Funding for Department of Transportation programs was contained in thePresident's budget submission, issued in February, 1998. For FY1999, the U.S.Department of Transportation (DOT) requested total funding of $43.3 billion, a 1%increase over the FY1998 enacted level of $42.8 billion. Hearings on the budgetrequest were held in transportation subcommittees of the House and SenateAppropriations Committees. In a related development, many of DOT's surfacetransportation programs were recently reauthorized by the Transportation EquityAct for the 21st Century, generally referred to as TEA-21 ( P.L. 105-178 , June 9,1998). Both the House ( H.Con.Res. 284 ) and the Senate( S.Con.Res. 86 ) passed their respective versions of the budgetresolution and subsequently held a conference. H.Con.Res. 284 provided the following amounts of budget authority and outlays for FY1999: $44.3billion (BA) and $42.1 billion (BO). S.Con.Res. 86 provided for thefollowing amounts during the same period: $51.5 (BA) and $42.8 (BO). In a related development, on June 9, 1998, President Clinton signed the Transportation Equity Act for the 21st Century (TEA 21) into law ( P.L. 105-178 , H.R. 2400 ). The law provides authorization for appropriations forDOT's agencies and programs for fiscal years 1998 through 2003. TEA 21 affectsvirtually all of the Department's surface transportation agencies, ranging from theNational Highway Traffic Safety Administration to the Coast Guard. The impact ofits provisions have been addressed in other sections of this report. On July 15, 1998, the Senate Committee on Appropriations reported out S. 2307 , Department of Transportation and Related AgenciesAppropriations Bill for 1999 ( S.Rept. 105-249 ). The report recommends$13,694,249,000 of new budget obligational authority for the Department ofTransportation. This amount represents approximately $340,000,000 more than theAdministration's request, and almost $1 billion more than the enacted amount forFY1998. In conjunction with $32,234,800,000 estimated obligation limitations(generated from trust funds), the total obligational authority is approximately $45.9billion. On July 24, with few substantive floor amendments, the Senate passed its version of the DOT appropriations for FY1999. One provision, relativelycontroversial between the Administration and Congress, however, was dropped fromthe legislation. That provision, which drew a veto warning from Administrationofficials, would have barred the use of federal funds to impose "project laboragreements" on highway and transit fund projects. A substitute amendment appearsto have served as a compromise, permitting passage. On July 22, 1998, the House Appropriations Committee reported H.R. 4328 ( H.Rept. 105-648 ) The bill provides for a total of$46.9billion (new budget authoruty, guaranteed obligations contained in the TEA-21,limitation on obligations and exempt obligations) for FY1999. This amount is $4.8billion greater than FY1998 enacted levels, and $3.9 billion greater than theAdministration's FY1999 request. On July 30, 1998, the House passed H.R. 4328 , also with few substantive amendments. H.R. 4328 was referred to the Senate, whichamended the bill by inserting S. 2307 after the enacting clause. On September 17, 1998, the House and Senate passed H.J.Res. 128 , a continuing resolution to fund, until October 9, 1998, any government activitythat would have otherwise been funded by an annual appropriation. Following the enactment of five subsequent continuing resolutions, the House passed the Omnibus Consolidated and Emergency Supplemental Appropriations Act,for Fiscal Year 1999 on October 19, 1998. On October 21, the Senate passed thesame measure. The conference agreement provided approximately $47 billion in FY1999 for federal transportation programs -- an amount 12% greater than the FY1998funding, 9% more than requested by the Administration, and about$150 million morethan that included in the House bill. The amount for some DOT programs (includingFederal Highways and Mass Transit) was virtually insured by funding "firewalls"that had been placed in the Transportation Equity Act for the 21st Century (TEA-21). For the complete legislative text of the Omnibus Act as it appears in the October 19, 1998 Congressional Record, Members and staff should see the followingInternet Web site: http://www.clerkweb.house.gov. Transportation budgeting uses a confusing lexicon (for those unfamiliar with theprocess) of budget authority and contract authority -- the latter, a form of budgetauthority. (1) Contract authority, provides obligationalauthority 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 amends, 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. As will be discussed, TEA-21 greatlylimits the role of the appropriations process in core highway and transit programsbecause the Act sets the limitation on obligations level for the period FY1999through FY2003. 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, perhaps months or even years after the projecthas begun. 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 expected futurecommitments 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. For FY1999, the DOT requested total funding of $43.259 billion, about a 1.0% increase from the FY1998 enactment of level $42.828 billion. The Department'sFY1999 budget request was similar in many respects to the FY1998 appropriation. The agencies targeted for gains include (in descending order): the MaritimeAdministration (+35.3%); The National Highway Traffic Safety Administration(+21.92%); Research and Special Programs Administration (+16%); FederalAviation Administration (+7.0%); Federal Railroad Administration (+2.6%); Officeof the Secretary (+2.4%); and the U.S. Coast Guard (+2%). Those whose budgetrequest were reduced for FY1999 included (in descending order): St. LawrenceSeaway Development Corporation (-100%); Federal Transit Administration(-1.38%). The budgets for the Office of the Inspector General and the SurfaceTransportation Board are set at the FY1998 level. This report analyzes the FY1999 budget request and final action from a numberof perspectives. First, funding proposals for several national transportation priorities,such as safety, national security, infrastructure needs, and technology development,are highlighted and selected policy issues associated with these are presented. Second, historical funding trends are analyzed. Third, highlights of the FY1999budget request for several key modal administrations, such as the Federal HighwayAdministration, the Federal Aviation Administration (FAA), and the U.S. CoastGuard, are summarized. Table 1. Status of DOT Appropriations,FY1999 One of the major challenges facing appropriators continues to be the allocationof funds for the U.S. Department of Transportation among numerous competingnational interests. Competition for these funds stems from various transportationinterests, and from the modal administrations themselves seeking portions of the"transportation pie." Monies have been allocated for a diverse array of purposes, forexample, to pay for the expenses of the U.S. Coast Guard, to improve safety acrossthe transportation system, and to help finance various infrastructure needs.