Surface Transportation: Reorganization, Program Restructuring, and Budget Issues

GAO discussed various issues affecting the Department of Transportation's (DOT) surface transportation programs. GAO noted that: (1) although DOT plans to consolidate its surface transportation departments, administrative support functions, and field office structure, details of its impending reorganization and specific budgetary savings have not been defined; (2) although restructuring the DOT grant program could decrease states' budget authority by $2.5 billion, increase flexibility, and simplify the grant application and approval process, the effects of these changes will not be known until the new grant delivery process is established; (3) federal highway demonstration project spending is not subject to obligation limitations and often exceeds authorized funding levels; (4) the impact of the proposed 30-percent reduction in federal mass transit assistance could vary; (5) the funding mechanism for new transit investments has caused DOT to not meet its funding commitments on certain projects and increased total project costs; (6) Amtrak's financial condition has declined since 1990 and its ability to provide nationwide service is threatened; (7) by 2001, Amtrak's losses are expected to exceed federal and state subsidies by $1.3 billion and its capital requirements for equipment and facility improvements are expected to be over $4 billion; and (8) it is unlikely that Amtrak can solve its financing, capital, and service quality problems without significant increases in passenger revenues or funding.