Appropriations for FY2004: Transportation, Treasury, Postal Service, Executive Office of the President, General Government, and Related Agencies
Released: 2004-03-01T00:00:00

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 theTransportation, Treasury and Independent Agencies Appropriations bill (Division F); theHouse 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 anacross-the-board rescission of 0.59% (the figures in this report do not reflect the impact of thatrescission). The Act also includes an additional $1.1 billion in funding for transportation andelection 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 beenpassed 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 billionmore than the Administration requested. The major financial change from the Administrationrequest 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 $4.4billion in highway funding; another major difference, the deletion of the $3.4 billion for grants-in-aidto airports, was the result of a point of order against funding the administrative expenses of theprogram from contract authority.

Overview

Legislative Status

Table 1. Status of FY2004 Departments of Transportation and Treasury and Independent Agencies Appropriations

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 ofTransportation (DOT) and its related agencies, and the Department of the Treasury, the PostalService, the Executive Office of the President, and General Government provisions, in a singleappropriations bill. This change is a result of the creation of a new federal department, theDepartment of Homeland Security, and the reorganization of the subcommittee structure of theHouse and Senate Committees on Appropriations, creating new subcommittees for HomelandSecurity 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 ofTransportation 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 toDHS. 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 givesthe 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 andDepartment of the Treasury and General Government appropriations. The FY2003 figures in thisreport 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, $740million below the final comparable FY2003-enacted figure (less than 1%). Table 2 shows theallocation of funding within the overall request.

Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004 (millions of dollars)

Source: FY2004 Transportation-Treasury Appropriations bill Conference Report BudgetAuthoritytable provided by the House Committee on Appropriations and House Report 108-243, Table: Comparative Statement of Budget Authority , except "Senate Reported" from Senate Committee onAppropriations, S.Rept. 108-146 , Table: Comparative Statement of Budget Authority . "Total" isfrom "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 Serviceinto the"Related Agencies" ("Independent Agencies" in the Senate report) Title. The conference report tablefollowed the Senate convention; therefore, in this table the Postal Service appropriation has beensubtracted from the Senate and Conference totals for Title V.

*During House deliberations on H.R. 2989 , funding for two programs was struck onpoints 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 theFederal Motor Carrier Safety Administration's Border Enforcement program ($47 million). Thisreduced 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%; thatrescission is not reflected in these figures.

Major Funding Trends

Table 3: Funding Trends for Transportation/Treasury Appropriations, FY1999-FY2004 (billions of current dollars)

Source: United States House of Representatives, Committee on Appropriations,Comparative Statement of Budget Authority tables from fiscal years 1999 through2004.

a. Figures for Department of Transportation appropriations for FY1999-FY2003have been adjusted for comparison with FY2004 figures by subtracting theUnited States Coast Guard, the Transportation Security Administration, theNational Transportation Safety Board, and the Architectural and TransportationBarriers Compliance Board, and by adding the Maritime Administration.

b. Figures for Department of the Treasury appropriations for FY1999-FY2003 havebeen adjusted for comparison with FY2004 figures by subtracting the Bureauof Alcohol, Tobacco, and Firearms, the Customs Service, the United StatesSecret Service, and the Law Enforcement Training Center.

c. Figures for Related Agencies appropriations for FY1999-FY2003 have beenadjusted by adding the National Transportation Safety Board and theArchitectural 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-boardrescission 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 budgetrequest conformed to the basic outline of both the Transportation Equity Act for the21st Century (TEA-21; P.L. 105-178 ) which authorizes spending on highways andtransit, and the aviation funding authorized in the Wendell Ford Aviation Investmentand Reform Act of the 21st Century (FAIR21 or AIR21; P.L. 106-181 ) (see Appendix1 for more information on these authorizing acts). However, the request did proposea few changes to the highway and transit funding structure, in line with theAdministration's reauthorization proposal; see the sections on the Federal HighwayAdministration and Federal Transit Administration for details.

Table 4. Title I: Department of Transportation Appropriations (in millions of dollars -- totals may not add)

Note: Figures were taken from an FY2004 Transportation-Treasury Appropriations bill ConferenceReport Budget Authority table provided by the House Committee on Appropriations. Because ofdiffering treatment of offsets, the totals will not always match the Administration's totals. Thefigures 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 smallerprogram line-items.

*During House deliberations on H.R. 2989 , funding for two programs was struck onpoints of order, which reflected a dispute over some aspect of the way the funds were beingprovided, 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 programsmay 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.

c. These amounts are in addition to the $50 million annual authorization for the Essential AirService program; thus, the total FY2004 funding would be $102 million ($50 million + $52million).

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

e. While the FY2004 FMCSA appropriation was $81 million less than requested, Congress providedan additional $111.5 million for grants to states for motor carrier safety activities under FHWAmiscellaneous appropriations.

f. NHTSA's FY2004 request includes $100 million transferred from FHWA; this funding waspreviously provided through the FHWA but administered by NHTSA. Therefore, the difference between budgetary resources available to NHTSA for FY2003 and its FY2004request 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 thatrepayment.

h. The figures do not reflect $14 million in permanent appropriations. Therefore, the total resourcesfor RSPA for FY2003 may be seen as $119 million, and the total funding for FY2004 as $132million.

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 resourcesavailable for the current fiscal year, the total resources available could be seen as $55.9 billionfor 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 andBudget). This is a $440 million increase in funding over the FY2003 enacted levelof $13.5 billion (this amount reflects a 0.65% rescission to which some parts of theFAA budget were subjected). The amount also differs slightly from the amountproposed in the House bill, H.R. 2989 , just over $14 billion and in theSenate bill, S. 1589 , that provided $13.97 billion. The majority of theincreased funding in P.L 108-199, and each of the other bills, would be used forOperations & Maintenance (O&M) expenses. With the exception of some programadjustments there are essentially no major new initiatives in any of the FY2004legislative 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 fundmonies. In FY2002 a Treasury general fund contribution of $1.1 billion wasprovided for O&M funding. The Administration proposed a general fundcontribution of almost $3.3 billion for FY2003. Whereas the general fundcontribution for FY2002 was on the low side historically, the Administration wastrying 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 FY2004the House Appropriations Committee initially suggested that $1.5 billion be providedfrom the general funds. During Floor debate the bill was amended to raise the generalfund contribution to approximately $3.5 billion. The Senate bill provided generalfunds at the $1.5 billion level. The FY2004 Act differs from both, however, andraises the general fund contribution to $4.5 billion. Historically, this funding splithas been an important part of the annual FAA budget debate. The rationale behindthe general fund contribution has been that the public at large realizes some benefitfrom aviation whether it uses the system or not. (2)

Operations and Maintenance (O&M). The FY2004 Act provides $7.5 billion for FY2004 O&Mspending. The same amount was included in both the House and Senate bills. Eachproposal 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 ofFAA personnel engaged in air traffic control, certification, and safety-relatedactivities. Much of the increased funding called for in the FY2004 request is forincreased air traffic control system costs and safety-related activities.

Facilities and Equipment (F&E). P.L. 108-7 provided $2.96 billion for this activity in FY2003. The FY2004 Actprovides for slightly less, $2.91 billion, and is in line with decreases in spendingproposed in both the House and Senate. A Senate proposal to transfer $100 millionof F&E money to the Airport Improvement Program (AIP) was dropped inConference. 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 controland 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 ismore than the House proposal of $108 million and slightly more than the almost $119million in the Senate proposal. The enacted level is well below the $148.5 millionlevel 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 overflightsof United States territory by foreign aircraft. EAS has had an annual authorizedfunding level of $50 million for the last several years. The overflight fundingmechanism, however, has never provided this much annual funding, so additionalfunding has been provided from other sources. The EAS program continues to enjoysignificant support in Congress. As a result, $102 million was provided for thisprogram 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 onthe overflight fee as its principal funding mechanism. This is the same level offunding as had been proposed by the Senate and $11 million less than had beenprovided by the House. A major feature of the bill is a provision that precludesfunding of a pilot cost sharing program that is included in FAA reauthorizationlegislation expected to be enacted shortly. In setting the $102 million program levelthe FY2004 Act rejects the Bush Administration's calls to reduce the size of the EASprogram by half and require a local contribution at each airport receiving EASservice. Also absent in the FY2004 Act is a House provision requiring that DOT askeach community receiving EAS assistance to report by March 1, 2004 on howprogram coordination and funding could be improved.

Grants-in-Aid for Airports. The Airport Improvement Program (AIP) provides grants for airport development andplanning. The Bush Administration FY2004 budget proposal requested $3.4 billionfor 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 AIPfunds be provided for the Small Community Air Service Program. The reportlanguage for AIP discretionary grants directed that the FAA give priority to projectsat 171 listed airports, but did not set the grant amounts. During floor debate on thebill the entire AIP provision was struck from the bill on a point of order. Consequently, the House-passed bill, H.R. 2989 , contained no fundingfor 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 billionobligation limitation. The report language for AIP discretionary grants directed theFAA to give priority to projects at 241 airports named in the report. The bill includeda prohibition against using AIP grants for airport changes or improvements neededto 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 $100million transfer from the F&E account included in the Senate-passed bill. P.L.108-199 prohibits the use of AIP grants to replace baggage conveyor systems,reconfiguration of terminal baggage area or other airport improvements toaccommodate bulk explosive detection systems. It also prohibits the use of AIP orany other funds in the bill to implement a ten-city Essential Air Service localparticipation pilot program set forth in Section 408 of the recently passed FAAreauthorization Act (VISION 100; H.R. 2115 ). The report language ofthe conference report ( H.Rept. 108-401 ) place-names, with dollar amounts, nearly150 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 theagency.

The Administration Request. For FY2004, the President requested $30.2 billion for FHWA. This would haverepresented a decrease of $2.2 billion (-7%) from the FY2003 appropriation of $32.4billion. The proposed obligation limitation, which supports most of the FAHP, wasset 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 guaranteefunding) 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 transportationreauthorization proposal. A new $1.0 billion Infrastructure Performance andMaintenance initiative was one of the proposed changes. The program's funds wouldhave been distributed, according to the Surface Transportation Program formula, foruse on "ready-to-go" projects that addressed congestion and improved infrastructureconditions. States would have had to commit these funds during the first six monthsof the fiscal year. Funds not obligated within this time frame would have beenreallocated 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'sgeneral fund, to the highway trust fund. This change has been projected to addroughly $600 million to highway trust fund revenues in FY2004. This change wouldrequire legislation in addition to the appropriations bill.

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 $2.2billion 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 FY2003level and $4.1 billion above the President's request. The overall total includedexempt obligations of $931 million (the same as the requested amount). As has beencommon in recent years, the federal-aid highway discretionary programs were heavilyearmarked.

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 forFHWA. At $33.8 billion, the obligation limitation was set roughly $500 millionabove the House bill. The $931 million for exempt obligations was the same as inthe House version. As is true with the House bill, the discretionary programs wereheavily earmarked by the Senate. The bill also directed that $175 million under thelimitation on administrative expenses be made available for surface transportationprojects earmarked in the report language of the bill.

The Consolidated Appropriations Act, 2004 (P.L. 108-199). The enacted Consolidated AppropriationsAct 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 theSenate total. This is an increase of more than 6% over the FY2003 enacted total andmore than 12% over the Administration's budget request. At $33.8 billion thelimitation 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-21authorization cycle, the enacted FY2004 conference agreement either completely orheavily earmarks all of the discretionary programs that are under the nominal controlof the FHWA. For example, the Interstate Discretionary, Bridge Discretionary, FerryBoats and Ferry Terminals, Transportation and Community and System PreservationPilot Program (TCSP), as well as the National Corridor Planning and Developmentand 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), SurfaceTransportation Program (STP), Congestion Mitigation and Air Quality ImprovementProgram (CMAQ), and the Highway Bridge Replacement and RehabilitationProgram) that in the past were generally left free of earmarks and under the controlof the states. Section 115 of Division F in the Conference Report earmarks over $1billion of unobligated core program funds. Funding for each project is to be drawnfrom 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'sSTP funds distribution. The funds are available for obligation until expended and thefederal share is 100%. Providing a 100% federal share for earmarked projects is alsoa departure from past practice under which the federal share (usually 80% or 90%)has generally been determined by the program under which the project wasearmarked.

In addition, under the heading, Miscellaneous Highway and Highway Safety Programs, the act provides for the use of nearly $300 million unobligated coreformula funds for a combination of interagency transfers and project earmarks. (3) Most of the money goes for transfers to the Federal Motor Carrier SafetyAdministration ($111.5 million) and to the National Highway Traffic SafetyAdministration ($150.5 million). In addition, $15 million is provided forconstruction of Pennsylvania Avenue in front of the White House and $20 millionfor 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)).

The act provides additional $150 million for the Appalachian Development Highway System (ADHS), $75 million of which is earmarked. It also adds 65 milesto the ADHS.

The TEA-21 Funding Framework. TEA-21 authorizing authority was scheduled to expire on October 1, 2003. WhileCongress continues to consider reauthorization proposals, all existing programscontinue 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 inthe months ahead is expected to at least retain a large part of the existing programfunding framework. TEA-21 created the largest surface transportation program inU.S. history. For the most part, however, it did not create new programs. Rather, itcontinued most of the highway and transit programs that originated in its immediatepredecessor 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 asthe core programs. These programs are: National Highway System (NHS), InterstateMaintenance (IM), Surface Transportation Program (STP), Bridge Replacement andRehabilitation (BRR), and Congestion Mitigation and Air Quality Improvement(CMAQ). All of these programs are subject to apportionment on an annual basis byformula 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 minimumguarantee funding ($639 million per fiscal year) and emergency relief ($100 millionper 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 controlof FHWA or other governmental entities. These programs include: the Federal LandsHighway Program, High Priority Projects (former demonstration project category),Appalachian Development Highway System roads, the National Corridor Planningand 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 becameoperational on January 1, 2000, andassumed almost all of the responsibilities and personnel of DOT's Office of MotorCarrier Safety. (5) FMCSA issues and enforces thefederal motor carrier safetyregulations that govern the operation and maintenance of interstate commercial truckand bus operations and specify licensing requirements for commercial drivers. FMCSA also administers several grants and programs to help states conduct varioustruck and bus safety activities. Together with the states, FMCSA conductsinspections of Mexican-domiciled commercial drivers and vehicles entering theUnited States, advances Intelligent Transportation Systems for commercialoperations, and reviews thousands of carriers transporting property and passengers. Most of the funds used to conduct FMCSA activities are derived from the federalHighway Trust Fund.

The FMCSA appropriation has two primary components: FMCSA administrative expenses (including operations) and research; and financial assistanceprovided primarily to the states to conduct various truck and bus safety programs,(grants and information systems). The FY2004 Administration request for theFMCSA was $447 million. This was an increase of almost $134 million (43%) overthe FY2003 appropriation of $313.1 million. For FY2004, the conference committeespecified an FMCSA appropriation of $366 million: $176 million for administrativeexpenses under the FMCSA limitation on administrative expenses account, and $190million for motor carrier safety grants and information systems. The conferenceagreement also provides for an additional $111.5 million for various other FMCSAprograms and activities under the FHWA miscellaneous appropriation.

Administrative and Operations Expenses. The President's budget request for FMCSA'sadministrative and operations expenses in FY2004 was $224 million (up from $124million in FY03), including funds for research and technology (R&T) and regulatorydevelopment. The House approved $236.8 million, the Senate approved $246million, and the conferees agreed to $176 million. Some of the activities that wouldbe 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 withcommercial vehicles; and the establishment of a medical review board to assistFMCSA. Some of the core FMCSA activities or expenses supported by these fundsinclude: rent, administrative infrastructure, personnel compensation and benefits andother related staff expenses for more than 1,000 employees; outreach efforts to helpeducate 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 accountalso 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 activitieswas $223 million; the House approved $190 million, the Senate approved $237million, and the conferees agreed to $190 million. These funds are used primarilyto pay for the Motor Carrier Safety Assistance Program (MCSAP), which providesgrants to states to help them enforce commercial vehicle safety and hazardousmaterials transportation regulations. MCSAP grants cover up to 80% of the costs ofa state's truck and bus safety program. Some 10,000 state and local law-enforcementofficers conduct more than 2.6 million roadside inspections of trucks and busesannually under the program. The Senate bill included an additional $47 million forconstruction of border inspection stations for trucks. For FY2004, the conferenceagreement includes $170 million dedicated to MCSAP (with $1 million going to acrash causation study), and an additional $20 million for information systems andstrategic safety initiatives. Under the FHWA miscellaneous appropriation, theconference 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 intendedto improve traffic safety. More specifically, NHTSA seeks to reduce impaireddriving, increase occupant protection, improve police traffic services, enhanceemergency medical responses to crashes, ensure compliance with various federalvehicle safety regulations, and track and seek to mitigate emerging vehicle safetyproblems. NHTSA also provides grants to the states for the implementation ofvarious 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 millionabove the FY2003 program level: this reflected an increase of $131million above theFY2003 program level and the proposed transfer to NHTSA of $100 million infunding for safety belt use and impaired-driving law incentive programs previouslyallocated 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 reducehighway fatalities and prevent injuries. Included in the Administration's request wasfunding in these major areas: research and analysis (e.g., collection of crashstatistics and research on vehicle performance and occupant damage during thesecrashes); highway safety programs (e.g., developing improved countermeasures tocombat alcohol- or drug-impaired driving); safety assurance (e.g., testing of vehiclesto ensure compliance with federal motor vehicle safety standards and maintaining alegislatively required database to track vehicle defects); and safety performancestandards (e.g, conducting crash avoidance and crash-worthiness testing, andevaluating child safety seats). The House approved $434.8 million, the Senateapproved $448.7 million, and the conference agreement recommends $451.1 millionfor NHTSA: $225 million for highway traffic safety grants and $222.5 million foroperations and research. (7)

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 Administrationrequested $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 thePresident requested for FY2003. The House agreed to $131 million; the Senate alsoagreed to $131 million, and P.L. 108-199 provides $131 million. For railroadresearch and development, the President requested $35 million, which is $6 millionmore than funding for FY2003. The House agreed to $28 million, the Senate agreedto $34 million; P.L. 108-199 provides $34 million. For next generation high-speedrail, the President requested $23 million, $7 million less than last year; the Houseagreed to $28 million; the Senate agreed to $29 million. Conferees agreed on $37million.

Although most of the debate involving the FRA budget centers on Amtrak, agency safety activities (which receive more detailed treatment following thissection), Next Generation High-Speed Rail, and how states might obtain additionalfunds for high-speed rail initiatives are also issues.

Railroad Safety and Research and Development. The FRA is the primary federal agency that promotesand regulates railroad safety. Increased railroad traffic volume and density makeequipment, employees, and operations more vulnerable to adverse safety impacts.The Administration proposes $131.2 million in FY2004 for FRA's safety programand related administrative and operating activities. This represents about a 13%increase over the $116.6 million provided in the FY2003 DOT appropriations for railsafety and operations. The House Committee on Appropriations recommended andthe House approved $130.9 million, and the Senate Committee recommended and theSenate 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 traveland training expenses for FRA's field and headquarters staff and to pay forinformation systems monitoring the safety performance of the rail industry. (8) Thefunds requested support FRA's goals of reducing rail accidents and incidents,reducing grade-crossing accidents, and contributing to the avoidance of serioushazardous materials incidents.

The railroad safety statute was last reauthorized in 1994. Funding authority forthe program expired at the end of FY1998. FRA's safety program continues using theauthorities specified in existing federal railroad safety law and funds provided byannual appropriations. Though hearings have been held since 1994, the deliberationshave not resulted in agreement on funding for FRA's regulatory and safetycompliance activities or change to any of the existing authorities used by FRA topromote railroad safety. A reauthorization statute changing the scope and nature ofFRA'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 tocontrol train movements, and track dynamics. In reports accompanying House andSenate transportation appropriation bills and in annual conference reports, theappropriations committees historically have allocated FRA's R&D funds amongvarious research categories pertaining to safety. The FY2003 DOT appropriationprovided $29.1 million for the R&D program. For FY2004, the Administrationrequests $35 million for these activities. The House Committee recommended andthe House approved $28.2 million, and the Senate Committee recommended and theSenate approved $34.2 million. The conferees recommend $34 million.

Next Generation High-Speed Rail R&D. This program supports work on high-speed train controlsystems, track and structures technology, corridor planning, grade crossing hazardmitigation, 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 FY2003appropriation of $30.25 million. The House agreed to $28.3 million. The differencewas largely the House's support for establishing the compliance of diesel multipleunits (a form of passenger rail car with its own engine which is used in othercountries but is not currently used in this country) with FRA passenger safetyregulations. The Senate agreed to $29.3 million. The difference was largely theSenate's support for additional high-speed corridor planning ($5 million for Florida'shigh-speed corridor, $2.5 million for a few others) and for maglev ($5 million for 4maglev projects). P.L. 108-199 provides $37.4 million; the increase came largelyfrom combining the different projects contained in the House and Senate bills, plusadding 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 million (9) and $900 millionless than the $1.8 billion Amtrak requested for FY2004. Amtrak said that it couldnot survive FY2004 on $900 million; the DOT Inspector General agreed with thatassessment. The House agreed to $900 million, similar to the Administrationrequest. It also added a provision allowing states to apply to FHWA to transfer aportion of their allocation of an appropriation of $267 million from the HighwayTrust Account to Amtrak. (10) The Senate agreedto $1.346 billion for Amtrak, andextended to all Amtrak routes the requirement (begun for FY2003) that Amtrak'slong-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 Amtrakroutes 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 forstate-supported routes currently operated by Amtrak. If a state wishes to contractwith an operator other than Amtrak for service, the state may contract with Amtrakfor use of Amtrak's equipment, facilities, and services necessary to enable thenon-Amtrak operator to provide the service. If Amtrak and the state cannot agree onterms for this use, the Secretary of Transportation is given the power to compelAmtrak to provide the equipment, facilities and services on terms and conditions setby 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 theSecretary of Transportation, who would provide funding to Amtrak quarterly throughthe grant-making process. Congress also imposed several other requirements onAmtrak in FY2003 which had the effect of reducing Amtrak's discretion with itsfederal funding. Among these was a requirement that Amtrak submit a 5-yearbusiness plan to Congress, which it did on April 25, 2003. In this plan, Amtrakrequested average annual federal support of $1.6 billion for FY2004-FY2008 to bothmaintain the current network and begin to address the estimated $6 billion inbacklogged maintenance needs. The plan did not propose expansion of the existingrail 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: theHouse Transportation and Infrastructure Committee has reported out H.R. 2572 that would authorize Amtrak at $2 billion annually for threeyears, and the Senate Commerce, Science, and Transportation Committee hasapproved a surface transportation safety bill, S. 1978 , that includes anamendment 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 restructuringAmtrak and passenger rail service ( S. 1501 ) which would shift much ofthe planning and financial responsibility for passenger rail service to the states. Sen.Hutchinson and others have submitted a plan for restructuring Amtrak and passengerrail service ( S. 1505 ) that would give the federal government moreresponsibility for planning and implementing passenger rail service, authorize $2billion annually for 6 years for Amtrak operations, and authorize $48 billion in bondsto finance capital improvements to the nation's passenger rail system. Sen. Hollingsand others have submitted a plan that would authorize $2 billion annually for 6 yearsfor Amtrak, and would authorize $30 billion in bonds to finance capitalimprovements 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 finalappropriation was reduced to $7.179 billion after the 0.65% rescission). (11) TheAdministration's request also proposed changes to FTA's program structure,reflecting the Administration's reauthorization proposal (the proposed changes aredescribed below). The House agreed to $7.231 billion, the Senate agreed to $7.305billion; P.L. 108-199 provides $7.309 billion. Since the Administration'sreauthorization proposal has not been approved, the proposed program changes arenot reflected in the FTA appropriations.

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)

Note: numbers may not add due to rounding.

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations billConference 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%; thatrescission is not reflected in these figures.

** The Conference Report directs that this $607 million is supplemented with $70 milliontransferred from other FTA programs, for a total of $677 million.

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 militaryauxiliary in time of war. MARAD administers programs that benefit U.S. vesselowners, shipyards, and ship crews. For FY2004, the President requested a total of$219 million for MARAD, which is about $12 million more than the Presidentrequested, and about $11 million less than Congress appropriated, for FY2003. TheConsolidated Appropriations Act provides a total of $226.4 million for MARADwhich is about $7.8 million more than the House passed bill and $1.2 million lessthan 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 providesguaranteed loans for purchasing ships from U.S. shipyards and for the modernizationof U.S. shipyards. The purpose of the program is to promote the growth andmodernization of U.S. shipyards. Consistent with its budget requests in prior years,the Administration has requested no funds for additional loans in FY2004, calling theprogram a "corporate subsidy." The Administration has, however, requested $4.5million for the administration of existing loans. For FY2003, in the Consolidated Appropriations Resolution ( P.L. 108-7 ), Congress initially provided no funds for theprogram other than $4 million for administrative expenses. However, in the WartimeSupplemental Appropriations bill ( P.L. 108-11 ), Congress provided $25 million forthe program. For FY2004, the Consolidated Appropriations Act agrees with thePresident'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 applicationsmore effectively, exercise more rigorous financial oversight of borrowers, and usean external financial advisor in reviewing loan applications. The IG's investigationwas prompted by the bankruptcy of American Classic Voyages, leaving MARADwith $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 GeneralAccounting Office also identified weaknesses in the program and maderecommendations for improving the financial oversight of the program(GAO-03-728T). The conference agreement notes MARAD's cooperation with theIG'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, $52.9million is requested for the U.S. Merchant Marine Academy in Kings Point, NewYork; $9.5 million for state maritime academies; and $42 million for the operationsof MARAD. The Consolidated Appropriations Act provides $107 million foroperations and training. For the Maritime Security Program (MSP), theAdministration requested $98.7 million, virtually the same amount as Congressprovided last year. The Consolidated Appropriations Act agrees with the President'srequest. MSP is a fleet of 47 privately-owned U.S. flag commercial vessels engagedin international trade that are available to support the Department of Defense in anational emergency.

For the disposal of obsolete vessels in the National Defense Reserve Fleet (NDRF), the Administration requested $11.4 million, about the same amountCongress appropriated in FY2003. There are over 130 vessels in the NDRF that areawaiting disposal because of their age. These vessels have raised environmentalconcerns due to the presence of asbestos and other hazardous substances. MARADhas until 2006 to dispose of these surplus ships, most of which are located on theJames River in Virginia and in Suisan Bay, California. The ConsolidatedAppropriations Act provides $16.2 million for ship disposal, which is $2.2 millionmore than the House passed measure and $2.2 million less than the Senate passedmeasure.

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 ofHazardous Materials Safety. RSPA also conducts a multimodal research program,helps coordinate and plan for transportation research and technology transferactivities, sponsors educational activities to promote innovative transportation, andmanages DOT's transportation-related emergency response and recoveryresponsibilities.

For FY2004, the Administration requested a budget of $118 million for RSPA; most of this funding was for activities that promote transportation safety. ForRSPA's pipeline transportation safety program, $67 million was proposed by theAdministration (an increase of $3 million over the FY2003 appropriation); for thehazardous materials transportation safety program, $25 million was requested (anincrease of $2 million over the FY2003 appropriation). Much of the additionalfunding requested was intended to enhance RSPA's ability to ensure that the federalhazardous materials transportation pipeline safety regulations are complied with andto assist DOT in participating in the safety oversight of containment systems that willbe used to ship spent nuclear fuel and high-level radioactive wastes. The HouseAppropriations Committee recommended and the House approved $111.3 millionfor RSPA in FY2004, including $23.6 million for hazardous materials transportationsafety, 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 $67.6million for pipeline safety. The Consolidated Appropriations Act, 2004 provides$112.9 million for RSPA, including $23.7 million for hazardous materialstransportation safety and $66.3 million for pipeline safety. (12)

Title II: Treasury Appropriations

Table 6. Title II: Department of the TreasuryAppropriations (in millions of dollars)

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriationsbill Conference Report Budget Authority table provided by the House Committee onAppropriations.

a. The Consolidated Appropriations Act, 2004 contains an across-the-boardrescission of 0.59%; that rescission is not reflected in these figures.

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, andfiscal 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 thecreation of the Department of Homeland Security (DHS) late in 2002 and itsassumption in March 2003 of the authorities transferred to it by executive order, thisfunctional profile has changed significantly. While Treasury still serves as one of thefederal government's principal economic policymakers and its financial manager,revenue collector, and producer of currency, coinage, and stamps, its role in lawenforcement 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 theformulation and implementation of policy and the management of the Department asa whole, while the operating bureaus carry out specific duties assigned to theDepartment. The bureaus typically account for more than 95% of the Department'semployment 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 ofPublic Debt, Community Development Financial Institutions Fund, and Office ofThrift Supervision; and law enforcement has been done by the Bureau of Alcohol,Tobacco, and Firearms (BATF), U.S. Secret Service, Federal Law EnforcementTraining Center, U.S. Customs Service, Financial Crimes Enforcement Network(FinCen), and Treasury Forfeiture Fund. The exception to this dichotomy is theInternal Revenue Service (IRS), which performs both financial duties and lawenforcement 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 transferredfrom the Treasury Department to DHS, while the Treasury Forfeiture Fund and manyfunctions of BATF were transferred to the Justice Department (DOJ). On January24, 2003, the Treasury Department announced the establishment of a new bureau toadminister laws related to the use of alcohol and tobacco and to implementregulations formerly handled by BATF: the Alcohol and Tobacco Tax and TradeBureau. Its main duties include collecting alcohol and tobacco excise taxes andclassifying those products for tax purposes.

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 thanthe amount enacted for FY2003 ($11.018 billion), after adjusting for the transfer offunctions to DHS and the Justice Department. According to budget documents, theAdministration's top priorities for Treasury operations in FY2004 were to bolsterIRS's efforts to monitor and enforce compliance with tax laws, improve theDepartment's overall efficiency by further streamlining operations, and elevate theDepartment's role in federal efforts to combat money laundering and disrupt financialnetworks supporting international terrorist activities. Under the newly configuredTreasury 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 InternationalTechnical Assistance program, which assists the efforts of countries torn by war orpolitical instability to improve their systems of economic governance. In addition,the Administration proposed that the Treasury Inspector General for TaxAdministration (TIGTA) be merged with the Office of Inspector General (OIG) onthe grounds that many of the functions once handled by OIG had been transferred toother 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 operationsin FY2004. The measure authorized $11.273 billion in funding, or $423.5 millionmore than the amount enacted for FY2003 but $70 million less than the amountrequested by the Bush Administration for FY2004. According to the Committee'sreport on H.R. 2989 ( H.Rept. 108-243 ), most of the difference with theAdministration's request concerned a smaller recommended budget for IRSoperations.

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 measureprovided $8.9 million more in funding for Treasury's departmental offices than theAdministration had requested. Most of this increase (89%) was spread amongadministrative 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 proposalto combine the functions of OIG and TIGTA into a new Treasury Inspector Generalon the grounds that such a step would have required "extensive new legislation thathas yet to be enacted." Instead, the bill added $1.7 million to OIG's budget forFY2003 and $3.8 million to TIGTA's budget for FY2003. But it matched theAdministration'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 to39 on September 9, 2003. Two of the amendments were related to Treasuryappropriations for FY2004. One, introduced by Representative Jim Cooper, wouldhave reduced proposed funding from $100 million to $25 million for a controversialIRS pilot program to require some taxpayers claiming the earned income tax creditto certify the residency status of the qualifying child they plan to claim beginningwith the 2004 tax year and divert the $75 million in savings to programs aimed atimproving compliance among large and medium-sized business taxpayers. It failedby 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 knownas Cooper v. IBM . In July 2003, the federal judge in the case ruled that IBM's cashbenefit pension plan violated a federal law proscribing discrimination on the basis ofage because the rate of benefit accrual under the plan declines as a participant's ageincreases. (14) In December 2002, the IRS issuedproposed regulations on theapplication of age-discrimination rules to the conversion of traditional pension plansto cash balance plans. (15) Some Members ofCongress feared that if the IRS were tomake those regulations final, IBM would have a better chance of prevailing if it wereto appeal the judge's ruling. (16) The amendmentpassed by a vote of 258 to 160. Otherwise, the House-passed version of H.R. 2989 endorsed therecommended levels of funding for Treasury departmental offices and operatingbureaus 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 theTreasury Department in FY2004. This amount was $202 million more than theamount enacted for FY2003 but $147 million less than the amount requested by theBush Administration and $77 million less than the amount approved by the Housefor FY2004. According to the Committee's report on the legislation ( S.Rept.108-146 ), most of the difference between S. 1589 and theAdministration's budget request and the House-passed version of H.R. 2989 was due to a smaller recommended budget for IRS operations. Morespecifically, compared to the Administration's request, S. 1589 provided$26 million less in funding for tax processing, assistance, and management, and $79million less in funding for IRS information systems.

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 inrecommended funding for the initiative in FY2004 of $55 million. In addition, S. 1589 would have spent nearly $8 million more than theAdministration has requested for Treasury's departmental offices. A substantialshare of this recommended increase would have gone to the Office of InternationalAffairs (+$2.7 million) and the Office of Terrorist Finance and Financial Crimes(+$2.3 million). S. 1589 also denied the Administration's proposedmerger of the OIG and the TIGTA into a new office (known as the Inspector Generalfor 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 increasein 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 recommendedincrease in funding for FinCen of $6.1 million, in part to manage the newresponsibilities 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 bureauand has the primary responsibility for enforcing the Department's regulations againstmoney laundering and collecting and sharing financial and other information usefulin 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 themeasure, it considered and approved a number of amendments, several of whichrelated to Treasury appropriations. By voice vote, the Senate passed an amendmentby Sen. Mary Landrieu that requires the IRS to undertake a comprehensive study ofa proposed pilot program to pre-certify eligibility for the EITC. The study wouldfocus 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 ineligibilityor failure to complete the required documents. In addition, the Senate passed byvoice vote an amendment by Sen. Tom Harkin to prevent the Treasury Departmentfrom implementing a new regulation that would permit companies to converttraditional pension plans to cash balance plans. It was similar in intent to anamendment to the version of H.R. 2989 approved by the House. Theprincipal differences in appropriations for the Treasury Department between theSenate-passed and House-passed versions of H.R. 2989 related tofunding 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 confereesreached an agreement, which was submitted to both houses for approval. Under theagreement, funding for Treasury Department operations in FY2004 would total$11.166 billion. This was $317 million greater than the amount enacted for FY2003but $177 million less than the amount requested by the Bush Administration, $107million less than the amount approved by the House, and $30 million less than theamount approved by the Senate. In each instance, virtually the entire differencerelated to funding for the IRS, which would account for 92% of total Treasuryappropriations in FY2004. Under the agreement, Treasury departmental officeswould receive $176.1 million; Treasury programs for capital investment, $36.4million; the Office of Inspector General, $13 million; TIGTA, $128 million; the AirTransportation Stabilization Program, $2.5 million; the Treasury Building and AnnexRepair and Restoration Fund, $25 million; FinCen, $57.6 million; the FinancialManagement Service, $228.5 million; the Alcohol and Tobacco Tax and TradeBureau, $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 ) coveringseven 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 across-the-board cut of 0.59% on alldiscretionary spending approved in non-defense appropriations bills, including thosealready enacted. This cut was not reflected in the budget totals discussed above. OnDecember 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 measureinto law the next day ( P.L. 108-199 ).

Internal Revenue Service (IRS). The federal government levies individual and corporate income taxes, socialinsurance taxes, excise taxes, estate and gift taxes, customs duties, and miscellaneoustaxes and fees. The federal agency responsible for administering all these taxes andfees, except customs duties, is the IRS. In discharging that duty, the IRS receives andprocesses tax returns and other related documents, processes payments and refunds,enforces compliance through audits and other methods, collects delinquent taxes, andprovides a variety of services to taxpayers to help them understand their rights andresponsibilities and resolve problems. In FY2002, the most recent year for whichdata are available, the IRS collected $2,017 billion before refunds, the largestcomponent 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 enactedfor FY2003 and 5.2% greater than the amount requested by the Administration forFY2003. Of the requested budget for FY2004, $4.135 billion was to be used forprocessing, assistance, and management; $4.086 billion for tax law enforcement;$1.709 billion for information systems; $500 million for the business systemsmodernization program (BSM); $251 million for a program aimed at curbing fraudand abuse in claims for the earned income tax credit (EITC) known as the EarnedIncome Tax Credit Compliance Initiative; and $35 million to administer the healthinsurance tax credit. Two proposed enforcement initiatives for FY2004 arousedconcern or outright opposition among some Members of Congress. One wouldallocate $100 million to a pilot program to require that some taxpayers certify theresidency status of the qualifying child before filing a claim for the EITC. Under thesecond proposal, the IRS would spend $2 million to hire private collection agents tocollect 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 fivesources of tax evasion: (1) the promotion of abusive tax schemes; (2) the misuse oftrusts and offshore accounts to hide or illegally lower taxable income; (3) the use ofabusive corporate tax avoidance schemes; (4) the under-reporting of income byupper-income individuals; and (5) the failure of employers to file employment taxreturns and pay substantial amounts of employment taxes in a timely manner. TheAdministration contended that such a program to curb tax evasion would lead to a72% increase in the number of audits of tax returns for high-income individuals andbusinesses. Nonetheless, some expressed concern that the Administration's proposedfunding for IRS operations fell short of what would be needed to enable the IRS toenforce 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 of1998. Under the Act, the Board is required to review the annual IRS budget requestprepared by the IRS Commissioner and submit its recommendations to the Secretaryof the Treasury. The President in turn is required to submit the Board's budgetrecommendations 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 BushAdministration. (18) It also recommended that theIRS hire an additional 2,120 full-timeemployees in FY2004, compared to the 238 additional full-time employees includedin the Administration's request. The Board's budget recommendations wereintended to accomplish three goals. One was to achieve a real growth rate of 2% inthe next five years for the purpose of channeling adequate resources into efforts tomonitor and enforce compliance with tax laws. The second goal was to provide moreresources for the BSM, which the Board views as essential to the transformation ofthe IRS into an efficient, fair, customer-friendly collector of revenue and enforcer oftax laws. The third goal was to restore funds for customer service and tax lawenforcement that were diverted in recent years to cover unanticipated expenses, suchas unfunded increases in annual pay raises for federal civilian employees. Nearly85% of the difference between the Administration's budget request for FY2004 andthe 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 theamount enacted for FY2003 but $85 million less than the amount requested by theBush Administration. More specifically, the measure provided $4.038 billion forprocessing, assistance, and management; $4.221 billion for tax law enforcement;$1.629 billion for information systems; $429 million for BSM; and $35 million foradministering the health insurance tax credit.

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 (-$6.4million); and information systems (-$41.3 million). Among the IRS programs andinitiatives receiving favorable comment in the Committee's report ( H.Rept. 108-243 )were low-income taxpayer clinics (which would receive $8 million in funding), thetax counseling program for elderly taxpayers (which would receive $4.25 million infunding), the emerging partnership between the IRS and suppliers of tax-returnsoftware in implementing the Free-File Alliance, a controversial pilot program forpre-certifying persons eligible for the earned income tax credit (which would receive$100 million in funding), and a controversial proposal to hire private collectionagencies 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 inFY2004 approved by the Appropriations Committee. Under an amendment adoptedby the House during floor debate on the measure, none of the funds appropriated inthe measure could be used to help overturn a federal judge's recent ruling that IBM'scash balance pension plan violates a federal law barring age discrimination. Thesponsors of the amendment wanted to prevent the IRS from making final proposedregulations it issued in December 2002 on the application of age-discrimination rulesto the conversion of traditional pension plans to cash balance plans it issued inDecember 2002. They feared that such a step would strengthen IBM's hand if it wereto 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 forIRS operations in FY2004. This amount was $296 million more than the amountenacted in FY2003 but $160 million less than the amount requested by theAdministration 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 theAdministration's request but $10 million above the amount in H.R. 2989 ); $4.173 billion on tax law enforcement (or $196 million above theAdministration's request but $48 million below the amount in H.R. 2989 ); $1.591 billion on information systems (or $79 million below theAdministration's request and $38 million below the amount in H.R. 2989 ); $429 million for BSM (or the same amount requested by the Administrationand contained in H.R. 2989 ); and $35 million to administer the healthinsurance tax credit (or the same amount requested by the Administration andcontained 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. Itrecommended that the former be funded at a level of $3.9 million and the latter at alevel of $7.0 million in FY2004. In addition, the report recommended that the IRSmanage its earned income tax compliance initiative as part of its budget for tax lawenforcement, and that the IRS "realign development activities funded under theInformation Systems account so that they are managed and integrated formally intoBusiness Systems Modernization activity." It was unclear from the report how theCommittee viewed recent controversial proposals to pre-certify the eligibility ofcertain taxpayers for the earned income tax credit and to hire private collection agentsto 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 andpassed the measure by a vote of 93 to 1. It made no changes in the level of fundingin FY2004 for IRS operations approved by the Appropriations Committee. But theSenate did approve by voice vote two amendments that related to the IRS. Onewould prevent the Treasury Department from using any of the appropriated funds toimplement a recently issued IRS final regulation making it easier for companies toconvert from traditional pension plans to a cash balance plan. The secondamendment would require the IRS to undertake a comprehensive study of itsproposed pilot program to pre-certify the eligibility of thousands of taxpayers for theEITC. Among other things, the study would examine the time and cost to programparticipants and the administrative cost to the IRS, and the number of participantswho are denied certification because they are deemed ineligible or failed to completethe 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. Thedifference was distributed among three accounts: processing, assistance, andmanagement (-$10 million); tax law enforcement (+$48 million); and informationsystems (+$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 conferenceagreement reached on November 12, 2003, funding for the IRS in FY 2004 wouldtotal $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, $107million less than the amount approved by the House, and $31 million less than theamount approved by the Senate. More specifically, the agreement provides $4.033billion for processing, assistance and management, of which $4.1 million must beused to fund the Tax Counseling for the Elderly Program and $7.5 million is to bemade available to fund grants for low-income taxpayer clinics; $4.196 billion for taxlaw 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 SenateAppropriations Committees; and $35 million to administer the health insurance taxcredit. Proposed funding for the BSM represented a reduction of $39 million in theamounts approved by the House and the Senate and could be construed as anexpression of congressional dissatisfaction with the results of the program so far anddistrust of the ability of IRS managers to remedy known problems with it. Theproblems reportedly include unanticipated cost increases, delays in the completionof 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 1999moratorium on the conversion of corporate pension plans from traditionaldefined-benefit plans to cash-balance plans. Cash-balance plans often result from theconversion of traditional defined-benefit pension plans to defined-contributionpension plans. Instead, the agreement required the agency to present to Congresswithin six months of its enactment proposed legislation that would "providetransition relief for older and longer-service participants affected by conversions oftheir employers' traditional pension plans to cash-balance pension plans." Theagreement also required the IRS to submit to Congress by June 30, 2005 a finalreport examining various aspects of any program established by the IRS to certify orpre-certify the eligibility of certain taxpayers for the EITC, including the costsincurred by affected taxpayers in participating in the program and the IRS inadministering 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 spendingfor all federal programs outside of defense and military construction in FY2004. OnDecember 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 suiton 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 ServiceAppropriations (in millions of dollars)

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations billConference Report Budget Authority table provided by the House Committee onAppropriations.

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 aseparate title. The Conference Report table follows this convention.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of0.59%; 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 aregular appropriation from Congress, however, to compensate for revenue it forgoesin providing, at congressional direction, free mailing privileges for the blind andvisually impaired and for overseas voting. Under the Revenue Forgone Reform Actof 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 andCurrent Issues ). The terrorist attacks in the fall of 2001, however, including use ofthe mail for delivery of anthrax spores to congressional and media offices, generatednew funding needs that USPS contends should be met through appropriations.

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 October1, 2003, and the $29 million ($28.8 after rescission) due annually under the RevenueForgone 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 FY2003installment under the Revenue Forgone Reform Act of 1993 -- reduced by $19.2million as a reconciliation adjustment to reflect actual versus estimated free mailvolume in 2001 -- for a total of $65.5 million. Of this amount, $36.5 million wouldnot be available for obligation until October 1, 2004, which is in FY2005. However,USPS will also have available for obligation during FY2004 the $31 millionprovided for revenue forgone in fiscal 2002, for a total of $60 million. In its FY2002Budget, the Bush Administration had proposed to "reverse the misleading budgetpractice of using advance appropriations simply to avoid [annual] spendinglimitations." The Administration did not renew the proposal in its FY2003 orFY2004 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) inemergency response funds to protect the safety of employees and customers fromthreats such as the 2001 anthrax attack. The funds would be used to continueacquisition and deployment of ventilation and filtration equipment that was begunwith $762 million provided in FY2002 specifically for emergency response. Neitherthe Administration's FY2003 Budget nor its FY2004 Budget included any additionalfunds for emergency preparedness for the Postal Service. As a condition to receivingthe largest part of its previous emergency response funding, on March 6, 2002 USPSsubmitted to its oversight and appropriations committees an emergency preparednessplan to combat the threat of biological and chemical substances in the mail . (19) TheMarch 6, 2002 emergency preparedness plan did identify substantial neededappropriations 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 FY2004though 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 inFY2005, a provision carried through in the end-of-session consolidatedappropriations bill. Neither Committee's report referred to the Postal Service'ssupplementary request for bio-terrorism prevention. Both versions of the bill and thefinal Consolidated Appropriations Act, 2004 continue long-standing languageforbidding USPS to reduce service below the six-day delivery and rural deliverystandards that have prevailed since 1983, or to close rural or other small post officesduring FY2004. The end-of-session Consolidated Appropriations Act (H.R.2673; P.L. 108-199 ) also contained a provision (Division F, title V, section541) amending 39 U.S.C. 414(h) to extend the authorized sales period for the BreastCancer Research semi-postal stamp. Sales of the stamp, which fund research into acure for breast cancer, had been authorized only through December 31, 2003. Theamendment 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 underthe Civil Service Retirement System. Congress has passed legislation ( P.L. 108-18 )to reduce the annual USPS contribution to the Civil Service Retirement andDisability Fund, which will have the effect of saving USPS $2.9 billion in FY2003and $2.6 billion in succeeding years. For more on this legislation, see CRS Report RL31684, Funding Postal Service Obligations to the Civil Service RetirementSystem.

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)

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations billConference Report Budget Authority table provided by the House Committee onAppropriations.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of0.59%; 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 thethree exceptions, the Council on Environmental Quality and Office of EnvironmentalQuality, and the Office of Science and Technology Policy are funded under theVeterans Affairs, Housing and Urban Development, and Independent Agenciesappropriations; and the Office of the United States Trade Representative is fundedunder the Commerce, Justice, State, and the Judiciary and Related Agenciesappropriations.

The President's FY2004 budget proposed to consolidate and financially realign several annual EOP salaries and expenses appropriations that directly support thePresident into a single annual appropriation, called "The White House." Thisconsolidated 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 beconsolidated. The accounts included in the consolidated appropriation would be:

Compensation of the President

White House Office (including resources for the Office ofHomeland Security)

Executive Residence/White House Repair andRestoration

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, andpermits more rapid response to changing needs and priorities." (20) The Administrationproposed similar consolidations in the FY2002 and FY2003 budgets, but theconference committees for the Treasury and General Government AppropriationsAct, FY2002 ( P.L. 107-67 ) and FY2003 ( P.L. 108-7 , Division J) agreed to continuewith separate appropriations for the EOP accounts. A concern of the Administrationhas been the "needless complexity [of different accounts] that adds expense, thatadds burdens, that adds administrative hurdles that they must go through toaccomplish anything." (21) A concern of Congressabout 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 thefollowing 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 PolicyDevelopment, National Security Council, Council of EconomicAdvisers)

Office of Management and Budget

Office of National Drug Control Policy

Special Assistance to the President and Official Residence ofthe Vice President (transfers would be subject to the approval of the VicePresident)

Council on Environmental Quality and Office of EnvironmentalQuality

Office of Science and Technology Policy

Office of the United States TradeRepresentative (23)

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 OMBdirector, or such other officer as thePresident may designate, could, 15 days after giving notice to the Senate and HouseCommittees on Appropriations, transfer up to 10% of any appropriation to any otherappropriation, to be merged with, and available for, the same time and for the samepurposes as the appropriation to which transferred. An appropriation could not beincreased by more than 50% by such transfers. (25)

Both the House and the Senate Committees on Appropriations recommended and the law provides that separate appropriations for the EOP accounts will becontinued and that the transfer authority proposal is not agreed to. According to thecommittee report accompanying S. 1589 :

Last year, the Committee gave this request considerable deliberation and concluded that the existing structure served theCommittee's and the public's need for transparency in the funding and operation ofthese important functions well. The existing structure also provides the executivebranch with the flexibility it needs to reprogram funds within accounts to addressunforseen budget needs upon the notification and approval of the Committee. Asnoted in discussions with administration officials in past years, at no time has thisCommittee rejected an administration's request to reprogram existing funds withinaccounts in this Title. (26)

EOP Offices Funded Through Treasury and General Government Appropriations. The President's FY2004budget for EOP programs funded under the Treasury and General Governmentappropriations proposed an appropriation of $790.6 million, an increase of 1.7% overthe $777.0 million appropriated in FY2003. The FY2004 budget proposals forspecific accounts are discussed below.

Compensation of the President. The President's FY2004 budget proposed an appropriation of $450,000, whichincludes an expense allowance of $50,000. This is the same amount as wasappropriated in FY2003. The salary of the President is $400,000 per annum ,effective January 20, 2001. The House and Senate Committees on Appropriationsrecommended, the House and Senate passed, and the law provides the same amountas the President requested. The law also amends 3 U.S.C. 102 to provide that anyunused amount of the expense allowance shall revert to the Treasury pursuant to 31U.S.C. 1552 and that no amount of the allowance shall be included in the President'sgross income.

White House Office (WHO). This account provides the President with staff assistance and administrative services. ThePresident's FY2004 budget proposed an appropriation of $70.3 million, an increaseof 39.5% over the $50.4 million appropriated in FY2003.

The House Committee on Appropriations recommended and the House passed an appropriation of $66.057 million, of which $8.65 million would be forreimbursements to the White House Communications Agency. The amount is $4.2million less than the President's request. The reduction is taken from the Office ofHomeland Security funding which is included in the White House Officeappropriation (see below). The Committee again requests that the Executive Officeof the President, within 30 days of the Act's enactment, provide "a detailed report onthe status of efforts to safely resume public tours of the White House." Such a reporthad been requested in the 2003 appropriations bill, but the committee reportaccompanying H.R. 2989 states that the EOP "provided a cursory,four-sentence 'report' that said very little about the status of efforts in this regard." (27) (This provision is not included in the conference agreement as the report has beensubmitted.)

The Committee also directs that both the House and Senate Committees on Appropriations receive a report on the renovations of the Eisenhower ExecutiveOffice Building no later than November 15, 2003. According to the committee reportaccompanying H.R. 2989 :

On repeated occasions, the Committee has sought specific answers to questions about the use of non-federal funds forrenovating and furnishing GSA facilities occupied by agencies of the ExecutiveOffice of the President. In particular, the Committee believes more information isneeded on the use of non-federal funding for renovation and furnishing efforts for theEisenhower Executive Office Building [EEOB], for which $65,757,000 is includedin this bill. The Committee directs EOP to review and report on the use ofnon-federal funds for renovation and furnishings in the [EEOB] .... should identifythe federal agency that coordinated the work funded by non-federal sources, thespecific sources and amounts of non-federal funding used, a description of eachproject, and an explanation of why non-federal funds were used in each specificinstance. Finally, the report should determine which agency's gift authority was usedto accept the contribution of non-federal funds and whether this authority was usedproperly. Given EOP's reluctance to provide information on this subject thus far, aprovision is included in the bill prohibiting the obligation of more than $35,000,000on this project until this report is submitted to theCongress. (28)

The Senate Committee on Appropriations recommended and the Senate passed an appropriation of $61.9 million, "a decrease of $8,331,000 below the budgetestimate as funds requested under this account for the Homeland Security Councilare provided in a separate account." (29) Of the total,$8.65 million would be availablefor reimbursements to the White House Communications Agency.

The law provides an appropriation of $69.168 million. Of the total, $8.65 million would be available for reimbursements to the White House CommunicationsAgency.

Office of Homeland Security (OHS). This office provides support and advice to the President andinteragency coordination of all aspects of homeland security, including theimplementation of the National Strategy for Homeland Security. The funding forOHS is included in the White House Office request. Of the $70.3 million requestedfor the WHO for FY2004, $8.3 million is for the OHS. The OHS FY2003appropriation was $19.3 million. The Homeland Security Council functionsestablished in the Homeland Security Act of 2002, P.L. 107-296 , are supported bythe OHS budget.

The House Committee on Appropriations recommended and the House passed an appropriation of $4.1 million, which is $4.2 million less than the President'srequest of $8.3 million. The committee report accompanying H.R. 2989 explained the recommendation as follows.

It is clear that most of [the responsibilities of OHS] have now been assumed by the Secretary of the Departmentof Homeland Security [DHS]. Although the Administration has changed the "Officeof Homeland Security" to the "Homeland Security Council," it is not clear what workremains that cannot be effectively performed by the [DHS]. Although the Committeeunderstands the President's need for policy support and advice, it is not clear whythat would require 66 staff, given the existence and support of the[DHS]. (30)

The Senate Committee on Appropriations recommended and the Senate passed the same appropriation as the President requested. The Committee did not approvefunding for the council within the White House Office, believing that the council"should be funded as a separate account, which is consistent with the budgetarytreatment of its predecessor, the Office of Homeland Security." (31)

The law provides an appropriation of $7.231 million and funds the council under the White House office.

Executive Residence (White House) Operation and Care. These accounts provide for the care, maintenance, andoperation of the Executive Residence and its repair, alteration, and improvement.

The President's FY2004 budget proposed an overall appropriation of $16.7 million for this account, an increase of 25.4% over the $13.3 million appropriated inFY2003. For the executive residence, the budget proposed an appropriation of $12.5million, an increase of 2.9% over the $12.3 million appropriated in FY2003. Forrepair and restoration of the White House, the budget proposed an appropriation of$4.2 million, an increase of 254.4% over the $1.2 million appropriated in FY2003. The EOP budget submission states that the repair and restoration funding would beused to renovate various specific electrical, mechanical, and control systemcomponents; replace two power servers; and complete the second phase of therestoration of the East and West Wing exterior. (32)

Maintenance and repair costs for the White House are also funded by the National Park Service as part of that agency's responsibility for national monuments.Entertainment costs for state functions are funded by the Department of State.Reimbursable political events in the Executive Residence are to be paid for inadvance by the sponsor, and all such advance payments are to be credited to aReimbursable Expenses account. The political party of the President is to deposit$25,000 to be available for expenses relating to reimbursable political events duringthe fiscal year. Reimbursements are to be separately accounted for and thesponsoring organizations billed, and charged interest, as appropriate. The staff of theExecutive Residence must report to the Committees on Appropriations, after theclose of each fiscal year, and maintain a tracking system on the reimbursableexpenses.

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides the same appropriations as the Presidentrequested. The House committee report accompanying H.R. 2989 statesthat the repair and restoration funds "will finance the ongoing restoration of the eastand west wing exterior ($3,500,000), replacement or repair of various electrical,mechanical, and control system components ($530,000), and replacement ofcomputer servers and backup power supplies ($195,000)." (33)

Special Assistance to the President (Office of the Vice President). This account funds the Vice President in carryingout the responsibilities assigned to him by the President and by law.

The President's FY2004 budget proposed an appropriation of $4.5 million for salaries and expenses, an increase of 10.4% over the $4.0 million appropriated inFY2003. According to the EOP budget submission:

An additional programmatic increase of $70,000, or 1.7 percent was requested for costs associated with official VicePresidential travel. Since September 11, 2001, the Vice President's travel has beenaugmented by travel to undisclosed locations for security purposes. This travel is 100percent official ... (34)

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides the same appropriation as the Presidentrequested. This funding level "will allow for 24 full-time permanent positions infiscal year 2004," according to the Senate committee report accompanying S. 1589 . (35) The law places the appropriationat the end of the title asproposed by the House.

Official Residence of the VicePresident. This account provides for the care and operation of theVice President's official residence and includes the operation of a gift fund for theresidence.

The President's FY2004 budget proposed an appropriation of $331,000 for the operating expenses of the Official Residence, an increase of 2.8% over the $322,000appropriated in FY2003.

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides the same appropriation as the Presidentrequested. In its report accompanying S. 1589 , the Senate Committeestated that it "has had a longstanding interest in the condition of the residence andexpects to be kept fully apprised by the Vice President's office of any and allrenovations and alterations made to the residence by the Navy." (36) The law places theappropriation at the end of the title as proposed by the House.

Council of Economic Advisers (CEA). The three-member council was created in 1946 to assist andadvise the President in the formulation of economic policy. The council analyzes andevaluates the national economy, economic developments, federal programs, andfederal policy to formulate economic advice . The council assists in the preparationof the annual Economic Report of the President to Congress.

The President's FY2004 budget proposed an appropriation of $4.5 million, an increase of 20.4% over the $3.8 million appropriated in FY2003.

The House Committee on Appropriations recommended and the House passed an appropriation of $4 million, $502,000 less than the President's request. TheSenate Committee on Appropriations recommended, the Senate passed, and the lawprovides the same appropriation as the President requested.

Office of Policy Development. The Office supports and coordinates the Domestic Policy Council (DPC) and theNational Economic Council (NEC) in carrying out their responsibilities to advise andassist the President in formulating, coordinating, and implementing economic anddomestic policy. The office also supports other policy development andimplementation initiatives.

The President's FY2004 budget proposed an appropriation of $4.1 million, an increase of 27.2% over the $3.2 million appropriated in FY2003. Of the total, anestimated $2.1 million supports the Office of Policy Development's DPC functionsand $2.0 million supports the office's NEC functions. (37)

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides the same appropriation as the Presidentrequested.

National Security Council (NSC). The NSC advises the President on integrating domestic, foreign, military,intelligence, and economic policies relating to national security.

The President's FY2004 budget proposed an appropriation of $10.6 million, an increase of 35.8% over the $7.8 million appropriated in FY2003. Of the total, $9.8million funds the operations of the NSC, including the Office for CombatingTerrorism, and $741,000 funds the President's Foreign Intelligence AdvisoryBoard. (38)

The House Committee on Appropriations recommended and the House passed an appropriation of $9 million, $1.6 million less than the President's request. TheSenate Committee on Appropriations recommended, the Senate passed, and the lawprovides the same appropriation as the President requested. This funding level "willsupport 60 full-time equivalent positions, or the same since the fiscal year 1996 levelfor the normal activities of the NSC." (39)

Office of Administration. The Office of Administration provides administrative services, including informationtechnology; human resources management; library and records management;financial management; and facilities, printing, and supply, to the Executive Officeof the President.

The President's FY2004 budget proposed an appropriation of $77.2 million, a decrease of 15.1% from the $90.9 million appropriated in FY2003. Of the total,$56.6 million is for salaries and expenses and $20.6 million is for capitalinvestment. (40)

The House Committee on Appropriations recommended and the House passed an appropriation of $82.8 million of which $17.5 million would remain availableuntil expended for the Capital Investment Plan for continued modernization of theinformation technology infrastructure within the EOP. This amount is $5.7 millionmore than the President's request. The committee report accompanying H.R. 2989 stated that the "recommendation maintains funding tocontinue the core enterprise pilot program in this account (+$8,258,000) andacknowledges program savings for security guard services provided to the Office ofScience and Technology Policy (-$1,096,000) and for information technologycontract services provided to the Homeland Security Council (-$1,500,000)." TheCommittee also recommended continuation of the "pilot project to determinewhether economies of scale could be achieved through centralized procurement ofcertain common goods and services." (41)

The Senate Committee on Appropriations recommended and the Senate passed the same appropriation as the President requested. Of the total, $20.578 millionwould remain available until expended for the Capital Investment Plan for continuedmodernization of the information technology infrastructure within the EOP. TheEOP would submit a report to the Committees on Appropriations that includes acurrent description of (1) the Enterprise Architecture, as defined in OMB CircularA-130 and the Federal Chief Information Officers Council guidance; (2) theInformation Technology (IT) Human Capital Plan; (3) the capital investment plan forimplementing the Enterprise Architecture; and (4) the IT capital planning andinvestment control process. The report would be reviewed and approved by OMB,and reviewed by GAO. In its report accompanying S. 1589 , theCommittee states its continuing support for the Centralized Procurement PilotProject, "but recommends funding for such items [information technology, rent,printing and reproduction, supplies and materials and equipment] in individualoffices within the EOP until saving and other benefits are identified." (42)

The law provides the House-passed appropriation. Of the total, $20.578 million would remain available until expended for the Capital Investment Plan for continuedmodernization of the information technology infrastructure within the EOP. The lawincludes funding for the core enterprise pilot program (+$8,258,000) and reflectsreductions for security guard services provided to the Office of Science andTechnology Policy (-$1,096,000) and for information technology contract servicesprovided to the Homeland Security Council (-$1,500,000). The Administration isencouraged to include all EOP funds for the core enterprise pilot program under thisappropriation in the FY2005 budget request.

Office of Management and Budget (OMB). OMB assists the President in discharging budgetary,management, and other executive responsibilities. The agency's activities includepreparing the budget documents; examining agency programs, budget requests, andmanagement activities; preparing the government-wide financial management statusreport and five-year plan (with the Chief Financial Officer Council); reviewing andcoordinating agency regulatory proposals and information collection requirements;and promoting economical, efficient, and effective procurement of property andservices for the executive branch.

The President's FY2004 budget proposed an appropriation of $77.4 million, an increase of 24.9% over the $62.0 million appropriated in FY2003. According to theEOP budget submission, "Since the start of the Administration, OMB has maintaineda very tight budget" and "In light of constrained funding levels over the past twoyears, the majority of the increase in the FY2004 request will permit OMB tocontinue current operations." (43)

The House Committee on Appropriations recommended and the House passed an appropriation of $62.8 million, $14.6 million less than the President's request. Savings would be derived from deferring proposed discretionary initiatives ($2.4million), assuming 20 fewer staff years than budgeted ($1.5 million), limitingreception and representation expenses to half of the budget estimated amount($1,500), reducing funding for the office of information and regulatory affairs ($2.5million), and transferring funds back to the pilot project on centralized procurementof common goods and services discussed under the Office of Administration ($8.3million). The Committee also directs OMB

To the extent that OMB establishes individual agency targets in its internal guidance [on competitive sourcing targets],the agency is directed within 30 days of establishing such targets, to submit a reportto the House and Senate Committees on Appropriations that indicates each agency'scompetitive sourcing target. The report should specifically detail the research andanalysis that was used in determining each agency's individual target, goal or quota. To the extent that such targets change over time, OMB is directed to maintain anup-to-date record of such changes and convey the changes periodically to the[appropriations committees] and the appropriate legislativecommittees.

[T]o submit a report to the House and Senate Committees on Appropriations, not later than April 1, 2004, detailing theamount of federal funds used by federal grantees to pay dues, fees, or other types ofmembership costs to national associations or other types of professionalorganizations.

[T]o involve the House and Senate Committees on Appropriations in the development of PART [program assessmentrating tool] ratings [which rate the effectiveness of federal programs] at all stages inthe process. (44)

The Senate Committee on Appropriations recommended and the Senate passed an appropriation of $75.4 million, $2 million less than the President's request. "[T]he reduction is manageable by limiting the growth for staff and professionaldevelopment," according to the committee report accompanying S. 1589 . (45) The Committee also expressed its concern"that agencies are shieldingsignificant, influential data and related documents funded by the Federal governmentfrom the requirements of the Federal Data Quality Act [FDQA]" and "directs theAdministrator of the Office of Information and Regulatory Affairs [OIRA] to submita report to the House and Senate Committees on Appropriations not later than 30days on how guidelines to agencies may be updated to address these concerns andimprove the transparency of agency science." Expressing strong support for theTruman Scholarship program, the Committee directs the program's board "to strictlyadhere to its statutory mandate to assure that at least one Truman scholar shall beselected each year from each State in which there is at least one resident applicantwho meets the minimum criteria established by the Foundation." (46)

The law provides an appropriation of $67.159 million and includes the following instructions for the Office of Information and Regulatory Affairs (OIRA)and the implementation of the Federal Data Quality Act.

The conferees direct that $1,000,000 of the total funding provided in [the OIRA] appropriation be withheld from obligationuntil resolution of existing programmatic concerns by House conferees are addressedand the House and Senate Committees on Appropriations approve of suchobligation.

The conferees are concerned that agencies are not complying fully with the requirements of the Federal Data QualityAct (FDQA). The conferees agree that data endorsed by the Federal Governmentshould be of the highest quality, and that the public should have the opportunity toreview the data disseminated by the Federal Government for its accuracy and haveavailable to it a streamlined procedure for correcting inaccuracies. TheAdministrator [of OIRA] is directed to submit a report to the House and SenateCommittees on Appropriations by June 1, 2004 on whether agencies have beenproperly responsive to public requests for correction of information pursuant to theFDQA, and suggest changes that should be made to the FDQA or OMB guidelinesto improve the accuracy and transparency of agencyscience. (47)

The House- and Senate-passed funding and the law provide that none of the funds appropriated or made available to OMB

may be used for the purpose of reviewing any agricultural marketing orders or any activities or regulations under theprovisions of the Agricultural Marketing Agreement Act of1937;

may be expended for the altering of the transcript of actual testimony of witnesses, except for testimony of officials of theOffice of Management and Budget, before the Committees on Appropriations or theCommittees on Veterans' Affairs or their subcommittees ... the preceding shall notapply to printed hearings released by the Committees on Appropriations or theCommittees on Veterans' Affairs;

may be available to pay the salary or expenses of any employee of the Office of Management and Budget who calculates,prepares, or approves any tabular or other material that proposes the sub-allocationof budget authority or outlays by the Committees on Appropriations among theirsubcommittees.

Office of National Drug Control Policy (ONDCP). The ONDCP develops policies, objectives, and prioritiesfor the National Drug Control Program. The account also funds general policyresearch to support the formulation of the National Drug Control Strategy.

The President's FY2004 budget proposed an appropriation of $27.3 million, an increase of 3.8% over the $26.3 million appropriated in FY2003. Of the total, $25.9million is for salaries and expenses operations and $1.4 million is for policyresearch. (48)

The House Committee on Appropriations recommended and the House passed an appropriation of $28.8 million (policy research and evaluation would be fundedat $1.35 million and the National Alliance for Model State Drug Laws would befunded at $1.5 million). This amount is $1.5 million more than the President'srequest.

The Senate Committee on Appropriations recommended, the Senate passed, and the law provides an appropriation of $27.997 million, $706,500 more than thePresident's request. Of the total, $1.35 million would remain available untilexpended for policy research and evaluation and $1.5 million is to be used for theNational Alliance for Model State Drug Laws.

The Counterdrug Technology Assessment Center (CTAC). The CTAC is the central counterdrug research anddevelopment organization for the federal government.

The President's FY2004 budget requested $40 million, a decrease of 16.1% from the $47.7 million appropriated in FY2003. Of the total, $18 million is forcounternarcotics research and development projects (which shall be available fortransfer to other federal departments or agencies) and $22 million is for the continuedoperation of the technology transfer program. (49)

The House Committee on Appropriations recommended and the House passed the same appropriation as the President requested. Counternarcotics research anddevelopment projects would be funded at $18 million (and available for transfer toother federal departments or agencies) and the continued operation of the technologytransfer program would be funded at $22 million.

The Senate Committee on Appropriations recommended and the Senate passed an appropriation of $42 million, $2 million more than the President's request. Of thetotal, $18 million would be for counternarcotics research and development projectsand would be available for transfer to other federal departments or agencies. Thecontinuation of the technology transfer program to State and local law enforcementin their efforts to combat drugs is funded at $24 million. Several Committeeexpectations with regard to CTAC are stated in the report accompanying S. 1589 . In addition, ONDCP is directed "to report to the House andSenate Committees on Appropriations, no later than December 15, 2003, on CTACfunding allocations, specifically providing a detailed spending plan for the researchand development program as well as the technology transfer program for fiscal years2001, 2002, and 2003." The Committee requests "that the fiscal year 2005 budgetrequest include a specific accounting of the total number of grant applicationsreceived and the number awarded in the previous year so that the Committee mayhave a true understanding of CTAC's ability to meet demand." (50)

The law provides the Senate-passed appropriation and includes the following instructions.

The conferees direct ONDCP to report to the Committees on Appropriations, no later than December 31, 2003, on CTACfunding allocations, specifically providing a detailed spending plan for both theresearch and development program and the technology transfer program for fiscalyears 2001-2003. In addition, the conferees direct the chief scientist to notify theCommittees on Appropriations on how fiscal year 2004 funds will be spent, as wellas to provide biannual reports on priority counterdrug enforcement research anddevelopment requirements and the status of projects funded by CTAC. Finally, theconferees direct ONDCP to include in the fiscal year 2005 budget request a specificaccounting of the total number of grant applications received and the numberawarded in the previous fiscal year. (51)

Federal Drug Control Programs. The High Intensity Drug Trafficking Areas (HIDTA) program provides assistance tofederal, state, and local law enforcement entities operating in those areas mostadversely affected by drug trafficking. Funds are disbursed at the discretion of thedirector of ONDCP for joint local, state, and federal initiatives.

The President's FY2004 budget proposed an appropriation of $206.4 million, a decrease of 8.2% from the $224.9 million appropriated in FY2003. No less than51% of the total would be transferred to State and local entities for drug controlactivities, which would be obligated within 120 days of enactment of theTransportation/Treasury appropriations act. Up to 49% of the total would remainavailable until September 30, 2005, and could be transferred to federal agencies anddepartments at a rate to be determined by the director, of which not less than $2.1million would be used for auditing services and associated activities, and at least$500,000 of the $2.1 million would be used to develop and implement a datacollection system to measure the performance of the High Intensity Drug TraffickingAreas Program. (52)

The House Committee on Appropriations recommended and the House passed an appropriation of $226.350 million, $20 million more than the President's request. According to the committee report accompanying H.R. 2989 , theincrease is

to meet requirements to fully fund existing HIDTA program activity, to expand HIDTAs where such expansion isjustified, to fund new HIDTAs as appropriate, and to fund HIDTA activities throughthe Central Priority Organization Targets (CPOT) initiative .... The Committeedirects that HIDTAs existing in fiscal year 2003 shall receive funding at least equalto the fiscal year 2003 initial allocation level, which does not include fundingprovided through the CPOT initiative .... As ONDCP reviews candidates for newHIDTA funding, the Committee recommends that it consider the following: increased funding for the Central Florida, Central Valley, Lake County, and Midwest(Platte and Madison counties, Nebraska) HIDTAs; and expansion of the AppalachianHIDTA (Letcher County, Kentucky). (53)

The Senate Committee on Appropriations recommended and the Senate also passed an appropriation of $226.350 million, $20 million more than the President'srequest. The additional amount, which is subject to reprogramming guidelines, is tofully fund existing HIDTA program activities, expand existing HIDTAs wherewarranted, and fund new HIDTAs and new HIDTA activities that are consistent withthe program's mission. Existing HIDTAs are to be funded at no less than the FY2003initial allocation level, unless the ONDCP Director submits to, and the House andSenate Committees on Appropriations approve, a request to reprogram funds "basedon clearly articulated priorities for the HIDTA program, as well as published ONDCPperformance measures of effectiveness." (54) Nofunds would be used for any furtheror additional consolidation of the Southwest Border HIDTA, except for the operationof an office with a coordinating role, until the office submits a report on the structureof the HIDTA. According to the committee report accompanying S. 1589 :

In allocating the HIDTA funds, the Committee expects the Director of ONDCP to ensure that the activities receivingthese limited additional resources are used strictly for implementing the strategy foreach HIDTA, taking into consideration local conditions and resource requirements. These funds should not be used to supplant existing support for ongoing Federal,State, or local drug control operations normally funded out of the operating budgetsof each agency. The remaining funds may be transferred to Federal agencies anddepartments to support Federal antidrugactivities. (55)

Several Committee expectations with regard to the HIDTA program are stated in the report. Additionally, the Committee directs ONDCP to consult with the Houseand Senate Committees on Appropriations "in the developmental stages of any newgrant programs that it plans to institute in the future." (56) ONDCP also is directed bythe Committee "to coordinate with other Federal agencies with a core mission totarget international drug traffickers in an effort to pool personnel, intelligence, andavailable resources to further the originally conceived CPOT [Consolidated PriorityOrganizational Targets] program and to report to the House and Senate Committeeson Appropriations no later than 90 days after enactment of this Act on the progressof these efforts." The General Accounting Office is directed "to conduct a study onthe effectiveness of the CPOT program, its conformity with the HIDTA mission ...and what resources other Federal law enforcement agencies contribute to theprogram." (57) Committee views with regard tomethamphetamine reduction, and issuesspecific to the Midwest, New England, Southwest Border, Appalachia, Northwest,and Southern Ohio HIDTAs also are expressed in the report. (58)

The law provides the same appropriation as passed by the House and Senate. No less than 51% of the total shall be transferred to State and local entities for drugcontrol activities, which shall be obligated within 120 days of enactment of theTransportation/Treasury appropriations act. Up to 49% of the total shall remainavailable until September 30, 2005, and may be transferred to federal agencies anddepartments at a rate to be determined by the director, of which not less than $2.1million shall be used for auditing services and associated activities, and at least$500,000 of the $2.1 million shall be used to develop and implement a datacollection system to measure the performance of the HIDTA program. HIDTAsdesignated as of September 30, 2003 shall be funded at no less than the FY2003initial allocation levels unless the director submits to the Committees onAppropriations and the committees approve, justification for changes in those levelsbased on clearly articulated priorities for the HIDTA programs as well as publishedONDCP performance measures of effectiveness. A request, complying withreprogramming guidelines, shall be submitted to the Committees on Appropriationsfor approval prior to the obligation of funds of an amount in excess of the FY2004budget request.

Other Federal Drug Control Programs (formerly The Special Forfeiture Fund). The account, administered by the directorof ONDCP, supports high-priority drug control programs. The funds may betransferred to drug control agencies or directly obligated by the ONDCP director.

The President's FY2004 budget proposed an appropriation of $250 million, an increase of 12.7% over the $221.7 million appropriated in FY2003. Of the total,$170 million is to support a national media campaign, as authorized by the Drug-FreeMedia Campaign Act of 1998; $70 million is for a program of assistance andmatching grants to local coalitions and other activities, as authorized in chapter 2 ofthe National Narcotic Leadership Act of 1988, as amended; $4.5 million is for theCounterdrug Intelligence Executive Secretariat; $2 million is for evaluations andresearch related to National Drug Control Program performance measures; $1 millionis for the National Drug Court Institute; $1.5 million is for the United StatesAnti-Doping Agency for anti-doping activities; and $1 million is for the UnitedStates membership dues to the World Anti-Doping Agency. (59)

The House Committee on Appropriations recommended and the House passed an appropriation of $230 million. The money would be allocated in the same manneras the President proposed except that $150 million would support a national mediacampaign. This amount is $20 million less than the President's request. Accordingto the committee report accompanying H.R. 2989 , "The Committee haschanged the name of the Special Forfeiture Fund account to Other Federal DrugControl Programs as requested by the President, reflecting the fact that this accountreceives no forfeiture funds but only direct appropriations." The report "encouragesONDCP to explore options for using alternative media in schools as a way ofutilizing traditional learning tools in non-traditional ways, such as children's bookstailored with an anti-drug message, provided that such media can be utilized in amanner consistent with the goals and parameters of the Media Campaign."

The report also states the Committee's belief "that without a convincing demonstration that the Media Campaign has had an impact on youth drug use thatcan be at least somewhat different from the general trends in such use, any increasein funding for the Media Campaign cannot be justified at this time." The Directorof ONDCP is directed to submit an evaluation plan for the Media Campaign for fiscalyears 2004-2008 to the Committees on Appropriations no later than 120 days afterthis Act's enactment. The Committee also is requiring "that no less than 77 percentof funds be spent on advertising time and space." (60)

The Senate Committee on Appropriations recommended and the Senate passed an appropriation of $174 million, $76 million less than the President's request. Ofthe total, $100 million is for continuation of the National Youth Anti-Drug MediaCampaign; $7.2 million is for the United States Anti-Doping Agency; $60 millionis for the Drug-Free Communities Program (including $1 million to continue theNational Community Anti-Drug Coalition Institute); $1.5 million is for theCounterdrug Executive Secretariat; $1 million is for the National Drug CourtInstitute; $2 million is for Performance Measures Development; and $800,000 is forUnited States dues to the World Anti-Doping Agency. Noting that the current sourceof funding for this account is direct appropriations, the Committee concurred withchanging the name of the account.

The committee report accompanying S. 1589 includes several directives related to the National Media Campaign. According to the report:

Today, a large portion of the campaign's budget pays for outside media and advertising consultants and the Committee isconcerned about the amount of resources that are being consumed by these parties. The Committee has provided $100,000,000 for the national media campaign anddirects that no less than 80 percent of the funding provided be used for the purchaseof advertising time and space unless ONDCP submits and the House and SenateCommittees on Appropriations approves a request for reprogramming of the fundsbased on clearly articulated principals and priorities. The Committee directs theGeneral Accounting Office to conduct a study to determine the extent to whichoutside consultants are being used by the Media Campaign, the cost-effectiveness ofthis method, and if this system is producing more effective ads that aid ONDCP inits core mission. (61)

With regard to the campaign's industry match program, under which federal funds for paid advertising were to be matched dollar-for-dollar by industry, thecommittee report states that:

It has come to the Committee's attention however, that while ONDCP is purchasing peak time for specific ads, they areagreeing to have that time and space matched with different ads at different times. The Committee believes that this violates the intent of Congress and directs ONDCPto provide a detailed report to the House and Senate Committees on Appropriationsregarding all advertising, their placement and what matches are being provided by allmedia in all markets. Further, the Committee directs ONDCP to more closelyscrutinize the matching proposals and to ensure that the one to one match moreappropriately mirrors the time and space that has beenpurchased. (62)

The report also states that "the Committee intends to rely on the scientifically rigorous NIDA study to gauge [the advertising campaign's] ultimate impact." (63)

The law provides an appropriation of $229 million. Of the total, $145 million is to support a national media campaign (no less than 78% shall be used to purchaseadvertising time and space); $70 million is to continue a program of matching grantsto drug-free communities (of which $1 million is a directed grant to the CommunityAnti-Drug Coalitions of America for the National Community Anti-Drug CoalitionInstitute; $3 million is for the Counterdrug Intelligence Executive Secretariat; $2million is for evaluation and research related to National Drug Control Programperformance measures; $1 million is for the National Drug Court Institute; $7.2million is for the United States Anti-Doping Agency (USADA) for anti-dopingactivities; and $800,000 is for the United States membership dues to the WorldAnti-Doping Agency. The funds may be transferred to other federal departments andagencies to carry out such activities.

With regard to the USADA, the conferees direct the agency to provide the Committees on Appropriations with a prior year expenditure report and a detailedspending plan for FY2004 no later than 120 days after the enactment of theTransportation and Treasury appropriations act. Each report is to include USADA'sefforts to secure funding from sources other than the federal government. As for theNational Youth Anti-Drug Media Campaign, the conferees reemphasize the need todemonstrate that "welcome trends in the incidence of youth drug use" can be linkedto the media campaign. ONDCP is directed to submit an FY2004-FY2008evaluation plan for the media campaign to the Committees on Appropriations no laterthan 120 days after the enactment of the Transportation and Treasury appropriationsact. The conferees further direct ONDCP to provide a detailed report to theCommittees on Appropriations on the "type and content of all advertising, its timingand placement in media markets, and the matches provided for all advertising." (64)

Unanticipated Needs. The account provides funds for the President to meet unplanned and unbudgetedcontingencies for national interest, security, or defense purposes.

The President's FY2004 budget proposed an appropriation of $1 million. This is virtually the same amount as was appropriated in FY2003 ($993,000 afterrescission). The House and Senate Committees on Appropriations recommended,the House and Senate passed, and the law provides the same appropriation as thePresident requested.

Title V: Independent Agencies

Table 9. Title V: Related AgenciesAppropriations (in millions of dollars)

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations billConference Report Budget Authority table provided by the House Committee onAppropriations.

Note: A newly created independent agency which begins operation in FY2004, the ElectionAssistance Commission, received an additional appropriation of $1 billion for electionreform grants in a separate division of the appropriations act.

*The Senate Committee on Appropriations and the Conference Report table list the PostalService under the Independent Agencies Title, rather than as a separate title. Forcomparative purposes, the Postal Service appropriation ($97 million) has been subtractedfrom the Independent Agencies total Senate and Conference reports' total figure.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of0.59%; that rescission is not reflected in these figures.

Federal Election Commission (FEC). The FEC administers federal campaign finance law,including overseeing disclosure requirements, limits on contributions andexpenditures, and the presidential election public funding system; the agency retainscivil enforcement authority for the law. The Office of Election Administration,which serves as a clearinghouse for information on voting laws and procedures forstate and local election officers, is another part of the FEC .

The President's fiscal 2004 budget proposed an appropriation of $50.4 million for the FEC, an increase of $898,000 above the fiscal 2003 appropriation of $49.5million. The FEC, in its separate budget submission to Congress, concurred with theAdministration proposal, both in the request for overall appropriations and for 391employees. The agency noted in its submission that the 1.8% increase over the 2003appropriated amount represented "essentially a Current Services request," reflectingonly an adjustment for inflation and salary and benefits increases but no additionalfunds or staff for new programs or initiatives. The agency attributed the essentiallystable budget request to the greater efficiency resulting from mandatory electronicfiling and the new administrative fine and Alternative Dispute Resolution programs.

The House-passed bill contained the same $50.4 million funding level as requested by the Administration and the agency, with a stipulation that no less than$6.4 million be used for automated data processing systems. The House bill alsocontained two legislative provisions added by the Appropriations Committee: toextend the FEC's administrative fines program by two years, through the end of2005, and to allow reports filed by overnight delivery, priority, or express mail to beconsidered as timely based on the postmark or, if by non-U.S. Postal Service carriers,by the date delivered to that carrier.

The bill passed by the Senate contained the same $50.4 million recommended by the Administration, the FEC, and the House. The Senate version, however, didnot include the House bill's stipulation regarding spending on data systems, nor didit include the legislative provisions in the House bill.

The conference version appropriates $51.2 million for the FEC, with the additional $800,000 above the House and Senate figure designated for interimactivities of the agency's Office of Election Administration, pending its incorporationinto the newly created Election Assistance Commission. Conferees included theHouse bill's stipulation that no less than $6.4 million be used for automated dataprocessing systems, as well as the House's legislative provisions dealing withextension of the administrative fines program and the timing of filing of reports. Ina separate division of the Consolidated Appropriations Act, 2004 (Division H,Section 159), conferees added $1 billion for the activities of the Election AssistanceCommission.

Federal Labor Relations Authority (FLRA). The FLRA serves as a neutral party in the settlement ofdisputes that arise between unions, employees, and federal agencies on mattersoutlined in the Federal Service Labor Management Relations Statute; decides majorpolicy issues; prescribes regulations; and disseminates information appropriate to theneeds of agencies, labor organizations, and the public. The FLRA also engages incase-related interventions and training and facilitates labor-managementrelationships. It has three components: the Authority which adjudicateslabor-management disputes; the Office of the General Counsel which, among otherduties, investigates all allegations of unfair labor practices filed and processes allrepresentation petitions received; and the Federal Service Impasses Panel whichresolves impasses which occur during labor negotiations between federal agenciesand labor organizations.

The President's FY2004 budget proposed an appropriation of $29.6 million for the FLRA, an increase of 3.0% over the $28.8 million appropriated in FY2003. TheHouse and Senate Committees on Appropriations recommended, the House andSenate passed, and the law provides the same amount as the President requested.

Table 10. General Services Administration Appropriations (in millions of dollars)

Source: Figures were taken from an FY2004 Transportation-Treasury Appropriations billConference Report Budget Authority table provided by the House Committee onAppropriations.

a. The Consolidated Appropriations Act, 2004 contains an across-the-board rescission of0.59%; that rescission is not reflected in these figures.

General Services Administration (GSA). The General Services Administration administers federalcivilian procurement policies pertaining to the construction and management offederal buildings, disposal of real and personal property, and management of federalproperty and records. It is also responsible for managing the funding and facilitiesfor former Presidents and presidential transitions.

As reconciled by agreement to the conference report ( H.Rept. 108-401 ), P.L. 108-199 authorizes a total of $56.4 million for government-wide policy and $88.1million for operating expenses; $39.2 million for the Office of Inspector General;$3.4 million for allowances and office staff for former Presidents; and $3.0 millionto remain available until expended for the electronic government fund.

As agreed to in the Senate, S.Amdt. 1943 (to H.R. 1989 ) recommended a total of $61.8 million for government-wide policy and $85.1million for operating expenses; $39.2 million for the Office of Inspector General;$3.4 million for allowances and office staff for former Presidents; and $5.0 millionto remain available until expended for the electronic government fund.

S. 1589 , as introduced and reported, recommended a total of $61.8 million for government-wide policy and $85.1 million for operating expenses; $39.2million for the Office of Inspector General; $3.4 million for allowances and officestaff for former Presidents; and $5.0 million to remain available until expended forthe electronic government fund.

H.R. 2989 , as introduced, reported, and passed by the House, provided a total of $56.4 million for government-wide policy and $79.1 million foroperating expenses; $39.2 million for the Office of Inspector General; $3.4 millionfor allowances and office staff for former Presidents; and $1.0 million to remainavailable until expended for the electronic government fund.

The President's FY2004 budget contained a request of $74.0 million for government-wide policy and $85.1 million for operating expenses; $39.2 millionfor the Office of Inspector General; $3.4 million for allowances and office staff forformer Presidents; $45.0 million for interagency electronic government initiatives;and $17.6 million to be deposited into the Federal Consumer Information CenterFund.

Federal Buildings Fund (FBF). Revenue to the FBF is the principal source of funding. Congress, however, directsthe GSA as to the allocation or limitation on spending of funds.

As reconciled by agreement to the conference report ( H.Rept. 108-401 ), P.L. 108-199 authorizes that an additional $446.0 million be deposited into the FBF, fora total of $6,758.2 million. Of this total, $708.3 million is to remain available untilexpended for new construction, including $204.6 million for nine courthouses. Anadditional $991.3 million is to remain available until expended for repairs andalterations. This amount includes $208.2 million for repairs to five existingcourthouse; $5.0 million to implement a chlorofluorocarbons program; $20.0 millionfor a glass fragmentation program; and amounts necessary to provide suchreimbursable fencing, lighting, guard booths, and other facilities on private or otherproperty as may be appropriate to enable the U.S. Secret Service to perform itsprotective functions.

As agreed to in the Senate, S.Amdt. 1943 (to H.R. 2989 ) recommended that an additional $407.0 million be deposited into the FBF, fora total of $6,717.3 million. Of this total, $659.7 million was to remain available untilexpended for new construction. An additional $1,000.9 million was to remainavailable until expended for repairs and alterations.

S. 1589 , as introduced and reported, recommended that an additional $407.0 million be deposited into the FBF, for a total of $6,717.3 million. Of this total, $659.7 million was to remain available until expended for newconstruction, including $204.6 million for nine courthouses. An additional $1,000.9million was to remain available until expended for repairs and alterations. Thisamount included $208.2 million for repairs to five existing courthouses; $20.0million to implement a glass fragmentation program; $5.0 million to implement achlorofluorocarbons program; and amounts to provide such reimbursable fencing,lighting, guard booths, and other facilities on private or other property not in federalownership as may be appropriate to enable the U.S. Secret Service to perform itsprotective functions.

H.R. 2989 , as introduced, reported, and passed by the House, recommended that an additional $247.4 million be deposited into the FBF, for a totalof $6,557.5 million. Of this total, $406.1 million was to remain available untilexpended for new construction. An additional $1,010.5 million was to remainavailable until expended for repairs and alterations. This amount included $208.2million for repairs to five existing courthouses; $20.0 million to implement a glassfragmentation program; $5.0 million to implement a chlorofluorocarbons program;and for funding any costs associated with implementing security improvements infederal buildings.

The President's FY2004 budget requested that an additional $217.0 million be deposited into the Federal Buildings Fund, for a total of $6,579.9 million. Anamount not to exceed $400.6 million was to remain available until expended for newconstruction projects. An additional $1,012.7 million was to remain available untilexpended for repairs and alterations. This amount included $217.2 million forrepairs to five existing courthouses; $20.0 million to implement a glass fragmentationprogram; $5.0 million to implement a chlorofluorocarbons program; and "amountsto provide such reimbursable fencing, lighting, guard booths, and other facilities onprivate or other property not in Government ownership or control as may beappropriate to enable the United States Secret Service to perform its protectivefunctions pursuant to 18 U.S.C. 3056."

Electronic Government Fund. The Senate and House adopted the conferees' recommended allocation of $3 million forthe e-gov fund, a midpoint compromise between the amounts initially approved byeach chamber. This appropriation is $2 million less than the amounts provided inFY2002 and FY2003 and considerably less than the $45 requested by the Presidentfor FY2004.

The Senate had initially approved the appropriators' recommended $5 million for the e-gov fund for FY2004, the same amount recommended and ultimatelyapproved for FY2003. House appropriators had initially recommended only $1million for the e-gov fund for FY2004, and this was subsequently approved by theHouse. The House committee report offered no explanation for the reduced amount. The account statement noted that the fund has been authorized by the E-GovernmentAct of 2002, which had previously been a matter of concern for appropriators. (65) Under the terms of the authorizing provision, the fund is administered by theAdministrator of General Services as a GSA account to support projects approved bythe director of OMB. No transfers of monies from the fund to federal agencies maybe made until 10 days after a proposed spending plan and justification for eachproject to be undertaken using such monies has been submitted to the Committeeson Appropriations.

Funding for the Electronic Government Fund was a somewhat contentious matter between the President and Congress in FY2003, as it had been in FY2002. On February 28, 2001, in advance of his proposed budget for FY2002, the President released: A Blueprint for New Beginnings: A Responsible Budget for America'sPriorities . Intended as a 10-year budget plan, the Blueprint , among otherinnovations, proposed the establishment of an electronic government account seededwith "$10 million in 2002 as the first installment of a fund -- that will grow to a totalof $100 million over three years -- to support interagency electronic Government(e-gov) initiatives." Managed by OMB, the fund was foreseen as supporting"projects that operate across agency boundaries," facilitating "the development of aPublic Key Infrastructure to implement digital signatures that are accepted acrossagencies for secure online communications," and furthering "the Administration'sability to implement the Government Paperwork Elimination Act of 1998, whichcalls upon agencies to provide the public with optional use and acceptance ofelectronic information, services and signatures, when practicable, by October2003." (66) About one month later, on March 22,OMB Deputy Director Sean O'Keefeannounced that the Bush Administration had decided to double the amount to beallocated to the e-gov fund, bringing it to $20 million. (67)

As included in the President's FY2002 budget, the fund was established as an account within the General Services Administration (GSA), to be administered by theAdministrator of General Services "to support interagency projects, approved by theDirector of the Office of Management and Budget, that enable the FederalGovernment to expand its ability to conduct activities electronically, through thedevelopment and implementation of innovative uses of the Internet and otherelectronic methods."

The President's initial request for the fund was $20 million, to remain available until September 30, 2004. Congress, however, appropriated $5 million for the fundfor FY2002, to remain available until expended. Appropriators specified thattransfers of monies from the fund to federal agencies could not be made until 10 daysafter a proposed spending plan and justification for each project to be undertakenusing such monies had been submitted to the Committees on Appropriations. Expressing general support for the purposes of the fund, they also recommended, andboth chambers agreed, that the administration work with the House Committee onGovernment Reform and the Senate Committee on Governmental Affairs to clarifythe status of its authorization.

The President's budget for FY2003 recognized "GSA as operator of the official federal portal for providing citizens with one-stop access to federal services via theInternet or telephone" and, therefore, a key agency in implementing the President'se-gov vision, which will "require cross-agency approaches that permit citizens,businesses, and state and local governments to easily obtain services from, andelectronically transact business with the federal government." In this regard, anAdministration interagency Quicksilver E-Gov Task Force, according to the budget,"identified 23 high priority Internet services for early development."

Seeking $45 million for the e-gov fund, the budget acknowledged that this amount was "a significant increase over the $20 million requested in 2002," butnoted that the request "is supported by specific project plans developed by theQuicksilver Task Force." (68) Furthermore,according to the fund account statement,these monies "would also further the Administration's implementation of theGovernment Paperwork Elimination Act (GPEA) of 1998, which calls upon agenciesto provide the public with optional use and acceptance of electronic information,services, and signatures, when practicable, by October 2003."

The House appropriators again rejected the amount requested by the President and recommended $5 million for the fund, reiterating, as previously, that transfers ofmonies from the fund to federal agencies could not be made until 10 days after aproposed spending plan and justification for each project to be undertaken using suchmonies had been submitted to the Committees on Appropriations. The HouseCommittee also declined to recommend an appropriation for the fund as a GSAaccount, but did fund it as an account under the jurisdiction of the Office ofManagement and Budget within the Executive Office of the President. (69) Senateappropriators, however, recommended the full $45 million requested by thePresident. Their report stated that OMB "would control the allocation of the fundand direct its use for information systems projects and affect multiple agencies andoffer the greatest improvements in access and service." (70) Final funding, as providedby P.L. 108-7 , nonetheless, was $5 million.

National Archives and Records Administration (NARA). The custodian of the historically valuable records of thefederal government since its establishment in 1934, NARA also prescribes policy andprovides both guidance and management assistance concerning the entire life cycleof federal records. It also administers the presidential libraries system; publishes thelaws, regulations, and presidential and other documents; and assists the InformationSecurity Oversight Office (ISOO), which manages federal security classification anddeclassification policy; and the National Historical Publications and RecordsCommission (NHPRC), which makes grants nationwide to help nonprofitorganizations identify, preserve, and provide access to materials that documentAmerican history.

The Senate and House adopted the conferees' recommended allocation of $316.3 million for NARA. This appropriation results from several adjustments inNARA funding as initially approved by the two chambers. The confereesrecommended $256.7 million for operating expenses, with $600,000 of this amountdesignated for the preservation of the records of the Freedman's Bureau. For theelectronic records archive, $35.9 million was recommended, of which $22 millionis to remain available until the end of FY2006. Similarly, while $13.7 million wasrecommended for repairs and restoration, portions of this amount were specified forthree particular projects: $500,000 for the Military Personnel Records Centerrequirements study; $2.25 million for land acquisition for a new regional archivesand records facility in Anchorage, Alaska; and $5 million for repair of the plaza ofthe Lyndon Baines Johnson Presidential Library. Finally, $10 million wasrecommended for the NHPRC.

The Senate had initially approved the appropriators' recommended $276.674 million for NARA for FY2004, about $29 million less than the President's requestand approximately $23 million less than the House appropriators' recommendation. Of this amount recommended in the Senate, $258.191 million was proposed foroperating expenses; $13.483 million for repairs and restoration, with $2.025 millionspecified for the construction of a regional archival facility in Alaska and $5 milliondesignated for repair of the plaza of the Lyndon Baines Johnson Presidential Library;and $5 million for the NHPRC.

The House had initially approved the funding for NARA recommended by House appropriators -- a total amount of $299.8 million, which was about $5 millionless than the President's request, but about $23 million more than the amountrecommended by Senate appropriators. Of this amount approved by the House,$255.2 million was proposed for NARA operating expenses, which was almost $39million less than the funding the President had requested for this account. However,some of these funds were included in a new electronic records archive account, forwhich the Committee had recommended $35.9 million. The President's requestedamount for repairs and restoration was approved, as was twice the amount requestedby the President for the NHPRC.

The President's budget requested $305.6 million for FY2004, which was slightly more than $42 million above the FY2003 appropriation for NARA. Of therequested amount, $294.1 million was sought for operating expenses, $6.5 millionfor repairs and restoration, and $5 million for the NHPRC grants program. Compared with FY2003 funding, increased monies were being sought for operatingexpenses; amounts sought for the latter two accounts were below the amountsappropriated for them for FY2003.

Merit Systems Protection Board (MSPB). The MSPB serves as guardian of the federal government'smerit-based system of employment. The agency carries out its mission by hearingand deciding appeals from federal employees of removals and other major personnelactions. The MSPB also hears and decides other types of civil service cases, reviewsOPM regulations, and conducts studies of the merit systems. The agency's efforts areto assure that personnel actions taken involving employees are processed within thelaw and that actions taken by OPM and other agencies support and enhance federalmerit principles.

The President's FY2004 budget proposed an appropriation of $35.5 million for the MSPB. The request is 11.6% more than the $31.8 million appropriated inFY2003. The MSPB budget submission states that the amount requested includes"$75,000 to provide for employee and managerial development opportunities" and"$100,000 to comply with the Accountability of Tax Dollars Act of 2002, Public Law107-289, which requires audited financial statements for agencies with over$25,000,000 in appropriated funds in their budget." (71) According to the budgetsubmission:

Beginning in fiscal year 2004, at the request of [OMB], the [MSPB] is not requesting funds be transferred from the CivilService Retirement and Disability Trust Fund. Instead, the funding previouslysupplied from the Trust Fund for adjudication of Civil Service Retirement appealsis being requested as part of the regular appropriation total of $35,503,000. OMB hasrecommended this change to simplify the financial record keeping for both the[MSPB] and the Civil Service Retirement and Disability Trust Fund. We checkedwith the Office of Personnel Management, which has responsibility for the TrustFund, and they have no objection to this change. (72)

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides an appropriation of $32.9 million, $2.6million less than the President's request. In addition, up to $2.6 million foradministrative expenses could be transferred from the Civil Service Retirement andDisability Fund to adjudicate retirement appeals. The conferees agreed to the trustfund transfer rather than providing a direct appropriation as the President hadrequested. According to the House committee report accompanying H.R. 2989

The decrease from the President's request reflects the Committee's decision to continue the practice of appropriatingfunds to MSPB from the Civil Service Retirement and Disability Fund rather thandiscontinuing this practice as requested by the President; this request has not beenadequately justified. (73)

Office of Personnel Management (OPM). The budget for OPM is comprised of budget authority forboth permanent and current appropriations. This report discusses the budgetauthority for current appropriations. The agency is responsible for administeringpersonnel functions. The OPM helps agencies to develop merit-based humanresources management accountability systems to support their missions. TheStrategic Human Resources Policy Division designs and develops human resourcespolicies and strategies linked to agency accomplishment of missions. The HumanCapital Leadership and Merit Systems Accountability Division assists agencies inimplementing and assessing human capital strategies. The Human ResourcesProducts and Services Division supports federal agencies by administering retirementand insurance programs, providing personnel investigation services, managerial andexecutive training, and other human resources services. (74) The Office of InspectorGeneral (OIG) conducts audits, investigations, evaluations, and inspectionsthroughout the agency and may issue administrative sanctions related to the operationof the Federal Employees Health Benefits Program.

The President's FY2004 budget proposed an appropriation of $18.0 billion for OPM. This total included discretionary funding of $118.7 million (75) for salaries andexpenses and $1.5 million for OIG salaries and expenses. It also included mandatoryfunding of $7.5 billion for the government payment for annuitants of the employeeshealth benefits program, (76) $35.0 million for thegovernment payment for annuitantsof the employee life insurance program, and $10.0 billion for payment to the civilservice retirement and disability fund. Included in this total as well were trust fundtransfers of $135.9 million (77) for salaries andexpenses and $14.4 million (78) for OIGsalaries and expenses. (In FY2003, $120.8 million for salaries and expenses and$10.9 million for OIG salaries and expenses were transferred from trust funds.)

According to OPM's budget submission, the $118.7 million requested for salaries and expenses "includes $111,748,000 in annual funds [for such things asenhanced information technology support and competitive sourcing studies],$4,500,000 in no-year funds for e-Government (e-Gov) projects, and $2,500,000 toremain available through the end of FY2005 to coordinate and conduct programevaluation and performance management." (79)

With regard to the OIG, the budget states that the amount requested

will finance more audit staff, special agent criminal investigators, associated analytical staff, and improved informationsystems. OPM expects to reduce the audit cycle from 5 years to 3.6 years forcommunity-related carriers. Recoveries are expected to increase by $16 millionannually as a result. (80)

The OPM budget request is 8.8% more than the $16.6 billion appropriated in FY2003. Specifically, it is 7.7% less than the $128.6 million appropriated in FY2003for salaries and expenses; 0.7% less than the $1.5 million for OIG salaries andexpenses; 5.3% more than the $6.9 billion for the government payment for annuitantsof the employees health benefits program; 2.9% more than the $34.0 million for thegovernment payment for annuitants of the employee life insurance program; and6.1% more than the $9.4 billion for payment to the civil service retirement anddisability fund. (81)

The House Committee on Appropriations recommended and the House passed an appropriation of $119.498 million for salaries and expenses ($750,000 more thanthe President's request), of which $2 million would be for the cost of the enterprisehuman resources integration project; $2.5 million would be for the cost of leading thegovernment-wide initiative to modernize federal payroll systems and servicedelivery; and $2.5 million would be to coordinate and conduct program evaluationand performance measurement. The Committee recommended the same amounts asthe President requested for OIG salaries and expenses, the government payment forannuitants of the employees health benefits program, the government payment forannuitants of the employee life insurance program, and payment to the civil serviceretirement and disability fund. In addition, the Committee recommended trust fundtransfers of $126.9 million for salaries and expenses, $9.1 million less than thePresident requested, and $14.4 million for OIG salaries and expenses, the sameamount as the President requested. The committee report accompanying H.R. 2989 states that

The increase of $750,000 above the President's request is to provide additional funding for the ongoing 'retirementreadiness' project being done by OPM in conjunction with the InternationalFoundation for Retirement Education (InFRE)... The Committee directs OPM toaward this money to InFRE as a grant or contract, and to report to the Committee onthe progress of this project no later than 60 days after enactment of thisAct. (82)

The report also "urges the Director of OPM to certify that any transfer of DSS [Defense Security Service] functions to OPM will not have a detrimental impact onthe ability of OPM to handle its current caseload," directs OPM to "notify theCommittees if any research, audit, or investigation regarding PBMs [pharmacybenefit managers] has been delayed or terminated at the formal or informal requestof another Federal agency" by September 1, 2003, encourages OPM to complete thecomprehensive outside audit to determine the true cost of mandated services underthe Federal Employees Health Benefits Program (FEHBP) and "promptly submit areport of the results to the Committee," and "directs OPM to consider Hampshire andHampden counties [in Massachusetts] for inclusion into the Hartford [CT] LocalityPay Area." (83)

The Committee directs OPM

to conduct a study in both the aggregate and by State to: (1) determine the approximate number of Federal employees andretirees who are eligible to participate in the FEHBP, but who are not covered by thisprogram or by any other health insurance program; (2) the principal reasons whythese individuals do not obtain health insurance; and (3) by which agencies thesepeople are employed and at which pay grades, levels, or rates of pay. The results ofthis study shall be submitted to the Committees on Appropriations no later thanSeptember 30, 2004. (84)

The Senate Committee on Appropriations recommended and the Senate passed the same appropriations as the President requested. The salaries and expensesappropriation would be allocated in the same manner as the House Committeerecommended. Of the amount recommended for transfer from the trust funds, $36.7million would remain available until expended for the cost of automating theretirement recordkeeping systems. In its report accompanying S. 1589 ,the Committee addressed OPM's ongoing program to modernize its retirementsystem which began in 1997. According to the report:

Two years ago, the Committee recommended that OPM reach out to GAO for guidance and support because OPMcould benefit from the experiences that GAO has documented with other Federalagency modernization projects. OPM did not act on the Committee's suggestion,therefore, last year, the Committee directed OPM to conduct quarterly meetings withGAO on the progress of the IT modernization project. These meetings did not occurquarterly. Instead only one meeting occurred in 2002 and none in 2003. TheCommittee is now aware that this multi-year effort has been plagued with problems. The Committee is disappointed by this lack of cooperation and therefore directs GAOto do a comprehensive audit on the problems and any mismanagement of themodernization project. (85)

The law provides an appropriation of $119.498 million for salaries and expenses (the House-passed amount and allocated in the same way) and the same amounts asthe President requested for the other accounts. The conferees direct OPM to considerimplementing the Federal Salary Council's recommendation to include Franklin,Hampshire, and Hampden Counties in Massachusetts in the Hartford, CT pay area.

During consideration of the appropriations bill, the Senate agreed by voice vote to an amendment (No. 1949) offered by Senator Charles Grassley that would prohibitany funds appropriated or made available under the Act from being used toimplement regulations proposed by OPM on September 9, 2003, (86) relating to thedetail of executive branch employees to the legislative branch. Senator Grassleyexplained the need for the amendment as follows.

The regulation proposed by the Office of Personnel Management ... seeks to reduce to 6 months [from typically 1 to 2 years]the time that a detailee can spend in Congress. This is too short a time for even themost industrious of detailees to understand the intricacies of the legislative processand contribute to that process. Moreover, this regulation attempts to limit theactivities in which executive branch employees can engage while under the directsupervision of a Congressional office in an effort to micro-manage from afar. Thisis unacceptable. (87)

Human Capital Performance Fund. The President's FY2004 budget proposed an appropriation of $500 million for thisnew fund which

is designed to create performance-driven pay systems for employees and reinforce the value of employee performancemanagement systems. The Administration proposes providing additional pay overand above any annual, across-the-board pay raise to certain civilian employees basedon individual or organizational performance and/or other critical agency humancapital needs. Ninety percent of funds appropriated would be distributed to agencieson a pro rata basis, upon OPM approval of an agency's plan. The remainder, and anyamount withheld from agencies due to inadequate plans, would be allocated at thediscretion of OPM. (88)

The House Committee on Appropriations recommended and the House passed an appropriation of $2.5 million, $497.5 million less than the President's request. Obligation of the funding is contingent upon legislation authorizing the creation ofthe fund within OPM. (89) No funds would beavailable until the OPM Director notifiesthe relevant subcommittees of jurisdiction of the Committees on Appropriations ofthe approval of a performance pay plan for an agency and the prior approval of thesubcommittees has been attained. The Committee directs OPM "to report annuallyto the Committees on Appropriations on the performance pay plans that have beenapproved, and the amounts that have been obligated or transferred." (90)

The Senate Committee on Appropriations did not recommend and the Senate did not pass an appropriation for the fund. "The Committee believes that an initiativeof this type should be budgeted and administered within each individual agency,"according to the report accompanying S. 1589 . (91)

The law provides an appropriation of $1 million. The money shall not be obligated or transferred until legislation is enacted to establish the fund within OPM. Funds also shall not be obligated or transferred to any federal agency until the OPMDirector notifies and receives prior approval from the relevant subcommittees ofjurisdiction of the Committees on Appropriations of OPM approval of an agency'sperformance pay plan. Such amounts as determined by the OPM Director may betransferred to federal agencies to carry out the purposes of the fund.

Office of Special Counsel (OSC). The agency investigates federal employee allegations of prohibited personnelpractices and, when appropriate, prosecutes matters before the Merit SystemsProtection Board; provides a channel for whistle blowing by federal employees; andenforces the Hatch Act. In carrying out the latter activity, the OSC issues bothwritten and oral advisory opinions. The OSC may require an agency to investigatewhistle blower allegations and report to the Congress and the President asappropriate.

The President's FY2004 budget proposed an appropriation of $13.5 million for the OSC, an increase of 9.2% over the $12.4 million appropriated in FY2003. According to the budget, the funding "will enable OSC to continue its efforts toreduce its long-standing case processing backlogs .... This request provides fundingfor seven additional full time staff in [the Hatch Act and Disclosure Units] to addressgrowing backlog concerns." (92)

The House and Senate Committees on Appropriations recommended, the House and Senate passed, and the law provides the same appropriation as the Presidentrequested.

Title VI: General Provisions

This section of the report discusses, briefly, general provisions such asgovernment-wide guidance on basic infrastructure-like policies. Examples are provisions related to the Buy America Act, drug-free federal workplaces, andauthorizing agencies to pay GSA bills for space renovation and other services whichare annually incorporated into the Treasury and General Government appropriationslegislation. Quite frequently, additionally, there have been provisions which relateto specific agencies or programs. For both Transportation/Treasury-related generalprovisions and government-wide general provisions, with noted exceptions, thesections discussed here will be those which are new or contain modified policies. TheConsolidated Appropriations Act, 2004, contain these provisions. It should be notedthat there are also general provisions which relate only to agencies and accountswithin the bill.

The Administration's proposed language for government-wide general provisions can be found in the Appendix . (93) Most of the general provisions continuedlanguage which has appeared under that title for several years. For an array ofreasons, Congress has determined that reiterating the language is preferable toplacing the provisions in permanent law.

The Administration was recommending dropping several such provisions. The provisions are shown in Table 11 .

Table 11. Government-wide General Provisions

Federal Personnel Issues

General Schedule Pay. At the close of the 108th Congress, 1st Session, the prospects for General Schedule January2004 pay adjustments were uncertain. A 2% adjustment was effective the first payperiod beginning on or after January 1, 2004 (January 11 for most). (94) Now that the Consolidated Appropriations Act, 2004 has been enacted, an average 4.1% increasewill go into effective, retroactive to January 1, 2004. The 4.1% includes the 2%adjustment.

Under the Federal Pay Comparability Act of 1990 (FEPCA), federal white collar employees, paid under the General Schedule and related salary systems, are to receiveannual adjustments based on two separate mechanisms. The first is the adjustmentto base pay which is based on changes in private sector salaries as reflected in theEmployment Cost Index (ECI). The rate of pay adjustment is supposed to be thepercentage rate of change in that element of the ECI, minus 0.5. Under that formula,for January 2003, the base pay adjustment was 3.1%. On December 31, 2002, thePresident signed an Executive Order establishing the salary schedules for federalcivilian personnel effective January 2003. (95) Underthe provisions of Section 637,Division J, P.L. 108-7 , the full pay increase for the General Schedule was 4.1%. There was no stipulation as to how the additional 1% would be apportioned betweenbase pay and locality-based comparability payments. The payment was retroactiveto January 2003. On March 21, it was announced that the additional 1% would beapplied exclusively to locality-based comparability payments. (96)

Much the same situation existed for January 2004. The President's budget proposed a federal civilian pay increase of 2.0% in January 2004. (97) He submitted analternative plan at the end of August which would provide a 1.5% increase in basicpay and a 0.5% increase in locality pay. Because Congress has not completed actionon legislation to establish other rates, the President's plan was effective in January2004.

Section 601 of the FY2004 budget resolution ( H.Con.Res. 95 , H.Rept. 108-71 ) contained a Sense of the Senate provision stating that the civilianand military pay increases should be in parity. The H.R. 2989 , as passedby the House and the Senate would have established a January 2004 pay increase, ata rate of 4.1%, for civilian employees, equal to the Administration's proposal for themilitary. It would be left to the President's discretion as to how the increase wouldbe split between basic and locality pay. The pay provision is in the pendingConsolidated Appropriations, 2004 (H.R. 2673, Division F, Section 640). According to the Office of Personnel Management, the 4.1% will be split with 2.7%for basic pay (the rate that would have been established if the ECI mechanism hadbeen the only basis for the adjustment) and 1.4% for the locality-based payments.

The net rates of adjustment for the Washington, DC area were 2.12% under the overall 2% adjustment and will be 4.41% under the overall 4.1% adjustment.

Federal Wage System. The Federal Wage System (FWS) is designed to compensate the federal blue collar, orskilled labor, force at rates prevailing in local wage areas for like occupations. If thestatutory system were allowed to be managed as planned, the wage rates and the ratesof adjustment in the over 130 wage areas would vary, according to the labor costs andcompensation in the private sector. For the last several years, Congress has limitedthe rates of adjustment, based on the rates of adjustment for the General Schedule(for FY2003: P.L. 108-7 , Division J, Section 613 and for FY2004: H.R. 2673 , Division F, Sections 613 and 640(b)). Part of the rationale for that decision isthat, in certain high cost areas, some FWS wages would exceed the salaries paid toGeneral Schedule supervisors. Wages in lower cost areas will be allowed to increaseaccording to the findings of the wage surveys but the high cost area wages will becapped.

P.L. 107-117 extended the Monroney Amendment out-of-area survey application to Department of Defense personnel.

Senior Executive Service Salaries. Section 637 of the President's proposed General Provisions requested an amendmentto the statute governing the determination of salary levels for the Senior ExecutiveService. The provisions to change the system by eliminating the six-tier system, bychanging the salary setting authority from the President to the Office of PersonnelManagement, and by taking them out of the locality pay system and capping theirrates at Level II of the Executive Schedule, were enacted under the National DefenseAuthorization Act for 2004. (98) For January 2004the minimum rates of pay is$103,700 and the maximum for most is $145,600. Those in agencies withperformance appraisal systems certified by OPM, will be able to receive a maximumof $158,100, a salary equal to that of Members of Congress and U.S. District Courtjudges. (99)

Human Capital Performance Fund. The Administration's FY2004 pay proposal would combine a 2% across-the boardincrease with a performance component. A $500 million fund would be set asidegovernment-wide to allow managers to reward top-performing individuals withpermanent increases in base pay. (100) See thesection on the Office of PersonnelManagement above for a more detailed discussion.

Members of Congress, Judges, and Other Officials. There are no provisions in either the House-passed orSenate-reported versions which address the pay of Members of Congress, Judges, orother federal officials. If Congress is legislatively silent, the annual adjustment goesinto effect automatically. A pay adjustment of 2.2% is scheduled for the officials ofthe three branches effective January 2004. However, because the General Schedulebasic pay adjustment rate was 1.5% until passage of the Consolidated AppropriationsAct, 2004, the rate of pay adjustment for these federal officials was limited to 1.5%. The full adjustment of 2.2% will go into effect and will be retroactive. The Senate,on October 23, 2003, voted to table an amendment which would have denied the payincrease to Members and would not have affected the pay of other officials. (101)

Under the Ethics Reform Act of 1989, as amended, pay adjustments for federal officials, including Members of Congress and judges, are also based on ECIcalculations, but for a different 12-month period. The ECI calculations dictate a payadjustment in January 2004 of 2.2%. However, the statute limits those adjustmentsto the rate of adjustment for base pay of the General Schedule. Therefore, since theGeneral Schedule base pay was adjusted at the rate of 1.5%, pending final action onthe Consolidated Appropriations bill, 1.5% was the temporary maximum rate ofadjustment in salaries of federal officials. Because the mechanism described aboveis automatic, no bill language is necessary to establish the pay adjustment. (102)

Unlike that for Members of Congress and executive branch officials, the annual pay increase must be specifically authorized for judges. P.L. 108-167 (December 6,2003) was enacted for that purpose with regard to the January 2004 adjustment. Atno time, since the authorization was required, have the judges received loweradjustments than the other officials.

President. Pursuant to the Treasury and General Government Appropriations Act, 2000 ( P.L. 106-58 ), effectivenoon, January 20, 2001, the President receives a salary of $400,000 per annum . Since 1969, Presidents had been paid a salary of $200,000. No further action onpresidential pay is expected. Former Presidents receive a pension equal to the rateof pay for Cabinet Secretaries (currently $171,900) and the pension is adjustedautomatically as those pay rates are changed. (103)

Federal Employees Workers' Compensation Program (FECA). The Federal Employees Compensation Act(FECA) provides workers' compensation benefits for Federal employees injured onthe job. Under current law (5 U.S.C. Sect. 8147), the direct costs of these benefitsare reimbursed via transfers from the budgets of each Federal agency to the LaborDepartment, which administers the program and disburses the benefits. The costs ofadministration are covered by appropriation directly to the Labor Department.

The Administration again proposed various changes in FECA that it broached in the 107th Congress. The aspect that would affect agency budgets government-wideis to charge administrative costs in the same manner as benefit costs, i.e. through theappropriation of each employing agency. The stated intention is to make each agencyexplicitly bear the full cost of their employees' claims, thus "bolstering theirincentive to improve workplace safety." The administrative surcharge would bearound 3.5% of benefit costs (calculated from the Administration budget forFY2004, which contemplates $88 million in administrative costs to service $2,532million in program benefits). Most of the surcharge would be paid by the twoagencies that account for more than 60% of FECA claims: the U.S. Postal Serviceand the Defense Department. (However, the Postal Service already pays its sharepursuant to 5 U.S.C. 8147(c).) No similar language is found in either the House,Senate, or conference bill.

Competitive Sourcing of Federal Activities

(104)

In its "Statement of Administration Policy," on H.R. 2989 , the Administration reiterated its support for competitive sourcing, objected to anamendment that was thought would hinder competitive sourcing, and stated that thePresident's senior advisers would recommend that the President veto the bill if itcontained a prohibition on funding for public-private competitions. (105) After H.R.2989 had been inserted into H.R. 2673 , the ConsolidatedAppropriations Act, 2004 (Division F), and the conference report had been prepared,but not yet filed, the Office of Management and Budget (OMB) apparently wassuccessful in having some of the competitive sourcing provisions altered orremoved. (106)

Competitive sourcing, which applies only to the commercial activities of federal executive agencies, is one of the components of the President's Management Agenda(PMA). Since February 2001, the OMB has implemented several initiatives designedto promote competitive sourcing, including revising OMB Circular A-76 (May 29,2003) and requiring agencies to submit inventories of their inherently governmentalactivities. Circular A-76 provides policy and guidance for public-privatecompetitions.

The enacted versions of the competitive sourcing provisions are found in Section 647 of H.R. 2673 ( P.L. 108-199 ), Division F, Title VI. Section647(a), which applies only to departments and agencies funded by the Departmentsof Transportation and Treasury, and Independent Agencies Appropriations bill of2004, would place two conditions on competitions that involve more than 10 federalemployees. First, an agency would be required to develop a plan for a most efficientorganization (MEO), (107) which already isrequired by Circular A-76 for standardcompetitions, but is not required for streamlined competitions. (108) While thisrequirement might facilitate the preparation of an in-house (government) costestimate that is competitive, the time necessary to complete an MEO might make itdifficult for an agency to meet the circular's 90-day deadline (or 135 days if anextension is granted) for streamlined competitions. (109)

Second, Section 647(a) also apparently would require consideration of the conversion differential in streamlined competitions. Under Circular A-76, thedifferential is not used in streamlined competitions. (The conversion differential isthe lesser of $10 million or 10% of the personnel costs of the government's MEO. (110) ) However, since the circular may not have less stringent requirements than a law,Section 647(a) -- which has a requirement that is more stringent than the circular'sconcerning the application of the conversion differential to streamlined competitions -- apparently would take precedence. Section 647(a) would direct the competitivesourcing official (CSO) to consider how the conversion differential would affect thecontractor's cost. (111) Under Section 647(a)(2),this official would consider whether"the cost of performance of the activity or function by a contract would be less costlyto the executive agency" by $10 million, or 10% of the government's personnel costs,whichever is less. Left unstated is the criterion or standard against which the CSOshould compare the cost of contractor performance to determine if it is less costly tothe agency. Additionally, it remains to be seen whether, or how, a performancedecision, which involves completing the streamlined competition form, could takeinto account the conversion differential. (112) Could a CSO's consideration override aperformance decision?

It seems that both the circular and Section 647(a) would apply to standard competitions. However, unlike the circumstances surrounding streamlinedcompetitions, the more stringent requirement for standard competitions is found inthe circular. Therefore, agencies would continue to add the conversion differentialto the cost of the non-incumbent's performance on the standard competition form,which is a requirement of Circular A-76. (113)

Section 647(b) would require all executive agencies to submit annual reports toCongress on their competitive sourcing activities. The first report would be duewithin 120 days after enactment; the deadline for subsequent reports would beDecember 31 of each year. The reports would include the number of completedcompetitions and the number of announced, but not yet completed, competitions (andFTEs associated with each category); the cost of conducting competitions (includingcosts for contractors and consultants); estimated and actual savings; the projectednumber of FTEs scheduled to be competed in the next fiscal year; and a descriptionof the agency's competitive sourcing decision-making process. A reportingrequirement could aid congressional oversight of agency competitive sourcingactivities while facilitating the collection of useful information. Agency reportscould be used to inform OMB policy and guidance, and agency decisions. However,the absence of an established methodology for identifying, defining, and collectingthe required information might detract from its usefulness. Furthermore, fulfillingthis requirement possibly could add to the costs of competitive sourcing.

Under Section 647(c), agency heads would not be required to limit the performance period in a letter of obligation issued to an MEO to five years or less. (114) Apparently, as required by Circular A-76, MEOs would still be subject torecompetition, (115) but, as a result of theflexibility allowed by this provision,recompetitions might occur less frequently than would be the case otherwise. Thismodification could result in different treatment for government agencies and privatesector sources. Per Circular A-76, contractors who win public-private competitionsare subject to recompetition under the provisions of the Federal AcquisitionRegulation (FAR). (116) On the other hand,allowing agencies to write letters ofobligation with performance periods longer than five years could mitigate against anypotential recruitment or retention problems among federal government employees,and prospective employees, who are concerned about the possibility of relativelyfrequent recompetitions and the implications for their positions.

Another competitive sourcing provision, Section 647(d), would permit agency heads to use appropriated funds, and any other funds made available to theiragencies, for monitoring the performance of an activity that had been subjected toa public-private competition. Depending upon what form monitoring might take, thisprovision could support oversight efforts and enhance agency decision-making byfunding the collection, recording, and analysis of information about agencycompetitions. Depending upon the extent, and associated costs, of such an initiative,however, agencies might be reluctant to expend funds on this type of activity.

Section 647(e) states that any work converted to contractor performance could not be moved to a location outside the United States if the work had been previouslyperformed by federal government employees within the United States. Thisprovision possibly could affect the ability of some contractors to prepare competitivebids or proposals if, for example, labor costs in a given industry or sector are cheaperin other countries than in the United States. On the other hand, implementation ofthis provision could help to retain jobs for residents of the United States, while someemployers might benefit from keeping their workforce in relatively close proximityto their facilities in the United States.

Cuba Sanctions

(117)

Both House- and Senate-approved versions of the FY2004 Transportation-Treasury appropriations bill, H.R. 2989, had nearlyidentical provisions that would have prevented funds from being used to administeror enforce restrictions on travel or travel-related transactions. But the provisions weredropped in the conference report to the Consolidated Appropriations Act, 2004, P.L.108-199 (H.R. 2673, H.Rept. 108-401 , filed November 25, 2003), whichincorporated seven regular appropriations acts, including Transportation-Treasuryappropriations. The conference also dropped two Cuba provisions from the Houseversion of H.R. 2989 on remittances and on people-to-people educationalexchanges. The White House had threatened to veto any legislation that weakenedeconomic sanctions against Cuba. The Administration's Statement of AdministrationPolicy on H.R. 2989 stated that if the final version of the bill containedprovisions weakening current sanctions against Cuba, the President's senior advisorswould recommend that he veto the bill.

Since the early 1960s, U.S. policy toward Cuba has consisted largely of efforts to isolate the Communist government of Fidel Castro through comprehensiveeconomic sanctions, including a trade embargo and prohibitions on U.S. financialtransactions with Cuba, including travel. The comprehensive sanctions were madestronger by congressional initiative with the 1992 passage of the Cuban DemocracyAct ( P.L. 102-484 , Title XVII) and the 1996 enactment of the Cuban Liberty andDemocratic Solidarity Act ( P.L. 104-114 ), often referred to as the Helms/Burtonlegislation. Sanctions on financial transactions with Cuba, including those related totravel, are set forth in the Cuban Assets Control Regulations (CACR), administeredby the Treasury Department's Office of Foreign Assets Control (OFAC).

Cuba sanctions have been controversial in recent years, and numerous initiatives have been introduced in the 108th Congress that would lift or ease restrictions onCuba sanctions. While there appears to be broad congressional agreement on theoverall objective of U.S. policy toward Cuba -- to help bring democracy and respectfor human rights to the island -- there are several schools of thought on how toachieve that objective. Some advocate maximum pressure on the Cuban governmentuntil reforms are enacted, others argue for lifting some U.S. sanctions that theybelieve are hurting the Cuban people, and still others call for a swift normalizationof U.S.-Cuban relations by lifting the U.S. embargo.

House Action. The House-approved version of H.R. 2929 had three Cuba provisions,approved during September 9, 2003 floor consideration, that would have preventedfunds from being used to administer or enforce restrictions on travel (section 745)and remittances (section 746), and from being used to eliminate the travel categoryof people-to-people educational exchanges (section 749).

H.Amdt. 375 (Flake), approved by a vote of 227-188, would have prevented funds from being used to enforce travel restrictions; its language becamesection 745 of the House bill. Restrictions on travel have been a key and oftencontentious component in U.S. efforts to isolate Cuba. The embargo regulationsgenerally have not banned travel, but restrictions on any financial transactions haveresulted in a de facto travel ban. Certain categories of travelers may travel to Cubaunder a general license, which means that there is no need to obtain specialpermission from OFAC. These include U.S. government officials, journalists,persons with close relatives in Cuba (once every 12 months), full-time professionalsfor research or for professional meetings, and amateur or semi-professional athletesparticipating in international competitions. In addition, a wide variety of travelersengaging in educational, religious, and other activities, may be eligible for specific licenses, including those visiting close relatives more than once in a 12-month period.

Supporters of the Flake amendment argued that U.S. policy toward Cuba abridges the rights of ordinary Americans who can travel to other countries withcommunist or authoritarian governments, and that such travel by Americans can helpcarry the idea of freedom to Cuba and expose Cubans to alternative information. Opponents of the amendment argued that not enforcing the travel restrictions wouldprovide the Cuban government with millions of dollars in tourist receipts at the sametime when it is brutally cracking down on democracy activists, and that such travelwould not increase purposeful contact with ordinary Cubans.

H.Amdt. 377 (Delahunt), approved by a vote of 222-196, would have prevented funds from being used to enforce restrictions on remittances; itslanguage became section 746 of the House bill. In March 2003, OFAC hadannounced that the Cuba travel regulations were being amended to allow travelersto Cuba to carry up to $3,000 in remittances, although the limit of $300 per quarterdestined for a Cuban household remains. Supporters of the Delahunt amendmentargued that there should be no limit on the amount of financial support that CubanAmericans can send their families in Cuba, while opponents argued that lifting thecap on remittances would mean that more money would go to the Cuban regimethrough government-owned dollar stores that have inflated prices.

H.Amdt. 382 (Davis), approved by a vote of 246-173, would have prohibited funds from being used to eliminate the travel category of people-to-peopleeducational exchanges; its language became section 749 of the House bill. In March2003, OFAC announced that the Cuba travel regulations were being tightened forcertain types of educational travel. People-to-people educational exchanges unrelatedto academic coursework would no longer be allowed under the regulations. Somegroups lauded the restriction of these educational exchanges because they believedthey had become an opportunity for unrestricted travel; others criticized theAdministration's decision to restrict a category of travel to Cuba in which ordinarypeople were able to travel and exchange with their counterparts on the island.

Senate Action. On October 23, 2003, during Senate floor consideration of H.R. 2989 , the Senateapproved by voice vote S.Amdt. 1900 (Dorgan) that would haveprevented funds from being used to administer or enforce restrictions on Cuba travelor travel-related transactions; its language became section 643 of the Senate version. A motion to table the Dorgan amendment was defeated by a vote of 59-36. TheSenate provision was nearly identical to the Flake amendment in the House versionof the bill described above; the only difference was that the Dorgan amendment, asamended by S.Amdt. 1901 (Craig), stated that the provision would takeeffect one day after enactment of the bill.

To some extent, Cuba's human rights crackdown in 2003 had an impact on momentum behind legislative proposals to ease U.S. sanctions policy toward Cuba. For example, the House-approved Cuba amendments to H.R. 2989 wereapproved with less support than similar amendments in 2002. While the Flakeamendment to H.R. 2989 described above was approved by a vote of227-188, a similar Flake amendment to the FY2003 Treasury Departmentappropriations bill had been approved by a vote of 262-167.

For further information, see CRS Report RL31740 , Cuba: Issues for the 108th Congress ; and CRS Report RL31139 , Cuba: U.S. Restrictions on Travel andLegislative Initiatives.

List of Transportation Acronyms

ARC: Amtrak Reform Council

AIP: Airport Improvement Program (FAA)

AIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ( P.L. 106-181 ), the current aviation authorizing legislation

ARAA: the Amtrak Reform and Accountability Act of 1997 ( P.L. 105-134 ), the current Amtrak authorizing legislation

ATSA: the Aviation and Transportation Security Act ( P.L. 107-71 ), legislation which created the Transportation Security Administration within the DOT

BRR: Bridge Replacement and Rehabilitation program (FHWA)

BTS: Bureau of Transportation Statistics

CG: Coast Guard

CMAQ: Congestion Mitigation and Air Quality program (FHWA)

DOT: Department of Transportation

EAS: Essential Air Service (FAA)

F&E: Facilities and Equipment program (FAA)

FAA: Federal Aviation Administration

FAHP: Federal-Aid Highway Program (FHWA)

FAIR21: the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ( P.L. 106-181 ), the current aviation authorizing legislation

FHWA: Federal Highway Administration

FRA: Federal Railroad Administration

FTA: Federal Transit Administration

Hazmat: Hazardous materials (safety program in RSPA)

HPP: High Priority Projects (FHWA)

HTF: Highway Trust Fund

IM: Interstate Maintenance program (FHWA)

ITS: Intelligent Transportation Systems (FHWA)

MCSAP: Motor Carrier Safety Assistance Program (FMCSA)

New Starts: part of the FTA's Capital Grants and Loans Program which funds new fixed-guideway systems or extensions to existing systems

NHS: National Highway System; also a program within FHWA

NHTSA: National Highway Traffic Safety Administration

NMCSA: National Motor Carrier Safety Administration

O&M: Operations and Maintenance program (FAA)

OIG: Office of the Inspector General of the DOT

OST: Office of the Secretary of Transportation

RABA: Revenue-Aligned Budget Authority

RD&T: Research, Development and Technology program (FHWA)

RE&D: Research, Engineering and Development program (FAA)

RSPA: Research and Special Projects Administration

SCASD: Small Community Air Service Development program (FAA)

STB: Surface Transportation Board

STP: Surface Transportation Program (FHWA)

TCSP: Transportation and Community and System Preservation Program (FHWA)

TEA-21: Transportation Equity Act for the 21st Century ( P.L. 105-178 ), the current highway and transit authorizing legislation

TIFIA: Transportation Infrastructure Finance and Innovation Act program (FHWA)

TSA: Transportation Security Administration

Appendix 1: The Transportation Appropriations Framework

Transportation is function 400 in the annual unified congressional budget. It isalso considered part of the discretionary budget. Funding for the DOT budget isderived from a number of sources. The majority of funding comes from dedicatedtransportation trust funds. The remainder of DOT funding is from federal Treasurygeneral funds. The transportation trust funds include: the highway trust fund, whichcontains two accounts, the highway trust account and the transit account; the airportand airway trust fund; and the inland waterways trust fund. All of these accountsderive their respective funding from specific excise and other taxes.

In FY2002 trust funds accounted for well over two-thirds of total federal transportation spending. Together, highway and transit funding constitute the largestcomponent of DOT appropriations. Most highway and transit programs are fundedwith contract authority derived by the link to the highway trust fund. This is verysignificant from a budgeting standpoint. Contract authority is tantamount to, butdoes not actually involve, entering into a contract to pay for a project at some futuredate. Under this arrangement, specified in Title 23 U.S.C., authorized funds areautomatically made available at the beginning of each fiscal year and may beobligated without appropriations legislation; although appropriations are required tomake outlays at some future date to cover these obligations.

Where most federal programs require new budget authority as part of the annual appropriations process, transportation appropriators are faced with the oppositesituation. That is, the authority to spend for the largest programs under their controlalready exists, and the mechanism to obligate funds for these programs also is inplace.

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

During the 105th and 106th Congresses, major legislation changed the relationships between the largest transportation trust funds and the federal budget.The Transportation Equity Act for the 21st Century (TEA-21) ( P.L. 105-178 ) linkedannual spending for highway programs directly to revenue collections for thehighway trust fund. In addition, core highway and mass transit program funding wasgiven special status in the discretionary portion of the federal budget by virtue of thecreation of two new budget categories. The Act thereby created a virtual "firewall"around highway and transit spending programs. The funding guarantees were set upin a way that makes it difficult for funding levels to be altered as part of the annualbudget/appropriations process. Additional highway funds can be provided annuallyby a mechanism called "Revenue Aligned Budget Authority" (RABA); RABA fundsaccrue to the trust fund as a result of increased trust fund revenues. For FY2003,however, it now appears that the RABA adjustment, if it had been left intact duringthe appropriations process, would have led to a significant and unexpected drop inthe availability of highway obligational funding.

TEA-21 changed the role of the House and Senate appropriations and budget committees in determining annual spending levels for highway and transit programs.The appropriations committees are precluded from their former role of setting anannual level of obligations. These were established by TEA-21 and are adjusted byan annual RABA computation. In addition, it appears that TEA-21 precludes, atleast in part, the House and Senate appropriations committees from exercising whatsome Members view as their once traditional option of changing spending levels forspecific core programs or projects. In the FY2000 appropriations act, theappropriators took some tentative steps to regain some of their discretion overhighway spending. The FY2000 Act called for the redistribution of some fundsamong programs and added two significant spending projects. In the FY2001appropriations act, the appropriators continued in this vein by adding funds for largenumbers of earmarked projects. Further, the FY2001 Act called for redirection of alimited amount of funding between programs and includes significant additionalfunding for some TEA-21 programs. This trend continued, and even accelerated, inthe FY2002 Act as appropriators made major redistributions of RABA funds and, insome instances, transferred RABA funds to agencies that are not eligible for RABAfunding under TEA-21.

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (FAIR21 or AIR21)

The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (FAIR21 or AIR21)( P.L. 106-181 ) provides a so-called "guarantee" for FederalAviation Administration (FAA) program spending. The guarantee for aviationspending, however, is significantly different from that provided by TEA-21. Insteadof creating new budget categories, the FAIR21 guarantee rests on adoption of twopoint-of-order rules for the House and the Senate. Supporters of FAIR21 believe thenew law requires significant new spending on aviation programs; and, for at least theFY2001 and FY2002 appropriations cycles, spending grew significantly. Mostobservers view the FAIR21 guarantees, however, as being somewhat weaker thanthose provided by TEA-21. Congress can, and sometimes does, waivepoints-of-order during consideration of legislation.

Enactment of TEA-21 and FAIR21 means that transportation appropriators have total control over spending only for the TSA, the Coast Guard, the Federal RailroadAdministration (including Amtrak), and a number of smaller DOT agencies. All ofthese agencies are concerned about their funding prospects in any year where it isbelieved that there is a constrained budgetary environment.

Appendix 2: Transportation Budget Terminology

Transportation budgeting uses a confusing lexicon (for those unfamiliar with theprocess) of budget authority and contract authority -- the latter, a form ofbudgetauthority. Contract authority provides obligational authority for the funding of trustfund-financed programs, such as the federal-aid highway program. Prior to TEA-21,changes in spending in the annual transportation budget component had beenachieved in the appropriations process by combining changes in budget/contractauthority and placing limitations on obligations . The principal function of thelimitation on obligations is to control outlays in a manner that corresponds tocongressional budget agreements.

Contract authority is tantamount to, but does not actually involve, entering into a contract to pay for a project at some future date. Under this arrangement, specifiedin Title 23 U.S.C., which TEA-21 amended, authorized funds are automatically madeavailable to the states at the beginning of each fiscal year and may be obligatedwithout appropriations legislation. Appropriations are required to make outlays atsome future date to cover these obligations. TEA-21 greatly limited the role of theappropriations process in core highway and transit programs because the Actenumerated the limitation on obligations level for the period FY1999 throughFY2003 in the Statute.

Highway and transit grant programs work on a reimbursable basis : states pay for projects up front and federal payments are made to them only when work iscompleted and vouchers are presented, months or even years after the project hasbegun. Work in progress is represented in the trust fund as obligated funds andalthough they are considered "used" and remain as commitments against the trustfund balances , they are not subtracted from balances. Trust fund balances,therefore, appear high in part because funds sufficient to cover actual and expectedfuture commitments must remain available.

Both the highway and transit accounts have substantial short- and long-term commitments. These include payments that will be made in the current fiscal yearas projects are completed and, to a much greater extent, outstanding obligations tobe made at some unspecified future date. Additionally, there are unobligatedamounts that are still dedicated to highway and transit projects, but have not beencommitted to specific projects.

Two terms are associated with the distribution of contract authority funds to the states and to particular programs. The first of these, apportionments, refers to fundsdistributed to the states for formula driven programs. For example, all nationalhighway system (NHS) funds are apportioned to the states. Allocated funds, arefunds distributed on an administrative basis, typically to programs under directfederal control. For example, federal lands highway program monies are allocated;the allocation can be to another federal agency, to a state, to an Indian tribe, or tosome other governmental entity. These terms do not refer to the federal budgetprocess, but often provide a frame of reference for highway program recipients, whomay assume, albeit incorrectly, that a state apportionment is part of the federal budgetper se.