# Appropriations for FY2004: Transportation, Treasury, Postal Service, Executive Office of the President, General Government, and Related Agencies > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3ARL31808 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** March 1, 2004 - **Citation:** RL31808 ## Text Order Code RL31808 CRS Report for Congress Received through the CRS Web 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 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 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 G&F G&F RSI 7-.... 7-.... 7-.... 7-.... 7-.... 7-.... 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 58,794 Title II: Department of the Treasury 10,849 11,343 11,273 11,196 11,166 11,166 Title III: Postal Service 107 97 97 97 97 97 Title IV: Executive Office of the President 777 791 777 735 787 787 Title V: Related Agencies 19,151 19,555 19,021 20,180 19,259 19,259 Title VI: General Provisions 279 — 15 — — — 86,588 85,863 85,819 91,028 89,845 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 9.9 10.5 10.8 11.3 Title III: Postal Service 0.1 0.1 0.1 0.7 0.1 0.1 Title IV: Executive Office of the President 0.7 0.7 0.7 0.8 0.8 0.8 Title V: Related Agencies c 14.6 15 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 1 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. CRS-5 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 a Enacted 173 177 52 50 13,490 14,007 FY2004 House Passed 159 63 10,540 FY2004 FY2004 FY2004 Senate Conference Enactedb b Passed 172 166 166 52 52 52 13,971 13,930 13,930 7,023 7,591 7,532 7,536 7,531 7,531 2,942 2,916 2,900 2,916 2,880 2,880 3,378 3,400 — 3,400 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 — 157 150 125 125 305 447 427 483 366 366 434 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 1,214 599 628 628 628 2,413 321 2,507 2,512 2,510 2,510 14 230 14 219 15 219 14 228 14 222 14 222 105 55 18 55,674 118 55 18 54,266 111 55 18 *55,171 110 56 18 59,142 113 56 18 58,794 113 56 18 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. CRS-6 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 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...) CRS-7 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 2 (...continued) Trust Fund Issues in the 106th Congress, by (name redacted). CRS-8 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 CRS-9 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. CRS-10 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 CRS-11 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)). 3 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. CRS-12 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 4 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. CRS-13 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 5 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. CRS-14 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 6 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.” CRS-15 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 7 Excluding funds for the National Driver Register. CRS-16 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 8 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 8 (...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 9 For FY2003, Congress also deferred Amtrak’s repayment of a $100 million loan to the DOT. 10 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 11 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 3,429 3,429 3,429 Capital Investment Grants & Loans Program (Section 5309) Total 3,016 2,729 3,107 3,140 3,138 3,138 New Starts Program 1,207 1,515 1,214 1,318 1,324 1,324 Fixed Guideway Modernization Program 1,207 1,214 1,214 1,214 1,207 1,207 Bus Discretionary Program 603 — 678 607 **607 **607 Non-Urbanized Areas Formula Program (Section 5311) 237 359 239 239 239 239 Job Access & Reverse Commute Program 149 — 85 125 125 125 Elderly & Individuals with Disabilities Formula Program (Section 5310) 90 87 91 91 91 91 Rural Transportation Accessibility Incentive Program (Section 3038), also known as the Over-the-Road Bus Accessibility program 7 7 7 7 7 7 122 122 126 126 Program FY2004 Planning & Research 121 Other 145 108 151 152 155 155 New Freedom Initiative — 145 — — — — 7,179 7,226 7,231 7,305 7,309 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 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 3 Enacte d FY2004 Request FY200 4 House Passed FY200 4 Senate Passed FY200 4 Confer encea FY2004 Enacte d Departmental Offices 158 167 176 175 176 176 Department-wide Systems and Capital Investments 37 37 37 37 36 36 Office of Inspector General 11 — 13 13 13 13 Treasury Inspector General for Tax Administration 124 — 128 128 128 128 Treasury Inspector General — 135 — — — — Air Transportation Stabilization Program 6 3 3 3 3 3 Treasury Building Repair and Restoration 29 25 25 25 25 25 Financial Crimes Enforcement Network 51 58 58 58 58 58 Interagency Crime and Drug Enforcement 107 — — — — — Financial Management Service 221 229 229 229 229 229 Alcohol and Tobacco Tax and Trade Bureau 79 80 80 80 80 80 Bureau of the Public Debt 189 174 174 174 174 174 Internal Revenue Service, Total 9,835 10,437 10,352 10,276 10,245 10,245 Processing, Assistance and Management 3,930 4,075 4,038 4,048 4,033 4,033 Tax Law Enforcement 3,705 3,977 4,221 4,173 4,196 4,196 Information Systems 1,622 1,670 1,629 1,591 1,591 1,591 Business Systems Modernization 364 429 429 429 390 390 Health Insurance Tax Credit Administration 70 35 35 35 35 35 10,840 11,343 11,273 11,196 11,166 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 13 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. 14 CRS Report RL30196, Pension Issues: Cash Balance Plans, by Patrick J. Purcell, p. 15. 15 Ibid., pp. 15-16. 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. 17 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. 18 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 a FY2004 Enacted Payment to the Postal Service Fund 29 29 29 29 29 29 Advance Appropriation, FY2002/2003 47 31 31 31 31 31 Advance Appropriation, FY2004 31 37 37 37 37 37 Total, Postal Service 107 97 97 97 97 97 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 19 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 a FY2004 Enacted Compensation of the President 0.5 — 0.5 0.5 0.5 0.5 The White House Office (salaries and expenses) 50 — 66 62 69 69 Homeland Security Council 19 — — 8 — — Executive Residence at the White House (operating expenses) 12 — 13 13 13 13 White House Repair and Restoration 1 — 4 4 4 4 Office Council of Economic Advisors 4 — 4 5 5 5 Office of Policy Development 3 — 4 4 4 4 National Security Council 8 — 9 11 11 11 Office of Administration 91 — 83 77 83 83 The White House — 184 — — — — Office of Management and Budget 62 77 63 75 67 67 Office of National Drug Control Policy (salaries and expenses) 26 27 29 28 28 28 Office of National Drug Control Policy Counterdrug Technology Assessment Center 48 40 40 42 42 42 Federal Drug Control Programs: High Intensity Drug Trafficking Areas Program 225 206 226 226 226 226 Federal Drug Control Programs: Other Programs 222 250 230 174 229 229 CRS-37 FY2004 House Passed FY2004 Senate Passed 4 4 4 4 4 0.3 0.3 0.3 0.3 0.3 FY2003 Enacted FY2004 Request Office of the Vice President (salaries and expenses) 4 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 a 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 20 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 23 ! 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 21 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. 22 Ibid. 23 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.) 24 EOP Budget Submission, p. 11. 25 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 a [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL31808. Public record. Not legal advice.