-243, p. 163.

S.Rept. 108-146, p. 135.

EOP Budget Submission, p. 62.

CRS-42

sponsoring organizations billed, and charged interest, as appropriate. The staff of the

Executive Residence must report to the Committees on Appropriations, after the

close of each fiscal year, and maintain a tracking system on the reimbursable

expenses.

The House and Senate Committees on Appropriations recommended, the House

and Senate passed, and the law provides the same appropriations as the President

requested. The House committee report accompanying H.R. 2989 states that the

repair and restoration funds “will finance the ongoing restoration of the east and west

wing exterior ($3,500,000), replacement or repair of various electrical, mechanical,

and control system components ($530,000), and replacement of computer servers and

backup power supplies ($195,000).”33

Special Assistance to the President (Office of the Vice President).

This account funds the Vice President in carrying out the responsibilities assigned to

him by the President and by law.

The President’s FY2004 budget proposed an appropriation of $4.5 million for

salaries and expenses, an increase of 10.4% over the $4.0 million appropriated in

FY2003. According to the EOP budget submission:

An additional programmatic increase of $70,000, or 1.7 percent was requested

for costs associated with official Vice Presidential travel. Since September 11,

2001, the Vice President’s travel has been augmented by travel to undisclosed

locations for security purposes. This travel is 100 percent official ...34

The House and Senate Committees on Appropriations recommended, the House

and Senate passed, and the law provides the same appropriation as the President

requested. This funding level “will allow for 24 full-time permanent positions in

fiscal year 2004,” according to the Senate committee report accompanying S. 1589.35

The law places the appropriation at the end of the title as proposed by the House.

Official Residence of the Vice President. This account provides for the

care and operation of the Vice President’s official residence and includes the

operation of a gift fund for the residence.

The President’s FY2004 budget proposed an appropriation of $331,000 for the

operating expenses of the Official Residence, an increase of 2.8% over the $322,000

appropriated in FY2003.

The House and Senate Committees on Appropriations recommended, the House

and Senate passed, and the law provides the same appropriation as the President

requested. In its report accompanying S. 1589, the Senate Committee stated that it

“has had a longstanding interest in the condition of the residence and expects to be

kept fully apprised by the Vice President’s office of any and all renovations and

H.Rept. 108-243, p. 165.

EOP Budget Submission, p. 164.

S.Rept. 108-146, p. 133.

CRS-43

alterations made to the residence by the Navy.”36 The law places the appropriation

at the end of the title as proposed by the House.

Council of Economic Advisers (CEA). The three-member council was

created in 1946 to assist and advise the President in the formulation of economic

policy. The council analyzes and evaluates the national economy, economic

developments, federal programs, and federal policy to formulate economic advice.

The council assists in the preparation of the annual Economic Report of the President

to Congress.

The President’s FY2004 budget proposed an appropriation of $4.5 million, an

increase of 20.4% over the $3.8 million appropriated in FY2003.

The House Committee on Appropriations recommended and the House passed

an appropriation of $4 million, $502,000 less than the President’s request. The

Senate Committee on Appropriations recommended, the Senate passed, and the law

provides the same appropriation as the President requested.

Office of Policy Development. The Office supports and coordinates the

Domestic Policy Council (DPC) and the National Economic Council (NEC) in

carrying out their responsibilities to advise and assist the President in formulating,

coordinating, and implementing economic and domestic policy. The office also

supports other policy development and implementation initiatives.

The President’s FY2004 budget proposed an appropriation of $4.1 million, an

increase of 27.2% over the $3.2 million appropriated in FY2003. Of the total, an

estimated $2.1 million supports the Office of Policy Development’s DPC functions

and $2.0 million supports the office’s NEC functions.37

The House and Senate Committees on Appropriations recommended, the House

and Senate passed, and the law provides the same appropriation as the President

requested.

National Security Council (NSC). The NSC advises the President on

integrating domestic, foreign, military, intelligence, and economic policies relating

to national security.

The President’s FY2004 budget proposed an appropriation of $10.6 million, an

increase of 35.8% over the $7.8 million appropriated in FY2003. Of the total, $9.8

million funds the operations of the NSC, including the Office for Combating

Terrorism, and $741,000 funds the President’s Foreign Intelligence Advisory

Board.38

S.Rept. 108-146, p. 134.

EOP Budget Submission, p. 102.

EOP Budget Submission, p. 129.

CRS-44

The House Committee on Appropriations recommended and the House passed

an appropriation of $9 million, $1.6 million less than the President’s request. The

Senate Committee on Appropriations recommended, the Senate passed, and the law

provides the same appropriation as the President requested. This funding level “will

support 60 full-time equivalent positions, or the same since the fiscal year 1996 level

for the normal activities of the NSC.”39

Office of Administration. The Office of Administration provides

administrative services, including information technology; human resources

management; library and records management; financial management; and facilities,

printing, and supply, to the Executive Office of the President.

The President’s FY2004 budget proposed an appropriation of $77.2 million, a

decrease of 15.1% from the $90.9 million appropriated in FY2003. Of the total,

$56.6 million is for salaries and expenses and $20.6 million is for capital

investment.40

The House Committee on Appropriations recommended and the House passed

an appropriation of $82.8 million of which $17.5 million would remain available

until expended for the Capital Investment Plan for continued modernization of the

information technology infrastructure within the EOP. This amount is $5.7 million

more than the President’s request. The committee report accompanying H.R. 2989

stated that the “recommendation maintains funding to continue the core enterprise

pilot program in this account (+$8,258,000) and acknowledges program savings for

security guard services provided to the Office of Science and Technology Policy ($1,096,000) and for information technology contract services provided to the

Homeland Security Council (-$1,500,000).” The Committee also recommended

continuation of the “pilot project to determine whether economies of scale could be

achieved through centralized procurement of certain common goods and services.”41

The Senate Committee on Appropriations recommended and the Senate passed

the same appropriation as the President requested. Of the total, $20.578 million

would remain available until expended for the Capital Investment Plan for continued

modernization of the information technology infrastructure within the EOP. The

EOP would submit a report to the Committees on Appropriations that includes a

current description of (1) the Enterprise Architecture, as defined in OMB Circular A130 and the Federal Chief Information Officers Council guidance; (2) the

Information Technology (IT) Human Capital Plan; (3) the capital investment plan for

implementing the Enterprise Architecture; and (4) the IT capital planning and

investment control process. The report would be reviewed and approved by OMB,

and reviewed by GAO. In its report accompanying S. 1589, the Committee states its

continuing support for the Centralized Procurement Pilot Project, “but recommends

funding for such items [information technology, rent, printing and reproduction,

S.Rept. 108-146, p. 135.

EOP Budget Submission, p. 73.

H.Rept. 108-243, pp. 166-167.

CRS-45

supplies and materials and equipment] in individual offices within the EOP until

saving and other benefits are identified.”42

The law provides the House-passed appropriation. Of the total, $20.578 million

would remain available until expended for the Capital Investment Plan for continued

modernization of the information technology infrastructure within the EOP. The law

includes funding for the core enterprise pilot program (+$8,258,000) and reflects

reductions for security guard services provided to the Office of Science and

Technology Policy (-$1,096,000) and for information technology contract services

provided to the Homeland Security Council (-$1,500,000). The Administration is

encouraged to include all EOP funds for the core enterprise pilot program under this

appropriation in the FY2005 budget request.

Office of Management and Budget (OMB). OMB assists the President

in discharging budgetary, management, and other executive responsibilities. The

agency’s activities include preparing the budget documents; examining agency

programs, budget requests, and management activities; preparing the governmentwide financial management status report and five-year plan (with the Chief Financial

Officer Council); reviewing and coordinating agency regulatory proposals and

information collection requirements; and promoting economical, efficient, and

effective procurement of property and services for the executive branch.

The President’s FY2004 budget proposed an appropriation of $77.4 million, an

increase of 24.9% over the $62.0 million appropriated in FY2003. According to the

EOP budget submission, “Since the start of the Administration, OMB has maintained

a very tight budget” and “In light of constrained funding levels over the past two

years, the majority of the increase in the FY2004 request will permit OMB to

continue current operations.”43

The House Committee on Appropriations recommended and the House passed

an appropriation of $62.8 million, $14.6 million less than the President’s request.

Savings would be derived from deferring proposed discretionary initiatives ($2.4

million), assuming 20 fewer staff years than budgeted ($1.5 million), limiting

reception and representation expenses to half of the budget estimated amount

($1,500), reducing funding for the office of information and regulatory affairs ($2.5

million), and transferring funds back to the pilot project on centralized procurement

of common goods and services discussed under the Office of Administration ($8.3

million). The Committee also directs OMB

To the extent that OMB establishes individual agency targets in its internal

guidance [on competitive sourcing targets], the agency is directed within 30 days

of establishing such targets, to submit a report to the House and Senate

Committees on Appropriations that indicates each agency’s competitive sourcing

target. The report should specifically detail the research and analysis that was

used in determining each agency’s individual target, goal or quota. To the extent

that such targets change over time, OMB is directed to maintain an up-to-date

S.Rept. 108-146, p. 136.

EOP Budget Submission, p. 189.

CRS-46

record of such changes and convey the changes periodically to the

[appropriations committees] and the appropriate legislative committees.

[T]o submit a report to the House and Senate Committees on Appropriations, not

later than April 1, 2004, detailing the amount of federal funds used by federal

grantees to pay dues, fees, or other types of membership costs to national

associations or other types of professional organizations.

[T]o involve the House and Senate Committees on Appropriations in the

development of PART [program assessment rating tool] ratings [which rate the

effectiveness of federal programs] at all stages in the process.44

The Senate Committee on Appropriations recommended and the Senate passed

an appropriation of $75.4 million, $2 million less than the President’s request.

“[T]he reduction is manageable by limiting the growth for staff and professional

development,” according to the committee report accompanying S. 1589.45 The

Committee also expressed its concern “that agencies are shielding significant,

influential data and related documents funded by the Federal government from the

requirements of the Federal Data Quality Act [FDQA]” and “directs the

Administrator of the Office of Information and Regulatory Affairs [OIRA] to submit

a report to the House and Senate Committees on Appropriations not later than 30

days on how guidelines to agencies may be updated to address these concerns and

improve the transparency of agency science.” Expressing strong support for the

Truman Scholarship program, the Committee directs the program’s board “to strictly

adhere to its statutory mandate to assure that at least one Truman scholar shall be

selected each year from each State in which there is at least one resident applicant

who meets the minimum criteria established by the Foundation.”46

The law provides an appropriation of $67.159 million and includes the

following instructions for the Office of Information and Regulatory Affairs (OIRA)

and the implementation of the Federal Data Quality Act.

The conferees direct that $1,000,000 of the total funding provided in [the OIRA]

appropriation be withheld from obligation until resolution of existing

programmatic concerns by House conferees are addressed and the House and

Senate Committees on Appropriations approve of such obligation.

The conferees are concerned that agencies are not complying fully with the

requirements of the Federal Data Quality Act (FDQA). The conferees agree that

data endorsed by the Federal Government should be of the highest quality, and

that the public should have the opportunity to review the data disseminated by

the Federal Government for its accuracy and have available to it a streamlined

procedure for correcting inaccuracies. The Administrator [of OIRA] is directed

to submit a report to the House and Senate Committees on Appropriations by

June 1, 2004 on whether agencies have been properly responsive to public

requests for correction of information pursuant to the FDQA, and suggest

H.Rept. 108-243, pp. 167-169.

S.Rept. 108-146, p. 136.

Ibid., p. 137.

CRS-47

changes that should be made to the FDQA or OMB guidelines to improve the

accuracy and transparency of agency science.47

The House- and Senate-passed funding and the law provide that none of the

funds appropriated or made available to OMB

may be used for the purpose of reviewing any agricultural marketing orders or

any activities or regulations under the provisions of the Agricultural Marketing

Agreement Act of 1937;

may be expended for the altering of the transcript of actual testimony of

witnesses, except for testimony of officials of the Office of Management and

Budget, before the Committees on Appropriations or the Committees on

Veterans’ Affairs or their subcommittees ... the preceding shall not apply to

printed hearings released by the Committees on Appropriations or the

Committees on Veterans’ Affairs;

may be available to pay the salary or expenses of any employee of the Office of

Management and Budget who calculates, prepares, or approves any tabular or

other material that proposes the sub-allocation of budget authority or outlays by

the Committees on Appropriations among their subcommittees.

Office of National Drug Control Policy (ONDCP). The ONDCP develops

policies, objectives, and priorities for the National Drug Control Program. The

account also funds general policy research to support the formulation of the National

Drug Control Strategy.

The President’s FY2004 budget proposed an appropriation of $27.3 million, an

increase of 3.8% over the $26.3 million appropriated in FY2003. Of the total, $25.9

million is for salaries and expenses operations and $1.4 million is for policy

research.48

The House Committee on Appropriations recommended and the House passed

an appropriation of $28.8 million (policy research and evaluation would be funded

at $1.35 million and the National Alliance for Model State Drug Laws would be

funded at $1.5 million). This amount is $1.5 million more than the President’s

request.

The Senate Committee on Appropriations recommended, the Senate passed, and

the law provides an appropriation of $27.997 million, $706,500 more than the

President’s request. Of the total, $1.35 million would remain available until

expended for policy research and evaluation and $1.5 million is to be used for the

National Alliance for Model State Drug Laws.

The Counterdrug Technology Assessment Center (CTAC). The

CTAC is the central counterdrug research and development organization for the

federal government.

H.Rept. 108-401, p. 1016.

EOP Budget Submission, p. 216.

CRS-48

The President’s FY2004 budget requested $40 million, a decrease of 16.1%

from the $47.7 million appropriated in FY2003. Of the total, $18 million is for

counternarcotics research and development projects (which shall be available for

transfer to other federal departments or agencies) and $22 million is for the continued

operation of the technology transfer program.49

The House Committee on Appropriations recommended and the House passed

the same appropriation as the President requested. Counternarcotics research and

development projects would be funded at $18 million (and available for transfer to

other federal departments or agencies) and the continued operation of the technology

transfer program would be funded at $22 million.

The Senate Committee on Appropriations recommended and the Senate passed

an appropriation of $42 million, $2 million more than the President’s request. Of the

total, $18 million would be for counternarcotics research and development projects

and would be available for transfer to other federal departments or agencies. The

continuation of the technology transfer program to State and local law enforcement

in their efforts to combat drugs is funded at $24 million. Several Committee

expectations with regard to CTAC are stated in the report accompanying S. 1589.

In addition, ONDCP is directed “to report to the House and Senate Committees on

Appropriations, no later than December 15, 2003, on CTAC funding allocations,

specifically providing a detailed spending plan for the research and development

program as well as the technology transfer program for fiscal years 2001, 2002, and

2003.” The Committee requests “that the fiscal year 2005 budget request include a

specific accounting of the total number of grant applications received and the number

awarded in the previous year so that the Committee may have a true understanding

of CTAC’s ability to meet demand.”50

The law provides the Senate-passed appropriation and includes the following

instructions.

The conferees direct ONDCP to report to the Committees on Appropriations, no

later than December 31, 2003, on CTAC funding allocations, specifically

providing a detailed spending plan for both the research and development

program and the technology transfer program for fiscal years 2001-2003. In

addition, the conferees direct the chief scientist to notify the Committees on

Appropriations on how fiscal year 2004 funds will be spent, as well as to provide

biannual reports on priority counterdrug enforcement research and development

requirements and the status of projects funded by CTAC. Finally, the conferees

direct ONDCP to include in the fiscal year 2005 budget request a specific

accounting of the total number of grant applications received and the number

awarded in the previous fiscal year.51

Federal Drug Control Programs. The High Intensity Drug Trafficking

Areas (HIDTA) program provides assistance to federal, state, and local law

FY2004 Budget, Appendix, p. 1053.

S.Rept. 108-146, p. 138.

H.Rept. 108-401, p. 1017.

CRS-49

enforcement entities operating in those areas most adversely affected by drug

trafficking. Funds are disbursed at the discretion of the director of ONDCP for joint

local, state, and federal initiatives.

The President’s FY2004 budget proposed an appropriation of $206.4 million,

a decrease of 8.2% from the $224.9 million appropriated in FY2003. No less than

51% of the total would be transferred to State and local entities for drug control

activities, which would be obligated within 120 days of enactment of the

Transportation/Treasury appropriations act. Up to 49% of the total would remain

available until September 30, 2005, and could be transferred to federal agencies and

departments at a rate to be determined by the director, of which not less than $2.1

million would be used for auditing services and associated activities, and at least

$500,000 of the $2.1 million would be used to develop and implement a data

collection system to measure the performance of the High Intensity Drug Trafficking

Areas Program.52

The House Committee on Appropriations recommended and the House passed

an appropriation of $226.350 million, $20 million more than the President’s request.

According to the committee report accompanying H.R. 2989, the increase is

to meet requirements to fully fund existing HIDTA program activity, to expand

HIDTAs where such expansion is justified, to fund new HIDTAs as appropriate,

and to fund HIDTA activities through the Central Priority Organization Targets

(CPOT) initiative .... The Committee directs that HIDTAs existing in fiscal year

2003 shall receive funding at least equal to the fiscal year 2003 initial allocation

level, which does not include funding provided through the CPOT initiative ....

As ONDCP reviews candidates for new HIDTA funding, the Committee

recommends that it consider the following: increased funding for the Central

Florida, Central Valley, Lake County, and Midwest (Platte and Madison

counties, Nebraska) HIDTAs; and expansion of the Appalachian HIDTA

(Letcher County, Kentucky).53

The Senate Committee on Appropriations recommended and the Senate also

passed an appropriation of $226.350 million, $20 million more than the President’s

request. The additional amount, which is subject to reprogramming guidelines, is to

fully fund existing HIDTA program activities, expand existing HIDTAs where

warranted, and fund new HIDTAs and new HIDTA activities that are consistent with

the program’s mission. Existing HIDTAs are to be funded at no less than the FY2003

initial allocation level, unless the ONDCP Director submits to, and the House and

Senate Committees on Appropriations approve, a request to reprogram funds “based

on clearly articulated priorities for the HIDTA program, as well as published ONDCP

performance measures of effectiveness.”54 No funds would be used for any further

or additional consolidation of the Southwest Border HIDTA, except for the operation

of an office with a coordinating role, until the office submits a report on the structure

of the HIDTA. According to the committee report accompanying S. 1589:

FY2004 Budget, Appendix, p. 1051.

H.Rept. 108-243, p. 170.

S.Rept. 108-146, p. 139.

CRS-50

In allocating the HIDTA funds, the Committee expects the Director of ONDCP

to ensure that the activities receiving these limited additional resources are used

strictly for implementing the strategy for each HIDTA, taking into consideration

local conditions and resource requirements. These funds should not be used to

supplant existing support for ongoing Federal, State, or local drug control

operations normally funded out of the operating budgets of each agency. The

remaining funds may be transferred to Federal agencies and departments to

support Federal antidrug activities.55

Several Committee expectations with regard to the HIDTA program are stated

in the report. Additionally, the Committee directs ONDCP to consult with the House

and Senate Committees on Appropriations “in the developmental stages of any new

grant programs that it plans to institute in the future.”56 ONDCP also is directed by

the Committee “to coordinate with other Federal agencies with a core mission to

target international drug traffickers in an effort to pool personnel, intelligence, and

available resources to further the originally conceived CPOT [Consolidated Priority

Organizational Targets] program and to report to the House and Senate Committees

on Appropriations no later than 90 days after enactment of this Act on the progress

of these efforts.” The General Accounting Office is directed “to conduct a study on

the effectiveness of the CPOT program, its conformity with the HIDTA mission ...

and what resources other Federal law enforcement agencies contribute to the

program.”57 Committee views with regard to methamphetamine reduction, and issues

specific to the Midwest, New England, Southwest Border, Appalachia, Northwest,

and Southern Ohio HIDTAs also are expressed in the report.58

The law provides the same appropriation as passed by the House and Senate. No

less than 51% of the total shall be transferred to State and local entities for drug

control activities, which shall be obligated within 120 days of enactment of the

Transportation/Treasury appropriations act. Up to 49% of the total shall remain

available until September 30, 2005, and may be transferred to federal agencies and

departments at a rate to be determined by the director, of which not less than $2.1

million shall be used for auditing services and associated activities, and at least

$500,000 of the $2.1 million shall be used to develop and implement a data

collection system to measure the performance of the HIDTA program. HIDTAs

designated as of September 30, 2003 shall be funded at no less than the FY2003

initial allocation levels unless the director submits to the Committees on

Appropriations and the committees approve, justification for changes in those levels

based on clearly articulated priorities for the HIDTA programs as well as published

ONDCP performance measures of effectiveness. A request, complying with

reprogramming guidelines, shall be submitted to the Committees on Appropriations

for approval prior to the obligation of funds of an amount in excess of the FY2004

budget request.

Ibid.

Ibid., p. 140.

Ibid.

S.Rept. 108-146, pp. 140-142.

CRS-51

Other Federal Drug Control Programs (formerly The Special

Forfeiture Fund). The account, administered by the director of ONDCP, supports

high-priority drug control programs. The funds may be transferred to drug control

agencies or directly obligated by the ONDCP director.

The President’s FY2004 budget proposed an appropriation of $250 million, an

increase of 12.7% over the $221.7 million appropriated in FY2003. Of the total,

$170 million is to support a national media campaign, as authorized by the Drug-Free

Media Campaign Act of 1998; $70 million is for a program of assistance and

matching grants to local coalitions and other activities, as authorized in chapter 2 of

the National Narcotic Leadership Act of 1988, as amended; $4.5 million is for the

Counterdrug Intelligence Executive Secretariat; $2 million is for evaluations and

research related to National Drug Control Program performance measures; $1 million

is for the National Drug Court Institute; $1.5 million is for the United States AntiDoping Agency for anti-doping activities; and $1 million is for the United States

membership dues to the World Anti-Doping Agency.59

The House Committee on Appropriations recommended and the House passed

an appropriation of $230 million. The money would be allocated in the same manner

as the President proposed except that $150 million would support a national media

campaign. This amount is $20 million less than the President’s request. According

to the committee report accompanying H.R. 2989, “The Committee has changed the

name of the Special Forfeiture Fund account to Other Federal Drug Control Programs

as requested by the President, reflecting the fact that this account receives no

forfeiture funds but only direct appropriations.” The report “encourages ONDCP to

explore options for using alternative media in schools as a way of utilizing traditional

learning tools in non-traditional ways, such as children’s books tailored with an antidrug message, provided that such media can be utilized in a manner consistent with

the goals and parameters of the Media Campaign.”

The report also states the Committee’s belief “that without a convincing

demonstration that the Media Campaign has had an impact on youth drug use that

can be at least somewhat different from the general trends in such use, any increase

in funding for the Media Campaign cannot be justified at this time.” The Director

of ONDCP is directed to submit an evaluation plan for the Media Campaign for fiscal

years 2004-2008 to the Committees on Appropriations no later than 120 days after

this Act’s enactment. The Committee also is requiring “that no less than 77 percent

of funds be spent on advertising time and space.”60

The Senate Committee on Appropriations recommended and the Senate passed

an appropriation of $174 million, $76 million less than the President’s request. Of

the total, $100 million is for continuation of the National Youth Anti-Drug Media

Campaign; $7.2 million is for the United States Anti-Doping Agency; $60 million

is for the Drug-Free Communities Program (including $1 million to continue the

National Community Anti-Drug Coalition Institute); $1.5 million is for the

Counterdrug Executive Secretariat; $1 million is for the National Drug Court

FY2004 Budget, Appendix, p. 1052.

H.Rept. 108-243, pp. 171-172.

CRS-52

Institute; $2 million is for Performance Measures Development; and $800,000 is for

United States dues to the World Anti-Doping Agency. Noting that the current source

of funding for this account is direct appropriations, the Committee concurred with

changing the name of the account.

The committee report accompanying S. 1589 includes several directives related

to the National Media Campaign. According to the report:

Today, a large portion of the campaign’s budget pays for outside media and

advertising consultants and the Committee is concerned about the amount of

resources that are being consumed by these parties. The Committee has provided

$100,000,000 for the national media campaign and directs that no less than 80

percent of the funding provided be used for the purchase of advertising time and

space unless ONDCP submits and the House and Senate Committees on

Appropriations approves a request for reprogramming of the funds based on

clearly articulated principals and priorities. The Committee directs the General

Accounting Office to conduct a study to determine the extent to which outside

consultants are being used by the Media Campaign, the cost-effectiveness of this

method, and if this system is producing more effective ads that aid ONDCP in

its core mission.61

With regard to the campaign’s industry match program, under which federal

funds for paid advertising were to be matched dollar-for-dollar by industry, the

committee report states that:

It has come to the Committee’s attention however, that while ONDCP is

purchasing peak time for specific ads, they are agreeing to have that time and

space matched with different ads at different times. The Committee believes that

this violates the intent of Congress and directs ONDCP to provide a detailed

report to the House and Senate Committees on Appropriations regarding all

advertising, their placement and what matches are being provided by all media

in all markets. Further, the Committee directs ONDCP to more closely scrutinize

the matching proposals and to ensure that the one to one match more

appropriately mirrors the time and space that has been purchased.62

The report also states that “the Committee intends to rely on the scientifically

rigorous NIDA study to gauge [the advertising campaign’s] ultimate impact.”63

The law provides an appropriation of $229 million. Of the total, $145 million

is to support a national media campaign (no less than 78% shall be used to purchase

advertising time and space); $70 million is to continue a program of matching grants

to drug-free communities (of which $1 million is a directed grant to the Community

Anti-Drug Coalitions of America for the

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