McCain hits Transportation on funding decisions

Senate Commerce Committee Chairman John McCain, R-Ariz., Tuesday called on the Transportation Department to stop spending its discretionary funds on projects not deemed high priorities by its own review process.

McCain's angry comments at a committee hearing came with the release of a report by the Transportation Department's inspector general.

The report found 59 percent of highway money left to the discretion of the department in FY97 was used for projects not considered by the Federal Highway Administration staff to be of "high priority."

The report also found that the FAA allowed regional directors to direct 15 percent of discretionary funds to "lower priority projects within their region that were not the next highest national priority."

Although FAA officials documented the reasons for funding those projects, the selection of lower priority projects "is contrary to [the] FAA's established policy to fund the highest priority national projects," the inspector general's report found.

But the FAA is doing better than the Federal Transit Administration, which, the report found, does not have a process for analyzing and prioritizing mass transit and bus projects.

The inspector general for the Commerce Department also reported some grants and contracts are made with little competition.

Transportation Department officials testifying at the hearing acknowledged the problems brought up by the inspector general's report, and said they will work to improve the situation. The FTA plans to issue priority guidelines next year.

"Often I've asked colleagues to refrain from earmarking money in appropriations bills to fund a particular project or institution, and allow it to compete so that merit and need might prevail," McCain said.

"But that argument remains valid only so far as the administration adheres to appropriate policies and procedures to ensure that funding is allocated based on established priorities and merit-based selection criteria," McCain added.

McCain unsuccessfully fought against the more than 1,000 earmarked projects contained in the recently passed highway and transit reauthorization.

But even with those earmarks, the Transportation Department will still have $16.7 billion in discretionary funds to dole out over the next six years.

McCain called on Transportation Department officials to make sure they document the reasons any of that money is used for projects not considered a high priority. The department has not been documenting why it has funded low-priority projects.

Deputy Federal Transit Administrator Nuria Fernandez told the committee that the FTA considers projects listed in a bill's report language to be the same priority as those contained in the actual statute passed by Congress, which visibly angered McCain.

"You are not required to fund projects in report language," he said. "One is a matter of law, the other is a matter of a report. It's just outrageous."