March 28, 2019

The Senate subcommittee on Transportation, Housing and Urban Development, and Related Agencies held a hearing on March 27 inviting Secretary of Transportation, Elaine Chao as a witness to review the FY20 budget request for USDOT.  However, due to the recent events involving the Boeing 737 MAX, much of the hearing was consumed with questions around FAA protocols and methodologies especially pertaining to aircraft safety. Beyond the FAA, senators focused questions around Amtrak appropriations, the Highway Trust Fund, and specific projects and policy concerns in their own states.

FAA and Safety

The FAA oversees certification of aircraft based on criteria and actions mandated to the manufacturers – a process that has been examined many times by Congress, GAO, and think tanks. The FAA is responsible for safety in the air including air traffic control and aircraft certification, requiring a broad range of expertise in an agency that neither builds nor flies many aircraft. The March 10^th Boeing 737 MAX crash reignited conversations around the certification process, with Congress and the Secretary acknowledging the need to conduct in-depth safety analysis of the crashes and the current safety requirements and certification protocol.

The Office of the Inspector General is conducting an audit of the FAA’s oversight of the Boeing 737 Max, and at the hearing the Secretary assured senators that they will look into making optional safety equipment mandatory, whether there are financial incentives for timely certification, and what requirements the FAA sets. When Sen. Jack Reed (D-RI) asked about the timeline and number of people on the organizational design authorization (ODA) at Boeing, Chao responded that (in comparison to the FAA), “they build a lot of planes, ” and after checking the numbers, told the subcommittee that a whopping 1,461 Boeing employees work on the ODA. If personnel and expertise are not lacking in the certification process, policy and responsibility shifts may be the answer to improving safety in the airspace.

“Safety is always number one at the Department of Transportation” – Secretary of Transportation, Elaine Chao

A few senators did relate the current safety debates to impending funding needs. Sen. Chris Coons (D-DE) reminded the subcommittee of the needs to find funding sources not only for surface transportation, but also aviation infrastructure noting the possibility of increasing the passenger facility charge as one possible source.

Amtrak

Even though Amtrak requested a slight cut in their own budget, the administration proposed to further eliminate $595.5 million of direct operating subsidies by replacing the money with $550 million in operating subsidies from the Restoration and Enhancement grant program to zero out after four years. The Secretary defended this cut as well as the lack of funding towards the Northeast corridor by pointing the “billion dollars on the books” that Amtrak currently has available. (Ed. Note: Because of the lateness of recent appropriations, and because Congress has given Amtrak more money than requested for two years running, as a cash flow matter they recently reported a lot of money on-hand.)

Sen. Chris Coons (D-DE) expressed his concern over the Amtrak budget cuts both from his perspective in the Northeast Corridor as well as the national impact, and Sen. Steve Daines (R-MT) also expressed concerns over the Amtrak budget prompting the Secretary’s response suggesting that states should take a larger share in funding, especially for routes that require high per-passenger subsidies.

Highway Trust Fund

In her opening remarks, subcommittee chairman Susan Collins (R-ME) reminded the subcommittee that the administration’s budget request addresses neither the cap on overall discretionary funding for FY20 (leading to be decrease of $55 billion for non-defense programs collectively) nor the insolvency of the Highway Trust Fund. Sen. Dick Durbin (D-IL) pressed Secretary Chao on the legislation moving forward that would help fund Trust Fund as well as other vital national infrastructure. Upon direct questioning about the timeline for an infrastructure bill, Secretary Chao discussed the benefits of a single bill for both a surface transportation reauthorization and infrastructure spending given the timeline of the looming expiration of the FAST Act. 

CIG and TIFIA Funds

For months, members of Congress and advocacy groups have been tracking unobligated CIG funds, and a number of Senators took this hearing as an opportunity to press the Secretary on specific projects in their states.

Sen. Dianne Feinstein (D-CA) highlighted both the Westside Purple Line Section 3 extension project in Los Angeles that is racing against the deadline of the 2028 Olympic Games, and the BART core capacity project. Delving into the details of the holdups behind the BART project, The Secretary listed three reasons for the unobligated funds: 1) A controversial sole source procurement request for rail cars; 2) a letter of no prejudice request; and 3) a letter to request progress from the project development phase to the engineering phase. Citing the sole source procurement request as the main cause of delay, the Secretary also noted that the requirement for FTA to consider all three requests in unison further complicates the ability to release funding. Other agencies applying to finds can look to the reasons behind current project delays to be able to avoid or at least predict funding timelines from the administration with CIG projects moving forward. However, some projects have less clear causes for delayed obligations. The Secretary assured Sen. Patty Murray (D-WA) that funds were not being help back when pressed on the delays for a Sound Transit project that only a small portion of funds coming from the Federal Government and should be an easy lift.

The Secretary quickly shut down Sen. Shelley Moore Capito’s (R-WV) suggestion that funds that haven’t been obligated could be reallocated to other projects (such as projects in West Virginia), supporting her stance that projects in the CIG “pipeline” will receive their funds eventually, after administrative issues have been resolved.  Capito’s complaint that programs such as TIFIA may be too complicated for states with fewer resources, leading to a underutilization of available funds provided a good platform for the Secretary to reinforce the current administration’s focus on rural America with the Rural Projects Initiative and available technical assistance.