December 20, 1979
Page 37379
Mr. MUSKIE. Mr. President, the Senate is now considering H.R. 3951, the National Capital Transportation Amendments of 1979. The bill authorizes Federal assistance to the Washington Metropolitan Area Transit Authority (WMATA) for capital grants to complete the Washington area rail system. It also authorizes Federal assistance toward the orderly retirement of about $1 billion in WMATA debt, now guaranteed by the Federal Government.
The potential budgetary impacts of the bill are as follows: First, a lump sum authorization of $1.7 billion beginning in fiscal year 1982 for an 80 percent share of construction costs; second, a two-thirds Federal contribution to pay interest and principal on the $1 billion in guaranteed WMATA debt. This amounts to about $52 million per year between fiscal year 1981 and fiscal year 2012. The debt service authorization is estimated to total about $2.4 billion between fiscal year 1981 and fiscal year 2014 when all the outstanding debt should be retired.
Mr. President, I will support this bill because it continues a Federal commitment to assist the Washington area in constructing a model mass transit system for the use of residents and visitors to the Nation's Capital. I congratulate the Governmental Affairs Committee on a responsible piece of legislation that makes several improvements over the House-passed bill and urge them to stand by this Senate version of the bill.
This is a big bill budgetarily, with authorizations totaling about $4.1 billion stretched out over a very long time frame, out to the fiscal year 2014. Mr. President, a lot can happen over that period and I do not plan to be here in the Senate for all of it, so I want to make a few comments now while I have the chance.
First, this bill is an authorization for appropriations for many future years. We cannot predict at this time what Federal budget policy will be appropriate in each of those years. This bill, by making a lump-sum authorization for further construction grants, provides some needed flexibility with regard to the annual funding levels that may be appropriated. This is a good policy because the annual funding requests will have to be considered in the context of the overall Federal budget.
Second, the bill provides for an orderly method to retire WMATA bonds that were issued with a Federal guarantee. This provision represents an improvement over the current situation, where each year a Federal contribution to debt service has been provided on an ad hoc basis due to a continuing shortage of funds at WMATA. The bill requires the local jurisdictions to establish a "stable and reliable source of revenue" with which to pay their share of the debt service.
I must point out, however, that this debt service authorization reflects a continuing problem which I have found it necessary to address before the Senate on several occasions. That problem is the expanding use of Federal loan guarantees. They may appear to be a low cost method of providing Federal assistance, but here is a case where we are being asked to liquidate our obligation because the recipient cannot generate the funds to do so. However reasonable it may have seemed at the time, what was then authorized as a loan guarantee is now being largely converted to a Federal grant. These costs represent a claim on the budget until fiscal year 2014.
Third, on a related point, the bill requires that the "stable and reliable source of revenue" also be sufficient to meet the operating deficits which may be incurred by WMATA. This is potentially a very important aspect of the bill before us. It will help to insure that WMATA and its participating jurisdictions will evaluate further construction carefully and operate the system efficiently because they must bear a major responsibility for future operating deficits. I commend the floor managers for bringing us a bill that does not include special operating subsidies for WMATA, an unwise provision that is in the House-passed bill. The projected deficits could be very large if unneeded lines are built or if operations are not efficient. Therefore, it would be unwise to open the door for continuing special operating subsidies for WMATA, over and above the regular UMTA formula grants now provided by the section 5 program.
Therefore, I urge the Secretary of Transportation to exercise carefully his authority under this legislation to review and approve the local financing program which details the "stable and reliable source of revenue" for each governmental entity scheduled to make contributions to WMATA. Enforcement of this provision will be crucial to the success of this legislation.
Mr. President, I will support this bill.