Table Of ContentDOWNSIZING GOVERNMENT AND SETTING
PRIORITIES OF FEDERAL PROGRAMS
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Dounsizing Governnent and Setting P..
BEFORE
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SUBCOMMITTEES OF THE
^t ^ COMMITTEE ON APPROPRIATIONS
'"^"^ HOUSE OP REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
PART 3
Page
DepartmentofTransportation andRelatedAgencies ... 1
Treasury, Postal Service, and General Government 269
VA, HUD, andIndependentAgencies 629
4^
t4
Printed for the use ofthe Committee on Appropriations
DOWNSIZING GOVERNMENT AND SETTING
PRIORITIES OF FEDERAL PROGRAMS
HEARINGS
BEFORE
SUBCOMMITTEES OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTH CONGRESS
FIRST SESSION
PART 3
Page
DepartmentofTransportation andRelatedAgencies ... 1
Treasury, Postal Service, and General Government 269
VA, HUD, andIndependentAgencies 629
Printed for the use ofthe Committee on Appropriations
U.S. GOVERNMENT PRINTING OFFICE
88-496O WASHINGTON : 1995
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-046934-1
/*
COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman
JOSEPHM. McDADE, Pennsylvania DAVID R. OBEY, Wisconsin
JOHNT. MYERS, Indiana SIDNEY R. YATES, IlUnois
C. W. BILLYOUNG, Florida LOUIS STOKES, Ohio
RALPH REGULA, Ohio TOM BEVILL, Alabama
JERRY LEWIS, California JOHN P. MURTHA, Pennsylvania
JOHN EDWARD PORTER, Illinois CHARLES WILSON, Texas
HAROLD ROGERS, Kentucky NORMAN D. DICKS, Washington
JOE SKEEN, New Mexico MARTIN OLAVSABO, Minnesota
FRANKR. WOLF, Virginia JULIAN C. DIXON, California
TOM Delay, Texas VIC FAZIO, California
JIM KOLBE, Arizona W. G. (BILL) HEFNER, North Carolina
BARBARAF. VUCANOVICH, Nevada STENYH. HOYER, Maryland
JIM LIGHTFOOT, Iowa RICHARDJ. DURBIN, Illinois
RON PACKARD, California RONALD D. COLEMAN, Texas
SONNY CALLAHAN, Alabama ALAN B. MOLLOHAN, WestVirginia
JAMES T. WALSH, NewYork JIM CHAPMAN, Texas
CHARLES H. TAYLOR, North Carolina MARCY KAPTUR, Ohio
DAVID L. HOBSON, Ohio DAVID E. SKAGGS, Colorado
ERNESTJ. ISTOOK, Jr., Oklahoma NANCYPELOSI, California
HENRYBONILLA, Texas PETERJ. VISCLOSKY, Indiana
JOE KNOLLENBERG, Michigan THOMAS M. FOGLIETTA, Pennsylvania
DAN MILLER, Florida ESTEBAN EDWARDTORRES, California
JAY DICKEY,Arkansas NITAM. LOWEY, NewYork
JACK KINGSTON, Georgia RAYTHORNTON, Arkansas
FRANK RIGGS, California
RODNEY P. FRELINGHUYSEN, NewJersey
ROGERF. WICKER, Mississippi
MICHAEL P. FORBES, NewYork
GEORGE R. NETHERCUTT,Jr., Washington
JIM BUNN, Oregon
MARKW. NEUMANN, Wisconsin
JamesW. Dyer, Clerk andStaffDirector
(II)
DOWNSIZING GOVERNMENT AND SETTING
PRIORITIES OF FEDERAL PROGRAMS
SUBCOMMITTEE ON THE DEPARTMENT OFTRANSPORTATION AND
RELATEDAGENCIESAPPROPRIATIONS
FRANKR.WOLF,Virginia,Chairman
TOMDelay,Texas MARTINOLAVSABO.^Minnesota
RALPHREGULA,Ohio RICHARDJ. DURBIN, Illinois
HAROLDROGERS,Kentucky RONALDD. COLEMAN,^Texas
JIMLIGHTFOOT,Iowa THOMASM.FOGLIETTA,Pennsylvania
RONPACKARD,California
SONNYCALLAHAN,Alabama
JAYDICKEY,Arkansas
1RankingDemocraticMember(leaveofabsence).
2ActingRankingDemocraticMember.
NOTE: Under Committee Rules, Mr. Livingston, as Chairman ofthe Full Committee, and
Mr. Obey, as Ranking Minority Member of the Full Committee, are authorized to sit as
MembersofallSubcommittees.
JohnT.BlazeyII,RichardE.Efford,Stephanie K. Gupta,andLindaJ. Muir,
SubcommitteeStaff
WEDNESDAY,JANUARY 11, 1995.
U.S. GENERALACCOUNTING OFFICE
DEPARTMENTOFTRANSPORTATION
U.S.
witnesses
kenneth m. mead, director, transportation issues, re-
sources, community, and economic development division,
u.s.generalaccountingoffice
a. mary schiavo, inspector general, u.s. department of
transportation
louise frankel stoll, assistant secretary for budget and
programs, office of the secretary, u.s. department of
transportation
OpeningRemarks
Mr. Wolf. Good morning. I wantto welcome everyone this morn-
ing, including my distinguished colleague from Texas, the Ranking
Member, Mr. Coleman, who I have served with on this Subcommit-
tee and on the Treasury Appropriations Subcommittee and have
been friends with foranumberofyears.
I also want to acknowledge three new Members of the Sub-
committee: Mr. Rogers from Kentucky; Mr. Packard, a new Mem-
CD
ber of the subcommittee from California; Mr. Callahan from Ala-
bama who is with another group right now; and Mr. Dickey from
Arkansas who is new to the full committee. I want to welcome ev-
erybody.
I want to pledge, although this is not really our first hearing in
the sense that the first hearing basically will be when we meet
with the Secretary on the budget, but I do want to welcome every-
one and makejust acouple personal comments.
These will be challenging times. They will be difficult times. It
won't—be like it was perhaps in 1982 or 1984 whereby there is
more we are actually faced with a situation whereby there will be
less. As we begin to reduce the size of government and as we re-
view our spending priorities, I think it is imperative that we make
decisions that are fair and reasoned andjustified.
We need to improve our decision-making process by developing
cost-benefit analysis and risk factors. Mr. Carr, let me just say
publiclyforthe record, wasvery instrumental inbeginningthat.
I also wantto introduce Mr. Lightfoot, who hasbeen on the Com-
mittee for a number ofyears, but is also new to the Subcommittee.
We need to review all programs and operations of the Depart-
ment ofTransportation to improve and enhance the effectiveness of
the management ofthe Department. That is not meant as criticism
to the people here in the Department. We are just saying I think
ifthey were a Republican administration or a Democratic adminis-
tration, you would saybasicallythe same thing.
We need to identify problems and weaknesses ifthere are any to
prevent fraud, waste and abuse. We need to identify areas where
we can do with less. However, and I think this is the important
part, we want to do so without compromising safety, and that is
very, very important. Through the course ofour work, it is impor-
tant to bear in mind that a government that has grown too large
is bound to disappoint as it diminishes in size. And too, we must
accomplish this task without hurting Federal workers and their
families.
I used to represent a district that had a lot ofFederal employees.
Through redistricting, we now go down to the Skyline Drive and
Shenandoah valley and down to the suburbs of Harrisonburg and
places like that. But, I still have a concern with regard to what
happenstothese Federal employees and theirfamilies.
One of the questions I would like to ask the Department is on
the travel budget that seems high. If you save $1 million on the
travel budget, how many employees does that really save, and any-
thing we can do to save employees whereby by doing some other
things, I thinkwe should be lookingat.
IntroductionofWitnesses
To assist us today, we have before us Mr. Ken Mead, who is the
DirectorofTransportation Issues at the General Accounting Office,
and Ms. Mary Schiavo, the Inspector General ofthe Department of
Transportation. Both have testified before this Subcommittee in
previous years, and quite candidly, both who I have a lot of con-
fidence in. What they say really does carry a lot ofweight with me.
Both the GAO and the IG have been before the Subcommittee on
a number ofother issues^nd I think they have been important for
checks andbalancesofthe,government.
onItvhaeluCeotmhmeiitrtoebeserfovrataionnVu,mbaserI aofmyseuarresMdeo.mbWeersapwphroechiaatveetbheeeinr
willingness to provide testii^ony to the Subcommittee today. Also
I would askboth witnesses and the others ifyourcommittee sched-
ule, I don't know what your schedule is like, allows you to, ifyou
could stay here for most ofthe hearing. We are going to ask that
GAO stay through a lot of the hearings this year so that we can
havethetestimonygoingbackandforth.
In addition, following GAO and the IG, the Subcommitteewill re-
ceive testimony from Louise Stoll, the Assistant Secretary for
Budget and Programs of the Office ofthe Secretary. The purpose
of this hearing really is not to go through the whole Department
with regard to the new upcomiiigbudget. There are a lot ofthings.
There are some questions I have that, and ifwe have time, I will
do it. But it is really to find out what rescissions we can honestly
do whereby we can save the American taxpayer money. Whereby,
when there is an overall rescission bill, and I will recognize the
Chairman to make some comments, whenever that is, sometime in
February, that we are able to make a significant contribution with
regard to that area regarding the number one thing is the area of
safety, and second, with regard to the impact on the Federal em-
ployees and theirfamilies. Before I recognize the RankingMember,
Mr. Coleman, let me just recognize the Chairman ofthe Commit-
tee, Mr. Livingston from Louisiana.
Mr. Livingston. Thank you very much, Mr. Chairman, and con-
gratulations to you on your assumption ofthis very important role
andthankyou forholdingthese hearings.
I want to welcome the witnesses and say that, first of all, I
wasn't here on time because I amjumping from one subcommittee
to another. Ijust left the Interior Subcommittee in which they had
witnesses from various think tanks come and offer their sugges-
tions for cuts. It was a very intriguing session for the last hour or
so, and I hope maybe you will entertain the possibility of having
asimilarhearing.
At any rate, we do welcome you all and let me say that from the
perspective ofthe full committee Chair, I have to tell you that this
is a very unusual year. Obviously, the philosophy ofCongress has
changed drastically in the last few months, and it is our intention
from the standpoint ofthe leadership ofthe House ofRepresenta-
tivesto makethis acut-spendingfirst Congress.
That means that the Appropriations Committee is going to be
center stage. It is going to be the place where a lot of activity is
undertaken to change the role ofgovernment. The Vice President,
to his credit, has been thinkingin terms ofreinventinggovernment
in the last few m—onths and I would say that I would add to that.
I think that the our role is actually to reduce government, and I
am not sure to what extent that can be accomplished within the
jurisdiction of this Subcommittee, but within all of the discre-
tionary budget, I would expect some significant reductions and
changes and role reversals or role eliminations ofvarious entities
within the Federal Government.
Certainly where we can turn back the power to States and com-
munities or where we are carrying on functions that are unneces-
sary, wasteful, duplicative or whatever, those roles need to be
rethought and, ifnecessary, scaledbackoreven eliminated.
So, Mr. Chairman, I will not belabor it except to tell you that I
appreciate your indulgence, look forward to hearing the testimony
from the witnesses, and hope that anybody listening, ifthey have
ideas about how we can create greater efficiency in the United
States Federal Government doing those things for the people that
we must do forthem, not letting people fall through the safety net,
making sure that the people that need help receive help, but cur-
tail the waste and bureaucracy and inefficiencies thathavebuiltup
over the years, we invite their thoughts. We look forward to hear-
ing from them, either through written testimony, direct testimony,
and in this subcommittee and in all the others.
Thankyou, Mr. Chairman.
Mr. Wolf. Thank you, Mr. Chairman. I appreciate that. I appre-
ciateyourtakingthe time to come. One otherthing, wewould hope
to mark up something within two weeks, and as we get into the
question and answer period, any time there is an answer that we
can't quite get, if we can have all the answers by next Friday, I
would appreciateit.
I now recognize Mr. Coleman, the Ranking Member from Texas.
Mr. Coleman. Thankyou, Mr. Chairman, and Chairman Living-
ston. We appreciate very much on our side the willingness of all
ofthe subcommittees to work with the Minority as we have done
inthiscommittee overa numberofyears.
Since it is the first time that I am participating as the Ranking
Minority Member, I would like to say that I do look forward to
working with you in this capacity, Mr. Chairman. I know you are
right in saying that this will be an extremely challenging year. We
must attempt to find responsible budgetary savings in the Federal
Government, as this committee has tried to do over a number of
years underthe leadership ofBob Carr. More recentlythis commit-
tee has tried to find out how it is we can attach ourselves to addi-
tional dollars that may not have been spent and that need not stay
inthe pipeline.
I wouldjust say also that in findingthose savings in the Federal
Government and the Department ofTransportation, we must also
work very hard to see to it that we address the Nation's very real
transportation safety and infrastructure investment needs. I know
thatyou have a sincere and deep interest in those matters, as I do,
and I intend to work in partnership with you to meet those goals.
Today I look forward to hearing the testimony on ways to
downsize the Department of Transportation and join you in wel-
comingourwitnesses.
Thankyou, Mr. Chairman.
Mr. Wolf. Thankyou, Ron.
EDITORIALENTITLED, SPIGOTOFLASTRESORT
Mr. Livingston. Mr. Chairman, yes, I meant to just add that
Robert Samuelson has an intriguingarticle in The WashingtonPost
editorial section today and I offer it foryour attention and askthat
acopybemade partofthe record.
Thankyou verymuch.
[The information follows:]
[FromtheWashingtonPost,Jan. 11, 1995]
SpigotofLastResort
(RobertJ.Samuelson)
Thecaseagain—stAmtrakandmanyotherfederalprograms—programsthatought
tobe eliminated is not that they are worthless. It is thatthey are not thejob of
government, or at least the federal government. For too long, it has been treated
asthespigotoflastresort: anopen-ended supportsystemforactivities shunnedby
the private marketor, forwhateverreason, deemeddesirableby some eagergroup
ofinfluentials. Intheprocess,governmenthasbeentrivialized. Ithasbeenreduced
from an instrumentofoverridingnational goals intoone ofnarrow and sometimes
pettypurposes.
Ourbudgetdebatessufferfromanabsenceofa"publicphilosophy."IftheRepub-
licanCongressistomendthis, its deliberationsmustrise—aboveamereaccounting
exercise.By—"publicphilosophy,"Imeanasetofprinciples andarestrainingsense
oftradition thatreservestheuseofthefederalgovernmentonlyforproblemsthat
aregenuinelyimportantandnationalinscope.Amtrakfailsthistest.Itcarriesless
than one percent ofintercity travel, and halfofthatis in the Northeast Corridor.
It is important to purge whole programs, as opposed to merely cutting them, to
restore a seriousness to government by defining some activities as outside its re-
sponsibilities."Publicphilosophy"oughttoengagemorethanUkesordisUkes.Ilike
books, but it is not government's job to subsidize the Holy Cow! Press with a
$30,000 grant ortheYale Review with a $10,000 grant. (These grants were made
bytheNational EndowmentfortheArts in 1993.) I likefood, butitisnotgovern-
ment'sjobtosubsidizefarmers'incomes.GoodliteraturedoesnotdependontheNa-
tionalEndowment;foodwouldbeproducedwithoutsubsidies.
No important national purposes are served; instead such programs arejustified
bythemushierconceptsofaidingthe"deserving"orpromoting"worthy"causes. A
public philosophyposesthe mostbasic question: Whatcan and shouldgovernment
do?Thehabitofaskingandansweringthisquestioninspiresatraditionofthinking
in terms ofresponsibility, obligation and competence. In this sense, pubUc philoso-
phyacquiresauthorityinthesamemannerascommonlaw;bypracticeand prece-
dent.
The usual objection made to slaughtering programs like Amtrak is that their
spendingissosmallthatitwon'tmakemuchdifference.Thisisacynical,unprinci-
pledargument;ifprogramsaren'tjustified,theyshouldbeended,whethertheycost
$1 miUionor$10billion. Butasanarithmeticproposition, theobjectionhasmerit.
Consider some programs that are routinely suggested (by me, at least) for termi-
nation, along with 1995 spending estimates from the Congressional Budget Office:
Farmincomesupports:$9.8bUBon.
Amtrak:$1billion.
Culture agencies (the endowmentsfortheArts and Humanities; the Corporation
forPublicBroadcasting):$673million.
Mass-transitsubsidiesforlocalities:$3.8billion.
TheSmallBusinessAdministration:$508million.
Propagandaagencies(RadioFreeEurope,VoiceofAmerica,TVMarti,etc.): $486
million.
Regional development (Economic Development Administration; Appalachian Re-
gionalCommission):$487million.
Noneoftheseprogramspromotesvitalnationalgoals. Localtransitbenefitslocal-
ities; they should pay. Few small businesses receive SBA subsidies; none should.
With CNN, fax machines and the Internet, propaganda agencies are dinosaurs.
When 98 percent ofhouseholds have TVs and 81 percent have VCRs, government
does—n't need to subsidize "public" TV. But all these programs cost only $16.8 bil-
lion alot ofmoney, butloose changein a $1.5 trillionbudgetwith a $176 biUion
deficit.
Might other programs be ended? S—ure. But even—doubling the savings, which is
generous,leavesahugedeficit.(Note asmanywill thatthelistexcludesdefense.
Itisanessentialfunctionofgovernment. Ofcourse,there'swaste, anditshouldbe
eliminated when possible. But it's worth noting that defense has dropped from 27
to 18percentoffederal spendingsince 1985. In 1995 defensetotals $270billion; if
itssharehadstayedstable,thatwouldbe$140biUionhigher.)
6
ThearithmeticshowswhyaviablepubUcphilosophyrequiresatruecommitment
toabalancedbudget. Indemocracies,evensillyprogramsarelegitimateiftheyare
wildlypopular.Buttheirlegitimacyissuspectifnorealchoiceisposed.Abalanced-
budget standard demands thatbenefits and burdens becalibrated. Such discipline
reveals that budgetbalancing involves eitherraisingtaxes or cutting popular pro-
gramslikeSocialSecurity($334biUion)orMedicare($176billion).
ItisunclearwhetherRepublicanswillgenuinelytransformtiiebudgetdebate. So
far, they talk—better than they behave. House SpeakerNewtGingrich plugs abal-
anced-budget and then sets a target of2002, which is laughably distant. It is so
remotethatitdoesn'timpose anypractical limits on presentactions. FVoposed Re-
publican "tax cuts" merely redirectthe spigot to a new class ofconstituents. Such
"cuts"barelydifferfromnewspending;both disgorgebenefitswithborrowedfunds.
There is a biggeromission even in Republican rhetoric. Gingrich, though posing
as a candid critic ofthe welfare state, evades its largest dilemma: how to support
retirees without overburdening workers. The dilemma worsens dramatically in the
next century, when the baby boomers retire. Present-oriented politics avoids Uiese
issues;fiiture-orientedpoliticswouldengagethem.Thebudgetcan'tbebalancedby
slashing"traditional"welfare;Aid toFamilies with Dependent Children is 1.2 per-
centoffederalspending,foodstamps 1.7percent.
What connects these larger issues to Amtrak and farm subsidies is the climate
ofpublic opinion. The s3Tnbolic importance ofending these unjustified programs
overshadowstheirsize. Iftheyenjoy immortality, then the political process is cap-
tive to past commitments, no matterhow dubious. Itcan'traise basic questions of
responsibility or adjust to changing social conditions. The spigot may be twisted a
httlehereandthere;butitwillkeepgushinguntilitbursts.
Mr. Wolf. I read the article. It is a good article and we will put
it in the record. Before we hear from the witnesses, maybe I would
say three other things. One, we are going to be totally fair in this
process and totally open. I have sat here for 10 years. I think I
have a good record ofattending these hearings, so I have my own
feelings, I think, —but we will be very open eind anyone should feel
free both to come to say whatever is on their mind or ifyou feel
somewhat restrained, to comeby and see me in the office. Ourdoor
willbe always open.
One other thing. The next time you come, the seating could be
reversed, it may not. If it is reversed, it isn'—t that we are kind of
moving. It is simply because there are some ^there are a number
here versus a number there, so Ijust wanted people to know when
they come back ifthe seat is reversed, and it may not be. It isn't
because ofany special reason,just simply a question ofspace.
Mr. Dickey. Mr. Chairman, does that mean I might be closer to
you nexttime?
Mr. Wolf. Would any ofthe other Members like to make a com-
mentbefore we hearthewitnesses?
Mr. LiGHTFOOT. Mr. Chairman, I appreciate the opportunity to
serve on this subcommittee and it has a reputation in the House
for doing excellent work. We will try to live up to the high stand-
ardsthathave been setbymypredecessors.
Mr. Packard and I both spent time on the PublicWorks Commit-
tee which this kind offeels good to be back into that again. I think
the thingthat strikes me isthat so little hasbasicallychanged. An-
other administration is proposing to privatize the air traffic control
system and we still debate the merits of an independent FAA,
streamline procurement, and the Transportation Trust Fund is off
budget. Those arguments haven't changed atall.
I personally would say that the privatization of the air traffic
control system I thinkis averybad idea. As acommercial pilot and
one who has used the system for a lot ofyears, there are certainly
some things that we need to do to improve the air traffic control
