Appropriations for FY2004: Transportation, Treasury, Postal Service, Executive Office of the President, General Government, and Related Agencies

CRS Report for Congress
Appropriations for FY2004:
Transportation, Treasury, Postal Service,
Executive Office of the President, General
Government, and Related Agencies
Updated March 1, 2004
David Randall Peterman and John Frittelli
Coordinators
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the 13 regular appropriations bills that Congress considers
each year. It is designed to supplement the information provided by the Subcommittee on
Transportation, Treasury and Independent Agencies of the House Committee on
Appropriations the Subcommittee on Transportation, Treasury and General Government of
the Senate Committee on Appropriations. It summarizes the current legislative status of the
bill, its scope, major issues, funding levels, and related legislative activity. The report lists
the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web Version of this document with active links is
available to congressional staff at:
[http://www.crs.gov/ products/ appropri ati ons/ apppage.sht m l ].

Appropriations for FY2004:
Transportation, Treasury, Postal Service, Executive
Office of the President, General Government, and
Related Agencies
Summary
For FY2004 Congress began providing, in a single bill, appropriations for the
Departments of Transportation and the Treasury, the United States Postal Service, the
Executive Office of the President, and Related Agencies, as well as General
Government provisions.
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 the
FY2004 Transportation, Treasury and Independent Agencies Appropriations bill. On
September 9, 2003, the House passed H.R. 2989, the FY2004 Transportation,
Treasury and Independent Agencies Appropriations bill, which provided $85.8
billion. The major financial change from the Administration’s request was to
recommend an additional $4.4 billion in highway spending (another major change,
the deletion of the $3.4 billion for grants-in-aid to airports, was a procedural change;
funding may be restored in conference). On October 23, the Senate passed its version
of the bill, which provided $91.0 billion, adding $4.5 billion in highway funding to
the Administration’s request. Conferees agreed on $89.8 billion on November 25^th.
The conference version of the bill was added to the Consolidated Appropriations bill,
which the House passed on December 8, 2003. The Senate adjourned for the year
without voting on the bill; they approved the bill on January 22, 2004. The
Consolidated Appropriations Act contains a 0.59% across-the-board rescission; the
figures in this report do not reflect the impact of that rescission. They also do not
reflect the $55 million in transportation projects and $1 billion for election reform
grants projects located in the “Miscellaneous Appropriations” Division at the end of
the Act.
Prior to passage of P.L. 108-199, FY2004 funding for agencies and programs
in the Transportation, Treasury, and Independent Agencies appropriations bill was
provided, at FY2003 levels, through January 31, 2004 by a series of continuing
resolutions.
Key issues in the FY2004 appropriations bill included: pay for federal civilian
employees (the White House proposed a 2% raise; the bill provides a 4.1% raise for
federal civilian employees, in line with the military pay raise); outsourcing of federal
work (the bill restricts the Administration’s plan to increase outsourcing, but the
broader restrictions contained in both House and Senate bills were dropped due to
veto threats); “cash balance” pension plans (the bill prohibits the Treasury
Department from finalizing rules affecting conversion of traditional pension plans to
cash balance basis); and Cuba (the conference bill omitted provisions contained in
both House and Senate bills that constrained enforcement of travel restrictions to
Cuba). This report will not be updated.

Area of ExpertiseNameCRSDivisionTelephone
Airport Improvement ProgramBob Kirk,John FischerRSIRSI7-77697-7766
AmtrakRandy PetermanRSI7-3267
Aviation SafetyBart EliasRSI7-7771
E-GovernmentHarold RelyeaG&F7-8679
Executive Office of the PresidentBarbara SchwemleG&F 7-8655
Federal Aviation AdministrationJohn FischerRSI7-7766
Federal Child CareMelinda GishDSP7-4618
Federal Election CommissionJoseph CantorG&F7-7876
Federal Employee Health Care PolicyHealth SectionDSP7-5863
Federal Employee Pension PolicyPatrick PurcellDSP7-7571
Federal Employee Workers’
Compensation (FECA)Edward RappaportDSP7-7740
Federal Highway AdministrationBob KirkJohn FischerRSIRSI7-77697-7766
Federal Railroad AdministrationJohn FrittelliRSI7-7033
Federal Transit AdministrationRandy PetermanRSI7-3267
General ProvisionsMitchellG&F7-8789
Sollenberger
General Services AdministrationStephanie SmithG&F7-8674
Highway, Railroad, & Vehicular SafetyPaul RothbergRSI7-7012
Homeland SecuritySharon GressleG&F7-8677
Independent AgenciesSharon GressleG&F7-8677
Internal Revenue ServiceGary GuentherG&F7-7742
National ArchivesHarold RelyeaG&F7-8679
Office of Government EthicsMildred AmerG&F7-8304
Office of Personnel ManagementBarbara SchwemleG&F7-8655
Postal ServiceNye StevensG&F7-0208
Presidential SalarySharon GressleG&F7-8677
ProcurementStephanie SmithG&F7-8674
Real Estate Brokerage RegulationWilliam JacksonG&F77834
Surface Transportation BoardJohn FrittelliRSI7-7033
Transportation Infrastructure PolicyJohn FischerRSI7-7766
Treasury DepartmentGary GuentherG&F7-7742
DSP = Domestic Social Policy
G&F= Government & Finance
RSI = Resources, Science, and Industry Division.

Contents
Most Recent Developments..........................................1
Overview ........................................................2
Legislative Status..............................................2
Data note................................................2
FY2003 Appropriations.........................................2
FY2004 Budget Request........................................3
Major Funding Trends..........................................4
Title I: Transportation Appropriations..................................4
Overview ....................................................4
Federal Aviation Administration (FAA)............................6
Operations and Maintenance (O&M)..........................7
Facilities and Equipment (F&E)..............................7
Research, Engineering, and Development (RE&D)...............8
Essential Air Service (EAS)..................................8
Grants-in-Aid for Airports...................................8
Federal Highway Administration (FHWA)..........................9
The Administration Request.................................9
The House Bill...........................................10
The Senate Bill...........................................10
The Consolidated Appropriations Act, 2004 (P.L. 108-199)........11
Project Earmarking...................................11
The TEA-21 Funding Framework............................12
Federal Motor Carrier Safety Administration (FMCSA)...............12
Administrative and Operations Expenses......................13
Grants to States and Other Activities..........................13
National Highway Traffic Safety Administration (NHTSA)............14
Federal Railroad Administration (FRA)...........................16
Railroad Safety and Research and Development.................16
Next Generation High-Speed Rail R&D.......................18
Amtrak .....................................................18
Federal Transit Administration (FTA).............................19
Maritime Administration (MARAD)..............................22
Research and Special Programs Administration (RSPA)..............24
Title II: Treasury Appropriations.....................................25
Department of the Treasury Budget and Key Policy Issues.............26
Internal Revenue Service (IRS)..............................30
Title III: Postal Service............................................34
Title IV: Executive Office of the President (EOP) and Funds Appropriated
to the President...............................................36
EOP Offices Funded Through Treasury and
General Government Appropriations......................39
Compensation of the President..............................39
White House Office (WHO)................................39

Executive Residence (White House) Operation and Care..........41
Special Assistance to the President (Office of the Vice President)...42
Official Residence of the Vice President.......................42
Council of Economic Advisers (CEA)........................43
Office of Policy Development...............................43
National Security Council (NSC)............................43
Office of Administration...................................44
Office of Management and Budget (OMB).....................45
Office of National Drug Control Policy (ONDCP)...............47
The Counterdrug Technology Assessment Center (CTAC)........47
Federal Drug Control Programs..............................48
Other Federal Drug Control Programs (formerly
The Special Forfeiture Fund)........................51
Unanticipated Needs......................................53
Title V: Independent Agencies.......................................53
Federal Election Commission (FEC)..........................54
Federal Labor Relations Authority (FLRA).....................55
General Services Administration (GSA).......................56
Federal Buildings Fund (FBF)...........................57
Electronic Government Fund............................58
National Archives and Records Administration (NARA)..........60
Merit Systems Protection Board (MSPB)......................61
Office of Personnel Management (OPM)......................62
Human Capital Performance Fund........................66
Office of Special Counsel (OSC).............................67
Title VI: General Provisions........................................67
Federal Personnel Issues.......................................73
General Schedule Pay.....................................73
Federal Wage System......................................74
Senior Executive Service Salaries............................74
Human Capital Performance Fund........................75
Members of Congress, Judges, and Other Officials..............75
President ................................................76
Federal Employees Workers’ Compensation Program (FECA).....76
Competitive Sourcing of Federal Activities.........................76
Cuba Sanctions...............................................80
House Action............................................80
Senate Action............................................81
List of Transportation Acronyms.....................................83
Appendix 1: The Transportation Appropriations Framework...............85^st
Transportation Equity Act for the 21 Century (TEA-21)..............85
Wendell H. Ford Aviation Investment and Reform Act for the ^st
21 Century (FAIR21 or AIR21).............................86
Appendix 2: Transportation Budget Terminology........................87

List of Figures
Figure 1. Federal Aviation Administration Appropriations.................7
Figure 2. Federal Highway Administration Appropriations................10
Figure 3. National Highway Traffic Safety Administration Appropriations...15
Figure 4. Federal Railroad Administration Appropriations.................17
Figure 5. Federal Transit Administration Appropriations.................20
Figure 6. Maritime Administration Appropriations.......................23
List of Tables
Table 1. Status of FY2004 Departments of Transportation and Treasury
and Independent Agencies Appropriations..........................2
Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004...3
Table 3: Funding Trends for Transportation/Treasury Appropriations,
FY1999-FY2004 ..............................................4
Table 4. Title I: Department of Transportation Appropriations..............5
Table 5. FTA Appropriation, FY2003-FY2004..........................21
Table 6. Title II: Department of the Treasury Appropriations...............25
Table 7. Title III: United States Postal Service Appropriations..............34
Table 8. Title IV: Executive Office of the President (EOP) and Funds
Appropriated to the President Appropriations.......................36
Table 9. Title V: Related Agencies Appropriations.......................53
Table 10. General Services Administration Appropriations................55
Table 11. Government-wide General Provisions........................68

Appropriations for FY2004: Transportation,
Treasury, Postal Service, Executive Office
of the President, General Government, and
Related Agencies
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 the
Transportation, Treasury and Independent Agencies Appropriations bill (Division F);
the House 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
an across-the-board rescission of 0.59% (the figures in this report do not reflect the
impact of that rescission). The Act also includes an additional $1.1 billion in funding
for transportation and election 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 been passed 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 billion more than the Administration requested.
The major financial change from the Administration request 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 $4.4 billion in highway funding; another major
difference, the deletion of the $3.4 billion for grants-in-aid to airports, was the result
of a point of order against funding the administrative expenses of the program from
contract authority.

Overview
Legislative Status
Table 1. Status of FY2004 Departments of Transportation and
Treasury and Independent Agencies Appropriations
^Subco^m^mⁱ^t^t^ee^Hou^s^e^Hou^s^e^Sena^t^e^Sena^t^e^Co^nf.^Conference^Repo^rt^Public
^Ma^r^k^u^p^A^p^p^r^oval
^Repo^rt^Pas^s^age^Repo^rt^Pas^s^age^Repo^rt^La^w
^H^o^use^S^ena^t^e^H^o^u^se^Sena^t^e
^7/^11/⁰³^8/^3/⁰³^7/^30/⁰³^9/^9/⁰³^9/^8/⁰³^10/^23/⁰³^H.R^.^12/^8/⁰³^1/^22/⁰⁴^108-¹⁹⁹
^H.R^e^p^t^.^381-³⁹^S.Rep^t^.^91-³²⁶⁷³^242-¹⁷⁶^65-²⁸
^108-²⁴³^108-¹⁴⁶^H.R^e^p^t^.
^108-
⁴⁰¹
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
of Transportation (DOT) and its related agencies, and the Department of the
Treasury, the Postal Service, the Executive Office of the President, and General
Government provisions, in a single appropriations bill. This change is a result of the
creation of a new federal department, the Department of Homeland Security, and the
reorganization of the subcommittee structure of the House and Senate Committees
on Appropriations, creating new subcommittees for Homeland Security 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 of Transportation 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 to
DHS. 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 gives the 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 and Department of the Treasury and General Government

appropriations. The FY2003 figures in this report 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, $740 million below the final comparable FY2003-
enacted figure (less than 1%). Table 2 shows the allocation of funding within the
overall request.
Table 2. Transportation/Treasury Appropriations, by Title, FY2003-FY2004
(millions of dollars)
^Fin^a^l^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^**FY²⁰⁰⁴^**FY²⁰⁰⁴
Ti t l e^FY²⁰⁰³^Request^Hou^s^e^Sena^t^e^Conference^Ena^c^t^e^d
^Ena^c^t^e^d^P^a^sse^d^P^a^sse^d
^T^{itle I}^:^Dep^a^r^t^m^eⁿ^t^o^f^T^r^an^sp^o^r^tatioⁿ55,67454,266*54,94058,94758,79458,794
^T^{itle I}^I^:^Dep^a^r^t^m^eⁿ^t^o^f^th^{e T}^r^easu^r^y10,84911,34311,27311,19611,16611,166
^T^{itle III: P}^o^s^t^{al Serv}^ice1079797979797
^T^{itle I}^V^{: Ex}^ecu^tiv^{e Of}^fⁱ^{ce o}^f^th^e777791777735787787
^P^r^es^iden^t
^T^{itle V: Related}^A^g^en^cies19,15119,55519,02120,18019,25919,259
^T^{itle VI}^{: Gen}^e^r^a^{l P}^r^o^v^isioⁿ^s279 — 15— — —
^T^o^tal^,^T^r^an^s^p^ortati^on^/^T^reas^u^ry
^Appro^p^ria^t^io^ns 86,588 85,863 85,819 91,028 89,845 89,845
^S^o^u^rce:^FY^{2004 T}^r^aⁿ^s^portatⁱ^on-T^r^e^a^s^ury^A^ppropria^tions^{bill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t^A^u^thority^ta^ble^prov^ide^d^by^the^H^ous^e
^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^a^{nd H}^ous^e^R^e^por^{t 108-}^{243, T}^a^ble^:^C^o^m^par^ativ^e^State^m^eⁿ^{t of Budge}^{t Auth}^o^rⁱ^t^y^,^e^x^cep^t^“S^en^at^e
^R^e^por^te^d”^f^r^om^Se^na^te^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^{, S.R}^e^pt.^108-^146,^T^a^ble^:^C^o^m^par^ativ^e^State^m^eⁿ^{t of Budge}^{t Author}^ity^.^“T^o^t^al^”
^is^f^r^om^“^N^e^t^g^r^a^{nd tota}^{l budg}^e^t^a^r^y^r^e^s^our^c^e^s^”^line^{in ta}^ble^a^{nd r}^e^f^l^e^c^t^s^s^c^or^e^k^e^e^p^ing^a^d^jus^t^m^e^nts^.
^Note:^T^h^e^Se^na^te^divⁱ^de^s^the^budg^e^t^dif^f^e^re^ntly^f^r^om^the^H^ous^e^,^putting^the^P^o^s^t^a^l^Se^rv^ic^e^into^the^“^R^e^l^a^t^e^d^A^g^eⁿ^cⁱ^e^s^”^(“^Inde^pe^nde^nt
^A^g^eⁿ^cⁱ^e^s^”ⁱⁿ^the^Se^na^te^re^{port) T}^itle^{. T}^h^e^c^onf^e^r^eⁿ^c^e^re^{port ta}^bl^e^f^o^llow^e^d^the^Se^na^te^c^onv^eⁿ^{tion; the}^r^e^f^ore^,^{in this ta}^ble^th^{e P}^o^st^al
^Se^rv^ic^e^a^ppropria^{tion ha}^{s be}^eⁿ^s^ubtra^c^t^e^d^f^r^om^the^Se^na^te^a^{nd Conf}^e^r^eⁿ^c^e^tota^{ls f}^o^{r T}^itle^V^.
^*^D^ur^ing^H^ous^e^de^libe^r^a^tions^{on H}^.^R^.^{2989, f}^unding^f^o^r^tw^{o pr}^og^r^a^m^s^w^a^s^s^t^r^u^c^k^{on points}^of^or^de^r^,^r^e^f^l^e^c^ting^a^dis^pute^ov^e^r^s^o^m^e
^a^s^pe^c^t^of^the^w^a^y^the^f^unds^w^e^r^e^be^ing^pr^ov^ide^d^{, r}^a^the^r^thaⁿ^the^f^unding^its^e^l^f^:^FA^A^’^s^G^r^aⁿ^ts^-ⁱ^n-^Aⁱ^{d to A}ⁱ^r^por^ts^pr^og^r^a^m⁽^$3.42⁵
^{billion) a}^{nd the}^Fe^de^ra^{l Motor Ca}^rrie^r^Sa^f^e^ty^A^d^mⁱ^nis^t^ra^tion’s^Borde^r^Enf^o^rc^e^m^eⁿ^{t prog}^ra^m^{($47 m}^{illion). T}^h^is^re^duc^e^d^tota^l
^traⁿ^s^porta^tion^f^unding^{in the}^{bill by}^thos^e^a^m^ounts^,^f^r^om^{$58.4 billion to $54. 9 billion, a}^nd^thus^tota^l^f^undingⁱⁿ^the^bill^d^r^oppe^d
^f^r^om^{$89.3 billion to $85.8 billion.}
^*^*^T^he^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^on^is^not^r^e^f^l^e^c^t^e^dⁱⁿ
^t^h^{ese f}ⁱ^gu^res.

Major Funding Trends
Table 3: Funding Trends for Transportation/Treasury
Appropriations, FY1999-FY2004
(billions of current dollars)
^FY²⁰⁰⁴^f
^D^e^p^a^rtm^eⁿ^t^FY¹⁹⁹⁹^FY²⁰⁰⁰^FY²⁰⁰¹^d^FY²⁰⁰²^FY²⁰⁰³^e^Ena^c^t^e^d
^T^{itle I}^:^T^r^an^sp^o^r^tatioⁿ^a^43.9^46.2^51.9^57.4^55.7^54.3
^T^{itle I}^I^:^T^r^easu^r^y^b⁹⁹^9.9^10.5^10.8^11.3
^T^{itle III: P}^o^s^t^{al Serv}^ice⁰^.1^0.1⁰^.1^0.7⁰^.1^0.1
^T^{itle I}^V^{: Ex}^ecu^tiv^e^0.7⁰^.7^0.7⁰^.8^0.8⁰^.8
^Of^fⁱ^{ce of}^th^{e P}^r^es^iden^t
^T^{itle V: Related}^c^14.6¹⁵^15.8^16.8^19.2^19.6
^A^g^en^cies
^S^o^u^rce:^Unⁱ^t^e^d^S^t^a^t^e^s^Ho^u^s^{e o}^f^Rep^r^esen^t^a^tⁱ^v^es,^Co^m^mⁱ^t^t^{ee o}ⁿ^A^p^p^r^o^p^rⁱ^a^tⁱ^oⁿ^s^,^Co^m^p^aratⁱ^v^{e S}^t^at^em^en^t^o^f
^B^udg^e^t^A^u^thor^ity^ta^ble^s^f^r^om^fⁱ^s^c^a^l^y^e^a^r^s^{1999 thr}^oug^{h 2004.}
^a^.^Fig^u^r^e^s^f^o^r^Dep^a^r^t^m^e^{nt of}^T^r^aⁿ^s^por^ta^{tion a}^ppr^opr^ia^tions^f^o^r^FY^1999-^FY^{2003 ha}^v^e^be^eⁿ^a^d^jus^t^e^d^f^o^r
^c^o^m^p^a^r^is^{on w}^{ith FY}^{2004 f}ⁱ^g^u^r^e^s^by^s^ubtr^a^c^ting^the^Uⁿ^ite^{d Sta}^t^e^s^C^o^a^s^{t G}^u^a^r^{d, the}^Tr^an^sp^or^ta^tion
^Se^cu^rⁱ^t^y^A^d^mⁱ^nis^t^r^a^{tion, the}^N^a^tiona^{l T}^r^aⁿ^s^por^ta^{tion Sa}^f^e^ty^B^o^a^r^{d, a}^{nd the}^A^r^c^h^ite^c^t^ur^a^l^aⁿ^d
^T^r^aⁿ^sporta^{tion Ba}^rrie^r^{s Com}^p^lia^nc^e^Boa^r^{d, a}^{nd by}^a^dding^the^Ma^ritim^e^A^d^mⁱ^nistra^tion.
^{b. Fig}^u^r^e^s^f^o^r^Dep^a^r^t^m^e^{nt of}^the^T^r^e^a^s^ur^y^a^ppr^opr^ia^tions^f^o^r^FY^1999-^FY^{2003 ha}^v^e^be^eⁿ^a^d^jus^t^e^d^f^o^r
^c^o^m^p^a^r^is^{on w}^{ith FY}^{2004 f}ⁱ^g^u^r^e^s^b^y^su^b^t^r^a^c^ting^the^B^u^r^e^a^u^of^A^l^c^{ohol, T}^ob^acco^,^an^d^Fⁱ^rearm^s^,^t^h^e
^Cu^st^o^m^{s S}^e^rvi^ce,^t^h^{e Un}ⁱ^t^e^d^S^t^at^{es S}^ecret^S^e^rvi^ce,^an^d^t^h^{e L}^a^w^Eⁿ^f^o^rcem^en^t^T^r^aiⁿⁱⁿ^g^Cen^t^er.
^c^.^Fig^u^r^e^s^f^o^r^R^e^la^te^{d A}^g^eⁿ^cⁱ^e^s^a^ppr^opr^ia^tions^f^o^r^FY^1999-^FY^{2003 ha}^v^e^be^eⁿ^a^d^jus^t^e^d^by^a^dding^the^N^a^tiona^l
^T^r^aⁿ^s^por^ta^{tion Sa}^f^e^ty^B^o^a^r^{d a}^{nd the}^A^r^c^h^ite^c^t^ur^a^l^a^{nd T}^r^aⁿ^s^por^ta^{tion B}^a^r^rⁱ^e^r^s^C^o^m^p^lia^nc^e^B^o^a^r^d.
^{d. FY}^{2001 f}ⁱ^g^u^r^e^s^inc^l^ude^0.22%^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^on.
^e^.^FY^{2003 f}ⁱ^g^u^r^e^s^inc^l^ude^0.65%^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^on.
^f^.^T^h^e^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^;^tha^t^r^e^s^c^is^sⁱ^on
ⁱ^sⁿ^o^t^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.
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 budget
request conformed to the basic outline of both the Transportation Equity Act for the
21^st Century (TEA-21; P.L. 105-178) which authorizes spending on highways and
transit, and the aviation funding authorized in the Wendell Ford Aviation Investment
and Reform Act of the 21^st Century (FAIR21 or AIR21; P.L. 106-181) (see Appendix
1 for more information on these authorizing acts). However, the request did propose
a few changes to the highway and transit funding structure, in line with the

¹ This report relies on figures from tables provided by the House and Senate Committees on
Appropriations. Because of differing treatment of offsets, rescissions, and the structure of
appropriations bills, the totals will at times vary from those provided by the Administration.
The total FY2004 budget number for DOT is not directly comparable to those of previous
years due to the transfer of the Coast Guard and Transportation Security Administration to
the Department of Homeland Security during FY2003, as well as other changes.

Administration’s reauthorization proposal; see the sections on the Federal Highway
Administration and Federal Transit Administration for details.
Table 4. Title I: Department of Transportation Appropriations
(in millions of dollars — totals may not add)
^Departm^e^{nt or Agency}^Fin^a^l^FY²⁰⁰³^FY²⁰⁰⁴^FY²⁰⁰⁴^Hou^s^e^FY²⁰⁰⁴^Sena^t^e^FY²⁰⁰⁴^Conference^FY²⁰⁰⁴^b
^{(Selected Accounts}⁾^Ena^c^t^e^d^a^Request^P^a^sse^d^P^a^sse^d^b^Ena^c^t^e^d
^O^f^fⁱ^{ce of}^t^h^{e S}^ecret^ary^of^T^r^an^s^port^a^tⁱ^oⁿ¹⁷³¹⁷⁷¹⁵⁹¹⁷²¹⁶⁶¹⁶⁶^c
^Essen^{tial A}ⁱ^r^Ser^v^ice⁵²^{50 63}⁵²⁵²⁵²
^Fed^e^r^a^{l A}^v^iatioⁿ^A^d^mⁱⁿⁱ^str^a^tioⁿ^13,490^14,007^10,540^13,971^13,930^13,930
^O^p^e^r^a^tⁱ^o^{ns (}^t^r^u^st^fund^{& ge}^ne^r^a^l
^f^uⁿ^d⁾⁷^,023^7,591^7,532^7,536^7,531^7,531
^{Facilities &}^Eq^uⁱ^p^m^en^{t (}^F^&^E⁾
^(t^ru^s^t^f^uⁿ^d⁾²^,942^2,916^2,900^2,916^2,880^2,880
^Gran^t^-ⁱⁿ^-^aⁱ^d^Aⁱ^rport^s^(A^IP^{) (t}^ru^s^t
^f^uⁿ^d^{) (l}ⁱ^mⁱ^t^.^on^oblⁱ^g^.)^3,378^3,400^—^3,400^3,400^3,400
^R^e^s^earch^{, En}^gⁱⁿ^eerin^g^&
^D^e^v^e^l^opm^en^t^(t^ru^s^t^f^uⁿ^d⁾¹⁴⁷¹⁰⁰¹⁰⁸¹¹⁹¹¹⁹¹¹⁹
^Fe^d^e^r^a^l^Hⁱ^ghw^a^y^A^d^mⁱⁿⁱ^st^r^a^tⁱ^oⁿ^32,409^30,225^34,873^34,768^34,692^34,692
^(Lⁱ^mⁱ^t^a^tⁱ^oⁿ^on^O^b^lⁱ^g^atⁱ^oⁿ^s⁾^31,593^29,294^33,385^33,843^33,843^33,843
^(Ex^e^m^p^t^O^b^lⁱ^g^atⁱ^oⁿ^s⁾⁸⁸⁴⁹³¹⁹³¹⁹³¹⁹³¹⁹³¹
^A^d^d^itioⁿ^a^{l f}^uⁿ^d^s
^(tru^{st f}^uⁿ^d⁾^—^—⁴⁰⁰^—^—^—^d
^A^d^d^itioⁿ^a^{l f}^uⁿ^d^s
^(g^en^eral^f^uⁿ^d⁾¹⁸⁷^—¹⁵⁷¹⁵⁰¹²⁵¹²⁵
^F^e^deral^Mot^o^{r C}^a^rri^{er S}^a^f^e^t^y^e
^A^d^mⁱⁿⁱ^str^a^tioⁿ³⁰⁵⁴⁴⁷⁴²⁷⁴⁸³³⁶⁶³⁶⁶
^Natioⁿ^a^{l Hig}^h^w^ay^T^r^af^fⁱ^{c Saf}^e^ty^f
^A^d^mⁱⁿⁱ^st^r^a^tⁱ^oⁿ⁴³⁴⁶⁶⁵⁴³⁵⁴⁴⁹⁴⁵¹⁴⁵¹
^Fed^e^r^a^{l Railr}^o^a^d^A^d^mⁱⁿⁱ^str^a^tioⁿ¹^,261^1,089^1,087^1,568^1,455^1,455^g
^Am^t^r^a^k^1,043⁹⁰⁰⁹⁰⁰^1,346^1,225^1,225
^Fed^e^r^a^{l T}^r^an^{sit A}^d^mⁱⁿⁱ^str^a^tioⁿ⁷^,179^7,226^7,231^7,305^7,309^7,309
^Form^u^l^{a Gran}^ts
^(g^en^eral^f^uⁿ^d⁾⁷⁶³^—⁷⁶⁸⁷⁶⁸⁷⁶⁸⁷⁶⁸
^F^o^rm^u^l^{a G}^r^an^t^s^(t^ru^s^t^f^uⁿ^d⁾³^,051^5,615^3,071^3,071^3,071^3,071
^Cap^{ital I}ⁿ^v^e^stm^eⁿ^t^Gr^an^ts.
^(g^en^eral^f^uⁿ^d⁾⁶⁰³^1,214⁵⁹⁹⁶²⁸⁶²⁸⁶²⁸
^Cap^{ital I}ⁿ^v^e^stm^eⁿ^t^Gr^an^{ts (}^t^r^u^st
^f^uⁿ^d⁾²^,413³²¹^2,507^2,512^2,510^2,510
^{St. L}^a^w^r^en^{ce Seaw}^ay^Dev^e^lopm^en^t
^C^o^r^p^tⁱ^oⁿ¹⁴¹⁴¹⁵¹⁴¹⁴¹⁴
^Mar^itim^{e A}^d^mⁱⁿⁱ^str^a^tioⁿ²³⁰²¹⁹²¹⁹²²⁸²²²²²²
^R^e^s^earch^an^{d Special P}^r^og^ram^s^h
^A^d^mⁱⁿⁱ^st^r^a^tⁱ^oⁿ¹⁰⁵¹¹⁸¹¹¹¹¹⁰¹¹³¹¹³
^Of^fⁱ^{ce of}^In^s^p^{ector Gen}^e^ral⁵⁵⁵⁵⁵⁵⁵⁶⁵⁶⁵⁶
^Su^rf^{ace T}^r^an^s^portation^B^o^ard¹⁸¹⁸¹⁸¹⁸¹⁸¹⁸ⁱ
^T^o^tal^,^D^e^p^a^rtm^eⁿ^t^{of T}^r^an^s^p^ortati^on^55,674^54,266^*^55,171^59,142^58,794^58,794
^Note:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-T^r^e^a^s^ury^A^ppropria^tions^{bill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t^A^u^thority^ta^ble
^p^r^o^v^id^ed^b^y^th^e^Ho^u^s^e^Co^m^m^{ittee o}ⁿ^A^p^p^r^o^p^r^iatioⁿ^s^{. Becau}^{se o}^f^dⁱ^f^f^e^rin^g^treatm^eⁿ^t^o^f^o^f^f^s^{ets, th}^{e to}^{tals w}^illⁿ^o^t^alw^a^y^s^m^a^tch^the
^A^d^mⁱ^nis^t^r^a^tion’^s^tota^ls^.^T^h^e^fⁱ^g^u^r^e^s^w^ithin^this^ta^ble^m^a^y^dif^f^e^r^s^lig^htly^f^r^om^thos^e^{in the}^te^x^t^due^{to s}^upple^m^eⁿ^ta^{l a}^ppr^oprⁱ^a^tions^,
^r^e^s^c^is^sⁱ^ons^{, a}^{nd othe}^r^f^unding^a^c^tions^{. C}^o^lumⁿ^s^m^a^y^{not a}^{dd due}^{to r}^ounding^or^e^x^c^l^us^{ion of}^s^m^a^lle^r^pr^og^r^a^m^line^-^ite^m^s^.
^*^D^ur^ing^H^ous^e^de^libe^r^a^tions^{on H}^.^R^.^{2989, f}^unding^f^o^r^tw^{o pr}^og^r^a^m^s^w^a^s^s^t^r^u^c^k^{on points}^of^or^de^r^,^w^h^ic^{h r}^e^f^l^e^c^t^e^d^a^dis^pute^ov^e^r
^s^o^m^e^a^s^pe^c^t^of^the^w^a^y^the^f^unds^w^e^r^e^be^ing^pr^ov^ide^d^{, r}^a^the^r^thaⁿ^the^f^unding^its^e^l^f^:^FA^A^’^s^G^r^aⁿ^ts^-ⁱ^n-^Aⁱ^{d to A}ⁱ^r^por^ts^pr^og^r^a^m
^{($3.425 billion) a}^{nd the}^Fe^de^ra^l^Motor^Ca^rrie^r^Sa^f^e^ty^A^d^mⁱ^nis^t^ra^tion’s^Borde^r^Enf^o^rc^e^m^eⁿ^{t prog}^ra^m^{($47 m}^{illion). T}^h^is^re^duc^e^d
^tota^{l tra}ⁿ^s^porta^{tion f}^unding^{in the}^{bill by}^thos^e^a^m^ounts^.^Funding^f^o^{r the}^s^e^prog^ra^m^s^m^a^y^be^re^s^t^ore^d^{in c}^onf^e^r^eⁿ^c^e^.
^a^.^T^h^e^s^e^fⁱ^g^u^r^e^s^r^e^f^l^e^c^t^the^0.65%^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on inc}^l^ude^{d in P}^.^L^.^108-^7.
^{b. T}^h^e^s^e^fⁱ^g^u^r^e^s^{do not r}^e^f^l^e^c^t^the^0.59%^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on inc}^l^ude^{d in H}^.^R^.^2673.

^c^.^T^h^e^s^e^a^m^ounts^a^r^e^{in a}^{ddition to}^t^h^e^{$50 m}^illion^a^nnua^{l a}^u^thor^iz^a^{tion f}^o^r^the^Es^s^e^ntia^{l A}ⁱ^r^Se^r^v^ic^e^pr^og^r^a^m^;^thus^{, the}^tota^l
^FY^{2004 f}^unding^w^{ould be}^{$102 m}^{illion ($50 m}^{illion +}^{$52 m}^illion).
^{d. For A}^ppa^la^c^h^ia^{n D}^e^v^e^lopm^eⁿ^{t H}ⁱ^g^h^w^a^y^Sy^s^t^e^m^{($187 m}^illion).
^e^.^W^h^ile^the^FY^{2004 FMCSA}^a^ppropria^{tion w}^a^s^{$81 m}^{illion le}^s^s^th^aⁿ^re^que^s^t^e^d^{, Cong}^re^s^s^prov^ide^d^aⁿ^a^dditiona^{l $111.5 m}^illion
^f^o^{r g}^r^aⁿ^ts^{to s}^t^a^t^e^s^f^o^{r m}^o^{tor c}^a^rrie^r^s^a^f^e^ty^a^c^tiv^itie^s^unde^{r FH}^W^A^mⁱ^s^c^e^lla^ne^ous^a^ppropria^tions^.
^f^.^N^H^T^SA^’s^FY^{2004 re}^que^s^t^inc^l^ude^s^$100^m^{illion tra}ⁿ^s^f^e^rre^{d f}^r^om^FH^W^A^{; this}^f^unding^w^a^s^pre^v^ious^ly^prov^ide^d^throug^{h the}
^FH^W^A^{but a}^d^mⁱ^nis^t^e^r^e^d^by^N^H^T^SA^{. T}^h^e^r^e^f^or^e^,^the^dif^f^e^r^e^nc^e^be^tw^e^eⁿ^budg^e^t^a^r^y^r^e^s^our^c^e^s^a^v^a^ila^ble^{to N}^H^T^SA^f^o^r^FY²⁰⁰³
^a^{nd its}^FY^{2004 re}^que^s^t^is^{$131 m}^{illion, not $231 m}^illion.
^g^.^{In a}^{ddition to A}^m^tra^k^’s^FY²⁰⁰³^a^ppr^opria^{tion, Cong}^re^s^s^pos^tpone^{d A}^m^tra^k^’s^re^pa^y^m^eⁿ^{t of}^a^{$100 m}^illion^loaⁿ^f^r^om^the^D^O^T^;
^the^FY^{2004 c}^onf^e^r^eⁿ^c^e^a^g^r^e^e^m^eⁿ^{t w}^{ould a}^g^aⁱ^{n pos}^tpone^tha^t^r^e^pa^y^m^eⁿ^t.
^h.^T^h^e^fⁱ^g^u^re^s^do^not^re^f^l^e^c^t^$14^m^{illion in pe}^rm^aⁿ^eⁿ^{t a}^ppropria^tions^{. T}^h^e^r^e^f^ore^,^the^tota^{l re}^s^ourc^e^s^f^o^{r RSP}^A^f^o^r^FY²⁰⁰³^m^a^y^be
^s^e^eⁿ^a^s^{$119 m}^{illion, a}^{nd the}^tota^{l f}^unding^f^o^{r FY}^{2004 a}^s^{$132 m}^illion.
^{i. R}^e^s^c^is^sⁱ^ons^of^unoblig^a^t^e^d^pr^e^v^ious^y^e^a^r^s^’^c^ontr^a^c^t^a^u^thor^ity^ha^v^e^be^eⁿ^s^ubtr^a^c^t^e^d^f^r^om^this^tota^l.^B^ecau^{se resci}^ssi^oⁿ^s^o^f^p^rⁱ^o^r
^y^e^a^r^s^’^c^ontr^a^c^t^a^u^thor^ity^ha^v^e^{no im}^pa^c^t^{on the}^budg^e^t^a^r^y^r^e^s^our^c^e^s^a^v^a^ila^ble^f^o^r^the^c^u^r^r^e^{nt f}ⁱ^s^c^a^l^y^e^a^r^{, the}^tota^{l r}^e^s^our^c^e^s
^a^v^a^ila^ble^c^{ould be}^s^e^eⁿ^a^s^{$55.9 billion f}^o^{r FY}^{2003 e}ⁿ^a^c^t^e^d^.
Federal Aviation Administration (FAA)
[ h ttp://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 and
Budget). This is a $440 million increase in funding over the FY2003 enacted level
of $13.5 billion (this amount reflects a 0.65% rescission to which some parts of the
FAA budget were subjected). The amount also differs slightly from the amount
proposed in the House bill, H.R. 2989, just over $14 billion and in the Senate bill, S.

1589, that provided $13.97 billion. The majority of the increased funding in P.L 108-

199, and each of the other bills, would be used for Operations & Maintenance
(O&M) expenses. With the exception of some program adjustments there are
essentially no major new initiatives in any of the FY2004 legislative 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 fund
monies. In FY2002 a Treasury general fund contribution of $1.1 billion was
provided for O&M funding. The Administration proposed a general fund
contribution of almost $3.3 billion for FY2003. Whereas the general fund
contribution for FY2002 was on the low side historically, the Administration was
trying 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 FY2004
the House Appropriations Committee initially suggested that $1.5 billion be provided
from the general funds. During Floor debate the bill was amended to raise the general
fund contribution to approximately $3.5 billion. The Senate bill provided general
funds at the $1.5 billion level. The FY2004 Act differs from both, however, and
raises the general fund contribution to $4.5 billion. Historically, this funding split
has been an important part of the annual FAA budget debate. The rationale behind
the general fund contribution has been that the public at large realizes some benefit²

from aviation whether it uses the system or not.
² General fund appropriations have varied substantially, both in dollar terms and as a
percentage of FAA appropriations as a whole, from year to year. Over the last 12 years the
share has ranged from 0% to 47%. See table 1 in CRS Report RS20177, Airport and Airway
(continued...)

Operations and Maintenance (O&M). The FY2004 Act provides $7.5
billion for FY2004 O&M spending. The same amount was included in both the
House and Senate bills. Each proposal 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 of FAA personnel engaged in air traffic control,
certification, and safety-related activities. Much of the increased funding called for
in the FY2004 request is for increased air traffic control system costs and safety-
related activities.
Figure 1. Federal Aviation Administration Appropriations
Facilities and Equipment (F&E). P.L. 108-7 provided $2.96 billion for
this activity in FY2003. The FY2004 Act provides for slightly less, $2.91 billion,
and is in line with decreases in spending proposed in both the House and Senate. A
Senate proposal to transfer $100 million of F&E money to the Airport Improvement

² (...continued)
Trust Fund Issues in the 106^th Congress, by John W. Fischer.

Program (AIP) was dropped in Conference. 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 control and 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 is more than the House proposal of $108
million and slightly more than the almost $119 million in the Senate proposal. The
enacted level is well below the $148.5 million level 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 overflights of United States territory by foreign
aircraft. EAS has had an annual authorized funding level of $50 million for the last
several years. The overflight funding mechanism, however, has never provided this
much annual funding, so additional funding has been provided from other sources.
The EAS program continues to enjoy significant support in Congress. As a result,
$102 million was provided for this program 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 on
the overflight fee as its principal funding mechanism. This is the same level of
funding as had been proposed by the Senate and $11 million less than had been
provided by the House. A major feature of the bill is a provision that precludes
funding of a pilot cost sharing program that is included in FAA reauthorization
legislation expected to be enacted shortly. In setting the $102 million program level
the FY2004 Act rejects the Bush Administration’s calls to reduce the size of the EAS
program by half and require a local contribution at each airport receiving EAS
service. Also absent in the FY2004 Act is a House provision requiring that DOT ask
each community receiving EAS assistance to report by March 1, 2004 on how
program coordination and funding could be improved.
Grants-in-Aid for Airports. The Airport Improvement Program (AIP)
provides grants for airport development and planning. The Bush Administration
FY2004 budget proposal requested $3.4 billion for 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 AIP
funds be provided for the Small Community Air Service Program. The report
language for AIP discretionary grants directed that the FAA give priority to projects
at 171 listed airports, but did not set the grant amounts. During floor debate on the
bill the entire AIP provision was struck from the bill on a point of order.
Consequently, the House-passed bill, H.R. 2989, contained no funding for 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 billion obligation limitation. The report

language for AIP discretionary grants directed the FAA to give priority to projects
at 241 airports named in the report. The bill included a prohibition against using AIP
grants for airport changes or improvements needed to 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 $100
million 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 to
accommodate bulk explosive detection systems. It also prohibits the use of AIP or
any other funds in the bill to implement a ten-city Essential Air Service local
participation pilot program set forth in Section 408 of the recently passed FAA
reauthorization Act (VISION 100; H.R. 2115). The report language of the
conference report (H.Rept. 108-401) place-names, with dollar amounts, nearly 150
airports for airport projects totaling just under $258 million.
Federal Highway Administration (FHWA)
[ h ttp://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 the
agency.
The Administration Request. For FY2004, the President requested $30.2
billion for FHWA. This would have represented a decrease of $2.2 billion (-7%)
from the FY2003 appropriation of $32.4 billion. The proposed obligation limitation,
which supports most of the FAHP, was set 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 guarantee funding) 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 transportation
reauthorization proposal. A new $1.0 billion Infrastructure Performance and
Maintenance initiative was one of the proposed changes. The program’s funds would
have been distributed, according to the Surface Transportation Program formula, for
use on “ready-to-go” projects that addressed congestion and improved infrastructure
conditions. States would have had to commit these funds during the first six months
of the fiscal year. Funds not obligated within this time frame would have been
reallocated 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’s
general fund, to the highway trust fund. This change has been projected to add
roughly $600 million to highway trust fund revenues in FY2004. This change would
require 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 $2.2 billion 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 FY2003 level and $4.1 billion above the President’s request. The overall
total included exempt obligations of $931 million (the same as the requested
amount). As has been common in recent years, the federal-aid highway discretionary
programs were heavily earmarked.
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 for
FHWA. At $33.8 billion, the obligation limitation was set roughly $500 million
above the House bill. The $931 million for exempt obligations was the same as in
the House version. As is true with the House bill, the discretionary programs were
heavily earmarked by the Senate. The bill also directed that $175 million under the
limitation on administrative expenses be made available for surface transportation
projects earmarked in the report language of the bill.

Figure 2. Federal Highway Administration Appropriations

The Consolidated Appropriations Act, 2004 (P.L. 108-199). The
enacted Consolidated Appropriations Act 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 the Senate total. This is an increase of more than
6% over the FY2003 enacted total and more than 12% over the Administration’s
budget request. At $33.8 billion the limitation 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-21 authorization cycle, the enacted FY2004
conference agreement either completely or heavily earmarks all of the discretionary
programs that are under the nominal control of the FHWA. For example, the
Interstate Discretionary, Bridge Discretionary, Ferry Boats and Ferry Terminals,
Transportation and Community and System Preservation Pilot Program (TCSP), as
well as the National Corridor Planning and Development and 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), Surface
Transportation Program (STP), Congestion Mitigation and Air Quality Improvement
Program (CMAQ), and the Highway Bridge Replacement and Rehabilitation
Program) that in the past were generally left free of earmarks and under the control
of the states. Section 115 of Division F in the Conference Report earmarks over $1
billion of unobligated core program funds. Funding for each project is to be drawn
from 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’s
STP funds distribution. The funds are available for obligation until expended and the
federal share is 100%. Providing a 100% federal share for earmarked projects is also
a departure from past practice under which the federal share (usually 80% or 90%)
has generally been determined by the program under which the project was
earmarked.
In addition, under the heading, Miscellaneous Highway and Highway Safety
Programs, the act provides for the use of nearly $300 million unobligated core
formula funds for a combination of interagency transfers and project earmarks.³
Most of the money goes for transfers to the Federal Motor Carrier Safety
Administration ($111.5 million) and to the National Highway Traffic Safety
Administration ($150.5 million). In addition, $15 million is provided for
construction of Pennsylvania Avenue in front of the White House and $20 million
for 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)).

³ Section 110 of Division F of the Act modifies the determination of the obligation limitation
distribution to include these funds in the initial account set aside. This has the effect of
reducing, by a like amount, the final remaining limitation that is distributed to the states via
the core formula programs.

The act provides additional $150 million for the Appalachian Development
Highway System (ADHS), $75 million of which is earmarked. It also adds 65 miles
to the ADHS.
The TEA-21 Funding Framework. TEA-21 authorizing authority was
scheduled to expire on October 1, 2003. While Congress continues to consider
reauthorization proposals, all existing programs continue 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 in the months ahead is expected to at
least retain a large part of the existing program funding framework. TEA-21 created
the largest surface transportation program in U.S. history. For the most part, however,
it did not create new programs. Rather, it continued most of the highway and transit
programs that originated in its immediate predecessor 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 as
the core programs. These programs are: National Highway System (NHS), Interstate
Maintenance (IM), Surface Transportation Program (STP), Bridge Replacement and
Rehabilitation (BRR), and Congestion Mitigation and Air Quality Improvement
(CMAQ). All of these programs are subject to apportionment on an annual basis by
formula 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 minimum
guarantee funding ($639 million per fiscal year) and emergency relief ($100 million
per 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 control
of FHWA or other governmental entities. These programs include: the Federal Lands
Highway Program, High Priority Projects (former demonstration project category),
Appalachian Development Highway System roads, the National Corridor Planning
and 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 became operational on January 1, 2000, and
assumed almost all of the responsibilities and personnel of DOT’s Office of Motor

⁴ During various hearings held in the first session of the 106^th Congress, a number of
organizations, including DOT’s Inspector General, the General Accounting Office, and
many industry associations raised a variety of concerns regarding the effectiveness of the
federal truck and bus safety program. In response to these concerns, Congress created the
FMCSA.

Carrier Safety.⁵ FMCSA issues and enforces the federal motor carrier safety
regulations that govern the operation and maintenance of interstate commercial truck
and bus operations and specify licensing requirements for commercial drivers.
FMCSA also administers several grants and programs to help states conduct various
truck and bus safety activities. Together with the states, FMCSA conducts
inspections of Mexican-domiciled commercial drivers and vehicles entering the
United States, advances Intelligent Transportation Systems for commercial
operations, and reviews thousands of carriers transporting property and passengers.
Most of the funds used to conduct FMCSA activities are derived from the federal
Highway Trust Fund.
The FMCSA appropriation has two primary components: FMCSA
administrative expenses (including operations) and research; and financial assistance
provided primarily to the states to conduct various truck and bus safety programs,
(grants and information systems). The FY2004 Administration request for the
FMCSA was $447 million. This was an increase of almost $134 million (43%) over
the FY2003 appropriation of $313.1 million. For FY2004, the conference committee
specified an FMCSA appropriation of $366 million: $176 million for administrative
expenses under the FMCSA limitation on administrative expenses account, and $190
million for motor carrier safety grants and information systems. The conference
agreement also provides for an additional $111.5 million for various other FMCSA
programs and activities under the FHWA miscellaneous appropriation.
Administrative and Operations Expenses. The President’s budget
request for FMCSA’s administrative and operations expenses in FY2004 was $224
million (up from $124 million in FY03), including funds for research and technology
(R&T) and regulatory development. The House approved $236.8 million, the Senate
approved $246 million, and the conferees agreed to $176 million. Some of the
activities that would be 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 with commercial vehicles; and the establishment of a medical review
board to assist FMCSA. Some of the core FMCSA activities or expenses supported
by these funds include: rent, administrative infrastructure, personnel compensation
and benefits and other related staff expenses for more than 1,000 employees;
outreach efforts to help educate 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 account also 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 activities was $223 million; the House approved $190 million, the
Senate approved $237 million, and the conferees agreed to $190 million. These
funds are used primarily to pay for the Motor Carrier Safety Assistance Program
(MCSAP), which provides grants to states to help them enforce commercial vehicle

⁵ DOT’s Office of Motor Carrier Safety, which operated from October 9 through December
31, 1999, replaced the Office of Motor Carriers of the Federal Highway Administration of
the DOT.

safety and hazardous materials transportation regulations. MCSAP grants cover up
to 80% of the costs of a state’s truck and bus safety program. Some 10,000 state and
local law-enforcement officers conduct more than 2.6 million roadside inspections
of trucks and buses annually under the program. The Senate bill included an
additional $47 million for construction of border inspection stations for trucks. For
FY2004, the conference agreement includes $170 million dedicated to MCSAP (with
$1 million going to a crash causation study), and an additional $20 million for
information systems and strategic safety initiatives. Under the FHWA miscellaneous
appropriation, the conference 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 intended
to improve traffic safety. More specifically, NHTSA seeks to reduce impaired
driving, increase occupant protection, improve police traffic services, enhance
emergency medical responses to crashes, ensure compliance with various federal
vehicle safety regulations, and track and seek to mitigate emerging vehicle safety
problems. NHTSA also provides grants to the states for the implementation of
various 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 million
above the FY2003 program level: this reflected an increase of $131million above the
FY2003 program level and the proposed transfer to NHTSA of $100 million in
funding for safety belt use and impaired-driving law incentive programs previously
allocated 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 reduce
highway fatalities and prevent injuries. Included in the Administration’s request was
funding in these major areas: research and analysis (e.g., collection of crash
statistics and research on vehicle performance and occupant damage during these
crashes); highway safety programs (e.g., developing improved countermeasures to
combat alcohol- or drug-impaired driving); safety assurance (e.g., testing of vehicles
to ensure compliance with federal motor vehicle safety standards and maintaining a
legislatively required database to track vehicle defects); and safety performance

⁶ http://www.dot.gov/bib2004/nhtsa.html. According to DOT, total funds requested for
NHTSA for FY2004: “Includes $222 million of TEA-21 resources for the Sections 157 and
163 grant programs formerly appropriated to FHWA. NHTSA has always administered
these funds; therefore, the budget proposes that the funding be appropriated directly to
NHTSA.”

standards (e.g, conducting crash avoidance and crash-worthiness testing, and
evaluating child safety seats). The House approved $434.8 million, the Senate
approved $448.7 million, and the conference agreement recommends $451.1 million
for NHTSA: $225 million for highway traffic safety grants and $222.5 million for
operations and research.⁷

Figure 3. National Highway Traffic Safety Administration
Appropriations
⁷ Excluding funds for the National Driver Register.

Federal Railroad Administration (FRA)
[ h ttp://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 Administration
requested $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 the
President requested for FY2003. The House agreed to $131 million; the Senate also
agreed to $131 million, and P.L. 108-199 provides $131 million. For railroad
research and development, the President requested $35 million, which is $6 million
more than funding for FY2003. The House agreed to $28 million, the Senate agreed
to $34 million; P.L. 108-199 provides $34 million. For next generation high-speed
rail, the President requested $23 million, $7 million less than last year; the House
agreed to $28 million; the Senate agreed to $29 million. Conferees agreed on $37
million.
Although most of the debate involving the FRA budget centers on Amtrak,
agency safety activities (which receive more detailed treatment following this
section), Next Generation High-Speed Rail, and how states might obtain additional
funds for high-speed rail initiatives are also issues.
Railroad Safety and Research and Development. The FRA is the
primary federal agency that promotes and regulates railroad safety. Increased railroad
traffic volume and density make equipment, employees, and operations more
vulnerable to adverse safety impacts. The Administration proposes $131.2 million
in FY2004 for FRA’s safety program and related administrative and operating
activities. This represents about a 13% increase over the $116.6 million provided in
the FY2003 DOT appropriations for rail safety and operations. The House
Committee on Appropriations recommended and the House approved $130.9 million,
and the Senate Committee recommended and the Senate 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 travel and training expenses for
FRA’s field and headquarters staff and to pay for information systems monitoring the⁸
safety performance of the rail industry. The funds requested support FRA’s goals

⁸ The funds also are used to conduct a variety of initiatives, including the Safety Assurance
and Compliance Program (SACP), the Railroad Safety Advisory Committee (RSAC), and
field inspections. SACP involves numerous partnerships forged by railroad management,
FRA personnel, and labor to improve safety and compliance with federal railroad safety
regulations. RSAC uses a consensus-based process involving hundreds of experts who work
(continued...)

of reducing rail accidents and incidents, reducing grade-crossing accidents, and
contributing to the avoidance of serious hazardous materials incidents.
Figure 4. Federal Railroad Administration Appropriations
The railroad safety statute was last reauthorized in 1994. Funding authority for
the program expired at the end of FY1998. FRA’s safety program continues using the
authorities specified in existing federal railroad safety law and funds provided by
annual appropriations. Though hearings have been held since 1994, the deliberations
have not resulted in agreement on funding for FRA’s regulatory and safety
compliance activities or change to any of the existing authorities used by FRA to
promote railroad safety. A reauthorization statute changing the scope and nature of
FRA’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 to

⁸ (...continued)
together to formulate recommendations on new or revised safety regulations for FRA’s
consideration.

control train movements, and track dynamics. In reports accompanying House and
Senate transportation appropriation bills and in annual conference reports, the
appropriations committees historically have allocated FRA’s R&D funds among
various research categories pertaining to safety. The FY2003 DOT appropriation
provided $29.1 million for the R&D program. For FY2004, the Administration
requests $35 million for these activities. The House Committee recommended and
the House approved $28.2 million, and the Senate Committee recommended and the
Senate approved $34.2 million. The conferees recommend $34 million.
Next Generation High-Speed Rail R&D. This program supports work on
high-speed train control systems, track and structures technology, corridor planning,
grade crossing hazard mitigation, 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 FY2003 appropriation of $30.25 million. The House agreed to
$28.3 million. The difference was largely the House’s support for establishing the
compliance of diesel multiple units (a form of passenger rail car with its own engine
which is used in other countries but is not currently used in this country) with FRA
passenger safety regulations. The Senate agreed to $29.3 million. The difference
was largely the Senate’s support for additional high-speed corridor planning ($5
million for Florida’s high-speed corridor, $2.5 million for a few others) and for
maglev ($5 million for 4 maglev projects). P.L. 108-199 provides $37.4 million; the
increase came largely from combining the different projects contained in the House
and Senate bills, plus adding some new projects.
Amtrak
[ h ttp://www.amtrak.com]
The President requested $900 million for Amtrak for FY2004. This was $150⁹
million below Amtrak’s FY2003 appropriation of $1,050 million and $900 million
less than the $1.8 billion Amtrak requested for FY2004. Amtrak said that it could
not survive FY2004 on $900 million; the DOT Inspector General agreed with that
assessment. The House agreed to $900 million, similar to the Administration
request. It also added a provision allowing states to apply to FHWA to transfer a
portion of their allocation of an appropriation of $267 million from the Highway¹⁰
Trust Account to Amtrak. The Senate agreed to $1.346 billion for Amtrak, and
extended to all Amtrak routes the requirement (begun for FY2003) that Amtrak’s
long-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 Amtrak
routes 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 for state-
supported routes currently operated by Amtrak. If a state wishes to contract with an

⁹ For FY2003, Congress also deferred Amtrak’s repayment of a $100 million loan to the
DOT.
¹⁰ The provision is in the House Committee on Appropriations report (p. 72), not the bill.

operator other than Amtrak for service, the state may contract with Amtrak for use
of Amtrak’s equipment, facilities, and services necessary to enable the non-Amtrak
operator to provide the service. If Amtrak and the state cannot agree on terms for this
use, the Secretary of Transportation is given the power to compel Amtrak to provide
the equipment, facilities and services on terms and conditions set by 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 the
Secretary of Transportation, who would provide funding to Amtrak quarterly through
the grant-making process. Congress also imposed several other requirements on
Amtrak in FY2003 which had the effect of reducing Amtrak’s discretion with its
federal funding. Among these was a requirement that Amtrak submit a 5-year
business plan to Congress, which it did on April 25, 2003. In this plan, Amtrak
requested average annual federal support of $1.6 billion for FY2004-FY2008 to both
maintain the current network and begin to address the estimated $6 billion in
backlogged maintenance needs. The plan did not propose expansion of the existing
rail 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: the
House Transportation and Infrastructure Committee has reported out H.R. 2572 that
would authorize Amtrak at $2 billion annually for three years, and the Senate
Commerce, Science, and Transportation Committee has approved a surface
transportation safety bill, S. 1978, that includes an amendment 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 restructuring
Amtrak and passenger rail service (S. 1501) which would shift much of the planning
and financial responsibility for passenger rail service to the states. Sen. Hutchinson
and others have submitted a plan for restructuring Amtrak and passenger rail service
(S. 1505) that would give the federal government more responsibility for planning
and implementing passenger rail service, authorize $2 billion annually for 6 years for
Amtrak operations, and authorize $48 billion in bonds to finance capital
improvements to the nation’s passenger rail system. Sen. Hollings and others have
submitted a plan that would authorize $2 billion annually for 6 years for Amtrak, and
would authorize $30 billion in bonds to finance capital improvements to the nation’s
rail network (S. 1961). See CRS Report RL31743, Amtrak Issues in the 108^th
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 final

appropriation was reduced to $7.179 billion after the 0.65% rescission).¹¹ The
Administration’s request also proposed changes to FTA’s program structure,
reflecting the Administration’s reauthorization proposal (the proposed changes are
described below). The House agreed to $7.231 billion, the Senate agreed to $7.305
billion; P.L. 108-199 provides $7.309 billion. Since the Administration’s
reauthorization proposal has not been approved, the proposed program changes are
not reflected in the FTA appropriations.

Figure 5. Federal Transit Administration Appropriations
¹¹ These figures for FTA do not include any projections to account for possible flexible
funding transfers from FHWA to FTA. In FY2002 such transfers amounted to $1.1 billion.

For more information on FTA’s programs and funding structure, see CRS
Report RL31854, Transit Program Reauthorization in the 108^th Congress.
Table 5. FTA Appropriation, FY2003-FY2004
(millions of dollars)
^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Program^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Con^f^eren^ce^*^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d^*
^Urbanⁱ^{zed A}^r^eas^Form^u^l^{a P}^r^og^ram
^(S^ectⁱ^oⁿ⁵³⁰⁷⁾^3,407^3,521^3,429^3,429^3,429^3,429
^Cap^{ital I}ⁿ^v^e^stm^eⁿ^t^Gr^an^{ts &}^L^o^an^s
^Prog^ram^(S^ectⁱ^oⁿ^{5309) T}^o^t^a^l³^,016^2,729^3,107^3,140^3,138^3,138
^N^e^w^S^t^art^s^Prog^ram¹^,207^1,515^1,214^1,318^1,324^1,324
^Fix^e^{d Gu}^idew^ay
^Modern^ization^P^r^og^ram¹^,207^1,214^1,214^1,214^1,207^1,207
^Bu^s^Dⁱ^s^c^retⁱ^oⁿ^a^ry^Prog^ram⁶⁰³^—⁶⁷⁸⁶⁰⁷^*^*⁶⁰⁷^*^*⁶⁰⁷
^Non^-^Urbanⁱ^{zed A}^r^eas^Form^u^l^a
^Prog^ram^(S^ectⁱ^oⁿ⁵³¹¹⁾²³⁷³⁵⁹²³⁹²³⁹²³⁹²³⁹
^J^{ob A}^cces^s^&^R^e^v^e^rs^{e C}^o^m^m^u^te
^Prog^ram¹⁴⁹^—⁸⁵¹²⁵¹²⁵¹²⁵
^El^derl^y^&^In^di^vⁱ^du^al^s^wⁱ^t^h
^Disab^{ilities Fo}^r^m^u^l^{a P}^r^o^g^r^a^m
^(S^ectⁱ^oⁿ⁵³¹⁰⁾⁹⁰⁸⁷⁹¹⁹¹⁹¹⁹¹
^Ru^r^a^{l T}^r^an^sp^o^r^tatioⁿ^A^ccessib^ility
^In^cen^tⁱ^v^{e Prog}^ram^(S^ectⁱ^oⁿ^3038),
^als^o^kⁿ^o^wⁿ^as^th^{e Ov}^er-^t^h^e^-^R^{oad B}^u^s
^A^ccessib^ility^p^r^o^g^r^a^m⁷⁷⁷⁷⁷⁷
^Pl^anⁿⁱⁿ^g^&^R^e^s^earch¹²¹¹²²¹²²¹²⁶¹²⁶
^O^t^h^e^r¹⁴⁵¹⁰⁸¹⁵¹¹⁵²¹⁵⁵¹⁵⁵
^New^Fr^eed^o^m^Iⁿ^itiativ^e^—¹⁴⁵^—^—^—^—
^FT^A^T^o^tal⁷^,179^7,226^7,231^7,305^7,309^7,309
^Note:^num^be^r^s^m^a^y^{not a}^{dd due}^{to r}^ounding^.
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-T^r^e^a^s^ury^A^ppropria^tions^{bill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t^A^u^thority^ta^ble
^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^*^T^h^e^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^o^s^s^-^t^h^e^-^boa^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^{on is}^{not r}^e^f^l^e^c^t^e^d^{in the}^s^e
^fi^g^u^r^e^s^.
^*^*^T^h^e^Conf^e^r^eⁿ^c^e^Re^{port dire}^c^t^s^tha^t^this^{$607 m}^{illion is}^s^upple^m^eⁿ^te^d^w^ith^$70^m^{illion tra}ⁿ^s^f^e^rre^{d f}^r^om^othe^{r FT}^A^prog^ra^m^s^{, f}^or
^a^tota^{l of}^{$677 m}^illion.

Maritime Administration (MARAD)
[ h ttp://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 military
auxiliary in time of war. MARAD administers programs that benefit U.S. vessel
owners, shipyards, and ship crews. For FY2004, the President requested a total of
$219 million for MARAD, which is about $12 million more than the President
requested, and about $11 million less than Congress appropriated, for FY2003. The
Consolidated Appropriations Act provides a total of $226.4 million for MARAD
which is about $7.8 million more than the House passed bill and $1.2 million less
than 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 provides
guaranteed loans for purchasing ships from U.S. shipyards and for the modernization
of U.S. shipyards. The purpose of the program is to promote the growth and
modernization of U.S. shipyards. Consistent with its budget requests in prior years,
the Administration has requested no funds for additional loans in FY2004, calling the
program a “corporate subsidy.” The Administration has, however, requested $4.5
million for the administration of existing loans. For FY2003, in the Consolidated
Appropriations Resolution (P.L. 108-7), Congress initially provided no funds for the
program other than $4 million for administrative expenses. However, in the Wartime
Supplemental Appropriations bill (P.L. 108-11), Congress provided $25 million for
the program. For FY2004, the Consolidated Appropriations Act agrees with the
President’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 applications
more effectively, exercise more rigorous financial oversight of borrowers, and use
an external financial advisor in reviewing loan applications. The IG’s investigation
was prompted by the bankruptcy of American Classic Voyages, leaving MARAD
with $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 General
Accounting Office also identified weaknesses in the program and made
recommendations for improving the financial oversight of the program (GAO-03-
728T). The conference agreement notes MARAD’s cooperation with the IG’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, $52.9
million is requested for the U.S. Merchant Marine Academy in Kings Point, New
York; $9.5 million for state maritime academies; and $42 million for the operations
of MARAD. The Consolidated Appropriations Act provides $107 million for
operations and training. For the Maritime Security Program (MSP), the
Administration requested $98.7 million, virtually the same amount as Congress
provided last year. The Consolidated Appropriations Act agrees with the President’s

request. MSP is a fleet of 47 privately-owned U.S. flag commercial vessels engaged
in international trade that are available to support the Department of Defense in a
national emergency.
Figure 6. Maritime Administration Appropriations
For the disposal of obsolete vessels in the National Defense Reserve Fleet
(NDRF), the Administration requested $11.4 million, about the same amount
Congress appropriated in FY2003. There are over 130 vessels in the NDRF that are
awaiting disposal because of their age. These vessels have raised environmental
concerns due to the presence of asbestos and other hazardous substances. MARAD
has until 2006 to dispose of these surplus ships, most of which are located on the
James River in Virginia and in Suisan Bay, California. The Consolidated
Appropriations Act provides $16.2 million for ship disposal, which is $2.2 million

more than the House passed measure and $2.2 million less than the Senate passed
measure.
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 of
Hazardous Materials Safety. RSPA also conducts a multimodal research program,
helps coordinate and plan for transportation research and technology transfer
activities, sponsors educational activities to promote innovative transportation, and
manages DOT’s transportation-related emergency response and recovery
responsibilities.
For FY2004, the Administration requested a budget of $118 million for RSPA;
most of this funding was for activities that promote transportation safety. For
RSPA’s pipeline transportation safety program, $67 million was proposed by the
Administration (an increase of $3 million over the FY2003 appropriation); for the
hazardous materials transportation safety program, $25 million was requested (an
increase of $2 million over the FY2003 appropriation). Much of the additional
funding requested was intended to enhance RSPA’s ability to ensure that the federal
hazardous materials transportation pipeline safety regulations are complied with and
to assist DOT in participating in the safety oversight of containment systems that will
be used to ship spent nuclear fuel and high-level radioactive wastes. The House
Appropriations Committee recommended and the House approved $111.3 million
for RSPA in FY2004, including $23.6 million for hazardous materials transportation
safety, 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 $67.6
million for pipeline safety. The Consolidated Appropriations Act, 2004 provides
$112.9 million for RSPA, including $23.7 million for hazardous materials
transportation safety and $66.3 million for pipeline safety. ¹²

¹² The conference Agreement includes a limitation on obligations for emergency
preparedness grants of $14.3 million.

Title II: Treasury Appropriations
Table 6. Title II: Department of the Treasury Appropriations
(in millions of dollars)
^FY²⁰⁰^FY²⁰⁰^FY²⁰⁰^FY²⁰⁰^FY²⁰⁰⁴
^Program^{or A}^ccouⁿ^t³^Ena^c^t^e^FY²⁰⁰⁴^Request⁴^Hou^s^e⁴^Sena^t^e⁴^Co^nfer^Ena^c^t^e
^d^P^a^sse^d^P^a^sse^d^ence^a^d
^Departm^eⁿ^t^{al Of}^fⁱ^ces¹⁵⁸¹⁶⁷¹⁷⁶¹⁷⁵¹⁷⁶¹⁷⁶
^Departm^eⁿ^t^-^w^{ide Sy}^s^t^em^s
^aⁿ^d^C^a^pⁱ^a^l^I^v^e^s^t^m^eⁿ³⁷³⁷³⁷³⁷³⁶³⁶
^O^f^fⁱ^{ce of}^In^s^p^ect^{or G}^eⁿ^e^ral¹¹^—¹³¹³¹³¹³
^T^r^eas^u^r^y^In^s^p^{ector Gen}^e^ral
^f^o^{r T}^a^x^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ¹²⁴^—¹²⁸¹²⁸¹²⁸¹²⁸
^T^r^easu^r^y^In^sp^ecto^r^Gen^e^ral^—¹³⁵^—^—^—^—
^Aⁱ^r^T^r^an^sp^o^r^tatioⁿ
^S^t^a^b^lⁱ^z^a^tⁱⁿ^P^o^g^r^a^m⁶³³³³³
^T^r^easu^r^y^B^u^ildⁱⁿ^g^Rep^a^ir
^aⁿ^d^R^e^s^t^o^a^tⁱ^oⁿ²⁹²⁵²⁵²⁵²⁵²⁵
^Fin^aⁿ^c^{ial Cr}^im^es
^E^f^o^r^e^mⁿ^t^N^e^t^w^o^r^k⁵¹⁵⁸⁵⁸⁵⁸⁵⁸⁵⁸
^In^t^e^rag^eⁿ^c^y^C^rⁱ^m^{e an}^d
^Dru^g^En^f^o^rcem^en^t¹⁰⁷^{— — — —}^—
^Fi^na^ncⁱ^a^l^M^a^na^ge^m^e^nt
^S^e^rvⁱ^c^e²²¹²²⁹²²⁹²²⁹²²⁹²²⁹
^A^l^coh^o^{l an}^{d T}^{obacco T}^a^x
^an^{d T}^r^{ade Bu}^reau⁷⁹⁸⁰⁸⁰⁸⁰⁸⁰⁸⁰
^Bu^reau^of^t^h^{e Pu}^blⁱ^c^D^e^bt¹⁸⁹¹⁷⁴¹⁷⁴¹⁷⁴¹⁷⁴¹⁷⁴
^In^t^e^rn^al^R^e^v^eⁿ^u^e^S^e^rvⁱ^ce,
^T^o^t^a^l⁹^,835^10,437^10,352^10,276^10,245^10,245
^P^r^o^c^e^ssing,
^A^s^sⁱ^s^t^an^{ce an}^d
^Man^a^g^e^m^eⁿ^t^3,930^4,075^4,038^4,048^4,033^4,033
^Ta^x^L^a^w
^En^f^o^rcem^en^t³^,705^3,977^4,221^4,173^4,196^4,196
^In^f^o^rm^atⁱ^oⁿ^S^y^s^t^em^s¹^,622^1,670^1,629^1,591^1,591^1,591
^B^u^sine^{ss Sy}^ste^m^s
^Modernⁱ^zatⁱ^oⁿ³⁶⁴⁴²⁹⁴²⁹⁴²⁹³⁹⁰³⁹⁰
^Health^In^s^u^ran^{ce T}^a^x
^Cr^ed^{it A}^d^mⁱⁿⁱ^str^a^tioⁿ⁷⁰³⁵³⁵³⁵³⁵³⁵
^To^t^a^l,
^D^e^p^t^{. of th}^{e T}^reas^u^ry^10,840^11,343^11,273^11,196^11,166^11,166
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-T^r^e^a^s^ury^A^p^p^r^opria^tions^{bill Conf}^e^r^eⁿ^c^e^Re^port
^B^udg^e^t^A^u^thor^ity^ta^ble^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^a.^T^h^e^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^on^of^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^on
ⁱ^sⁿ^o^t^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.

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, and
fiscal 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 the
creation of the Department of Homeland Security (DHS) late in 2002 and its
assumption in March 2003 of the authorities transferred to it by executive order, this
functional profile has changed significantly. While Treasury still serves as one of the
federal government’s principal economic policymakers and its financial manager,
revenue collector, and producer of currency, coinage, and stamps, its role in law
enforcement 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 the
formulation and implementation of policy and the management of the Department as
a whole, while the operating bureaus carry out specific duties assigned to the
Department. The bureaus typically account for more than 95% of the Department’s
employment 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 of
Public Debt, Community Development Financial Institutions Fund, and Office of
Thrift Supervision; and law enforcement has been done by the Bureau of Alcohol,
Tobacco, and Firearms (BATF), U.S. Secret Service, Federal Law Enforcement
Training Center, U.S. Customs Service, Financial Crimes Enforcement Network
(FinCen), and Treasury Forfeiture Fund. The exception to this dichotomy is the
Internal Revenue Service (IRS), which performs both financial duties and law
enforcement 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 transferred
from the Treasury Department to DHS, while the Treasury Forfeiture Fund and many
functions of BATF were transferred to the Justice Department (DOJ). On January
24, 2003, the Treasury Department announced the establishment of a new bureau to
administer laws related to the use of alcohol and tobacco and to implement
regulations formerly handled by BATF: the Alcohol and Tobacco Tax and Trade
Bureau. Its main duties include collecting alcohol and tobacco excise taxes and
classifying 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 than
the amount enacted for FY2003 ($11.018 billion), after adjusting for the transfer of
functions to DHS and the Justice Department. According to budget documents, the
Administration’s top priorities for Treasury operations in FY2004 were to bolster
IRS’s efforts to monitor and enforce compliance with tax laws, improve the
Department’s overall efficiency by further streamlining operations, and elevate the
Department’s role in federal efforts to combat money laundering and disrupt financial
networks supporting international terrorist activities. Under the newly configured
Treasury 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 International
Technical Assistance program, which assists the efforts of countries torn by war or
political instability to improve their systems of economic governance. In addition,
the Administration proposed that the Treasury Inspector General for Tax
Administration (TIGTA) be merged with the Office of Inspector General (OIG) on
the grounds that many of the functions once handled by OIG had been transferred to
other 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 operations in FY2004.
The measure authorized $11.273 billion in funding, or $423.5 million more than the
amount enacted for FY2003 but $70 million less than the amount requested by the
Bush Administration for FY2004. According to the Committee’s report on H.R.
2989 (H.Rept. 108-243), most of the difference with the Administration’s request
concerned a smaller recommended budget for IRS operations.
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 measure provided $8.9 million
more in funding for Treasury’s departmental offices than the Administration had
requested. Most of this increase (89%) was spread among administrative 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 proposal to combine the functions of OIG and
TIGTA into a new Treasury Inspector General on the grounds that such a step would
have required “extensive new legislation that has yet to be enacted.” Instead, the bill

¹³ The Administration’s budget request for the Treasury Department in FY2004 is $65
million greater than the requested amounts being considered by the House and Senate
appropriations committees. This difference reflects funding for two programs administered
by Treasury but funded through separate appropriations accounts: the Community
Development Financial Institutions Fund (CDFI) and international technical assistance.
Funding for the former is covered under appropriations for the Department of Housing and
Urban Development, and for the latter under appropriations for foreign operations.

added $1.7 million to OIG’s budget for FY2003 and $3.8 million to TIGTA’s budget
for FY2003. But it matched the Administration’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 to 39 on
September 9, 2003. Two of the amendments were related to Treasury appropriations
for FY2004. One, introduced by Representative Jim Cooper, would have reduced
proposed funding from $100 million to $25 million for a controversial IRS pilot
program to require some taxpayers claiming the earned income tax credit to certify
the residency status of the qualifying child they plan to claim beginning with the
2004 tax year and divert the $75 million in savings to programs aimed at improving
compliance among large and medium-sized business taxpayers. It failed by 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 known as Cooper v.
IBM. In July 2003, the federal judge in the case ruled that IBM’s cash benefit
pension plan violated a federal law proscribing discrimination on the basis of age
because the rate of benefit accrual under the plan declines as a participant’s age
increases.¹⁴ In December 2002, the IRS issued proposed regulations on the
application of age-discrimination rules to the conversion of traditional pension plans
to cash balance plans.¹⁵ Some Members of Congress feared that if the IRS were to
make those regulations final, IBM would have a better chance of prevailing if it were
to appeal the judge’s ruling.¹⁶ The amendment passed by a vote of 258 to 160.
Otherwise, the House-passed version of H.R. 2989 endorsed the recommended levels
of funding for Treasury departmental offices and operating bureaus 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 the Treasury
Department in FY2004. This amount was $202 million more than the amount
enacted for FY2003 but $147 million less than the amount requested by the Bush
Administration and $77 million less than the amount approved by the House for
FY2004. According to the Committee’s report on the legislation (S.Rept. 108-146),
most of the difference between S. 1589 and the Administration’s budget request and
the House-passed version of H.R. 2989 was due to a smaller recommended budget
for IRS operations. More specifically, compared to the Administration’s request, S.
1589 provided $26 million less in funding for tax processing, assistance, and
management, and $79 million less in funding for IRS information systems.

¹⁴ CRS Report RL30196, Pension Issues: Cash Balance Plans, by Patrick J. Purcell, p. 15.
¹⁵ Ibid., pp. 15-16.
¹⁶ See Alan K. Ota, “Pension Amendment Unlikely on Transportation-Treasury Bill,” CQ
Weekly, Sept. 13, 2003, p. 2225, available at [http://www.cq.com].

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 in
recommended funding for the initiative in FY2004 of $55 million. In addition, S.
1589 would have spent nearly $8 million more than the Administration has requested
for Treasury’s departmental offices. A substantial share of this recommended
increase would have gone to the Office of International Affairs (+$2.7 million) and
the Office of Terrorist Finance and Financial Crimes (+$2.3 million). S. 1589 also
denied the Administration’s proposed merger of the OIG and the TIGTA into a new
office (known as the Inspector General for 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 increase
in 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 recommended increase in
funding for FinCen of $6.1 million, in part to manage the new responsibilities 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 bureau and has the primary
responsibility for enforcing the Department’s regulations against money laundering
and collecting and sharing financial and other information useful in 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 the measure, it considered and
approved a number of amendments, several of which related to Treasury
appropriations. By voice vote, the Senate passed an amendment by Sen. Mary
Landrieu that requires the IRS to undertake a comprehensive study of a proposed
pilot program to pre-certify eligibility for the EITC. The study would focus 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 ineligibility or failure
to complete the required documents. In addition, the Senate passed by voice vote an
amendment by Sen. Tom Harkin to prevent the Treasury Department from
implementing a new regulation that would permit companies to convert traditional
pension plans to cash balance plans. It was similar in intent to an amendment to the
version of H.R. 2989 approved by the House. The principal differences in
appropriations for the Treasury Department between the Senate-passed and House-
passed versions of H.R. 2989 related to funding 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 conferees reached an
agreement, which was submitted to both houses for approval. Under the agreement,
funding for Treasury Department operations in FY2004 would total $11.166 billion.
This was $317 million greater than the amount enacted for FY2003 but $177 million
less than the amount requested by the Bush Administration, $107 million less than
the amount approved by the House, and $30 million less than the amount approved
by the Senate. In each instance, virtually the entire difference related to funding for
the IRS, which would account for 92% of total Treasury appropriations in FY2004.
Under the agreement, Treasury departmental offices would receive $176.1 million;

Treasury programs for capital investment, $36.4 million; the Office of Inspector
General, $13 million; TIGTA, $128 million; the Air Transportation Stabilization
Program, $2.5 million; the Treasury Building and Annex Repair and Restoration
Fund, $25 million; FinCen, $57.6 million; the Financial Management Service, $228.5
million; the Alcohol and Tobacco Tax and Trade Bureau, $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) covering seven 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 all discretionary spending approved in non-defense
appropriations bills, including those already enacted. This cut was not reflected in
the budget totals discussed above. On December 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 measure into law the next day (P.L. 108-199).

Internal Revenue Service (IRS). The federal government levies individual
and corporate income taxes, social insurance taxes, excise taxes, estate and gift taxes,
customs duties, and miscellaneous taxes and fees. The federal agency responsible
for administering all these taxes and fees, except customs duties, is the IRS. In
discharging that duty, the IRS receives and processes tax returns and other related
documents, processes payments and refunds, enforces compliance through audits and
other methods, collects delinquent taxes, and provides a variety of services to
taxpayers to help them understand their rights and responsibilities and resolve
problems. In FY2002, the most recent year for which data are available, the IRS
collected $2,017 billion before refunds, the largest component 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 enacted
for FY2003 and 5.2% greater than the amount requested by the Administration for
FY2003. Of the requested budget for FY2004, $4.135 billion was to be used for
processing, assistance, and management; $4.086 billion for tax law enforcement;
$1.709 billion for information systems; $500 million for the business systems
modernization program (BSM); $251 million for a program aimed at curbing fraud
and abuse in claims for the earned income tax credit (EITC) known as the Earned
Income Tax Credit Compliance Initiative; and $35 million to administer the health
insurance tax credit. Two proposed enforcement initiatives for FY2004 aroused
concern or outright opposition among some Members of Congress. One would
allocate $100 million to a pilot program to require that some taxpayers certify the
residency status of the qualifying child before filing a claim for the EITC. Under the
second proposal, the IRS would spend $2 million to hire private collection agents to
collect 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 five
sources of tax evasion: (1) the promotion of abusive tax schemes; (2) the misuse of
trusts and offshore accounts to hide or illegally lower taxable income; (3) the use of
abusive corporate tax avoidance schemes; (4) the under-reporting of income by

upper-income individuals; and (5) the failure of employers to file employment tax
returns and pay substantial amounts of employment taxes in a timely manner. The
Administration contended that such a program to curb tax evasion would lead to a
72% increase in the number of audits of tax returns for high-income individuals and
businesses. Nonetheless, some expressed concern that the Administration’s proposed
funding for IRS operations fell short of what would be needed to enable the IRS to
enforce 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 of
1998. Under the Act, the Board is required to review the annual IRS budget request
prepared by the IRS Commissioner and submit its recommendations to the Secretary
of the Treasury. The President in turn is required to submit the Board’s budget
recommendations 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 Bush
Administration.¹⁸ It also recommended that the IRS hire an additional 2,120 full-time
employees in FY2004, compared to the 238 additional full-time employees included
in the Administration’s request. The Board’s budget recommendations were
intended to accomplish three goals. One was to achieve a real growth rate of 2% in
the next five years for the purpose of channeling adequate resources into efforts to
monitor and enforce compliance with tax laws. The second goal was to provide more
resources for the BSM, which the Board views as essential to the transformation of
the IRS into an efficient, fair, customer-friendly collector of revenue and enforcer of
tax laws. The third goal was to restore funds for customer service and tax law
enforcement that were diverted in recent years to cover unanticipated expenses, such
as unfunded increases in annual pay raises for federal civilian employees. Nearly
85% of the difference between the Administration’s budget request for FY2004 and
the 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 the amount
enacted for FY2003 but $85 million less than the amount requested by the Bush
Administration. More specifically, the measure provided $4.038 billion for
processing, assistance, and management; $4.221 billion for tax law enforcement;
$1.629 billion for information systems; $429 million for BSM; and $35 million for
administering the health insurance tax credit.

¹⁷ Alison Bennett, “Rossotti Details IRS Successes, Notes Much Work Remains for Years
Ahead,” Daily Report for Executives, Bureau of National Affairs, no. 210, Oct. 30, 2002,
p. G-6; and George Guttman, “Oversight Board Concerned About IRS Budget Situation,”
Tax Notes, vol. 97, no. 11, pp. 1404-1406.
¹⁸ For more details on the Board’s budget recommendations for FY2004, see the statement
made by Nancy Killefer, the chair of the IRS Oversight Board, before the House
Appropriations Subcommittee on Transportation and Treasury on May 7, 2003, available
at [www.nexis.com].

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 (-$6.4
million); and information systems (-$41.3 million). Among the IRS programs and
initiatives receiving favorable comment in the Committee’s report (H.Rept. 108-243)
were low-income taxpayer clinics (which would receive $8 million in funding), the
tax counseling program for elderly taxpayers (which would receive $4.25 million in
funding), the emerging partnership between the IRS and suppliers of tax-return
software in implementing the Free-File Alliance, a controversial pilot program for
pre-certifying persons eligible for the earned income tax credit (which would receive
$100 million in funding), and a controversial proposal to hire private collection
agencies 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 in FY2004
approved by the Appropriations Committee. Under an amendment adopted by the
House during floor debate on the measure, none of the funds appropriated in the
measure could be used to help overturn a federal judge’s recent ruling that IBM’s
cash balance pension plan violates a federal law barring age discrimination. The
sponsors of the amendment wanted to prevent the IRS from making final proposed
regulations it issued in December 2002 on the application of age-discrimination rules
to the conversion of traditional pension plans to cash balance plans it issued in
December 2002. They feared that such a step would strengthen IBM’s hand if it were
to 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 for IRS
operations in FY2004. This amount was $296 million more than the amount enacted
in FY2003 but $160 million less than the amount requested by the Administration
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 the Administration’s request but
$10 million above the amount in H.R. 2989); $4.173 billion on tax law enforcement
(or $196 million above the Administration’s request but $48 million below the
amount in H.R. 2989); $1.591 billion on information systems (or $79 million below
the Administration’s request and $38 million below the amount in H.R. 2989); $429
million for BSM (or the same amount requested by the Administration and contained
in H.R. 2989); and $35 million to administer the health insurance tax credit (or the
same amount requested by the Administration and contained 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. It
recommended that the former be funded at a level of $3.9 million and the latter at a
level of $7.0 million in FY2004. In addition, the report recommended that the IRS
manage its earned income tax compliance initiative as part of its budget for tax law
enforcement, and that the IRS “realign development activities funded under the
Information Systems account so that they are managed and integrated formally into
Business Systems Modernization activity.” It was unclear from the report how the
Committee viewed recent controversial proposals to pre-certify the eligibility of

certain taxpayers for the earned income tax credit and to hire private collection agents
to 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 and passed the measure by a
vote of 93 to 1. It made no changes in the level of funding in FY2004 for IRS
operations approved by the Appropriations Committee. But the Senate did approve
by voice vote two amendments that related to the IRS. One would prevent the
Treasury Department from using any of the appropriated funds to implement a
recently issued IRS final regulation making it easier for companies to convert from
traditional pension plans to a cash balance plan. The second amendment would
require the IRS to undertake a comprehensive study of its proposed pilot program to
pre-certify the eligibility of thousands of taxpayers for the EITC. Among other
things, the study would examine the time and cost to program participants and the
administrative cost to the IRS, and the number of participants who are denied
certification because they are deemed ineligible or failed to complete the 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. The difference was
distributed among three accounts: processing, assistance, and management (-$10
million); tax law enforcement (+$48 million); and information systems (+$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 conference agreement
reached on November 12, 2003, funding for the IRS in FY 2004 would total $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, $107 million less than
the amount approved by the House, and $31 million less than the amount approved
by the Senate. More specifically, the agreement provides $4.033 billion for
processing, assistance and management, of which $4.1 million must be used to fund
the Tax Counseling for the Elderly Program and $7.5 million is to be made available
to fund grants for low-income taxpayer clinics; $4.196 billion for tax law
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 Senate
Appropriations Committees; and $35 million to administer the health insurance tax
credit. Proposed funding for the BSM represented a reduction of $39 million in the
amounts approved by the House and the Senate and could be construed as an
expression of congressional dissatisfaction with the results of the program so far and
distrust of the ability of IRS managers to remedy known problems with it. The
problems reportedly include unanticipated cost increases, delays in the completion
of 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 1999 moratorium on the
conversion of corporate pension plans from traditional defined-benefit plans to cash-
balance plans. Cash-balance plans often result from the conversion of traditional
defined-benefit pension plans to defined-contribution pension plans. Instead, the
agreement required the agency to present to Congress within six months of its

enactment proposed legislation that would “provide transition relief for older and
longer-service participants affected by conversions of their employers’ traditional
pension plans to cash-balance pension plans.” The agreement also required the IRS
to submit to Congress by June 30, 2005 a final report examining various aspects of
any program established by the IRS to certify or pre-certify the eligibility of certain
taxpayers for the EITC, including the costs incurred by affected taxpayers in
participating in the program and the IRS in administering 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 spending for all federal
programs outside of defense and military construction in FY2004. On December 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 suit on 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 Service Appropriations
(in millions of dollars)
^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Program^{or A}^ccouⁿ^t^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^P^a^y^m^en^{t to}^th^{e P}^o^stal
^S^e^rvⁱ^{ce F}^uⁿ^d²⁹²⁹²⁹²⁹²⁹²⁹
^A^d^v^aⁿ^{ce A}^ppropri^a^tⁱ^oⁿ^,
^F^Y^2002/²⁰⁰³⁴⁷³¹³¹³¹³¹³¹
^A^d^v^aⁿ^{ce A}^ppropri^a^tⁱ^oⁿ^,
^F^Y²⁰⁰⁴³¹³⁷³⁷³⁷³⁷³⁷
^T^o^tal^,^Pos^t^al^S^ervi^c^e¹⁰⁷⁹⁷⁹⁷⁹⁷⁹⁷⁹⁷
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-^T^r^e^a^s^ury^A^p^p^r^o^p^rⁱ^a^tions^{bill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t
^A^u^thor^ity^ta^ble^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^Note:^T^h^e^Se^na^te^t^a^b^l^e^of^budg^e^t^a^u^thor^ity^lis^ts^the^P^o^s^t^a^l^Se^r^v^ic^e^a^ppr^opr^ia^{tion unde}^r^the^“^R^e^l^a^t^e^d^A^g^eⁿ^cⁱ^e^s^”
^(“^Inde^pe^nde^{nt A}^g^eⁿ^cⁱ^e^s^”^{in the}^Se^na^te^re^{port) T}^itle^{, ra}^the^r^thaⁿ^a^s^a^se^pa^ra^te^title^{. T}^h^e^Conf^e^r^eⁿ^c^e^Re^{port ta}^ble^f^o^llow^s
^{this c}^onv^eⁿ^tion.
^a.^T^h^e^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^os^s^-^th^e-^b^o^a^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^{on is}^not
^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.
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 a regular
appropriation from Congress, however, to compensate for revenue it forgoes in
providing, at congressional direction, free mailing privileges for the blind and
visually impaired and for overseas voting. Under the Revenue Forgone Reform Act
of 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 and
Current Issues). The terrorist attacks in the fall of 2001, however, including use of
the mail for delivery of anthrax spores to congressional and media offices, generated
new 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 October
1, 2003, and the $29 million ($28.8 after rescission) due annually under the Revenue
Forgone 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 FY2003
installment under the Revenue Forgone Reform Act of 1993—reduced by $19.2
million as a reconciliation adjustment to reflect actual versus estimated free mail
volume in 2001—for a total of $65.5 million. Of this amount, $36.5 million would
not be available for obligation until October 1, 2004, which is in FY2005. However,
USPS will also have available for obligation during FY2004 the $31 million
provided for revenue forgone in fiscal 2002, for a total of $60 million. In its FY2002
Budget, the Bush Administration had proposed to “reverse the misleading budget
practice of using advance appropriations simply to avoid [annual] spending
limitations.” The Administration did not renew the proposal in its FY2003 or
FY2004 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) in
emergency response funds to protect the safety of employees and customers from
threats such as the 2001 anthrax attack. The funds would be used to continue
acquisition and deployment of ventilation and filtration equipment that was begun
with $762 million provided in FY2002 specifically for emergency response. Neither
the Administration’s FY2003 Budget nor its FY2004 Budget included any additional
funds for emergency preparedness for the Postal Service. As a condition to receiving
the largest part of its previous emergency response funding, on March 6, 2002 USPS
submitted to its oversight and appropriations committees an emergency preparedness
plan to combat the threat of biological and chemical substances in the mail.¹⁹ The
March 6, 2002 emergency preparedness plan did identify substantial needed
appropriations 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 FY2004 though
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 in FY2005,
a provision carried through in the end-of-session consolidated appropriations bill.
Neither Committee’s report referred to the Postal Service’s supplementary request
for bio-terrorism prevention. Both versions of the bill and the final Consolidated
Appropriations Act, 2004 continue long-standing language forbidding USPS to
reduce service below the six-day delivery and rural delivery standards that have
prevailed since 1983, or to close rural or other small post offices during FY2004.
The end-of-session Consolidated Appropriations Act (H.R. 2673; P.L. 108-199) also
contained a provision (Division F, title V, section 541) amending 39 U.S.C. 414(h)
to extend the authorized sales period for the Breast Cancer Research semi-postal
stamp. Sales of the stamp, which fund research into a cure for breast cancer, had

¹⁹ See [http://www.usps.com/news/2002/press/pr02_pmg0313.htm ], visited Sept. 11, 2003.

been authorized only through December 31, 2003. The amendment 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 under
the Civil Service Retirement System. Congress has passed legislation (P.L. 108-18)
to reduce the annual USPS contribution to the Civil Service Retirement and
Disability Fund, which will have the effect of saving USPS $2.9 billion in FY2003
and $2.6 billion in succeeding years. For more on this legislation, see CRS Report
RL31684, Funding Postal Service Obligations to the Civil Service Retirement
System.
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)
^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Offi^ce^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^C^o^m^p^en^s^a^tion^of^th^{e P}^r^es^iden^t⁰^.5^—^0.5⁰^.5^0.5⁰^.5
^T^h^{e W}^h^{ite Hou}^s^{e Of}^fⁱ^ce
^(s^al^ari^e^s^an^{d ex}^pen^s^es⁾⁵⁰^—⁶⁶⁶²⁶⁹⁶⁹
^Ho^m^e^lan^d^Secu^r^ity^Co^uⁿ^c^il¹⁹^—^—⁸^—^—
^Ex^ecu^tiv^{e R}^e^sⁱ^den^{ce at th}^e
^W^h^{ite Ho}^u^s^{e (}^o^p^e^r^a^tin^g
^ex^pen^s^es⁾¹²^—¹³¹³¹³¹³
^W^h^{ite Ho}^u^s^{e Rep}^a^ir^an^d
^Resto^r^atioⁿ¹^—⁴⁴⁴⁴
^C^o^uⁿ^cⁱ^l^of^Econ^omⁱ^c^A^d^vⁱ^s^o^rs⁴^—⁴⁵⁵⁵
^O^f^fⁱ^{ce of}^Polⁱ^c^y^D^e^v^e^l^opm^en^t³^—⁴⁴⁴⁴
^Natioⁿ^a^{l Secu}^r^ity^Co^uⁿ^c^il⁸^—⁹¹¹¹¹¹¹
^O^f^fⁱ^{ce of}^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ⁹¹^—⁸³⁷⁷⁸³⁸³
^T^h^{e W}^h^{ite Ho}^u^s^e^—¹⁸⁴^—^—^—^—
^O^ffi^c^e^o^f^M^a^na^ge^m^e^nt^aⁿ^d
^Bu^dg^et⁶²⁷⁷⁶³⁷⁵⁶⁷⁶⁷
^Of^fⁱ^{ce o}^f^Natioⁿ^a^{l Dr}^u^g
^Coⁿ^t^r^o^{l P}^o^licy⁽^s^alar^{ies an}^d
^ex^pen^s^es⁾²⁶²⁷²⁹²⁸²⁸²⁸
^Of^fⁱ^{ce o}^f^Natioⁿ^a^{l Dr}^u^g
^Co^nt^r^o^l^P^o^lⁱ^c^y^Co^unt^e^r^d^r^ug
^T^echⁿ^o^l^o^g^y^A^s^s^e^s^s^m^en^t^C^eⁿ^t^er⁴⁸⁴⁰⁴⁰⁴²⁴²⁴²
^Fe^d^e^r^a^l^D^r^{ug Co}^nt^r^o^l
^P^r^o^g^r^a^m^s^{: Hig}^h^Iⁿ^ten^s^ity^Dr^u^g
^T^r^af^fⁱ^ckⁱⁿ^g^A^r^eas^Prog^ram²²⁵²⁰⁶²²⁶²²⁶²²⁶²²⁶
^Fe^d^e^r^a^l^D^r^{ug Co}^nt^r^o^l
^Prog^ram^s^:^O^t^h^e^{r Prog}^ram^s²²²²⁵⁰²³⁰¹⁷⁴²²⁹²²⁹

^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Offi^ce^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^Of^fⁱ^{ce of}^th^{e Vice P}^r^es^iden^t
^(s^alaries^an^{d ex}^pen^s^es⁾⁴⁴⁴⁴⁴⁴
^Of^fⁱ^{cial R}^e^sⁱ^den^{ce of}^th^{e Vice}
^Presⁱ^d^en^t^(operatⁱⁿ^g^ex^pen^s^es⁾⁰^.3^0.3⁰^.3^0.3⁰^.3^0.3
^To^t^a^{l, EO}^P^a^{nd F}^unds
^A^p^p^r^op^ri^ated^{to th}^e
^Presⁱ^d^en^t⁷⁷⁷⁷⁹¹⁷⁷⁶⁷³⁵⁷⁸⁷⁷⁸⁷
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^eⁿ^fr^o^m^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-^T^r^e^a^s^ury^A^ppropria^tions^b^{ill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t
^A^u^thor^ity^ta^ble^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^a.^T^h^e^C^oⁿ^s^o^lⁱ^d^a^t^e^d^A^p^p^r^o^p^rⁱ^a^tⁱ^oⁿ^s^A^c^t^,²⁰⁰⁴^c^oⁿ^t^aⁱⁿ^s^aⁿ^a^c^r^o^s^s^-^t^h^e^-^b^o^a^r^d^r^e^s^cⁱ^s^sⁱ^oⁿ^o^f⁰^.⁵⁹^%^;^t^h^a^t^r^e^s^cⁱ^s^sⁱ^oⁿⁱ^sⁿ^o^t
^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.
The Transportation, Treasury and General Government Appropriations bill
funds all but three offices in the Executive Office of the President (EOP). Of the
three exceptions, the Council on Environmental Quality and Office of Environmental
Quality, and the Office of Science and Technology Policy are funded under the
Veterans Affairs, Housing and Urban Development, and Independent Agencies
appropriations; and the Office of the United States Trade Representative is funded
under the Commerce, Justice, State, and the Judiciary and Related Agencies
appropriations.
The President’s FY2004 budget proposed to consolidate and financially realign
several annual EOP salaries and expenses appropriations that directly support the
President into a single annual appropriation, called “The White House.” This
consolidated 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 be
consolidated. The accounts included in the consolidated appropriation would be:
^!Compensation of the President
^!White House Office (including resources for the Office of Homeland
Security)
^!Executive Residence/White House Repair and Restoration
^!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, and
permits more rapid response to changing needs and priorities.”²⁰ The Administration
proposed similar consolidations in the FY2002 and FY2003 budgets, but the
conference committees for the Treasury and General Government Appropriations

²⁰ U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2004 Appendix (Washington: GPO, 2003), p. 882.
(Hereafter referred to as FY2004 Budget, Appendix.)

Act, FY2002 (P.L. 107-67) and FY2003 (P.L. 108-7, Division J) agreed to continue
with separate appropriations for the EOP accounts. A concern of the Administration
has been the “needless complexity [of different accounts] that adds expense, that
adds burdens, that adds administrative hurdles that they must go through to
accomplish anything.”²¹ A concern of Congress about 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 the
following 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 Policy Development, National Security
Council, Council of Economic Advisers)
^!Office of Management and Budget
^!Office of National Drug Control Policy
^!Special Assistance to the President and Official Residence of the
Vice President (transfers would be subject to the approval of the
Vice President)
^!Council on Environmental Quality and Office of Environmental
Quality
^!Office of Science and Technology Policy
^!Office of the United States Trade Representative²³
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 OMB director, or such other officer as the
President may designate, could, 15 days after giving notice to the Senate and House
Committees on Appropriations, transfer up to 10% of any appropriation to any other
appropriation, to be merged with, and available for, the same time and for the same
purposes as the appropriation to which transferred. An appropriation could not be
increased by more than 50% by such transfers.²⁵

²¹ Representative Ernest Istook, then chairman of the Subcommittee on Treasury, Postal
Service and General Government of the House Committee on Appropriations, discussing
the FY2002 proposal for consolidation of the Executive Office of the President accounts.
Congressional Record, daily edition, July 25, 2001, p. H4570.
²² Ibid.
²³ FY2004 Budget, Appendix, p. 882. U.S. Executive Office of the President, Fiscal Year
2004 Congressional Budget Submission (Washington: GPO, [Feb. 2003]), p. 11. (Hereafter
referred to as EOP Budget Submission.)
²⁴ EOP Budget Submission, p. 11.
²⁵ Ibid.

Both the House and the Senate Committees on Appropriations recommended
and the law provides that separate appropriations for the EOP accounts will be
continued and that the transfer authority proposal is not agreed to. According to the
committee report accompanying S. 1589:
Last year, the Committee gave this request considerable deliberation and
concluded that the existing structure served the Committee’s and the public’s
need for transparency in the funding and operation of these important functions
well. The existing structure also provides the executive branch with the
flexibility it needs to reprogram funds within accounts to address unforseen
budget needs upon the notification and approval of the Committee. As noted in
discussions with administration officials in past years, at no time has this
Committee rejected an administration’s request to reprogram existing funds²⁶
within accounts in this Title.
EOP Offices Funded Through Treasury and General Government
Appropriations. The President’s FY2004 budget for EOP programs funded under
the Treasury and General Government appropriations proposed an appropriation of
$790.6 million, an increase of 1.7% over the $777.0 million appropriated in FY2003.
The FY2004 budget proposals for specific accounts are discussed below.
Compensation of the President. The President’s FY2004 budget proposed
an appropriation of $450,000, which includes an expense allowance of $50,000. This
is the same amount as was appropriated in FY2003. The salary of the President is
$400,000 per annum, effective January 20, 2001. The House and Senate Committees
on Appropriations recommended, the House and Senate passed, and the law provides
the same amount as the President requested. The law also amends 3 U.S.C. 102 to
provide that any unused amount of the expense allowance shall revert to the Treasury
pursuant to 31 U.S.C. 1552 and that no amount of the allowance shall be included in
the President’s gross income.
White House Office (WHO). This account provides the President with staff
assistance and administrative services. The President’s FY2004 budget proposed an
appropriation of $70.3 million, an increase of 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 for
reimbursements to the White House Communications Agency. The amount is $4.2
million less than the President’s request. The reduction is taken from the Office of
Homeland Security funding which is included in the White House Office
appropriation (see below). The Committee again requests that the Executive Office
of the President, within 30 days of the Act’s enactment, provide “a detailed report on
the status of efforts to safely resume public tours of the White House.” Such a report
had been requested in the 2003 appropriations bill, but the committee report
accompanying H.R. 2989 states that the EOP “provided a cursory, four-sentence

²⁶ S.Rept. 108-146, p. 132.

‘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 been
submitted.)
The Committee also directs that both the House and Senate Committees on
Appropriations receive a report on the renovations of the Eisenhower Executive
Office Building no later than November 15, 2003. According to the committee report
accompanying H.R. 2989:
On repeated occasions, the Committee has sought specific answers to questions
about the use of non-federal funds for renovating and furnishing GSA facilities
occupied by agencies of the Executive Office of the President. In particular, the
Committee believes more information is needed on the use of non-federal
funding for renovation and furnishing efforts for the Eisenhower Executive
Office Building [EEOB], for which $65,757,000 is included in this bill. The
Committee directs EOP to review and report on the use of non-federal funds for
renovation and furnishings in the [EEOB] .... should identify the federal agency
that coordinated the work funded by non-federal sources, the specific sources and
amounts of non-federal funding used, a description of each project, and an
explanation of why non-federal funds were used in each specific instance.
Finally, the report should determine which agency’s gift authority was used to
accept the contribution of non-federal funds and whether this authority was used
properly. Given EOP’s reluctance to provide information on this subject thus far,
a provision is included in the bill prohibiting the obligation of more than²⁸
$35,000,000 on this project until this report is submitted to the Congress.
The Senate Committee on Appropriations recommended and the Senate passed
an appropriation of $61.9 million, “a decrease of $8,331,000 below the budget
estimate as funds requested under this account for the Homeland Security Council²⁹
are provided in a separate account.” Of the total, $8.65 million would be available
for 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 Communications
Agency.
Office of Homeland Security (OHS). This office provides support and
advice to the President and interagency coordination of all aspects of homeland
security, including the implementation of the National Strategy for Homeland
Security. The funding for OHS is included in the White House Office request. Of
the $70.3 million requested for the WHO for FY2004, $8.3 million is for the OHS.
The OHS FY2003 appropriation was $19.3 million. The Homeland Security Council
functions established in the Homeland Security Act of 2002, P.L. 107-296, are
supported by the OHS budget.

²⁷ H.Rept. 108-243, pp. 163-164.
²⁸ H.Rept. 108-243, p. 164.
²⁹ S.Rept. 108-146, p. 132.

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’s
request 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 Department of Homeland Security [DHS]. Although the
Administration has changed the “Office of Homeland Security” to the
“Homeland Security Council,” it is not clear what work remains that cannot be
effectively performed by the [DHS]. Although the Committee understands the
President’s need for policy support and advice, it is not clear why that would³⁰
require 66 staff, given the existence and support of the [DHS].
The Senate Committee on Appropriations recommended and the Senate passed
the same appropriation as the President requested. The Committee did not approve
funding for the council within the White House Office, believing that the council
“should be funded as a separate account, which is consistent with the budgetary³¹
treatment of its predecessor, the Office of Homeland Security.”
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, and operation 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 in
FY2003. For the executive residence, the budget proposed an appropriation of $12.5
million, an increase of 2.9% over the $12.3 million appropriated in FY2003. For
repair 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 be
used to renovate various specific electrical, mechanical, and control system
components; replace two power servers; and complete the second phase of the³²
restoration of the East and West Wing exterior.
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 in
advance by the sponsor, and all such advance payments are to be credited to a
Reimbursable Expenses account. The political party of the President is to deposit
$25,000 to be available for expenses relating to reimbursable political events during
the fiscal year. Reimbursements are to be separately accounted for and the

³⁰ H.Rept. 108-243, p. 163.
³¹ S.Rept. 108-146, p. 135.
³² EOP Budget Submission, p. 62.

sponsoring organizations billed, and charged interest, as appropriate. The staff of the
Executive Residence must report to the Committees on Appropriations, after the
close of each fiscal year, and maintain a tracking system on the reimbursable
expenses.
The House and Senate Committees on Appropriations recommended, the House
and Senate passed, and the law provides the same appropriations as the President
requested. The House committee report accompanying H.R. 2989 states that the
repair and restoration funds “will finance the ongoing restoration of the east and west
wing exterior ($3,500,000), replacement or repair of various electrical, mechanical,
and control system components ($530,000), and replacement of computer 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 carrying out 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 in
FY2003. According to the EOP budget submission:
An additional programmatic increase of $70,000, or 1.7 percent was requested
for costs associated with official Vice Presidential travel. Since September 11,

2001, the Vice President’s travel has been augmented by travel to undisclosed³⁴

locations for security purposes. This travel is 100 percent official ...
The House and Senate Committees on Appropriations recommended, the House
and Senate passed, and the law provides the same appropriation as the President
requested. This funding level “will allow for 24 full-time permanent positions in
fiscal year 2004,” according to the Senate committee report accompanying S. 1589.³⁵
The law places the appropriation at the end of the title as proposed by the House.
Official Residence of the Vice President. This account provides for the
care and operation of the Vice President’s official residence and includes the
operation of a gift fund for the residence.
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 $322,000
appropriated in FY2003.
The House and Senate Committees on Appropriations recommended, the House
and Senate passed, and the law provides the same appropriation as the President
requested. In its report accompanying S. 1589, the Senate Committee stated that it
“has had a longstanding interest in the condition of the residence and expects to be
kept fully apprised by the Vice President’s office of any and all renovations and

³³ H.Rept. 108-243, p. 165.
³⁴ EOP Budget Submission, p. 164.
³⁵ S.Rept. 108-146, p. 133.

alterations made to the residence by the Navy.”³⁶ The law places the appropriation
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 and advise the President in the formulation of economic
policy. The council analyzes and evaluates the national economy, economic
developments, federal programs, and federal policy to formulate economic advice.
The council assists in the preparation of 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. The
Senate Committee on Appropriations recommended, the Senate passed, and the law
provides the same appropriation as the President requested.
Office of Policy Development. The Office supports and coordinates the
Domestic Policy Council (DPC) and the National Economic Council (NEC) in
carrying out their responsibilities to advise and assist the President in formulating,
coordinating, and implementing economic and domestic policy. The office also
supports other policy development and implementation 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, an
estimated $2.1 million supports the Office of Policy Development’s DPC functions
and $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 President
requested.
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, $9.8
million funds the operations of the NSC, including the Office for Combating
Terrorism, and $741,000 funds the President’s Foreign Intelligence Advisory
Bo ard .³⁸

³⁶ S.Rept. 108-146, p. 134.
³⁷ EOP Budget Submission, p. 102.
³⁸ EOP Budget Submission, p. 129.

The House Committee on Appropriations recommended and the House passed
an appropriation of $9 million, $1.6 million less than the President’s request. The
Senate Committee on Appropriations recommended, the Senate passed, and the law
provides the same appropriation as the President requested. This funding level “will
support 60 full-time equivalent positions, or the same since the fiscal year 1996 level
for the normal activities of the NSC.”³⁹
Office of Administration. The Office of Administration provides
administrative services, including information technology; human resources
management; library and records management; financial management; and facilities,
printing, and supply, to the Executive Office of 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 capital
investment.⁴⁰
The House Committee on Appropriations recommended and the House passed
an appropriation of $82.8 million of which $17.5 million would remain available
until expended for the Capital Investment Plan for continued modernization of the
information technology infrastructure within the EOP. This amount is $5.7 million
more than the President’s request. The committee report accompanying H.R. 2989
stated that the “recommendation maintains funding to continue the core enterprise
pilot program in this account (+$8,258,000) and acknowledges program savings for
security guard services provided to the Office of Science and Technology Policy (-
$1,096,000) and for information technology contract services provided to the
Homeland Security Council (-$1,500,000).” The Committee also recommended
continuation of the “pilot project to determine whether economies of scale could be⁴¹
achieved through centralized procurement of certain common goods and services.”
The Senate Committee on Appropriations recommended and the Senate passed
the same appropriation as the President requested. Of the total, $20.578 million
would remain available until expended for the Capital Investment Plan for continued
modernization of the information technology infrastructure within the EOP. The
EOP would submit a report to the Committees on Appropriations that includes a
current description of (1) the Enterprise Architecture, as defined in OMB Circular A-
130 and the Federal Chief Information Officers Council guidance; (2) the
Information Technology (IT) Human Capital Plan; (3) the capital investment plan for
implementing the Enterprise Architecture; and (4) the IT capital planning and
investment control process. The report would be reviewed and approved by OMB,
and reviewed by GAO. In its report accompanying S. 1589, the Committee states its
continuing support for the Centralized Procurement Pilot Project, “but recommends
funding for such items [information technology, rent, printing and reproduction,

³⁹ S.Rept. 108-146, p. 135.
⁴⁰ EOP Budget Submission, p. 73.
⁴¹ H.Rept. 108-243, pp. 166-167.

supplies and materials and equipment] in individual offices 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 continued
modernization of the information technology infrastructure within the EOP. The law
includes funding for the core enterprise pilot program (+$8,258,000) and reflects
reductions for security guard services provided to the Office of Science and
Technology Policy (-$1,096,000) and for information technology contract services
provided to the Homeland Security Council (-$1,500,000). The Administration is
encouraged to include all EOP funds for the core enterprise pilot program under this
appropriation 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 include preparing the budget documents; examining agency
programs, budget requests, and management activities; preparing the government-
wide financial management status report and five-year plan (with the Chief Financial
Officer Council); reviewing and coordinating agency regulatory proposals and
information collection requirements; and promoting economical, efficient, and
effective procurement of property and services 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 the
EOP budget submission, “Since the start of the Administration, OMB has maintained
a very tight budget” and “In light of constrained funding levels over the past two
years, the majority of the increase in the FY2004 request will permit OMB to
continue 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 ($2.4
million), assuming 20 fewer staff years than budgeted ($1.5 million), limiting
reception and representation expenses to half of the budget estimated amount
($1,500), reducing funding for the office of information and regulatory affairs ($2.5
million), and transferring funds back to the pilot project on centralized procurement
of common goods and services discussed under the Office of Administration ($8.3
million). 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 report to the House and Senate
Committees on Appropriations that indicates each agency’s competitive sourcing
target. The report should specifically detail the research and analysis 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 an up-to-date

⁴² S.Rept. 108-146, p. 136.
⁴³ EOP Budget Submission, p. 189.

record of such changes and convey the changes periodically to the
[appropriations committees] and the appropriate legislative committees.
[T]o submit a report to the House and Senate Committees on Appropriations, not
later than April 1, 2004, detailing the amount of federal funds used by federal
grantees to pay dues, fees, or other types of membership costs to national
associations or other types of professional organizations.
[T]o involve the House and Senate Committees on Appropriations in the
development of PART [program assessment rating tool] ratings [which rate the⁴⁴
effectiveness of federal programs] at all stages in the process.
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 professional
development,” according to the committee report accompanying S. 1589.⁴⁵ The
Committee also expressed its concern “that agencies are shielding significant,
influential data and related documents funded by the Federal government from the
requirements of the Federal Data Quality Act [FDQA]” and “directs the
Administrator of the Office of Information and Regulatory Affairs [OIRA] to submit
a report to the House and Senate Committees on Appropriations not later than 30
days on how guidelines to agencies may be updated to address these concerns and
improve the transparency of agency science.” Expressing strong support for the
Truman Scholarship program, the Committee directs the program’s board “to strictly
adhere to its statutory mandate to assure that at least one Truman scholar shall be
selected each year from each State in which there is at least one resident applicant⁴⁶
who meets the minimum criteria established by the Foundation.”
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 obligation until resolution of existing
programmatic concerns by House conferees are addressed and the House and
Senate Committees on Appropriations approve of such obligation.
The conferees are concerned that agencies are not complying fully with the
requirements of the Federal Data Quality Act (FDQA). The conferees agree that
data endorsed by the Federal Government should be of the highest quality, and
that the public should have the opportunity to review the data disseminated by
the Federal Government for its accuracy and have available to it a streamlined
procedure for correcting inaccuracies. The Administrator [of OIRA] is directed
to submit a report to the House and Senate Committees on Appropriations by
June 1, 2004 on whether agencies have been properly responsive to public
requests for correction of information pursuant to the FDQA, and suggest

⁴⁴ H.Rept. 108-243, pp. 167-169.
⁴⁵ S.Rept. 108-146, p. 136.
⁴⁶ Ibid., p. 137.

changes that should be made to the FDQA or OMB guidelines to improve the⁴⁷
accuracy and transparency of agency science.
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 the provisions of the Agricultural Marketing
Agreement Act of 1937;
may be expended for the altering of the transcript of actual testimony of
witnesses, except for testimony of officials of the Office of Management and
Budget, before the Committees on Appropriations or the Committees on
Veterans’ Affairs or their subcommittees ... the preceding shall not apply to
printed hearings released by the Committees on Appropriations or the
Committees 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-allocation of budget authority or outlays by
the Committees on Appropriations among their subcommittees.
Office of National Drug Control Policy (ONDCP). The ONDCP develops
policies, objectives, and priorities for the National Drug Control Program. The
account also funds general policy research 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, $25.9
million is for salaries and expenses operations and $1.4 million is for policy⁴⁸
research.
The House Committee on Appropriations recommended and the House passed
an appropriation of $28.8 million (policy research and evaluation would be funded
at $1.35 million and the National Alliance for Model State Drug Laws would be
funded at $1.5 million). This amount is $1.5 million more than the President’s
request.
The Senate Committee on Appropriations recommended, the Senate passed, and
the law provides an appropriation of $27.997 million, $706,500 more than the
President’s request. Of the total, $1.35 million would remain available until
expended for policy research and evaluation and $1.5 million is to be used for the
National Alliance for Model State Drug Laws.
The Counterdrug Technology Assessment Center (CTAC). The
CTAC is the central counterdrug research and development organization for the
federal government.

⁴⁷ H.Rept. 108-401, p. 1016.
⁴⁸ EOP Budget Submission, p. 216.

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 for
counternarcotics research and development projects (which shall be available for
transfer to other federal departments or agencies) and $22 million is for the continued
operation 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 and
development projects would be funded at $18 million (and available for transfer to
other federal departments or agencies) and the continued operation of the technology
transfer 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 the
total, $18 million would be for counternarcotics research and development projects
and would be available for transfer to other federal departments or agencies. The
continuation of the technology transfer program to State and local law enforcement
in their efforts to combat drugs is funded at $24 million. Several Committee
expectations with regard to CTAC are stated in the report accompanying S. 1589.
In addition, ONDCP is directed “to report to the House and Senate Committees on
Appropriations, no later than December 15, 2003, on CTAC funding allocations,
specifically providing a detailed spending plan for the research and development
program as well as the technology transfer program for fiscal years 2001, 2002, and
2003.” The Committee requests “that the fiscal year 2005 budget request include a
specific accounting of the total number of grant applications received and the number
awarded in the previous year so that the Committee may have 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 CTAC funding allocations, specifically
providing a detailed spending plan for both the research and development
program and the technology transfer program for fiscal years 2001-2003. In
addition, the conferees direct the chief scientist to notify the Committees on
Appropriations on how fiscal year 2004 funds will be spent, as well as to provide
biannual reports on priority counterdrug enforcement research and development
requirements and the status of projects funded by CTAC. Finally, the conferees
direct ONDCP to include in the fiscal year 2005 budget request a specific
accounting of the total number of grant applications received and the number⁵¹
awarded in the previous fiscal year.
Federal Drug Control Programs. The High Intensity Drug Trafficking
Areas (HIDTA) program provides assistance to federal, state, and local law

⁴⁹ FY2004 Budget, Appendix, p. 1053.
⁵⁰ S.Rept. 108-146, p. 138.
⁵¹ H.Rept. 108-401, p. 1017.

enforcement entities operating in those areas most adversely affected by drug
trafficking. Funds are disbursed at the discretion of the director 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 than
51% of the total would be transferred to State and local entities for drug control
activities, which would be obligated within 120 days of enactment of the
Transportation/Treasury appropriations act. Up to 49% of the total would remain
available until September 30, 2005, and could be transferred to federal agencies and
departments at a rate to be determined by the director, of which not less than $2.1
million 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 data
collection system to measure the performance of the High Intensity Drug Trafficking
Areas 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, the increase is
to meet requirements to fully fund existing HIDTA program activity, to expand
HIDTAs where such expansion is justified, to fund new HIDTAs as appropriate,
and to fund HIDTA activities through the Central Priority Organization Targets
(CPOT) initiative .... The Committee directs that HIDTAs existing in fiscal year
2003 shall receive funding at least equal to the fiscal year 2003 initial allocation
level, which does not include funding provided through the CPOT initiative ....
As ONDCP reviews candidates for new HIDTA 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 Appalachian HIDTA⁵³
(Letcher County, Kentucky).
The Senate Committee on Appropriations recommended and the Senate also
passed an appropriation of $226.350 million, $20 million more than the President’s
request. The additional amount, which is subject to reprogramming guidelines, is to
fully fund existing HIDTA program activities, expand existing HIDTAs where
warranted, and fund new HIDTAs and new HIDTA activities that are consistent with
the program’s mission. Existing HIDTAs are to be funded at no less than the FY2003
initial allocation level, unless the ONDCP Director submits to, and the House and
Senate Committees on Appropriations approve, a request to reprogram funds “based
on clearly articulated priorities for the HIDTA program, as well as published ONDCP⁵⁴
performance measures of effectiveness.” No funds would be used for any further
or additional consolidation of the Southwest Border HIDTA, except for the operation
of an office with a coordinating role, until the office submits a report on the structure
of the HIDTA. According to the committee report accompanying S. 1589:

⁵² FY2004 Budget, Appendix, p. 1051.
⁵³ H.Rept. 108-243, p. 170.
⁵⁴ S.Rept. 108-146, p. 139.

In allocating the HIDTA funds, the Committee expects the Director of ONDCP
to ensure that the activities receiving these limited additional resources are used
strictly for implementing the strategy for each 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 budgets of each agency. The
remaining funds may be transferred to Federal agencies and departments to⁵⁵
support Federal antidrug activities.
Several Committee expectations with regard to the HIDTA program are stated
in the report. Additionally, the Committee directs ONDCP to consult with the House
and Senate Committees on Appropriations “in the developmental stages of any new
grant programs that it plans to institute in the future.”⁵⁶ ONDCP also is directed by
the Committee “to coordinate with other Federal agencies with a core mission to
target international drug traffickers in an effort to pool personnel, intelligence, and
available resources to further the originally conceived CPOT [Consolidated Priority
Organizational Targets] program and to report to the House and Senate Committees
on Appropriations no later than 90 days after enactment of this Act on the progress
of these efforts.” The General Accounting Office is directed “to conduct a study on
the effectiveness of the CPOT program, its conformity with the HIDTA mission ...
and what resources other Federal law enforcement agencies contribute to the
program.”⁵⁷ Committee views with regard to methamphetamine reduction, and issues
specific 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 drug
control activities, which shall be obligated within 120 days of enactment of the
Transportation/Treasury appropriations act. Up to 49% of the total shall remain
available until September 30, 2005, and may be transferred to federal agencies and
departments at a rate to be determined by the director, of which not less than $2.1
million 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 data
collection system to measure the performance of the HIDTA program. HIDTAs
designated as of September 30, 2003 shall be funded at no less than the FY2003
initial allocation levels unless the director submits to the Committees on
Appropriations and the committees approve, justification for changes in those levels
based on clearly articulated priorities for the HIDTA programs as well as published
ONDCP performance measures of effectiveness. A request, complying with
reprogramming guidelines, shall be submitted to the Committees on Appropriations
for approval prior to the obligation of funds of an amount in excess of the FY2004
budget request.

⁵⁵ Ibid.
⁵⁶ Ibid., p. 140.
⁵⁷ Ibid.
⁵⁸ S.Rept. 108-146, pp. 140-142.

Other Federal Drug Control Programs (formerly The Special
Forfeiture Fund). The account, administered by the director of ONDCP, supports
high-priority drug control programs. The funds may be transferred 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-Free
Media Campaign Act of 1998; $70 million is for a program of assistance and
matching grants to local coalitions and other activities, as authorized in chapter 2 of
the National Narcotic Leadership Act of 1988, as amended; $4.5 million is for the
Counterdrug Intelligence Executive Secretariat; $2 million is for evaluations and
research related to National Drug Control Program performance measures; $1 million
is for the National Drug Court Institute; $1.5 million is for the United States Anti-
Doping Agency for anti-doping activities; and $1 million is for the United States
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 manner
as the President proposed except that $150 million would support a national media
campaign. This amount is $20 million less than the President’s request. According
to the committee report accompanying H.R. 2989, “The Committee has changed the
name of the Special Forfeiture Fund account to Other Federal Drug Control Programs
as requested by the President, reflecting the fact that this account receives no
forfeiture funds but only direct appropriations.” The report “encourages ONDCP to
explore options for using alternative media in schools as a way of utilizing traditional
learning tools in non-traditional ways, such as children’s books tailored with an anti-
drug message, provided that such media can be utilized in a manner 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 that
can be at least somewhat different from the general trends in such use, any increase
in funding for the Media Campaign cannot be justified at this time.” The Director
of ONDCP is directed to submit an evaluation plan for the Media Campaign for fiscal
years 2004-2008 to the Committees on Appropriations no later than 120 days after
this Act’s enactment. The Committee also is requiring “that no less than 77 percent
of 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. Of
the total, $100 million is for continuation of the National Youth Anti-Drug Media
Campaign; $7.2 million is for the United States Anti-Doping Agency; $60 million
is for the Drug-Free Communities Program (including $1 million to continue the
National Community Anti-Drug Coalition Institute); $1.5 million is for the
Counterdrug Executive Secretariat; $1 million is for the National Drug Court

⁵⁹ FY2004 Budget, Appendix, p. 1052.
⁶⁰ H.Rept. 108-243, pp. 171-172.

Institute; $2 million is for Performance Measures Development; and $800,000 is for
United States dues to the World Anti-Doping Agency. Noting that the current source
of funding for this account is direct appropriations, the Committee concurred with
changing 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 is concerned about the amount of
resources that are being consumed by these parties. The Committee has provided
$100,000,000 for the national media campaign and directs that no less than 80
percent of the funding provided be used for the purchase of advertising time and
space unless ONDCP submits and the House and Senate Committees on
Appropriations approves a request for reprogramming of the funds based on
clearly articulated principals and priorities. The Committee directs the General
Accounting Office to conduct a study to determine the extent to which outside
consultants are being used by the Media Campaign, the cost-effectiveness of this
method, and if this system is producing more effective ads that aid ONDCP in⁶¹
its core mission.
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, the
committee report states that:
It has come to the Committee’s attention however, that while ONDCP is
purchasing peak time for specific ads, they are agreeing 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 ONDCP to provide a detailed
report to the House and Senate Committees on Appropriations regarding all
advertising, their placement and what matches are being provided by all media
in all markets. Further, the Committee directs ONDCP to more closely scrutinize
the matching proposals and to ensure that the one to one match more⁶²
appropriately mirrors the time and space that has been purchased.
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 purchase
advertising time and space); $70 million is to continue a program of matching grants
to drug-free communities (of which $1 million is a directed grant to the Community
Anti-Drug Coalitions of America for the National Community Anti-Drug Coalition
Institute; $3 million is for the Counterdrug Intelligence Executive Secretariat; $2
million is for evaluation and research related to National Drug Control Program
performance measures; $1 million is for the National Drug Court Institute; $7.2

⁶¹ S.Rept. 108-146, p. 143.
⁶² Ibid.
⁶³ Ibid., p. 144.

million is for the United States Anti-Doping Agency (USADA) for anti-doping
activities; and $800,000 is for the United States membership dues to the World Anti-
Doping Agency. The funds may be transferred to other federal departments and
agencies 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 detailed
spending plan for FY2004 no later than 120 days after the enactment of the
Transportation and Treasury appropriations act. Each report is to include USADA’s
efforts to secure funding from sources other than the federal government. As for the
National Youth Anti-Drug Media Campaign, the conferees reemphasize the need to
demonstrate that “welcome trends in the incidence of youth drug use” can be linked
to the media campaign. ONDCP is directed to submit an FY2004-FY2008
evaluation plan for the media campaign to the Committees on Appropriations no later
than 120 days after the enactment of the Transportation and Treasury appropriations
act. The conferees further direct ONDCP to provide a detailed report to the
Committees on Appropriations on the “type and content of all advertising, its timing
and 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 unbudgeted contingencies 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 after
rescission). The House and Senate Committees on Appropriations recommended,
the House and Senate passed, and the law provides the same appropriation as the
President requested.
Title V: Independent Agencies
Table 9. Title V: Related Agencies Appropriations
(in millions of dollars)
^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Agency^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^Natioⁿ^a^{l T}^r^an^sp^o^r^tatioⁿ^Saf^e^ty
^Boa^r^d⁷²⁷²⁷⁷⁷³⁷⁴⁷⁴
^F^e^deral^El^ectⁱ^oⁿ^C^o^m^mⁱ^s^sⁱ^on⁵⁰⁵⁰⁵⁰⁵⁰⁵¹⁵¹
^El^ectⁱ^oⁿ^A^s^sⁱ^s^t^an^{ce C}^o^m^mⁱ^s^sⁱ^on⁸³⁵⁵⁰⁰⁵⁰⁰^1,500⁵⁰¹⁵⁰¹
^F^e^deral^L^a^{bor R}^e^l^a^tⁱ^oⁿ^s^A^u^t^h^ori^t^y²⁹³⁰³⁰³⁰³⁰³⁰
^Fed^e^r^a^{l Mar}^itim^{e Co}^m^mⁱ^ssioⁿ¹⁷¹⁸¹⁸¹⁸¹⁸¹⁸
^G^eⁿ^e^ral^S^e^rvⁱ^ces^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ¹^,222⁴⁶⁴⁴²⁶⁶¹⁵⁶⁴⁹⁶⁴⁹
^Mer^{it Sy}^stem^{s P}^r^o^t^ectioⁿ^B^o^ar^d³⁴³⁶³³³⁶³³³³

⁶⁴ H.Rept. 108-401, p. 1018.

^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^Agency^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^Mo^r^rⁱ^{s K. Ud}^{all Fo}^uⁿ^d^atioⁿ³¹³³³³
^Nation^a^{l A}^r^ch^iv^es^an^{d R}^ecords
^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ²⁶²²⁹⁸³⁰⁰²⁶⁹³⁰⁹³⁰⁹
^O^ffi^c^e^o^f^P^e^r^s^o^nne^l^M^a^na^ge^m^e^nt
^(t^ot^al⁾^16,558^18,012^17,506^17,512^17,513^17,513
^G^o^ve^rⁿ^m^e^nt^P^a^y^m^eⁿ^t^s^fo^r
^A^nnui^t^a^nt^s,^E^m^p^l^o^y^e^e^s
^H^eal^t^h^Ben^e^fⁱ^t^s^6,853^7,219^7,219^7,219^7,219^7,219
^G^o^ve^rⁿ^m^e^nt^P^a^y^m^eⁿ^t^s^fo^r
^A^nnui^t^a^nt^s,^E^m^p^l^o^y^e^e^Li^fe
^In^s^u^ran^c^e³⁴³⁵³⁵³⁵³⁵³⁵
^P^a^y^m^en^{t to}^Civ^{il Ser}^v^ice
^Retir^em^en^{t an}^d^Disab^ility
^F^uⁿ^d^9,410^9,987^9,987^9,987^9,987^9,987
^O^f^fⁱ^{ce of}^S^p^eci^al^C^o^uⁿ^s^el¹²¹⁴¹⁴¹⁴¹⁴¹⁴
^Un^{ited States}^T^a^x^C^o^u^r^t³⁷⁴⁰⁴⁰⁴⁰⁴⁰⁴⁰
^T^o^tal^,^Iⁿ^d^e^p^eⁿ^d^eⁿ^t^A^g^en^ci^es^19,151^19,555^19,021^*20,180^*19,259^*19,259
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^p^o^r^t^a^tⁱ^on-^T^r^e^a^s^ury^A^ppropria^tions^b^{ill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t
^A^u^thor^ity^ta^ble^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^Note:^A^ne^w^l^y^c^r^e^a^t^e^d^inde^pe^nde^{nt a}^g^eⁿ^c^y^w^h^ic^{h be}^gⁱ^ns^ope^r^a^{tion in FY}^{2004, the}^Ele^c^{tion A}^s^sⁱ^s^t^aⁿ^c^e^C^o^m^mⁱ^s^sⁱ^oⁿ^,
^receiv^e^d^an^ad^d^itioⁿ^a^l^ap^p^r^o^p^r^iatioⁿ^o^f^$¹^b^illioⁿ^f^o^{r electio}ⁿ^ref^o^rm^g^r^an^{ts in}^{a sep}^a^{rate d}ⁱ^vⁱ^sioⁿ^o^f^th^{e ap}^p^r^o^p^r^iatioⁿ^s^act.
^*^T^he^Se^na^te^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^a^{nd the}^C^onf^e^r^eⁿ^c^e^R^e^por^t^ta^ble^lis^{t the}^P^o^s^t^a^l^Se^r^v^ic^e^unde^r^the^I^nde^pe^nde^nt
^A^g^eⁿ^cⁱ^e^s^T^itle^{, ra}^the^r^thaⁿ^a^s^a^s^e^pa^ra^te^title^.^For^c^o^m^p^a^r^a^tiv^e^purpos^e^s^,^the^P^o^s^t^a^l^Se^rv^ic^e^a^ppropria^{tion ($97 m}^illion)
^ha^s^be^eⁿ^s^ubtr^a^c^t^e^d^f^r^om^the^I^nde^pe^nde^{nt A}^g^eⁿ^cⁱ^e^s^tota^{l Se}^na^te^a^{nd C}^onf^e^r^eⁿ^c^e^r^e^por^ts^’^tota^{l f}ⁱ^g^u^r^e^.
^a.^T^h^e^C^ons^olida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^an^acr^o^s^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^{on is}^not
^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.
Federal Election Commission (FEC). The FEC administers federal
campaign finance law, including overseeing disclosure requirements, limits on
contributions and expenditures, and the presidential election public funding system;
the agency retains civil enforcement authority for the law. The Office of Election
Administration, which serves as a clearinghouse for information on voting laws and
procedures for state 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 $49.5
million. The FEC, in its separate budget submission to Congress, concurred with the
Administration proposal, both in the request for overall appropriations and for 391
employees. The agency noted in its submission that the 1.8% increase over the 2003
appropriated amount represented “essentially a Current Services request,” reflecting
only an adjustment for inflation and salary and benefits increases but no additional
funds or staff for new programs or initiatives. The agency attributed the essentially
stable budget request to the greater efficiency resulting from mandatory electronic
filing 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 also

contained two legislative provisions added by the Appropriations Committee: to
extend the FEC’s administrative fines program by two years, through the end of
2005, and to allow reports filed by overnight delivery, priority, or express mail to be
considered 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, did
not include the House bill’s stipulation regarding spending on data systems, nor did
it 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 interim
activities of the agency’s Office of Election Administration, pending its incorporation
into the newly created Election Assistance Commission. Conferees included the
House bill’s stipulation that no less than $6.4 million be used for automated data
processing systems, as well as the House’s legislative provisions dealing with
extension of the administrative fines program and the timing of filing of reports. In
a separate division of the Consolidated Appropriations Act, 2004 (Division H,
Section 159), conferees added $1 billion for the activities of the Election Assistance
Commission.
Federal Labor Relations Authority (FLRA). The FLRA serves as a
neutral party in the settlement of disputes that arise between unions, employees, and
federal agencies on matters outlined in the Federal Service Labor Management
Relations Statute; decides major policy issues; prescribes regulations; and
disseminates information appropriate to the needs of agencies, labor organizations,
and the public. The FLRA also engages in case-related interventions and training and
facilitates labor-management relationships. It has three components: the Authority
which adjudicates labor-management disputes; the Office of the General Counsel
which, among other duties, investigates all allegations of unfair labor practices filed
and processes all representation petitions received; and the Federal Service Impasses
Panel which resolves impasses which occur during labor negotiations between
federal agencies and 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. The
House and Senate Committees on Appropriations recommended, the House and
Senate passed, and the law provides the same amount as the President requested.
Table 10. General Services Administration Appropriations
(in millions of dollars)
^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^F^{und / O}^f^fⁱ^ce^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^Fed^e^r^a^{l B}^u^ildⁱⁿ^g^s^Fuⁿ^d
^A^ppropri^a^tⁱ^oⁿ^s³⁷³²¹⁷²⁴⁷⁴⁰⁷⁴⁴⁶⁴⁴⁶

^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴^FY²⁰⁰⁴
^F^{und / O}^f^fⁱ^ce^FY²⁰⁰³^Ena^c^t^e^d^FY²⁰⁰⁴^Request^Hou^s^e^Sena^t^e^Conference^a^Ena^c^t^e^d
^P^a^sse^d^P^a^sse^d
^Lⁱ^m^itatioⁿ^s^oⁿ
^O^b^lⁱ^g^atⁱ^oⁿ^s^6,567^6,634^6,558^6,772^6,812^6,812
^Go^v^e^rⁿ^m^eⁿ^t^-^w^id^{e P}^o^licy⁶⁶⁷⁴⁵⁶⁶²⁵⁶⁵⁶
^O^p^eratⁱⁿ^g^Ex^pen^s^es⁷²⁸⁵⁷⁹⁸⁵⁸⁸⁸⁸
^Of^fⁱ^{ce of}^In^s^p^ector
^G^eⁿ^r^a^l³⁸³⁹³⁹³⁹³⁹³⁹
^A^llow^aⁿ^ces^an^{d Of}^fⁱ^ce
^S^t^a^{ff fo}^r^F^o^r^m^e^r
^P^r^es^iden^ts³³³³³³
^E^l^e^c^t^r^oⁿⁱ^c^G^o^ve^rⁿ^m^e^nt
^(E-^G^ov^{) F}^uⁿ^d⁵⁴⁵¹⁵³³
^Electioⁿ^Ref^o^r^m
^P^a^y^m^en^ts^an^d
^Reim^b^u^rsem^en^ts⁶⁶⁵^{— —}^—^{— —}
^G^S^A^ap^p^r^op^ri^ati^oⁿ^s
^total¹^,222⁴⁶⁴⁴²⁶⁶¹⁵⁶⁴⁹⁶⁴⁹
^S^o^u^rce:^Fig^u^re^s^w^e^re^ta^k^e^{n f}^r^om^aⁿ^FY^{2004 T}^r^aⁿ^s^porta^tion-^T^r^e^a^s^ury^A^p^p^r^o^p^rⁱ^a^tions^{bill Conf}^e^r^eⁿ^c^e^Re^{port Budg}^e^t
^A^u^thor^ity^ta^ble^pr^ov^ide^d^by^the^H^ous^e^C^o^m^m^itte^e^{on A}^ppr^opr^ia^tions^.
^a.^Th^e^C^oⁿ^s^o^lida^t^e^d^A^ppr^opr^ia^tions^A^c^{t, 2004 c}^ontaⁱ^ns^aⁿ^a^c^r^os^s^-^the^-^boa^r^d^r^e^s^c^is^sⁱ^{on of}^0.59%^{; tha}^t^r^e^s^c^is^sⁱ^{on is}^not
^ref^l^ect^edⁱⁿ^t^h^{ese f}ⁱ^gu^res.
General Services Administration (GSA). The General Services
Administration administers federal civilian procurement policies pertaining to the
construction and management of federal buildings, disposal of real and personal
property, and management of federal property and records. It is also responsible for
managing the funding and facilities for 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 $88.1
million 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 million
to 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 $85.1 million 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 million to 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; $39.2 million for
the Office of Inspector General; $3.4 million for allowances and office staff for
former Presidents; and $5.0 million to remain available until expended for the
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 for operating
expenses; $39.2 million for the Office of Inspector General; $3.4 million for
allowances and office staff for former Presidents; and $1.0 million to remain
available 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 million
for the Office of Inspector General; $3.4 million for allowances and office staff for
former Presidents; $45.0 million for interagency electronic government initiatives;
and $17.6 million to be deposited into the Federal Consumer Information Center
Fund.
Federal Buildings Fund (FBF). Revenue to the FBF is the principal source
of funding. Congress, however, directs the 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, for
a total of $6,758.2 million. Of this total, $708.3 million is to remain available until
expended for new construction, including $204.6 million for nine courthouses. An
additional $991.3 million is to remain available until expended for repairs and
alterations. This amount includes $208.2 million for repairs to five existing
courthouse; $5.0 million to implement a chlorofluorocarbons program; $20.0 million
for a glass fragmentation program; and amounts necessary to provide such
reimbursable fencing, lighting, guard booths, and other facilities on private or other
property as may be appropriate to enable the U.S. Secret Service to perform its
protective 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, for a total of $6,717.3 million.
Of this total, $659.7 million was to remain available until expended for new
construction. An additional $1,000.9 million was to remain available 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 new construction,
including $204.6 million for nine courthouses. An additional $1,000.9 million was
to remain available until expended for repairs and alterations. This amount included
$208.2 million for repairs to five existing courthouses; $20.0 million to implement
a glass fragmentation program; $5.0 million to implement a chlorofluorocarbons
program; and amounts to provide such reimbursable fencing, lighting, guard booths,
and other facilities on private or other property not in federal ownership as may be
appropriate to enable the U.S. Secret Service to perform its protective 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 total of $6,557.5
million. Of this total, $406.1 million was to remain available until expended for new

construction. An additional $1,010.5 million was to remain available until expended
for repairs and alterations. This amount included $208.2 million for repairs to five
existing courthouses; $20.0 million to implement a glass fragmentation program;
$5.0 million to implement a chlorofluorocarbons program; and for funding any costs
associated with implementing security improvements in federal 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. An
amount not to exceed $400.6 million was to remain available until expended for new
construction projects. An additional $1,012.7 million was to remain available until
expended for repairs and alterations. This amount included $217.2 million for
repairs to five existing courthouses; $20.0 million to implement a glass fragmentation
program; $5.0 million to implement a chlorofluorocarbons program; and “amounts
to provide such reimbursable fencing, lighting, guard booths, and other facilities on
private or other property not in Government ownership or control as may be
appropriate to enable the United States Secret Service to perform its protective
functions pursuant to 18 U.S.C. 3056.”
Electronic Government Fund. The Senate and House adopted the
conferees’ recommended allocation of $3 million for the e-gov fund, a midpoint
compromise between the amounts initially approved by each chamber. This
appropriation is $2 million less than the amounts provided in FY2002 and FY2003
and considerably less than the $45 requested by the President for FY2004.
The Senate had initially approved the appropriators’ recommended $5 million
for the e-gov fund for FY2004, the same amount recommended and ultimately
approved for FY2003. House appropriators had initially recommended only $1
million for the e-gov fund for FY2004, and this was subsequently approved by the
House. The House committee report offered no explanation for the reduced amount.
The account statement noted that the fund has been authorized by the E-Government⁶⁵
Act of 2002, which had previously been a matter of concern for appropriators.
Under the terms of the authorizing provision, the fund is administered by the
Administrator of General Services as a GSA account to support projects approved by
the director of OMB. No transfers of monies from the fund to federal agencies may
be made until 10 days after a proposed spending plan and justification for each
project to be undertaken using such monies has been submitted to the Committees
on 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’s
Priorities. Intended as a 10-year budget plan, the Blueprint, among other
innovations, proposed the establishment of an electronic government account seeded
with “$10 million in 2002 as the first installment of a fund— that will grow to a total
of $100 million over three years— to support interagency electronic Government (e-
gov) initiatives.” Managed by OMB, the fund was foreseen as supporting “projects

⁶⁵ See 116 Stat. 2899 at 2906; 44 U.S.C. 3604.

that operate across agency boundaries,” facilitating “the development of a Public Key
Infrastructure to implement digital signatures that are accepted across agencies for
secure online communications,” and furthering “the Administration’s ability to
implement the Government Paperwork Elimination Act of 1998, which calls upon
agencies to provide the public with optional use and acceptance of electronic
information, services and signatures, when practicable, by October 2003.”⁶⁶ About
one month later, on March 22, OMB Deputy Director Sean O’Keefe announced that
the Bush Administration had decided to double the amount to be allocated 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 the
Administrator of General Services “to support interagency projects, approved by the
Director of the Office of Management and Budget, that enable the Federal
Government to expand its ability to conduct activities electronically, through the
development and implementation of innovative uses of the Internet and other
electronic 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 fund
for FY2002, to remain available until expended. Appropriators specified that
transfers of monies from the fund to federal agencies could not be made until 10 days
after a proposed spending plan and justification for each project to be undertaken
using such monies had been submitted to the Committees on Appropriations.
Expressing general support for the purposes of the fund, they also recommended, and
both chambers agreed, that the administration work with the House Committee on
Government Reform and the Senate Committee on Governmental Affairs to clarify
the 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 the
Internet or telephone” and, therefore, a key agency in implementing the President’s
e-gov vision, which will “require cross-agency approaches that permit citizens,
businesses, and state and local governments to easily obtain services from, and
electronically transact business with the federal government.” In this regard, an
Administration 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,” but
noted that the request “is supported by specific project plans developed by the

⁶⁶ U.S. Executive Office of the President, Office of Management and Budget, A Blueprint
for New Beginnings, pp. 179-180.
⁶⁷ William Matthews, “Bush E-gov Fund to Double,” Federal Computer Week, vol. 15, Mar.

26, 2001, p. 8.

Quicksilver Task Force.”⁶⁸ Furthermore, according to the fund account statement,
these monies “would also further the Administration’s implementation of the
Government Paperwork Elimination Act (GPEA) of 1998, which calls upon agencies
to 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 of
monies from the fund to federal agencies could not be made until 10 days after a
proposed spending plan and justification for each project to be undertaken using such
monies had been submitted to the Committees on Appropriations. The House
Committee also declined to recommend an appropriation for the fund as a GSA
account, but did fund it as an account under the jurisdiction of the Office of
Management and Budget within the Executive Office of the President.⁶⁹ Senate
appropriators, however, recommended the full $45 million requested by the
President. Their report stated that OMB “would control the allocation of the fund
and direct its use for information systems projects and affect multiple agencies and
offer the greatest improvements in access and service.”⁷⁰ Final funding, as provided
by P.L. 108-7, nonetheless, was $5 million.
National Archives and Records Administration (NARA). The custodian
of the historically valuable records of the federal government since its establishment
in 1934, NARA also prescribes policy and provides both guidance and management
assistance concerning the entire life cycle of federal records. It also administers the
presidential libraries system; publishes the laws, regulations, and presidential and
other documents; and assists the Information Security Oversight Office (ISOO),
which manages federal security classification and declassification policy; and the
National Historical Publications and Records Commission (NHPRC), which makes
grants nationwide to help nonprofit organizations identify, preserve, and provide
access to materials that document American history.
The Senate and House adopted the conferees’ recommended allocation of
$316.3 million for NARA. This appropriation results from several adjustments in
NARA funding as initially approved by the two chambers. The conferees
recommended $256.7 million for operating expenses, with $600,000 of this amount
designated for the preservation of the records of the Freedman’s Bureau. For the
electronic records archive, $35.9 million was recommended, of which $22 million
is to remain available until the end of FY2006. Similarly, while $13.7 million was
recommended for repairs and restoration, portions of this amount were specified for
three particular projects: $500,000 for the Military Personnel Records Center
requirements study; $2.25 million for land acquisition for a new regional archives
and records facility in Anchorage, Alaska; and $5 million for repair of the plaza of

⁶⁸ U.S. Office of Management and Budget, Fiscal Year 2003 Budget of the U.S. Government,
pp. 386-387.
⁶⁹ U.S. Congress, House Committee on Appropriations, Treasury, Postal Service, and
General Government Appropriations Bill, 2003, a report to accompany H.R. 5120, 107^th^nd
Cong., 2 sess., H.Rept. 107-575 (Washington: GPO, 2002), pp. 64, 83.
⁷⁰ S.Rept. 107-212, p. 77.

the Lyndon Baines Johnson Presidential Library. Finally, $10 million was
recommended 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 request
and approximately $23 million less than the House appropriators’ recommendation.
Of this amount recommended in the Senate, $258.191 million was proposed for
operating expenses; $13.483 million for repairs and restoration, with $2.025 million
specified for the construction of a regional archival facility in Alaska and $5 million
designated 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 million
less than the President’s request, but about $23 million more than the amount
recommended by Senate appropriators. Of this amount approved by the House,
$255.2 million was proposed for NARA operating expenses, which was almost $39
million 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, for
which the Committee had recommended $35.9 million. The President’s requested
amount for repairs and restoration was approved, as was twice the amount requested
by 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 the
requested amount, $294.1 million was sought for operating expenses, $6.5 million
for repairs and restoration, and $5 million for the NHPRC grants program.
Compared with FY2003 funding, increased monies were being sought for operating
expenses; amounts sought for the latter two accounts were below the amounts
appropriated for them for FY2003.
Merit Systems Protection Board (MSPB). The MSPB serves as guardian
of the federal government’s merit-based system of employment. The agency carries
out its mission by hearing and deciding appeals from federal employees of removals
and other major personnel actions. The MSPB also hears and decides other types of
civil service cases, reviews OPM regulations, and conducts studies of the merit
systems. The agency’s efforts are to assure that personnel actions taken involving
employees are processed within the law and that actions taken by OPM and other
agencies support and enhance federal merit 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 in
FY2003. 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 Law

107-289, which requires audited financial statements for agencies with over

$25,000,000 in appropriated funds in their budget.”⁷¹ According to the budget
submission:
Beginning in fiscal year 2004, at the request of [OMB], the [MSPB] is not
requesting funds be transferred from the Civil Service Retirement and Disability
Trust Fund. Instead, the funding previously supplied from the Trust Fund for
adjudication of Civil Service Retirement appeals is being requested as part of the
regular appropriation total of $35,503,000. OMB has recommended this change
to simplify the financial record keeping for both the [MSPB] and the Civil
Service Retirement and Disability Trust Fund. We checked with the Office of
Personnel Management, which has responsibility for the Trust Fund, and they⁷²
have no objection to this change.
The House and Senate Committees on Appropriations recommended, the House
and Senate passed, and the law provides an appropriation of $32.9 million, $2.6
million less than the President’s request. In addition, up to $2.6 million for
administrative expenses could be transferred from the Civil Service Retirement and
Disability Fund to adjudicate retirement appeals. The conferees agreed to the trust
fund transfer rather than providing a direct appropriation as the President had
requested. 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 appropriating funds to MSPB from the Civil Service
Retirement and Disability Fund rather than discontinuing this practice as⁷³
requested by the President; this request has not been adequately justified.
Office of Personnel Management (OPM). The budget for OPM is
comprised of budget authority for both permanent and current appropriations. This
report discusses the budget authority for current appropriations. The agency is
responsible for administering personnel functions. The OPM helps agencies to
develop merit-based human resources management accountability systems to support
their missions. The Strategic Human Resources Policy Division designs and
develops human resources policies and strategies linked to agency accomplishment
of missions. The Human Capital Leadership and Merit Systems Accountability
Division assists agencies in implementing and assessing human capital strategies.
The Human Resources Products and Services Division supports federal agencies by
administering retirement and insurance programs, providing personnel investigation
services, managerial and executive training, and other human resources services.⁷⁴
The Office of Inspector General (OIG) conducts audits, investigations, evaluations,

⁷¹ U.S. Merit Systems Protection Board, Fiscal Year 2004 Budget Justification, Feb. 3, 2003,
p. 6.
⁷² Ibid., p. 5.
⁷³ H.Rept. 108-243, pp. 191-192.
⁷⁴ U.S. Office of Personnel Management, Congressional Budget Justification; Annual
Performance Plan Fiscal Year 2004, Feb. 2003, p. 3. (Hereafter referred to as OPM Budget
Justification.)

and inspections throughout the agency and may issue administrative sanctions related
to the operation of 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 million⁷⁵ for salaries and
expenses and $1.5 million for OIG salaries and expenses. It also included mandatory
funding of $7.5 billion for the government payment for annuitants of the employees
health benefits program,⁷⁶ $35.0 million for the government payment for annuitants
of the employee life insurance program, and $10.0 billion for payment to the civil
service retirement and disability fund. Included in this total as well were trust fund
transfers of $135.9 million⁷⁷ for salaries and expenses and $14.4 million⁷⁸ for OIG
salaries 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 as
enhanced information technology support and competitive sourcing studies],
$4,500,000 in no-year funds for e-Government (e-Gov) projects, and $2,500,000 to
remain available through the end of FY2005 to coordinate and conduct program
evaluation 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 information systems. OPM expects to reduce the
audit cycle from 5 years to 3.6 years for community-related carriers. Recoveries⁸⁰
are expected to increase by $16 million annually as a result.
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 FY2003
for salaries and expenses; 0.7% less than the $1.5 million for OIG salaries and
expenses; 5.3% more than the $6.9 billion for the government payment for annuitants
of the employees health benefits program; 2.9% more than the $34.0 million for the

⁷⁵ Of this total of $118,748,000, $2,000,000 shall remain available until expended for the
cost of the enterprise human resources integration project, $2,500,000 shall remain available
until expended for the cost of leading the government-wide initiative to modernize federal
payroll systems and service delivery, and $2,500,000 shall remain available through
September 30, 2005 to coordinate and conduct program evaluation and performance
measurement.
⁷⁶ This was the amount of funding estimated in the FY2004 budget. OPM reported to the
House Appropriations Committee that funding of $7.2 billion would be needed.
⁷⁷ Of this total of $135,914,000, $36,700,000 shall remain available until expended for the
cost of automating the retirement record keeping systems.
⁷⁸ This money is for administrative expenses to audit, investigate, and provide other
oversight of OPM’s retirement and insurance programs.
⁷⁹ OPM Budget Justification, p. 5.
⁸⁰ FY2004 Budget, Appendix, p. 974.

government payment for annuitants of the employee life insurance program; and
6.1% more than the $9.4 billion for payment to the civil service retirement and
disability 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 than
the President’s request), of which $2 million would be for the cost of the enterprise
human resources integration project; $2.5 million would be for the cost of leading the
government-wide initiative to modernize federal payroll systems and service
delivery; and $2.5 million would be to coordinate and conduct program evaluation
and performance measurement. The Committee recommended the same amounts as
the President requested for OIG salaries and expenses, the government payment for
annuitants of the employees health benefits program, the government payment for
annuitants of the employee life insurance program, and payment to the civil service
retirement and disability fund. In addition, the Committee recommended trust fund
transfers of $126.9 million for salaries and expenses, $9.1 million less than the
President requested, and $14.4 million for OIG salaries and expenses, the same
amount 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 ‘retirement readiness’ project being done by OPM in
conjunction with the International Foundation for Retirement Education
(InFRE)... The Committee directs OPM to award this money to InFRE as a grant
or contract, and to report to the Committee on the progress of this project no later⁸²
than 60 days after enactment of this Act.
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 on
the ability of OPM to handle its current caseload,” directs OPM to “notify the
Committees if any research, audit, or investigation regarding PBMs [pharmacy
benefit managers] has been delayed or terminated at the formal or informal request
of another Federal agency” by September 1, 2003, encourages OPM to complete the
comprehensive outside audit to determine the true cost of mandated services under
the Federal Employees Health Benefits Program (FEHBP) and “promptly submit a
report of the results to the Committee,” and “directs OPM to consider Hampshire and
Hampden counties [in Massachusetts] for inclusion into the Hartford [CT] Locality⁸³

Pay Area.”
⁸¹ The amounts of $6,853,000,000; $34,000,000; and $9,410,000,000 for FY2003 are from
P.L. 108-7. OPM notifies the Secretary of the Treasury of the “such sums as may be
necessary” to fund these accounts each fiscal year. The FY2004 estimates for these
accounts are $7,219,000,000; $35,000,000; and $9,987,000,000 (from the House Committee
on Appropriations Table: Presidents Request with Outlays, FY2004).
⁸² H.Rept. 108-243, p. 196.
⁸³ H.Rept. 108-243, pp. 197-198.

The Committee directs OPM
to conduct a study in both the aggregate and by State to: (1) determine the
approximate number of Federal employees and retirees who are eligible to
participate in the FEHBP, but who are not covered by this program or by any
other health insurance program; (2) the principal reasons why these individuals
do not obtain health insurance; and (3) by which agencies these people are
employed and at which pay grades, levels, or rates of pay. The results of this
study shall be submitted to the Committees on Appropriations no later than⁸⁴
September 30, 2004.
The Senate Committee on Appropriations recommended and the Senate passed
the same appropriations as the President requested. The salaries and expenses
appropriation would be allocated in the same manner as the House Committee
recommended. Of the amount recommended for transfer from the trust funds, $36.7
million would remain available until expended for the cost of automating the
retirement recordkeeping systems. In its report accompanying S. 1589, the
Committee addressed OPM’s ongoing program to modernize its retirement system
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 OPM could benefit from the experiences that GAO
has documented with other Federal agency modernization projects. OPM did not
act on the Committee’s suggestion, therefore, last year, the Committee directed
OPM to conduct quarterly meetings with GAO on the progress of the IT
modernization project. These meetings did not occur quarterly. Instead only one
meeting occurred in 2002 and none in 2003. The Committee 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 GAO to do a
comprehensive audit on the problems and any mismanagement of the⁸⁵
modernization project.
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 as
the President requested for the other accounts. The conferees direct OPM to consider
implementing 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 prohibit
any funds appropriated or made available under the Act from being used to⁸⁶
implement regulations proposed by OPM on September 9, 2003, relating to the
detail of executive branch employees to the legislative branch. Senator Grassley
explained the need for the amendment as follows.

⁸⁴ H.Rept. 108-243, p. 198.
⁸⁵ S.Rept. 108-146, pp. 162-163.
⁸⁶ U.S. Office of Personnel Management, “Employment (General),” Federal Register, vol.

68, no. 174, Sept. 9, 2003, pp. 53054-53055.

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 the most industrious of detailees
to understand the intricacies of the legislative process and contribute to that
process. Moreover, this regulation attempts to limit the activities in which
executive branch employees can engage while under the direct supervision of a
Congressional office in an effort to micro-manage from afar. This is⁸⁷
unacceptable.
Human Capital Performance Fund. The President’s FY2004 budget
proposed an appropriation of $500 million for this new fund which
is designed to create performance-driven pay systems for employees and
reinforce the value of employee performance management systems. The
Administration proposes providing additional pay over and above any annual,
across-the-board pay raise to certain civilian employees based on individual or
organizational performance and/or other critical agency human capital needs.
Ninety percent of funds appropriated would be distributed to agencies on a pro
rata basis, upon OPM approval of an agency’s plan. The remainder, and any
amount withheld from agencies due to inadequate plans, would be allocated at⁸⁸
the discretion of OPM.
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 of⁸⁹
the fund within OPM. No funds would be available until the OPM Director notifies
the relevant subcommittees of jurisdiction of the Committees on Appropriations of
the approval of a performance pay plan for an agency and the prior approval of the
subcommittees has been attained. The Committee directs OPM “to report annually
to the Committees on Appropriations on the performance pay plans that have been
approved, 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 initiative
of this type should be budgeted and administered within each individual agency,”⁹¹
according to the report accompanying S. 1589.
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 OPM

⁸⁷ Congressional Record, vol. 149, daily edition, Oct. 23, 2003, p. S13120.
⁸⁸ FY2004 Budget, Appendix, p. 973.
⁸⁹ The Human Capital Performance Fund is created at Section 1129 of P.L. 108-136, the
National Defense Authorization Act for FY2004, enacted on Nov. 24, 2003. See CRS
Report RL31954, Civil Service Reform: Analysis of the National Defense Authorization Act
for FY2004.
⁹⁰ H.Rept. 108-243, p. 200.
⁹¹ S.Rept. 108-146, p. 165.

Director notifies and receives prior approval from the relevant subcommittees of
jurisdiction of the Committees on Appropriations of OPM approval of an agency’s
performance pay plan. Such amounts as determined by the OPM Director may be
transferred to federal agencies to carry out the purposes of the fund.
Office of Special Counsel (OSC). The agency investigates federal
employee allegations of prohibited personnel practices and, when appropriate,
prosecutes matters before the Merit Systems Protection Board; provides a channel for
whistle blowing by federal employees; and enforces the Hatch Act. In carrying out
the latter activity, the OSC issues both written and oral advisory opinions. The OSC
may require an agency to investigate whistle blower allegations and report to the
Congress and the President as appropriate.
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 to
reduce its long-standing case processing backlogs .... This request provides funding
for seven additional full time staff in [the Hatch Act and Disclosure Units] to address⁹²
growing backlog concerns.”
The House and Senate Committees on Appropriations recommended, the House
and Senate passed, and the law provides the same appropriation as the President
requested.
Title VI: General Provisions
This section of the report discusses, briefly, general provisions such as
government-wide guidance on basic infrastructure-like policies. Examples are
provisions related to the Buy America Act, drug-free federal workplaces, and
authorizing agencies to pay GSA bills for space renovation and other services which
are annually incorporated into the Treasury and General Government appropriations
legislation. Quite frequently, additionally, there have been provisions which relate
to specific agencies or programs. For both Transportation/Treasury-related general
provisions and government-wide general provisions, with noted exceptions, the
sections discussed here will be those which are new or contain modified policies. The
Consolidated Appropriations Act, 2004, contain these provisions. It should be noted
that there are also general provisions which relate only to agencies and accounts
within the bill.
The Administration’s proposed language for government-wide general
provisions can be found in the Appendix.⁹³ Most of the general provisions continued
language which has appeared under that title for several years. For an array of
reasons, Congress has determined that reiterating the language is preferable to
placing the provisions in permanent law.

⁹² FY2004 Budget, Appendix, p. 1091.
⁹³ FY2004 Budget, Appendix, pp. 9-13.

The Administration was recommending dropping several such provisions. The
provisions are shown in Table 11.
Table 11. Government-wide General Provisions
^A^d^mⁱⁿⁱ^s^t^rati^on^Prop^os^al^s^F^Y^{2004 E}ⁿ^acted
^Rep^{eats r}^eco^m^m^eⁿ^d^atioⁿ^elimⁱⁿ^atin^g^o^f^th^e^{Sec. 609. C}^oⁿ^tin^u^e^s^th^{e prov}^is^ion^proh^ibitin^g
^provⁱ^sⁱ^oⁿ^(s^ectⁱ^oⁿ^{609, F}^Y^{2003) w}^hⁱ^c^h^prohⁱ^bⁱ^t^s^p^a^y^m^en^{ts to}^p^e^r^s^oⁿ^{s f}^illin^g^p^o^s^itioⁿ^s^f^o^r
^pay^m^en^{t to political appoin}^t^ees^f^uⁿ^c^tionⁱⁿ^gⁱⁿ^w^hⁱ^c^{h t}^h^e^y^ha^ve^b^e^eⁿ^no^mⁱ^na^t^e^d^a^f^t^e^r^t^h^e
^j^o^b^s^fo^r^w^hⁱ^c^{h t}^h^e^y^ha^ve^b^e^eⁿ^no^mⁱ^na^t^e^d^,^b^u^t^Sen^a^{te h}^a^{s v}^o^tedⁿ^o^{t to}^ap^p^r^o^v^{e th}^e
ⁿ^o^{t co}ⁿ^f^ir^m^e^d^.^T^h^{is p}^r^o^v^isioⁿ^h^a^{s b}^eenⁱⁿ^th^e^no^mⁱ^na^tⁱ^o^n.
^b^{ill f}^o^r^{at least 2}⁰^y^ear^{s. T}^h^{e p}^r^ev^io^u^s
^admⁱⁿⁱ^s^t^ration^als^o^recom^m^eⁿ^d^{ed its}^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^elimⁱⁿ^atioⁿ^.
^Reco^m^m^eⁿ^d^ed^elimⁱⁿ^atioⁿ^o^f^th^{e p}^r^o^v^isioⁿ^{Sec. 612. C}^oⁿ^tin^u^e^th^{e prov}^is^ion^proh^ibitin^g
^(s^ectⁱ^oⁿ^{612, F}^Y^{2003) w}^hⁱ^c^h^prohⁱ^bⁱ^t^s^u^s^{e of}^t^h^e^use^o^f^fund^{s fo}^r^eⁿ^fo^r^cⁱ^{ng r}^e^gul^a^tⁱ^o^ns
^f^uⁿ^d^s^{to “}ⁱ^m^p^lem^eⁿ^t^{, adm}ⁱⁿⁱ^s^t^{er, or en}^f^o^{rce an}^y^dis^a^pprov^{ed in}^accordan^{ce w}^ith^th^e
^r^e^gul^a^tⁱ^o^n”^w^hⁱ^c^{h ha}^{s b}^e^eⁿ^dⁱ^sa^p^p^r^o^v^e^d^t^h^r^o^ugh^ap^p^licab^{le law}^o^f^th^{e Un}^ited^States.
^s^t^atu^t^orily^au^th^{orized m}^ean^s^.^If^th^{e prov}^is^ion
^w^e^{re elim}ⁱⁿ^{ated, con}^ceiv^a^bly^th^{e ex}^ecu^tiv^e^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^co^u^l^d^coⁿ^tin^u^e^r^e^g^u^l^ato^r^y^activ^{ities w}^h^ich
^Co^ngr^e^{ss ha}^d^dⁱ^sa^p^p^r^o^v^e^d^,^t^h^r^o^{ugh r}^e^so^l^u^tⁱ^o^{n o}^f
^di^s^a^pprov^al^{or t}^h^{e C}^oⁿ^g^r^es^sⁱ^on^al^R^e^vⁱ^ew^A^c^t^.
^T^h^{e prov}^is^ion^,ⁱⁿ^th^{e bill s}ⁱⁿ^{ce th}^{e early}^1980s^,
^h^a^{d been}^recom^m^eⁿ^d^{ed f}^o^{r elim}ⁱⁿ^ationⁱⁿ
^F^Y^{2002 an}^{d by}^t^h^{e prev}ⁱ^o^u^s^admⁱⁿⁱ^s^t^ratⁱ^oⁿ^al^s^o^.
^Reco^m^m^eⁿ^d^{s elim}ⁱⁿ^atioⁿ^o^f^p^r^o^v^isioⁿ^b^aⁿⁿⁱⁿ^g
^u^s^{e o}^f^f^uⁿ^d^{s to}^Cu^sto^m^{s Ser}^v^{ice f}^o^r^im^p^o^r^tatioⁿ
^{or rel}^eas^{e i}ⁿ^t^h^{e U}ⁿⁱ^t^e^{d S}^t^at^es^of^g^oods^f^o^uⁿ^d^t^o
^{be m}^aⁿ^u^f^actu^r^{ed by}^f^o^{rced or in}^den^t^u^r^{ed ch}^ild
^l^a^{bor (F}^Y^{2003, S}^{ec. 619). T}^hⁱ^s^provⁱ^sⁱ^oⁿ^m^a^y
^{reappear u}ⁿ^d^{er th}^{e Departm}^eⁿ^t^of^Hom^e^lan^d
^Secu^r^ity^ap^p^r^o^p^r^iatioⁿ^.
^Reco^m^m^eⁿ^d^{s, elim}ⁱⁿ^atioⁿ^o^f^p^r^o^v^isioⁿ⁽^s^ectioⁿ^S^{ec. 619. C}^oⁿ^tⁱⁿ^u^e^s^t^h^{e prov}ⁱ^sⁱ^oⁿ
^{621, F}^Y^{2002) w}^hⁱ^c^h^requⁱ^r^es^t^h^atⁿ^o^f^uⁿ^d^s^m^a^y^p^r^o^h^ib^itin^g^f^e^d^e^r^a^{l tr}^ainⁱⁿ^gⁿ^o^{t d}ⁱ^r^ectly
^{be oblig}^{ated or ex}^pen^d^{ed f}^o^{r em}^ploy^{ee train}ⁱⁿ^g^rel^a^t^e^{d t}^o^t^h^{e perf}^orm^aⁿ^{ce of}^of^fⁱ^ci^al^du^tⁱ^e^s^.
ⁿ^o^{t d}ⁱ^r^ectly^r^e^lated^to^th^{e em}^p^l^o^y^ee’^{s o}^f^fⁱ^cial
^d^u^{ties; th}^{at m}^a^yⁱⁿ^d^u^{ce h}ⁱ^g^h^lev^e^{ls o}^f^em^o^tioⁿ^a^l^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.

^r^e^sp^oⁿ^se^o^r^p^s^y^c^ho^lo^gic^a^l^str^e^{ss in so}^m^e
^p^a^r^ticip^an^{ts; th}^{at f}^a^{ils to}ⁱⁿ^f^o^r^m^r^e^co^u^r^se
^con^t^en^{t or pos}^t-^cou^r^s^e^ev^alu^a^tion^;^th^{at con}^t^ain^s
^m^e^th^o^d^s^o^r^coⁿ^t^en^{t “}^a^sso^ciated^w^ith^r^e^lig^io^u^s^o^r
^q^u^asi-^r^e^lig^io^u^s^b^e^lief^sy^stem^{s o}^r^‘ⁿ^ew^ag^e’
^b^e^lief^sy^stem^{s;” an}^d^th^{at is o}^f^f^eⁿ^s^iv^{e to}^{, o}^r
^d^e^sigⁿ^e^d^to^ch^an^g^e^{, p}^a^r^ticip^an^ts’^p^e^r^s^oⁿ^{al v}^a^lu^es
^{or lif}^es^ty^les^aw^ay^f^r^om^th^{e w}^o^rk^place.
^E^lim^ina^tio^{n o}^f^la^ngua^ge^{in the}^b^{ill sinc}^e^the^mⁱ^d^-
^1990s^{, w}^a^s^requ^es^t^e^{d prev}ⁱ^o^u^s^l^y^by^bot^h^t^h^e
^B^u^sh^A^d^mⁱⁿⁱ^str^a^tioⁿ^an^d^th^{e Clin}^toⁿ
^A^d^mⁱⁿⁱ^st^r^a^tⁱ^o^n.

^A^d^mⁱⁿⁱ^s^t^rati^on^Prop^os^al^s^F^Y^{2004 E}ⁿ^acted
^S^ectⁱ^oⁿ^{622 (F}^Y^{2003) proh}ⁱ^bⁱ^t^s^t^h^{e u}^s^{e of}^f^uⁿ^d^s^S^{ec. 620. C}^oⁿ^tⁱⁿ^u^e^s^t^h^{e prov}ⁱ^sⁱ^oⁿ
^{to requ}^{ire an}^{d ex}^ecu^{te em}^ploy^{ee n}^oⁿ^-^dis^c^los^u^re^p^r^o^h^ib^itin^g^th^{e ex}^p^eⁿ^d^itu^r^e^o^f^f^uⁿ^d^{s f}^o^r
^ag^reem^en^ts^w^ith^ou^{t th}^os^{e ag}^reem^en^ts^h^a^vⁱⁿ^g^im^plem^en^tation^of^ag^reem^en^tsⁱⁿⁿ^oⁿ^-
^w^h^istle-^b^lo^w^e^r^p^r^o^t^ectioⁿ^clau^{ses. T}^h^{e B}^u^sh^dⁱ^sclo^su^r^e^p^o^{licies u}ⁿ^l^{ess cer}^tain^p^r^o^v^isioⁿ^s
^propos^al^repeat^s^t^h^ei^{r F}^Y^{2002 an}^{d F}^Y²⁰⁰³^{are in}^clu^d^ed.
^r^e^q^u^{ests f}^o^r^elimⁱⁿ^atioⁿ^o^f^th^{at p}^r^o^v^isioⁿ^,^w^h^ich
^h^a^{s b}^eenⁱⁿ^th^{e b}^{ill f}^o^r^o^v^er^ten^y^ear^s.^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^S^ectⁱ^oⁿ^{625 (F}^Y^{2003) requ}ⁱ^r^es^approv^al^by^t^h^e^S^{ec. 623. C}^oⁿ^tⁱⁿ^u^e^s^t^h^{e prov}ⁱ^sⁱ^oⁿ
^C^o^m^mⁱ^t^t^ees^on^A^ppropri^a^tⁱ^oⁿ^s^of^rel^eas^{e of}^an^y^p^r^o^hⁱ^bⁱ^tⁱ^{ng fund}^{s t}^o^b^e^use^d^t^o^p^r^o^vⁱ^d^e^no^n-
^“ⁿ^oⁿ^-^p^u^b^{lic” in}^f^o^r^m^atioⁿ^su^ch^{as m}^a^ilin^g^o^r^p^u^b^{lic in}^f^o^r^m^atioⁿ^su^ch^{as m}^a^ilin^g^o^r
^telep^h^oⁿ^{e lists to}^an^y^p^e^r^s^oⁿ^o^r^an^y^o^r^g^aⁿⁱ^zatioⁿ^telep^h^oⁿ^{e lists to}^an^y^p^e^r^s^oⁿ^o^r^o^r^g^aⁿⁱ^zatioⁿ
^o^u^tsid^{e th}^{e f}^e^d^e^r^a^{l g}^o^v^e^rⁿ^m^eⁿ^t^{. T}^h^{e B}^u^sh^o^u^tsid^{e th}^{e g}^o^v^e^rⁿ^m^eⁿ^t^w^ith^o^u^{t th}^{e ap}^p^r^o^v^al
^A^d^mⁱⁿⁱ^str^a^tioⁿ^{is r}^e^p^eatin^g^th^eir^r^e^q^u^{est f}^o^r^its^of^t^h^{e C}^o^m^mⁱ^t^t^{ee on}^A^ppropri^a^tⁱ^oⁿ^s^.
^elimⁱⁿ^atioⁿ^.
^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^{Federal em}^ploy^eesⁱⁿ^ex^ecu^tiv^{e ag}^en^cies^are^S^{ec. 625. C}^oⁿ^tⁱⁿ^u^e^s^t^h^{e prov}ⁱ^sⁱ^oⁿ^di^rectⁱⁿ^g
^requⁱ^r^{ed (s}^ectⁱ^oⁿ^{627, F}^Y^{2003) t}^o^“^u^s^e^of^fⁱ^ci^al^ag^en^cy^em^ploy^ees^{to u}^s^{e of}^fⁱ^{cial tim}^{e in}^an
^tim^{e in}^an^h^oⁿ^e^s^t^ef^f^o^{rt to perf}^orm^of^fⁱ^cial^h^oⁿ^e^s^t^ef^f^o^rt^t^o^perf^orm^of^fⁱ^ci^al^du^tⁱ^e^s^.
^d^u^{ties.” T}^h^{at r}^e^q^u^ir^em^en^{t, in}^th^{e b}^{ill sin}^c^e
^F^Y^{1999, h}^a^s^been^s^l^at^{ed f}^o^{r el}ⁱ^mⁱⁿ^atⁱ^oⁿ^by^bot^h^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^t^h^{e Bu}^s^h^an^{d C}^lⁱⁿ^t^oⁿ^bu^dg^et^propos^al^s^.^T^h^e
^arg^u^m^en^{t h}^a^s^been^th^{at th}^{e eth}ⁱ^cs^s^t^atu^t^es^{, in}
^f^{act, place th}^{at s}^a^m^e^requ^irem^en^{t on}^{all f}^e^deral
^pers^onⁿ^e^l^.
^Propos^{ed s}^ectⁱ^oⁿ^{630 w}^o^u^l^{d am}^en^{d prov}ⁱ^sⁱ^oⁿ^s
^of^t^h^{e F}^e^deral^Em^pl^oy^ees^C^o^m^p^en^s^a^tⁱ^oⁿ^A^c^t
⁽^F^ECA⁾^w^h^ich^r^e^{lates to}^w^o^r^k^m^eⁿ^’^s
^com^p^en^s^a^tion^av^{ailable to f}^e^{deral em}^ploy^ees^.
^{[See dis}^c^u^s^sⁱ^on^below^uⁿ^d^{er “}^F^ederal
^Em^ploy^ees^W^o^rk^ers^’^C^o^m^p^en^s^a^tion^P^r^og^ram
^(FEC^A⁾^{” s}^ection^.^]
^Propos^{ed s}^ectⁱ^oⁿ^{631 w}^o^u^l^{d au}^t^h^ori^{ze f}^uⁿ^dⁱⁿ^gⁱ^f
^provⁱ^sⁱ^oⁿ^s^lⁱ^k^{e t}^h^os^{e of}^t^h^{e propos}^{ed Man}^a^g^e^ri^al^th
^Flex^ibility^A^c^{t of}^{2001 (S. 1612, 107}
^C^oⁿ^g^r^es^s⁾^{, relatin}^g^{to th}^{e accru}^a^{l of}^f^uⁿ^d^s^f^o^r
^t^h^{e pay}^m^en^t^of^f^e^deral^pen^sⁱ^oⁿ^s^an^{d pos}^t^-
^retirem^en^{t h}^ealth^ben^e^f^its^{, w}^e^{re en}^acted.
^Sim^ilar^legⁱ^slatioⁿ^h^a^{s n}^o^{t y}^e^{t b}^eenⁱⁿ^tr^o^d^u^cedⁱⁿ^th
^t^h^{e 108}^Co^ngr^e^ss.
^Propos^{ed s}^ectⁱ^oⁿ^{632 w}^o^u^l^{d au}^t^h^ori^{ze t}^h^e
^A^d^mⁱⁿⁱ^str^a^tioⁿ^to^tr^an^sf^er^u^p^to⁵^%^f^r^o^m^an^y
^ap^p^r^o^p^r^iatioⁿ^,^w^ith^cer^tain^lim^itatioⁿ^s^.
^S^{ec. 628. A}ⁿ^e^w^s^ectⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^p^r^o^h^ib^{it u}^s^{e o}^f^f^uⁿ^d^{s to}^o^p^e^r^a^{te an}^oⁿ^lin^e
^em^p^l^o^y^m^eⁿ^tⁱⁿ^f^o^r^m^atioⁿ^ser^v^{ice f}^o^r^th^e
^fe^d^e^r^a^l^go^ve^rⁿ^m^e^nt^und^e^r^c^e^r^t^aⁱⁿ
^circu^m^s^t^an^ces^.
^La^ngua^ge^a^dopt^{ed f}^r^om^S^.^{1589. N}^o^sⁱ^mⁱ^l^a^r
^H^o^u^s^{e prov}ⁱ^sⁱ^oⁿ^.

^A^d^mⁱⁿⁱ^s^t^rati^on^Prop^os^al^s^F^Y^{2004 E}ⁿ^acted
^S^{ec. 637. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^prohⁱ^bⁱ^t^t^h^{e pu}^rch^a^s^e^of^{a produ}^ct^{or s}^e^rvⁱ^c^e
^of^f^e^{red by}^t^h^{e F}^e^deral^Pri^s^on^In^du^s^t^ri^es^{, In}^c.,
^uⁿ^l^es^s^th^{e ag}^en^cy^m^a^kⁱⁿ^g^s^u^ch^pu^rch^a^s^e
^det^e^rmⁱⁿ^es^t^h^at^s^u^ch^produ^ct^{or s}^e^rvⁱ^c^e
^provⁱ^d^es^t^h^{e bes}^t^v^a^l^u^e.
^La^ngua^ge^a^dopt^{ed f}^r^om^S^.^{1589. N}^o^sⁱ^mⁱ^l^a^r
^H^o^u^s^{e prov}ⁱ^sⁱ^oⁿ^.
^S^{ec. 638. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^requ^{ire ag}^en^cies^{to ev}^alu^a^{te th}^e
^credi^t^w^ort^hⁱⁿ^es^s^of^anⁱⁿ^di^vⁱ^du^al^bef^o^re
ⁱ^ssui^{ng t}^h^eⁱⁿ^dⁱ^vi^d^u^a^l^a^go^ve^rⁿ^m^e^nt^t^r^a^v^e^l
^ch^arg^e^{card an}^{d w}^o^u^l^{d lim}^{it ag}^en^cy^action^s
^accordin^g^l^y^.
^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^S^{ec. 640. Wou}^l^{d prov}ⁱ^d^{e t}^h^at^t^h^{e adj}^u^s^t^m^eⁿ^t
ⁱⁿ^rat^e^s^of^basⁱ^{c pay}^f^o^{r f}^e^deral^em^pl^oy^ees
^und^e^r^st^a^t^ut^o^r^y^p^a^y^sy^st^e^m^{s t}^a^ki^{ng e}^ffe^c^tⁱⁿ
^fⁱ^s^cal^y^{ear 2004 s}^h^al^l^{be an}ⁱⁿ^creas^{e of}^4.1%^.
^Ho^u^s^{e an}^d^Sen^a^{te p}^r^o^v^isioⁿ^s^w^e^r^e^id^en^tical.
^{See s}^ection^,^“^F^{ederal P}^e^rs^on^{al Is}^s^u^es^,”
^elsew^h^er^{e in}^th^{is r}^e^p^o^r^t.
^S^{ec. 641. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^allo^w^f^o^r^th^{e tim}^ely^f^ilin^g^o^f^r^e^p^o^r^{ts w}^ith^th^e
^Fed^e^r^a^{l Electio}ⁿ^Co^m^mⁱ^ssioⁿ^u^sⁱⁿ^g
^o^v^erⁿⁱ^g^h^t^d^e^liv^er^y^,^p^r^io^r^ity^{, o}^r^ex^p^r^{ess m}^a^il.
^La^ngua^ge^a^dopt^{ed f}^r^om^H^.^R^.^{2989. N}^o
^sim^ilar^Sen^a^{te p}^r^o^v^isioⁿ^.
^S^{ec. 642. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^al^l^o^w^t^h^{e u}^s^{e of}^appropri^a^t^e^{d f}^uⁿ^d^s^f^o^r
^of^fⁱ^{cial trav}^{el by}^f^e^{deral departm}^eⁿ^t^s^an^d
^ag^en^cies^{to participate in}^th^{e f}^r^action^a^l
^ai^rcraf^t^owⁿ^e^rs^hⁱ^{p pi}^l^o^t^prog^ram^.
^La^ngua^ge^a^dopt^{ed f}^r^om^S^.^{1589. N}^o^sⁱ^mⁱ^l^a^r
^H^o^u^s^{e prov}ⁱ^sⁱ^oⁿ^.
^S^{ec. 643. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^w^o^u^l^d
^p^r^o^h^ib^{it th}^{e ex}^p^eⁿ^d^itu^r^e^o^f^f^uⁿ^d^{s f}^o^r^th^e
^acq^uⁱ^sitioⁿ^o^f^ad^d^itioⁿ^a^{l f}^e^d^e^r^a^{l law}
^en^f^o^r^cem^en^{t tr}^ainⁱⁿ^g^f^acilities.
^La^ngua^ge^a^dopt^{ed f}^r^om^S^.^{1589. N}^o^sⁱ^mⁱ^l^a^r
^H^o^u^s^{e prov}ⁱ^sⁱ^oⁿ^.

^A^d^mⁱⁿⁱ^s^t^rati^on^Prop^os^al^s^F^Y^{2004 E}ⁿ^acted
^S^{ec. 644. S}^eⁿ^s^{e of}^t^h^{e C}^oⁿ^g^r^es^s^t^h^atⁿ^o^pay
^lo^{calities, as d}^e^fⁱⁿ^e^d^f^o^r^th^{e Gen}^e^r^a^l
^S^c^h^e^du^l^e^{, w}^o^u^l^{d be di}^s^e^s^t^ablⁱ^s^h^e^d.
^La^ngua^ge^a^dopt^{ed f}^r^om^H^.^R^.^{2989. N}^o
^sim^ilar^Sen^a^{te p}^r^o^v^isioⁿ^.
^Propos^{ed s}^ectⁱ^oⁿ^{635 w}^o^u^l^{d al}^l^o^w^t^h^e
^A^d^mⁱⁿⁱ^str^a^tioⁿ^to^tr^an^sf^er^f^uⁿ^d^{s b}^e^tw^een
^accouⁿ^t^s^f^uⁿ^dⁱⁿ^g^operation^sⁱⁿ^th^{e Ex}^ecu^tiv^e
^Of^fⁱ^{ce of}^th^{e P}^r^es^iden^{t. In}^prev^iou^s^f^uⁿ^dⁱⁿ^g
^cy^cles^{, th}^{e A}^d^mⁱⁿⁱ^s^t^ration^h^a^{d requ}^es^{ted th}^{at all}
^of^th^{e accou}ⁿ^t^s^w^ithⁱⁿ^{te Ex}^ecu^tiv^{e Of}^fⁱ^{ce of}^th^e
^P^r^es^iden^{t be con}^s^olid^{ated in}^{to on}^{e accou}ⁿ^t^.
^C^oⁿ^g^r^es^s^rej^ect^{ed t}^h^at^propos^al^.
^Propos^{ed s}^ectⁱ^oⁿ^{636 w}^o^u^l^{d es}^t^a^blⁱ^s^h^{a H}^u^m^aⁿ
^C^a^{pital P}^e^rf^orm^aⁿ^{ce Fu}ⁿ^d^{to be adm}ⁱⁿⁱ^s^t^{ered by}
^t^h^e^O^ffi^c^e^o^f^P^e^r^s^o^nne^l^M^a^na^ge^m^e^nt⁽^O^P^M⁾^.
^S^{ee di}^s^c^u^s^sⁱ^on^abov^{e rel}^a^t^e^{d t}^o^O^P^{M f}^uⁿ^dⁱⁿ^g^.
^Propos^{ed s}^ectⁱ^oⁿ^{637 w}^o^u^l^{d ch}^an^g^e^t^h^{e pay}
^s^y^s^t^em^f^o^{r th}^{e Sen}ⁱ^{or Ex}^ecu^tiv^{e Serv}^ice.
^S^{ec. 648. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h^requⁱ^r^es
^each^ag^en^cy^{to reim}^bu^rs^{e th}^{e Federal}
^A^v^iatioⁿ^A^d^mⁱⁿⁱ^str^a^tioⁿ^f^o^r^th^{e o}^p^e^r^a^tioⁿ^o^f
^th^{e Mid}^w^ay^A^t^o^{ll A}ⁱ^r^f^ield^.
^La^ngua^ge^a^dopt^{ed f}^r^om^S^.^{1589. N}^o^sⁱ^mⁱ^l^a^r
^H^o^u^s^{e prov}ⁱ^sⁱ^oⁿ^.
^[S^{. 1589, S}^{ec. 645. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h
^w^o^u^l^{d requ}^{ire th}^{e Secretary}^of
^T^r^an^sp^o^r^tatioⁿ^to^am^en^d^th^{e Man}^u^a^{l o}ⁿ
^Un^if^o^r^m^Coⁿ^t^r^o^{l Dev}ⁱ^{ces to}ⁱⁿ^clu^d^e
ⁱⁿ^f^o^r^m^atioⁿ^to^{assist m}^o^to^rⁱ^{sts in}^lo^catin^g
^licen^s^e^{d 24-}^h^o^u^r^ph^arm^acy^s^e^rv^ices^.]
^Sen^a^te-^p^assed^p^r^o^v^isioⁿⁿ^o^{t ag}^r^eed^to^.
^[S^{. 1589, S}^{ec. 646. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ^w^hⁱ^c^h
^w^o^ul^d^p^r^o^hⁱ^bⁱ^t^use^o^f^fund^{s t}^o^r^e^m^o^ve^aⁿ
^en^tityⁱⁿ^{a f}^e^d^e^r^a^{l Gen}^e^r^a^{l Sch}^e^d^u^{le lo}^cality
^pay^area.]
^Sen^a^te-^p^assed^p^r^o^v^isioⁿⁿ^o^{t ag}^r^eed^to^.
^Propos^{ed s}^ectⁱ^oⁿ^{634 w}^o^u^l^{d au}^t^h^ori^z^e^[H^.R^{. 2989, S}^{ec. 737. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
ⁱⁿ^t^e^r^a^ge^nc^y^fundⁱ^{ng o}^f^t^h^e^N^a^tⁱ^o^na^l^w^hⁱ^c^{h w}^o^ul^d^p^e^r^mⁱ^tⁱⁿ^t^e^r^a^ge^nc^y^fundⁱ^{ng o}^f
^Ocean^og^raph^{ic P}^a^rtn^e^rs^hⁱ^{p P}^r^og^ram^Of^fⁱ^ce.^th^{e Nation}^a^{l ocean}^og^raph^{ic P}^a^rtn^e^rs^hⁱ^p
^P^r^og^ram^Of^fⁱ^{ce an}^{d th}^{e C}^o^as^{tal A}^m^erica
^prog^ram^an^{d w}^o^u^l^{d requ}ⁱ^r^{e a report}^.^]
^H^o^u^s^e-^pas^s^e^{d prov}ⁱ^sⁱ^oⁿ^w^a^sⁿ^o^t^ag^{reed t}^o^.

^A^d^mⁱⁿⁱ^s^t^rati^on^Prop^os^al^s^F^Y^{2004 E}ⁿ^acted
^[H^.R^{. 2989, S}^{ec. 738. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
^w^h^ich^w^o^u^l^d^ex^ten^d^th^{e Fed}^e^r^a^{l Electio}ⁿ
^C^o^m^mⁱ^s^sⁱ^on^’^s^admⁱⁿⁱ^s^t^ratⁱ^v^{e f}ⁱⁿ^e^prog^ram
^thr^o^{ugh Decem}^b^e^r³¹^,^2005.]
^H^o^u^s^e-^pas^s^e^{d prov}ⁱ^sⁱ^oⁿ^w^a^sⁿ^o^t^ag^{reed t}^o^.
^[H^.R^{. 2989, S}^{ec. 741. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
^w^h^ich^w^o^u^l^{d requ}^{ire a report f}^r^om^each
^ag^en^cy^oⁿ^co^m^p^etitiv^{e so}^u^r^cin^g^activ^{ities. S.}
^{1589, S}^{ec. 642. S}^eⁿ^a^t^e^Provⁱ^sⁱ^oⁿ^sⁱ^mⁱ^l^a^{r t}^o
^H^o^use^l^a^ngua^ge^.^S.^{1589, S}^{ec. 644. Wou}^l^d
^im^p^o^s^{e a r}^e^p^o^r^tin^g^r^e^q^u^ir^em^en^{t r}^e^latin^g^to
^co^m^p^etitiv^{e so}^u^r^cin^g^.^]
^H^o^use^aⁿ^d^Se^na^t^e^p^r^o^vⁱ^sⁱ^o^{ns w}^e^r^e^no^t
ⁱⁿ^clu^d^{ed in}^con^f^eren^{ce report.}
^{See sectio}ⁿ^,^“^C^o^m^p^e^titiv^{e So}^u^r^cin^g^o^f
^Fed^e^r^a^{l A}^c^tiv^{ities” elsew}^h^er^{e in}^th^{is r}^e^p^o^r^t.”
^[H.R^{. 2989, Sec. 743. Sh}^if^ts^{$1 m}^illion^f^r^om
^on^{e C}^a^lif^ornⁱ^{a B}^a^y^A^r^{ea tran}^s^{it proj}^{ect to}
^an^oth^e^r.]
^H^o^u^s^e-^pas^s^e^{d prov}ⁱ^sⁱ^oⁿⁿ^o^t^ag^{reed t}^o^.
^[H^.R^{. 2989, S}^{ec. 744. A}^ppropri^a^t^e^s^$63
^m^illioⁿ^f^o^r^th^{e Essen}^{tial A}ⁱ^r^Ser^v^ice
^prog^ram^,^repl^aciⁿ^g^f^uⁿ^dⁱⁿ^g^f^r^om^t^h^{e A}ⁱ^rport
^an^{d A}ⁱ^rw^ay^T^r^u^s^{t Fu}ⁿ^d^th^{at w}^a^s^s^t^rick^en^on^a
^poiⁿ^t^of^order.]
^H^o^u^s^e-^pas^s^e^{d prov}ⁱ^sⁱ^oⁿⁿ^o^t^ag^{reed t}^o^.
^[H^.R^{. 2989, S}^{ec. 745. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
^w^hⁱ^c^{h w}^o^ul^d^c^h^a^nge^t^r^a^v^e^l^r^e^st^rⁱ^c^tⁱ^o^{ns t}^o
^C^u^{ba. S}^{ec. 643. S}^eⁿ^a^t^e^Provⁱ^sⁱ^oⁿ^sⁱ^mⁱ^l^a^{r t}^o
^H^o^use^l^a^ngua^ge^.^]
^P^r^ov^is^ion^sⁿ^o^{t ag}^{reed to in}^con^f^eren^ce.
^{See s}^ection^,^“^C^u^b^{a San}^c^tion^s^{” els}^e^w^h^{ere in}
^th^{is r}^e^p^o^r^t.
^[H^.R^{. 2989, S}^{ec. 746. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
^w^hⁱ^c^{h w}^o^ul^d^p^r^o^hⁱ^bⁱ^t^use^o^f^fund^{s t}^o^eⁿ^fo^r^c^e
^an^y^r^e^strⁱ^ctioⁿ^oⁿ^r^e^m^ittan^{ces to}ⁿ^a^tioⁿ^a^{ls o}^f
^C^u^{ba or C}^u^ban^h^o^u^s^eh^ol^ds^.]
^H^o^u^s^e-^pas^s^e^{d prov}ⁱ^sⁱ^oⁿⁿ^o^t^ag^{reed t}^o^.
^[H^.R^{. 2989, S}^{ec. 747. A}ⁿ^e^w^provⁱ^sⁱ^oⁿ
^w^hⁱ^c^{h w}^o^ul^d^p^r^o^hⁱ^bⁱ^t^use^o^f^fund^{s i}ⁿ
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Federal Personnel Issues
General Schedule Pay. At the close of the 108^th Congress, 1^st Session, the
prospects for General Schedule January 2004 pay adjustments were uncertain. A 2%
adjustment was effective the first pay period beginning on or after January 1, 2004⁹⁴
(January 11 for most). Now that the Consolidated Appropriations Act, 2004 has
been enacted, an average 4.1% increase will 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 receive
annual adjustments based on two separate mechanisms. The first is the adjustment
to base pay which is based on changes in private sector salaries as reflected in the
Employment Cost Index (ECI). The rate of pay adjustment is supposed to be the
percentage 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, the
President signed an Executive Order establishing the salary schedules for federal⁹⁵
civilian personnel effective January 2003. Under the 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 between
base pay and locality-based comparability payments. The payment was retroactive
to January 2003. On March 21, it was announced that the additional 1% would be
applied exclusively to locality-based comparability payments.⁹⁶

⁹⁴ U.S. National Archives and Records Administration, “Executive Order 13322 —
Adjustments of Certain Rates of Pay,” Federal Register, vol. 69, January 2, 2004
(Washington: GPO, 2004), p. 231. E. O. 13322, dated December 30, 2003.
⁹⁵ U.S. National Archives and Records Administration, “Executive Order 13282 —
Adjustments of Certain Rates of Pay,” Federal Register, vol. 68, January 8, 2003
(Washington: GPO, 2003), pp. 1133-1142. E. O. 13282, dated December 31, 2002.
⁹⁶ U.S. National Archives and Records Administration, “Executive Order 13291 — Further
Adjustment of Certain Rates of Pay,” Federal Register, vol. 68, March 25, 2003
(Washington: GPO, 2003), pp. 14525-14526. E. O. 13291, dated March 21, 2003.

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 an
alternative plan at the end of August which would provide a 1.5% increase in basic
pay and a 0.5% increase in locality pay. Because Congress has not completed action
on legislation to establish other rates, the President’s plan was effective in January

2004.

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 civilian and military pay
increases should be in parity. The H.R. 2989, as passed by the House and the Senate
would have established a January 2004 pay increase, at a rate of 4.1%, for civilian
employees, equal to the Administration’s proposal for the military. It would be left
to the President’s discretion as to how the increase would be split between basic and
locality pay. The pay provision is in the pending Consolidated 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 had been 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, or skilled labor, force at rates prevailing in local
wage areas for like occupations. If the statutory system were allowed to be managed
as planned, the wage rates and the rates of adjustment in the over 130 wage areas
would vary, according to the labor costs and compensation in the private sector. For
the last several years, Congress has limited the 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 is that, in certain high cost areas, some FWS wages would
exceed the salaries paid to General Schedule supervisors. Wages in lower cost areas
will be allowed to increase according to the findings of the wage surveys but the high
cost area wages will be capped.
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 amendment to the statute governing the
determination of salary levels for the Senior Executive Service. The provisions to
change the system by eliminating the six-tier system, by changing the salary setting
authority from the President to the Office of Personnel Management, and by taking
them out of the locality pay system and capping their rates at Level II of the
Executive Schedule, were enacted under the National Defense Authorization Act for

⁹⁷ FY2004 Budget, Analytical Perspectives, p. 287.

2004.⁹⁸ For January 2004 the minimum rates of pay is $103,700 and the maximum
for most is $145,600. Those in agencies with performance appraisal systems
certified by OPM, will be able to receive a maximum of $158,100, a salary equal to
that of Members of Congress and U.S. District Court judges.⁹⁹
Human Capital Performance Fund. The Administration’s FY2004 pay
proposal would combine a 2% across-the board increase with a performance
component. A $500 million fund would be set aside government-wide to allow
managers to reward top-performing individuals with permanent increases in base
pay.¹⁰⁰ See the section on the Office of Personnel Management above for a more
detailed discussion.
Members of Congress, Judges, and Other Officials. There are no
provisions in either the House-passed or Senate-reported versions which address the
pay of Members of Congress, Judges, or other federal officials. If Congress is
legislatively silent, the annual adjustment goes into effect automatically. A pay
adjustment of 2.2% is scheduled for the officials of the three branches effective
January 2004. However, because the General Schedule basic pay adjustment rate
was 1.5% until passage of the Consolidated Appropriations Act, 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 pay increase 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 ECI
calculations, but for a different 12-month period. The ECI calculations dictate a pay
adjustment in January 2004 of 2.2%. However, the statute limits those adjustments
to the rate of adjustment for base pay of the General Schedule. Therefore, since the
General Schedule base pay was adjusted at the rate of 1.5%, pending final action on
the Consolidated Appropriations bill, 1.5% was the temporary maximum rate of
adjustment in salaries of federal officials. Because the mechanism described above
is automatic, no bill language is necessary to establish the pay adjustment.¹⁰²

⁹⁸ P.L. 108-136, Sec. 1125; Nov. 24, 2003.
⁹⁹ U.S. National Archives and Records Administration, “Executive Order 13322 —
Adjustments of Certain Rates of Pay,” Federal Register, vol. 69, January 2, 2004
(Washington: GPO, 2004), p. 231. E. O. 13322, dated December 30, 2003 and “Office of
Personnel Management: Senior Executive Service Pay and Performance Awards,” Federal
Register, vol. 69, January 13, 2004 (Washington: GPO, 2004), p. 2048.
¹⁰⁰ FY2004 Budget, Appendix, p. 12 and Analytical Perspectives, p. 287.
¹⁰¹ Consideration and debate on H.R. 2989, Congressional Record, vol. 149, 108^th Cong., 1^st
sess., daily edition, Oct. 23, 2003 (Washington: GPO, 2003), pp. S13087-S13089.
¹⁰² See also, CRS Report RL30014, Salaries of Members of Congress: Current Procedures
and Recent Adjustments and CRS Report 97-1011, Salaries of Members of Congress:
Payable Rates and Effective Dates, 1789-2001, both by Paul E. Dwyer. Also see, CRS
Report RS20388, Salary Linkage: Members of Congress and Other Federal Officials; CRS
(continued...)

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. At
no time, since the authorization was required, have the judges received lower
adjustments than the other officials.
President. Pursuant to the Treasury and General Government Appropriations
Act, 2000 (P.L. 106-58), effective noon, 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 on presidential pay is expected. Former Presidents
receive a pension equal to the rate of pay for Cabinet Secretaries (currently $171,900)
and the pension is adjusted automatically 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 on the job. Under current law (5 U.S.C. Sect.
8147), the direct costs of these benefits are reimbursed via transfers from the budgets
of each Federal agency to the Labor Department, which administers the program and
disburses the benefits. The costs of administration are covered by appropriation
directly to the Labor Department.
The Administration again proposed various changes in FECA that it broached
in the 107^th Congress. The aspect that would affect agency budgets government-wide
is to charge administrative costs in the same manner as benefit costs, i.e. through the
appropriation of each employing agency. The stated intention is to make each agency
explicitly bear the full cost of their employees’ claims, thus “bolstering their
incentive to improve workplace safety.” The administrative surcharge would be
around 3.5% of benefit costs (calculated from the Administration budget for
FY2004, which contemplates $88 million in administrative costs to service $2,532
million in program benefits). Most of the surcharge would be paid by the two
agencies that account for more than 60% of FECA claims: the U.S. Postal Service
and the Defense Department. (However, the Postal Service already pays its share
pursuant to 5 U.S.C. 8147(c).) No similar language is found in either the House,
Senate, or conference bill.
Competitive Sourcing of Federal Activities¹⁰⁴
In its “Statement of Administration Policy,” on H.R. 2989, the Administration
reiterated its support for competitive sourcing, objected to an amendment that was
thought would hinder competitive sourcing, and stated that the President’s senior

¹⁰² (...continued)
Report RS20278, Judicial Salaries: Current Situation; and CRS Report 98-53, Salaries of
Federal Officials, by Sharon S. Gressle.
¹⁰³ See CRS Report RS20114, Salary of the President Compared with That of Other Federal
Officials, by Sharon S. Gressle.
¹⁰⁴ Prepared by L. Elaine Halchin, Analyst in American National Government, Government
and Finance Division.

advisers would recommend that the President veto the bill if it contained a
prohibition on funding for public-private competitions.¹⁰⁵ After H.R. 2989 had been
inserted into H.R. 2673, the Consolidated Appropriations Act, 2004 (Division F), and
the conference report had been prepared, but not yet filed, the Office of Management
and Budget (OMB) apparently was successful in having some of the competitive
sourcing provisions altered or removed.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 designed
to promote competitive sourcing, including revising OMB Circular A-76 (May 29,
2003) and requiring agencies to submit inventories of their inherently governmental
activities. Circular A-76 provides policy and guidance for public-private
competitions.
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. Section 647(a),
which applies only to departments and agencies funded by the Departments of
Transportation and Treasury, and Independent Agencies Appropriations bill of 2004,
would place two conditions on competitions that involve more than 10 federal
employees. First, an agency would be required to develop a plan for a most efficient
organization (MEO),¹⁰⁷ which already is required by Circular A-76 for standard
competitions, but is not required for streamlined competitions.¹⁰⁸ While this
requirement might facilitate the preparation of an in-house (government) cost
estimate that is competitive, the time necessary to complete an MEO might make it

¹⁰⁵ Executive Office of the President, Office of Management and Budget, “Statement of
Administration Policy, H.R. 2989 – Departments of Transportation and Treasury and
Independent Agencies Appropriations Bill, FY2004,” Sept. 4, 2003, available at
[http://www.whitehouse.gov/omb/legislative/sap/108-1/hr2989 sap-h.pdf], visited Dec. 15,

2003.

¹⁰⁶ Christopher Lee, “Outsourcing Shield Weakened,” Washington Post, Nov. 26, 2003, P.
A23; Amelia Gruber, “White House Wins Deal to Undo Job Competition Revisions,”
Government Executive, Daily Briefing, Nov. 25, 2003, available at
[http://www.govexec.com], visited Dec. 15, 2003.
¹⁰⁷ “The MEO is an agency’s staffing plan .... The MEO is not usually a representation of
the incumbent organization, but is the product of management analyses that include, but are
not limited to, activity based costing, business case analysis, consolidation, functionality
assessment, industrial engineering, market research, productivity assessment, reengineering,
reinvention, utilization studies, and value engineering.” (U.S. Office of Management and
Budget, Circular No. A-76 (Revised), May 29, 2003, p. B-10.) Circular A-76 is available
at [http://www.whitehouse.gov/omb/circulars/a076/a76/incl_tech_correction.pdf], visited
Dec. 15, 2003.
¹⁰⁸ An agency must conduct a standard competition if the activity is performed by more than
65 full-time equivalents (FTEs). An agency may conduct a standard competition or a
streamlined competition if the activity is performed by 65 or fewer FTEs. (Ibid., p. B-1.)
A full-time equivalent is the “staffing of Federal civilian employee positions, expressed in
terms of annual productive work hours (1,776) rather than annual available hours that
includes non-productive hours (2,080 hours).” (Ibid., p. D-5.)

difficult for an agency to meet the circular’s 90-day deadline (or 135 days if an
extension 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, the
differential is not used in streamlined competitions. (The conversion differential is
the 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’s
concerning the application of the conversion differential to streamlined competitions
– apparently would take precedence. Section 647(a) would direct the competitive
sourcing official (CSO) to consider how the conversion differential would affect the
contractor’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 costly
to 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 CSO
should compare the cost of contractor performance to determine if it is less costly to
the agency. Additionally, it remains to be seen whether, or how, a performance
decision, which involves completing the streamlined competition form, could take
into account the conversion differential.¹¹² Could a CSO’s consideration override a
performance decision?
It seems that both the circular and Section 647(a) would apply to standard
competitions. However, unlike the circumstances surrounding streamlined
competitions, the more stringent requirement for standard competitions is found in
the circular. Therefore, agencies would continue to add the conversion differential
to 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 to
Congress on their competitive sourcing activities. The first report would be due

¹⁰⁹ U.S. Office of Management and Budget, Circular No. A-76 (Revised), May 29 2003, p.
B-5. A competitive MEO (or agency tender) is one that has a reasonable chance of being
selected to perform the work.
¹¹⁰ Ibid., p. B-16. The rationale for the differential, as presented in Circular A-76, is that
it “precludes conversions based on marginal estimated savings, and captures non-
quantifiable costs related to a conversion, such as disruption and decreased productivity.”
(Ibid., p. B-16.)
¹¹¹ An agency’s competitive sourcing official (CSO) is “an assistant secretary or equivalent
level official with responsibility for implementing” Circular A-76. (U.S. Office of
Management and Budget, Circular No. A-76 (Revised), p. 1.)
¹¹² The performance decision is the “outcome of a streamlined or standard decision based
on SLCF [streamlined competition form] or SCF [standard competition form]
certifications.” (Ibid., p. D-7.) The performance decision determines who – a government
agency or a private contractor – will do the work.
¹¹³ The rationale for the conversion differential is that it “precludes conversions based on
marginal estimated savings, and captures non-quantifiable costs related to a conversion, such
as disruption and decreased productivity.” (Ibid., p. B-16.)

within 120 days after enactment; the deadline for subsequent reports would be
December 31 of each year. The reports would include the number of completed
competitions and the number of announced, but not yet completed, competitions (and
FTEs associated with each category); the cost of conducting competitions (including
costs for contractors and consultants); estimated and actual savings; the projected
number of FTEs scheduled to be competed in the next fiscal year; and a description
of the agency’s competitive sourcing decision-making process. A reporting
requirement could aid congressional oversight of agency competitive sourcing
activities while facilitating the collection of useful information. Agency reports
could be used to inform OMB policy and guidance, and agency decisions. However,
the absence of an established methodology for identifying, defining, and collecting
the required information might detract from its usefulness. Furthermore, fulfilling
this 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 to
recompetition,¹¹⁵ but, as a result of the flexibility allowed by this provision,
recompetitions might occur less frequently than would be the case otherwise. This
modification could result in different treatment for government agencies and private
sector sources. Per Circular A-76, contractors who win public-private competitions
are subject to recompetition under the provisions of the Federal Acquisition
Regulation (FAR).¹¹⁶ On the other hand, allowing agencies to write letters of
obligation with performance periods longer than five years could mitigate against any
potential recruitment or retention problems among federal government employees,
and prospective employees, who are concerned about the possibility of relatively
frequent 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 their
agencies, for monitoring the performance of an activity that had been subjected to
a public-private competition. Depending upon what form monitoring might take, this
provision could support oversight efforts and enhance agency decision-making by
funding the collection, recording, and analysis of information about agency
competitions. 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 previously
performed by federal government employees within the United States. This
provision possibly could affect the ability of some contractors to prepare competitive
bids or proposals if, for example, labor costs in a given industry or sector are cheaper

¹¹⁴ A letter of obligation is a “formal agreement that an agency implements when a standard
or streamlined competition results in agency performance (e.g., MEO).” (Ibid., p. D-6.)
¹¹⁵ U.S. Office of Management and Budget, Circular No. A-76 (Revised), p. B-19.
¹¹⁶ The Federal Acquisition Regulation includes regulations concerning government
procurement. The FAR is Parts 1 through 53 of Title 48 of the Code of Federal
Regulations.

in other countries than in the United States. On the other hand, implementation of
this provision could help to retain jobs for residents of the United States, while some
employers might benefit from keeping their workforce in relatively close proximity
to their facilities in the United States.
Cuba Sanctions¹¹⁷
Both House- and Senate-approved versions of the FY2004
Transportation-Treasury appropriations bill, H.R. 2989, had nearly identical
provisions that would have prevented funds from being used to administer or enforce
restrictions on travel or travel-related transactions. But the provisions were dropped
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), which incorporated seven
regular appropriations acts, including Transportation-Treasury appropriations. The
conference also dropped two Cuba provisions from the House version of H.R. 2989
on remittances and on people-to-people educational exchanges. The White House
had threatened to veto any legislation that weakened economic sanctions against
Cuba. The Administration's Statement of Administration Policy on H.R. 2989 stated
that if the final version of the bill contained provisions weakening current sanctions
against Cuba, the President's senior advisors would 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 comprehensive
economic sanctions, including a trade embargo and prohibitions on U.S. financial
transactions with Cuba, including travel. The comprehensive sanctions were made
stronger by congressional initiative with the 1992 passage of the Cuban Democracy
Act (P.L. 102-484, Title XVII) and the 1996 enactment of the Cuban Liberty and
Democratic Solidarity Act (P.L. 104-114), often referred to as the Helms/Burton
legislation. Sanctions on financial transactions with Cuba, including those related to
travel, are set forth in the Cuban Assets Control Regulations (CACR), administered
by 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 108^th Congress that would lift or ease restrictions on
Cuba sanctions. While there appears to be broad congressional agreement on the
overall objective of U.S. policy toward Cuba—to help bring democracy and respect
for human rights to the island— there are several schools of thought on how to
achieve that objective. Some advocate maximum pressure on the Cuban government
until reforms are enacted, others argue for lifting some U.S. sanctions that they
believe are hurting the Cuban people, and still others call for a swift normalization
of 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
prevented funds from being used to administer or enforce restrictions on travel

¹¹⁷ Prepared by Mark P. Sullivan, Specialist in Latin American Affairs, Foreign Affairs,
Defense, and Trade Division.

(section 745) and remittances (section 746), and from being used to eliminate the
travel category of 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 became section 745
of the House bill. Restrictions on travel have been a key and often contentious
component in U.S. efforts to isolate Cuba. The embargo regulations generally have
not banned travel, but restrictions on any financial transactions have resulted in a de
facto travel ban. Certain categories of travelers may travel to Cuba under a general
license, which means that there is no need to obtain special permission from OFAC.
These include U.S. government officials, journalists, persons with close relatives in
Cuba (once every 12 months), full-time professionals for research or for professional
meetings, and amateur or semi-professional athletes participating in international
competitions. In addition, a wide variety of travelers engaging 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 with
communist or authoritarian governments, and that such travel by Americans can help
carry the idea of freedom to Cuba and expose Cubans to alternative information.
Opponents of the amendment argued that not enforcing the travel restrictions would
provide the Cuban government with millions of dollars in tourist receipts at the same
time when it is brutally cracking down on democracy activists, and that such travel
would 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; its language became
section 746 of the House bill. In March 2003, OFAC had announced that the Cuba
travel regulations were being amended to allow travelers to Cuba to carry up to
$3,000 in remittances, although the limit of $300 per quarter destined for a Cuban
household remains. Supporters of the Delahunt amendment argued that there should
be no limit on the amount of financial support that Cuban Americans can send their
families in Cuba, while opponents argued that lifting the cap on remittances would
mean that more money would go to the Cuban regime through 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-people
educational exchanges; its language became section 749 of the House bill. In March
2003, OFAC announced that the Cuba travel regulations were being tightened for
certain types of educational travel. People-to-people educational exchanges unrelated
to academic coursework would no longer be allowed under the regulations. Some
groups lauded the restriction of these educational exchanges because they believed
they had become an opportunity for unrestricted travel; others criticized the
Administration’s decision to restrict a category of travel to Cuba in which ordinary
people 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 Senate approved by voice vote S.Amdt. 1900 (Dorgan) that would

have prevented funds from being used to administer or enforce restrictions on Cuba
travel or 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.
The Senate provision was nearly identical to the Flake amendment in the House
version of the bill described above; the only difference was that the Dorgan
amendment, as amended by S.Amdt. 1901 (Craig), stated that the provision would
take effect 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 were approved
with less support than similar amendments in 2002. While the Flake amendment to
H.R. 2989 described above was approved by a vote of 227-188, a similar Flake
amendment to the FY2003 Treasury Department appropriations bill had been
approved by a vote of 262-167.
For further information, see CRS Report RL31740, Cuba: Issues for the 108^th
Congress; and CRS Report RL31139, Cuba: U.S. Restrictions on Travel and
Legislative 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 21^st 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 is
also considered part of the discretionary budget. Funding for the DOT budget is
derived from a number of sources. The majority of funding comes from dedicated
transportation trust funds. The remainder of DOT funding is from federal Treasury
general funds. The transportation trust funds include: the highway trust fund, which
contains two accounts, the highway trust account and the transit account; the airport
and airway trust fund; and the inland waterways trust fund. All of these accounts
derive 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 largest
component of DOT appropriations. Most highway and transit programs are funded
with contract authority derived by the link to the highway trust fund. This is very
significant from a budgeting standpoint. 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, specified in Title 23 U.S.C., authorized funds are
automatically made available at the beginning of each fiscal year and may be
obligated without appropriations legislation; although appropriations are required to
make 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 opposite
situation. That is, the authority to spend for the largest programs under their control
already exists, and the mechanism to obligate funds for these programs also is in
place.
Transportation Equity Act for the 21^st Century (TEA-21)
During the 105^th and 106^th Congresses, major legislation changed the
relationships between the largest transportation trust funds and the federal budget.^st
The Transportation Equity Act for the 21 Century (TEA-21) (P.L. 105-178) linked
annual spending for highway programs directly to revenue collections for the
highway trust fund. In addition, core highway and mass transit program funding was
given special status in the discretionary portion of the federal budget by virtue of the
creation of two new budget categories. The Act thereby created a virtual “firewall”
around highway and transit spending programs. The funding guarantees were set up
in a way that makes it difficult for funding levels to be altered as part of the annual
budget/appropriations process. Additional highway funds can be provided annually
by a mechanism called “Revenue Aligned Budget Authority” (RABA); RABA funds
accrue 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 during
the appropriations process, would have led to a significant and unexpected drop in
the 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 an
annual level of obligations. These were established by TEA-21 and are adjusted by
an annual RABA computation. In addition, it appears that TEA-21 precludes, at
least in part, the House and Senate appropriations committees from exercising what
some Members view as their once traditional option of changing spending levels for
specific core programs or projects. In the FY2000 appropriations act, the
appropriators took some tentative steps to regain some of their discretion over
highway spending. The FY2000 Act called for the redistribution of some funds
among programs and added two significant spending projects. In the FY2001
appropriations act, the appropriators continued in this vein by adding funds for large
numbers of earmarked projects. Further, the FY2001 Act called for redirection of a
limited amount of funding between programs and includes significant additional
funding for some TEA-21 programs. This trend continued, and even accelerated, in
the FY2002 Act as appropriators made major redistributions of RABA funds and, in
some instances, transferred RABA funds to agencies that are not eligible for RABA
funding under TEA-21.
Wendell H. Ford Aviation Investment and Reform Act for the

21^st Century (FAIR21 or AIR21)

The Wendell H. Ford Aviation Investment and Reform Act for the 21^st Century
(FAIR21 or AIR21)(P.L. 106-181) provides a so-called “guarantee” for Federal
Aviation Administration (FAA) program spending. The guarantee for aviation
spending, however, is significantly different from that provided by TEA-21. Instead
of creating new budget categories, the FAIR21 guarantee rests on adoption of two
point-of-order rules for the House and the Senate. Supporters of FAIR21 believe the
new law requires significant new spending on aviation programs; and, for at least the
FY2001 and FY2002 appropriations cycles, spending grew significantly. Most
observers view the FAIR21 guarantees, however, as being somewhat weaker than
those provided by TEA-21. Congress can, and sometimes does, waive points-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 Railroad
Administration (including Amtrak), and a number of smaller DOT agencies. All of
these agencies are concerned about their funding prospects in any year where it is
believed that there is a constrained budgetary environment.

Appendix 2: Transportation Budget Terminology
Transportation budgeting uses a confusing lexicon (for those unfamiliar with the
process) of budget authority and contract authority — the latter, a form of budget
authority. Contract authority provides obligational authority for the funding of trust
fund-financed programs, such as the federal-aid highway program. Prior to TEA-21,
changes in spending in the annual transportation budget component had been
achieved in the appropriations process by combining changes in budget/contract
authority and placing limitations on obligations. The principal function of the
limitation on obligations is to control outlays in a manner that corresponds to
congressional 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, specified
in Title 23 U.S.C., which TEA-21 amended, authorized funds are automatically made
available to the states at the beginning of each fiscal year and may be obligated
without appropriations legislation. Appropriations are required to make outlays at
some future date to cover these obligations. TEA-21 greatly limited the role of the
appropriations process in core highway and transit programs because the Act
enumerated the limitation on obligations level for the period FY1999 through
FY2003 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 is
completed and vouchers are presented, months or even years after the project has
begun. Work in progress is represented in the trust fund as obligated funds and
although they are considered “used” and remain as commitments against the trust
fund balances, they are not subtracted from balances. Trust fund balances,
therefore, appear high in part because funds sufficient to cover actual and expected
future 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 year
as projects are completed and, to a much greater extent, outstanding obligations to
be made at some unspecified future date. Additionally, there are unobligated
amounts that are still dedicated to highway and transit projects, but have not been
committed 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 funds
distributed to the states for formula driven programs. For example, all national
highway system (NHS) funds are apportioned to the states. Allocated funds, are
funds distributed on an administrative basis, typically to programs under direct
federal 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 to
some other governmental entity. These terms do not refer to the federal budget
process, but often provide a frame of reference for highway program recipients, who
may assume, albeit incorrectly, that a state apportionment is part of the federal budget
per se