SMARTER, MORE EFFECTIVE FUNDING FOR AMTRAK

June 15th, 2005 - -

Amtrak Funding:  The bill provides $550 million for Amtrak, which is $550 million more than was included in the budget request for Amtrak operations, and $657 million below the enacted level.  This bill prohibits federal funding for any Amtrak route that requires a subsidy of $30 or more per passenger – most of which are long-distance trains.  The mark allows Amtrak to use non-federal resources to support other routes, and does not mandate that any routes be shut down or truncated.  In a time of flat budgets and large deficits, taxpayers cannot continue to subsidize poor management and unprofitable services.

Amtrak Operations and Mismanagement:  For too long, Amtrak has played a Chicken Little game with Congress over its funding levels.  Officials would declare a crisis, threatening immediate shut downs of service because of supposed inadequate funding.  Further analysis reveals that Amtrak alone is to blame for the bulk of their problems – most notably taking on nearly $4 billion in debt, much of which occurred in the mid- to late-1990s, yet failing to make the infrastructure investments along the Northeast Corridor that are so critically needed to maintain efficient operations.  Instead, important maintenance was deferred to pursue money-losing ventures, which in turn increased operational costs.  In addition, Amtrak points to increased ridership as a sign that the railroad is on its way to financial health and as a justification that Congress continue to inject vast sums of taxpayer resources in passenger rail service.  However, in order to increase ridership, Amtrak has charged ticket prices that are well below costs. For example, Amtrak is currently offering fares that are discounted by 90% – this is simply not good business in light of Amtrak’s current projection that 2005 revenues will be $95 million short of its original estimate.

Unprofitable Services:  The Chairman Mark’s fully supports rail service for 4 out of 5 riders or 80 percent of Amtrak’s ridership.  Specifically, the bill permits Amtrak to use federal funds to support operations for:  all routes in the Northeast Corridor including spurs that run from New York City to Albany, from New Haven, Connecticut to Vermont and from Portland, Maine to Boston; routes running through Pennsylvania; most corridor routes in the Midwest; trains running from Portland, Oregon to Vancouver; and corridor routes in California. In order to address capital needs, the Chairman’s Mark includes $50 million for the Secretary of Transportation to improve the condition of the Northeast Corridor. 

The proliferation of low cost airfares makes national railroad service less necessary.  For example, a rider taking a train from Orlando to Los Angeles receives a $466 taxpayer subsidy on top of a $165 ticket for a trip that takes more than 71 hours.  For $211 – less than half of the federal subsidy alone – a traveler could fly from Orlando to Los Angeles in just six hours. 

HIGHLIGHTS OF FY06 TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT BILL

June 15th, 2005 - -

FY05 Comparable:  $63.172 billion ($18.418 billion Mandatory)

FY06 Request:  $60.705 billion (assumes transfer of economic development programs to Commerce Department)

FY06 Chairman’s Mark:  $66.935 billion ($18.993 billion Mandatory)

The bill represents a 6% growth over last year’s comparable levels.  The bulk of this increase goes to providing guaranteed levels of discretionary spending for various Highway, Transit and Aviation programs.  If the bill did not provide these mandated levels, the rules of the House of Representatives would prevent consideration of the bill.  This preferential treatment is unique to certain transportation programs and is not afforded to any other discretionary program including Veteran’s Medical Care, Homeland Security funding or National Defense programs. 

Boosts Highway Spending:

Federal-aid highways spending is $37 billion, as set by HR 3.  This is an increase of $1.6 billion over the President’s request and $1.9 billion over the FY 2005 enacted level, excluding emergency supplementals.

Supports Aviation:

A total of $14.427 billion is provided to the Federal Aviation Administration (FAA) -- $877 million above the fiscal year 2005 level and $1.741 billion above the President’s request.  This includes $8.2 billion in FAA operations, $3.6 billion for the Airport Improvement Program and $104 million for Essential Air Service.  The bill includes $25 million to hire and train 595 new air traffic controllers, and an additional $8 million above the request to hire and train of safety inspectors in the office of aircraft certification and flight standards.  The bill also extends the current provisions of war risk insurance, including current premium price caps, for one additional year. 

Addressing Critical Housing Needs: 

The Department of Housing and Urban Development (HUD) is funded at $37.5 billion, $$1.547 billion above last year's level and $4.32 billion above the President's Request.

Funding for Section 8 programs is split into two accounts to provide better accountability and oversight.

n      Tenant-Based Rental Assistance (Section 8 vouchers) is funded at $15.53 billion, $765 million over last year and $314 million below the request. Funding for the renewal of vouchers is significantly increased by $735 million to restore the reduction mandated last year and fund all anticipated increases in the costs. The costs of this program alone is now approaching 50% of HUD’s total budget.

n      Project-Based Rental Assistance (project-based contracts) is funded at $5.10 billion, $210 million below last year and $16 million above the request. This fully funds all contracts including inflation and expands the use of inspectors to ensure that tenants live in decent affordable housing.

n      Public and Indian Housing programs are funded at $6.8 billion and increase of $1.6 billion over last year and $466 million over the requested level. Implements a newly negotiated formula for distributing operating subsidies. Also includes $600 million for the Native American Housing Block Grants, $17 million above the request.

n      Provides $4.2 billion for the Community Development Block Grant of which  $3.86 billion in the formula funds to entitlement communities and states, a reduction of $250 million from the amount for the formula last year, The Committee did not agree to the proposal to eliminate this program, consolidate its functions and transfer the implementation to the Department of Commerce.

n      HOME Investments Partnership is level funded at $1.9 billion, $41 million below the request, but increases the amount for the formula to participating jurisdictions by $60 million above the requested amount.

n      Includes $1.34 billion for Homeless programs, an increase of $100 million over last year, $285 million for Housing Opportunities for Persons with AIDS (HOPWA), $741 million for Elderly Housing, and $238 million for Housing for Persons with Disabilities. The Committee did not agree to cut funding for assistance to victims of  HIV/AIDs or  eliminate funding for the construction of facilities for low income disabled  persons, as requested.

n      Provides the requested level for the Office of Federal Housing Enterprise Oversight of $60 million.

n      Eliminates several lower priority programs, as requested, in order to help meet the rapidly increasing costs of rental assistance in Section 8 and public Housing and stay within the Committees allocation.

Capital Investments in Transit

Transit program spending totals $8.482 billion as mandated by HR 3, $836 million above FY05 and $701 above the request. 

Supports National Anti-Drug Efforts

Provides $497 million to the Office of National Drug Control Policy, including:

n      $227 million for the High Intensity Drug Trafficking Areas program.

n      $120 million for the National Youth Anti-Drug Media Campaign

n      $80 million for the Drug-Free Communities program.

Provides for Smarter, More Efficient Amtrak Operations

The bill provides $550 million for Amtrak, $190 million over the President’s budget request and $657 million below FY05.  The bill also prohibits taxpayer funding of Amtrak’s most unprofitable routes.  (see attachment for more info)

District of Columbia Federal Payment:                                            District Funds:

FY05 Bill:  $556 million                                                                        FY06 Bill:  $8.3 billion

FY06 Budget Request:  $573.4 million                                      FY06 Request: $8.3 billion

FY06 Funding:  $604 million

Federal Judiciary:  Provides a 6% increase in funding for Federal Judiciary.  Total funding is $5.8 billion, $341 million above FY05 and $185 million below the request.  This level will fully fund the court’s revised request for security improvements at Federal judicial facilities, and enable the courts to effectively process priority criminal, civil and bankruptcy cases. 

Agency Funding

Department of Treasury is funded at $11.6 billion, $336 million above FY05 and $94 million below the President’s request. 

The Internal Revenue Service is funded at $10.5 billion, $313 million above FY05 and $130 million below the request.  The bulk of the increase is for the tax enforcement activities of the IRS.

Federal Election Commission is funded at the budget request of $55 million, $3 million above FY05 and the Election Assistance Commission is funded at  $16 million. 

National Historical Publications and Records Commission is funded at $7.5million ($5.5 million for grants and $2 million for administrative costs), $7.5 million above the President’s request.

 Other provisions

 Maintains both current law requiring contraceptive coverage under FEHBP (except in certain circumstances) and current law prohibiting the use of funds under FEHBP to pay for an abortion, except where the life of the mother is endangered or in case of rape or incest.

 Maintains current law on all restrictions on federal and local funds for the District of Columbia.