OMB's Mid-Session Review, which was released two weeks ago, contains revised estimates of the budget surplus, receipts, outlays and budget authority for fiscal years 2001 through 2011. A section of the report outlining spending trends describes a technical change that assumes reduced outlays for the highway program in FY 2003 and beyond. The report states the change "reflect(s) lower than expected revenues into the Highway Trust Fund."

Specifically, OMB estimates that the highway program outlays will be $1.7 billion less in FY 2003 than had been estimated in the administration's FY 2002 budget proposal, which was released in March. This would equate to an overall reduction in contract authority in FY 2003 of $6.2 billion, and obligations would dip to $26.8 billion in FY 2003, compared to $32.5 billion provided in FY 2002.

The OMB estimate also suggests that revenue aligned budget authority (RABA), which equals $4.5 billion in FY 2002, would, in fact, be a negative $1.5 billion in FY 2003.

Under the provisions of RABA, the guaranteed amount of highway spending can go up or down each year, depending on the actual and estimated revenues into the Highway Trust Fund. In the past three years, trust fund revenues exceeded the projections contained in TEA-21, which resulted in a corresponding boost of funding by $1.5 billion in FY 2000, $3 billion in FY 2001, and $4.5 billion in FY 2002. Under RABA, highway funding could also dip lower than the amounts authorized in TEA-21 if Highway Trust Fund revenues fall short.

Change in Estimates

The OMB report suggests for the first time since the passage of TEA-21, Highway Trust Fund revenues will decline from the previous year.

The total level of revenue into the Highway Trust Fund in a given year is not known until the end of the calendar year, when the U.S. Treasury tallies the total funding received from the federal fuel tax. However, in its August report, OMB's projected dip in Highway Trust Fund revenues in FY 2003 is based on fuel-tax revenues estimates between January and June of this year.

The Treasury Department has confirmed that fuel-tax collections during this time were below projections, primarily due to a drop in the revenue generated from a federal retail tax on trucks and a somewhat lower diesel fuel tax estimate.

Any calculation on outlays or RABA will not be conclusive until January, 2002. While the mid-session projections are important, the calculation of RABA is made using the final FY 2001 estimate. Therefore, the mid-session estimate is not the final word on outlays or RABA.

Jack Basso, AASHTO's Director of Management and Business Development and former Assistant Secretary for Budget at the U.S. DOT, said, "We've seen these kind of downward projections before, and at the moment it has no immediate practical effect. The FY 2002 RABA calculations are locked in and will not change. What will matter is what the projection is when the OMB snapshot for FY 2003 is taken in January." He noted that the U.S. Treasury Department will make its own projection of Highway Trust Fund revenue in November, which should help clarify the 2003 estimates.

Projections Do Not Match Travel Trends OMB's projections of reduced trust fund revenues do not correspond with the most recent figures of travel rates across the country. According to the Federal Highway Administration's latest Traffic Volume Trends, which measures the estimated vehicle miles traveled through June 2001, the overall rate of travel this year slightly exceeds last year's level.

After the sharp 5.5 percent reduction in VMT in December (AASHTO Journal, March 16 and May 11), the rate of VMT has grown by the following amounts compared to 2000:

• January - up 2.8 percent
• February - down 0.5 percent
• March - down 0.7 percent
• April - up 1.9 percent
• May - up 0.5 percent
• June - down 0.5 percent

The bill was unveiled in briefings by House Transportation and Infrastructure Committee staff this week and attended by AASHTO and other organizations. It would combine $36 billion in tax exempt bond financing to be issued by state governments and $35 billion in loans and loan guarantees in an expanded and corrected Railroad Infrastructure Financing program, providing for almost any freight or passenger rail project, with $7 billion set aside for short lines.

Citing congressional, state and labor sources, the Washington Post said the package is in part aimed at relieving highway congestion. It will not specify where high-speed rail lines would go, leaving that decision making to state authorities. Even the funding aimed at Amtrak improvements would be allocated via states in the New York-Washington corridor, working together to put together a cohesive plan, the Post reported. The Post reported that initial reactions were "positive . . . although most groups await more details."

The bill apparently would not offer much to relieve Amtrak's current financial plight, though it would let Amtrak pick up some extra money by operating state-built systems. Under the measure, Amtrak would not be able to tap into the bill's funding base to deal with its current issues, though it could compete, with other contenders, for the right to operate new lines. Amtrak spokesman Bill Schulz said Amtrak looks forward to seeing the details of the bill when it is introduced. "We welcome the efforts of those who would improve existing passenger rail infrastructure and high-speed rail," he said.

The bill's approach would be "a complete change in the policy of the country and would bring us closer to the European philosophy," said one official briefed on the content of the bill in recent days. The bill has been crafted to avoid changes in any rules on the use of highway funds, unlike several rail-related proposals in recent years.

"I think we have the makings of a really solid and doable high-speed rail bill," Rep. James Oberstar (D-MN), the ranking member of the T&I committee, told the Post. Oberstar, who has sponsored a $12 billion high-speed rail bond bill previously, said he wants to see the final language in the newly proposed measure.

Addressing a joint session of Congress, Fox spoke of bringing the two nations closer together "to establish a new relationship, a more mature, full and equitable relationship based on mutual trust."

Fox said, "Years ago, the United States Congress faced a difficult decision and chose to vote in favor of a greater integration with Mexico through the North American Free Trade Agreement. The partnership between Mexico and the United States is still incomplete. There remain many unresolved issues that must be dealt with in order to achieve our common goals now as partners. One of these goals is an issue which this great body will soon consider and which entails and important obligation under NAFTA. It is the issue of access to the United States for Mexican trucks. For this, as in may other items of our common agenda, we need your trust. It will allow both countries to comply responsibly and maturely with their obligations to one another."

The current approach to the entry of Mexican trucks - adopted in the early 1990s in response to safety concerns about their free travel throughout the U.S. - is generally to disallow such movements beyond a zone 20 miles from the U.S.-Mexico border. President Bush had set a goal of removing that restriction by January 1, saying the policy did not comply with NAFTA commitments. But in its version of the FY 2002 transportation appropriations bill, the Senate calls for inspections of Mexican trucks and drivers, audits of Mexican trucking firms and more staff and equipment at 27 U.S. border stations that check incoming trucks' safety. The House bill would maintain the current policy.

Conferees have not yet been appointed in the Senate, and the two senators who led a filibuster to fight the restrictions on access for Mexican trucks, Senators Phil Gramm (R-TX) and John McCain (R-AZ) have said they will use procedural measures to continue that fight until some compromise is reached. Reportedly, little progress was made on negotiating a compromise during the August recess.

That issue is the most controversial aspect of the $60 billion transportation funding bill. President Bush continues to maintain his veto threat of the spending package, and Secretary of Transportation Norman Mineta recently said that the Administration is examining other options for ensuring truck safety.

Other Appropriations Battles Still Ahead

Meanwhile, as Congress returned to session this week, high levels of rhetoric about the disappearing budget surplus set the stage for tough bargaining on all 13 major appropriations bills, including transportation spending.

Both Democrats and Republicans traded barbs over whether the combination of the $1.35 trillion tax-cut package and a slow economy had reduced Congressional options from once rosy scenarios of surpluses to potential raids on Social Security surpluses. Practically speaking, however, both the Congressional Budget Office projections and the Office of Management and Budget analysis indicate that Congress can slightly expand spending bills from current levels without touching Social Security surpluses, according to the September 4 CQ Daily Monitor.

The FY 2002 budget resolution (H. Con Res. 83) for FY 2002 set a discretionary spending level of $661.3 billion, and the CBO estimates have added an inflation factor to raise that cushion to $670 billion. But appropriators are faced with a Bush Administration request for an $18 billion increase in defense spending, as well as demands for education increases. The two biggest appropriations bills, Defense and Labor-Health and Human Services-Education, have yet to emerge from committee in either the House or Senate. Those two account for almost two-thirds of the total discretionary spending budget.

In their letter, the members reference the on-going safety issues relating to "cross border trucking under NAFTA" and state that it is important "to take care to see that our domestic highway safety laws are achieving their intended purpose."

The bill would extend the limits currently in force for truck size and weight on the Interstate System to the entire National Highway System. In addition, it would centralize within the U.S. DOT record keeping on oversize/overweight vehicles. The legislation would, according to the section-by-section description of the bill, "freeze and codify existing grandfather rights for commercial motor vehicles (other than longer combination vehicles)." The Federal Highway Administration "would be required to publish a list by route, commodity and weight of all truck operations permitted in excess of the current federal interstate weight limit. States' overweight operations will be limited to those published on the Secretary's list."

Sen. Gramm has been heavily engaged in transportation issues throughout his long career. He served as chair of the Senate Banking, Housing, and Urban Affairs Committee, which has jurisdiction over the federal-aid transit program, during the development of TEA-21. Along with Sen. Robert Byrd (D-WV), Gramm was also influential in a successful drive to transfer 4.3 cents of the federal motor-fuel tax from the General Fund to the Highway Trust Fund, which facilitated an eventual 40 percent growth in federal funding for highways and transit under TEA-21.

Gramm, a political conservative - who failed the third, seventh and ninth grades yet went on to earn a doctorate degree in economics - later taught that subject at Texas A&M University. One of his hallmark achievements was the Gramm-Rudman-Hollings deficit reduction law, requiring automatic budget cuts if the deficit were not reduced to specific levels.

According to a study released this week by the Institute for Highway Safety, the elderly population is expected to double over the next 30 years, to some 70 million people. These drivers are expected to retain their driving privileges longer than the current population, and also to increase their annual driving.

While older drivers now account for one in six accident fatalities, the report says, that number is likely to grow to one in four. The report states, however, that the death rate is a result of the elderly being more susceptible to injury, not necessarily more hazardous on the road. Elderly drivers currently have the lowest crash rate per licensed driver. However, while they are involved in 8 percent of highway accidents, they account for 13 percent of accident fatalities.

Such changes, while aiding congestion in and out of O'Hare and Midway Airports in Chicago and Mitchell Airport in Milwaukee, would not boost aircraft noise, the study said. At issue is adding high-altitude air lanes and reducing spacing between aircraft.

Critics - wary of additional pollution and noise - told AP they regarded the study as a thinly veiled effort to increase flights at O'Hare.

"It will allow for greater efficiencies in the routes to Chicago, and it safely addresses some of the interim needs to reduce delays," said Kitty Friedheim, Chicago's deputy aviation commissioner for planning and development.

The Associated Press reported the unusual joint NTSB action on Wednesday, saying ordinarily communiques from NTSB to Congress are signed by the chairman only. Acting NTSB Chairwoman Carol Carmody said she led the drive to generate the letter following an incident last month at Dallas-Fort Worth International Airport, in which one jet's tail scraped on the runway as it pulled up sharply to avoid another jet that had been mistakenly directed onto the same runway. The term "incursions" typically is used to describe incidents in which at least one of the vehicles or people in a near-collision is on the ground.

NTSB has issued numerous recommendations on runway safety. Of those, AP said, most have been heeded but several have not been, including a recommendation to the Federal Aviation Administration that technology be developed to warn pilots if someone is on a runway, and requirements for air traffic controllers to use standard international phrases likely to be understood by pilots whose native language is not English.

"We were all very stunned and disturbed by that (Dallas-Fort Worth Airport) incident," Carmody said. "It brought back to our minds that nothing much has happened. We hope Congress will do what we have not so far succeeded in doing."

FAA officials told AP they are working to reduce the number of runway incidents. FAA spokesman William Shumann said, "Each runway incursion is a human error, and heightened awareness through more and better training is an excellent way to prevent such errors." FAA has supported increased training along with better runway markings and lighting and changes in air traffic procedures, Shumann said.

Such incidents occur more than once a day, on average, though the number is down this year compared with last year, according to AP. This year through Aug. 29, 268 incursions were reported compared with 292 during the same period in 2000 - a year in which a record 431 incursions were reported for the full year.

FAA is installing a new system at major airports that uses existing radar to warn controllers of potential collisions. But NTSB officials say any system should tell pilots if there are other vehicles or people on a runway.