Statement of Administration Policy: H.R. 2 - Surface Transportation and Uniform Relocation Assistance Act

(House Rules)
(Howard (D) New Jersey)

The administration opposes H.R. 2 and, if it is presented to him in its current form, the President's senior advisers will recommend that the President veto the bill.

The administration urges adoption of the legislative proposal to reauthorize highway safety and highway construction programs that was transmitted to Congress by the Department of Transportation on January 5, 1986. Otherwise H.R. 2 should be amended to:

— authorize obligations for highway, transit, and highway safety activities of $77.4 billion for fiscal years 1987-1991, instead of $91 billion as contained in H.R. 2 (the adverse budget impact of H.R.2, compared with the Administration's proposal, would total $17.1 billion during 1987-1991: in addition to providing for excess obligations of $13.6 billion, it would not — as the administration has proposed — add $3.5 billion in new revenues to the Highway Trust Fund by repealing the current tax exemptions for gasohol, bus operators, and State and local governments);

— delete the provisions which undermine the purpose of the highway and transit obligation limitations by excluding spending on "demonstration projects" from those limitations;

— delete authorizations for over 100 expensive special interest projects;

— delete authorizations for two Boston projects to be added to the Interstate System which increase the Federal cost to complete the Interstate by $1.8 billion;

— delete the provisions which continue discretionary transit grants and authorize multi-year contracts, as well as effectively exempt these funds from sequestration and annual obligation limitations;

— delete provisions increasing the Federal matching share and waiving non-Federal matching requirements in certain cases;

— delete provisions (1) increasing domestic content requirements, (2) preventing States from using sealed bids and automatically accepting the lowest bidder on architectural and engineering contracts, (3) limiting the use of convict-produced materials, and (4) reauthorizing rather than terminating the compensation requirements of the highway beautification program;

— incorporate administration proposals to increase Federal and State flexibility in the use of highway funds to allocate mass transit account funds by formula and to increase the non-Federal share on transit projects to 50%;

— delete the provision that would permit States or localities to prohibit or restrict the awarding of federally-funded highway and transit construction contracts to businesses conducting business in South Africa; and

— delete definitions and requirements under the Uniform Relocation Act which increase Federal costs, restrict State and local flexibility, and are inconsistent with the principles of Federalism.

The administration is strongly opposed to any amendments to H.R. 2 that would increase spending levels or place the Highway Trust Fund off-budget or remove it from the budget controls contained in Gramm-Rudman-Hollings.

The administration also urges the adoption of amendments to repeal the current tax exemptions enjoyed by gasohol, bus operators, and State and local governments, estimated to generate $3.5 billion between 1987-1991, thereby assuring sufficient Highway Trust Fund revenues to cover the administration's proposed authorizations.