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Thursday, January 24, 2013

Issues in the Reauthorization of Amtrak



David Randall Peterman
Analyst in Transportation Policy

John Frittelli
Specialist in Transportation Policy


Amtrak is the nation’s primary provider of intercity passenger rail service. It was created by Congress in 1970 to preserve some level of intercity passenger rail service while enabling private rail companies to exit the money-losing passenger rail business. It is a quasi-governmental entity, a corporation whose stock is almost entirely owned by the federal government. It runs a deficit each year. Congressional appropriations cover about half its total loss, and represent essentially all of its funding for capital maintenance and improvements.

Amtrak can be divided into three parts. There is its Northeast Corridor (NEC) service between Washington, DC, and Boston, where Amtrak owns much of the infrastructure and operates frequent service using its fastest trains. There is its long-distance service, in which infrequent trains crisscross the country over tracks owned by freight rail companies. And there is its statesupported service, in which Amtrak operates shorter-distance trains under contract with states. Amtrak was last authorized in 2008, in the Passenger Rail Investment and Improvement Act. That authorization expires at the end of FY2013.

Since Amtrak’s inception, Congress has been divided on the question of whether it should even exist. Amtrak is regularly criticized for failing to cover its costs, and thus requiring federal assistance. The need for federal financial support is often cited as evidence that passenger rail service is not financially viable, or that Amtrak should yield to private companies that would find ways to provide rail service profitably. Yet it is not clear that a private company could perform the same range of activities better than Amtrak does. Indeed, Amtrak was created because privatesector railroad companies in the United States lost money for decades operating intercity passenger rail service and wished to be relieved of the obligation to do so.

By some measures, Amtrak is performing as well as or better than it ever has in its 42-year history. For example, it is carrying a record number of passengers, and its passenger load factor and its operating ratio are at the upper end of their historic ranges. On the other hand, Amtrak’s plans do not envision significant decreases in its need for federal funding. Among the perennial questions that Congress may examine in considering reauthorizing Amtrak are whether Amtrak should continue to exist, what range of services it should offer, the appropriate level of federal financial support for Amtrak, its relations with states and with private rail companies, and its level of accountability to Congress. 
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Date of Report: January 7, 2013
Number of Pages: 33
Order Number: R42889
Price: $29.95

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Wednesday, January 23, 2013

Funding and Financing Highways and Public Transportation



Robert S. Kirk
Specialist in Transportation Policy

William J. Mallett
Specialist in Transportation Policy


Federal surface transportation programs are currently funded primarily through taxes on motor fuels that are deposited in the highway trust fund. Although there has been some modification to the tax system, the tax rates, which are fixed in terms of cents per gallon, have not been increased at the federal level since 1993. Prior to the recession that began in 2007, annual increases in driving, with a concomitant increase in fuel use, were sufficient to keep revenues rising steadily. This is no longer the case. Future increases in fuel economy standards are expected to suppress motor fuel consumption in the years ahead even if annual increases in vehicle mileage resume.

Congress has yet to address the surface transportation program’s fundamental revenue issues, and has not given serious consideration to raising fuel taxes in recent years. Instead, Congress has financed the federal surface transportation program by supplementing fuel tax revenues with transfers from the U.S. Treasury general fund. The most recent reauthorization act, the Moving Ahead for Progress in the 21
st Century Act (MAP-21; P.L. 112-141), signed by President Barack Obama on July 6, 2012, authorized spending on federal highway and public transportation programs through September 30, 2014 and provided for general fund transfers to finance the programs. MAP-21 did not address concerns about funding of surface transportation programs over the longer term.

This report begins with a discussion of the problems associated with the trust fund financing system (which supports both federal highway and public transportation programs) and then explores possible options for financing surface transportation infrastructure. Among the key points:


  • Raising motor fuel taxes could provide the highway trust fund with sufficient revenue to fully fund the program in the near term, but it may not be a viable long-term solution due to expected future declines in fuel consumption. 
  • Replacing current motor fuel taxes with a fuel sales tax or a fee based on vehicle miles traveled (VMT) raise a variety of financial and administrative concerns. 
  • The political difficulty of adequately financing the highway trust fund could lead Congress to consider the desirability of changes to maintain the trust fund system or eliminating it altogether. Such changes might involve a reallocation of responsibilities and obligations among federal, state, and local governments. 
  • Interest in improving transportation infrastructure with private and nontraditional funding sources, such as tolls, public-private partnerships (PPPs), and federal loan programs is increasing, but many projects may not be well suited to alternative financing.


Date of Report: December 26, 2012
Number of Pages: 30
Order Number: R42877
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Offshoring of Airline Maintenance: Implications for Domestic Jobs and Aviation Safety



Rachel Tang
Analyst in Transportation and Industry

Bart Elias
Specialist in Aviation Policy


Airlines outsource maintenance to countries like China and El Salvador to achieve cost savings from the comparatively lower wages and from lower costs to build and maintain repair facilities. In some cases, particularly in China, government investment and other incentives, along with backing from national airlines, have spurred rapid expansion of the foreign aircraft maintenance industry over the past decade. While airline maintenance work outsourced to foreign repair facilities has increased considerably over the past decade, there are no conclusive data indicating that this has directly resulted in the loss of U.S. jobs. Despite increased maintenance outsourcing, the United States continues to maintain a positive trade balance for airline maintenance work, a trend that likely reflects the United States’ advanced capabilities on high-value engine and aircraft component work.

While investigative reports and labor union sponsored studies of airline outsourcing practices have been critical of foreign repair facilities, more detailed statistical analysis does not support conclusions that maintenance outsourcing or offshoring has had measurable negative impact on safety, quality control, or reliability. Although some experts believe that safety is being compromised and the regulation and oversight of foreign repair stations needs to be improved, analyses of recent trends do not provide obvious evidence that maintenance outsourcing has adversely affected airline safety.

Specific concerns have been raised regarding the Federal Aviation Administration’s (FAA’s) limited resources to oversee foreign repair stations, and FAA’s extensive reliance on foreign regulators and the airlines to monitor these facilities. Additional concerns have been raised over worker training and qualifications at foreign facilities, the relatively low numbers of workers at these facilities with FAA certification, and the lack of English language skills necessary to read and comprehend maintenance manuals and instructions.

Congress also has been concerned about the adequacy of drug and alcohol testing programs at foreign repair stations that work on U.S. aircraft. In the FAA Modernization and Reform Act of 2012 (P.L. 112-95), it mandated drug and alcohol testing at those locations in a manner consistent with existing bilateral aviation safety agreements and the laws of countries where the repair stations are located. Additionally, the act directed FAA to ensure that foreign repair stations are subject to appropriate inspections consistent with existing U.S. requirements and bilateral air safety agreements; inspect foreign repair stations annually; and carry out independent inspections when warranted by safety concerns.

The United States has continued to maintain a positive trade balance with respect to airline maintenance work. However, future foreign investment in advanced training and technical capabilities related to high-value engine and component repair and overhaul could lead to more direct foreign competition in these areas. While available data do not indicate that offshoring of maintenance work has negatively impacted safety, specific areas for potential improvement include the allocation of FAA inspectors and resources focused on the oversight of foreign repair stations; FAA certification and qualification standards for individuals assigned to supervisory roles at foreign repair stations; and standards or guidelines for English language proficiency and comprehension of written technical materials among foreign repair station mechanics.



Date of Report: December 21, 2012
Number of Pages: 30
Order Number: R42876
Price: $29.95

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Thursday, January 17, 2013

Surface Transportation: A Compendium



This Compendium consists of on various aspects of surface transportation, from highway and bridge programs to public transit programs and inter-modal transportation.

The documents within this Compendium that discuss highway and bridge programs consist of issues of tolling on interstate highways; legislative history of federal aid to roads and highways; repairing and reconstructing disaster damaged roads and bridges; a background and issues for congress on the role of the environmental review process in federally funded highway projects; an overview of the federal-aid highway pro-gram.

Documents that discuss the public transit program and intermodal topics range from the funding issues in surface transportation reauthorization; moving ahead for progress in the 21st Century Act (P.L. 112-114); North American Free Trade Agreement; implementation of the future of commercial trucking across the Mexican border; railroad access and competition issues within railroad companies; passenger train access to freight railroad tracks; issues and recent events on the development of high speed rail in the United States; overview and policy issues of positive train control; and the federal freight policy.

Date of Report: January 17, 2013
Number of Pages: 344
Order Number: C12019
Price: $79.95

 

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Thursday, January 10, 2013

Federal Freight Policy: An Overview



John Frittelli
Specialist in Transportation Policy

The U.S. freight system is a complex network including four principal modes of transportation:

  • The National Truck Network comprises 209,000 miles of highways that can accommodate large trucks, including the 47,000-mile Interstate Highway System. • Railroads, largely in private ownership, carry freight on 140,000 miles of track. 
  • Barge and ship lines utilize 12,000 miles of shallow-draft inland waterways and about 3,500 inland and coastal port terminal facilities. 
  • Air carriers provide cargo service to more than 5,000 public use airports, including more than 100 airports that handle all-cargo aircraft. 

About two-fifths of freight within the United States, measured in ton-miles, moves by truck, and another two-fifths moves by rail (Figure 1). About 11% moves by multiple modes. Measured in ton-miles, air transportation is a minor mode because it is expensive to ship goods this way. Goods moving by air tend to be of high value compared to their weight. About three-quarters of U.S. imports and exports, measured by weight, arrive or depart by ship. Most of the rest goes by truck (10%), rail (8%), or pipeline (5%). International air shipments account for less than 1% of U.S. foreign trade by weight, but 37% by value.1


Date of Report: December 27, 2012
Number of Pages: 9
Order Number: R42764
Price: $19.95


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