NEPA procedures have served as one of the primary bases for legal proceedings by environmental conservation groups against Federal agencies, such as the Corps of Engineers. For example, legal injunctions have prevented the corps from proceeding with work on several major projects, including the Cross-Florida barge canal project, dredging in San Francisco Bay, and maintenance dredging in inland waterways.

c. Department of Housing and Urban Development

The Department of Housing and Urban Development (HUD) is responsible for administering Federal programs to provide assistance for housing and for developing the Nation's communities and metropolitan areas. These responsibilities involve HUD in activities directly relating to air, highway, transit, and water transportation. Under the provisions of the Housing and Urban Development Act of 1954, HUD administers a program of financial and technical assistance to State and local public agencies for comprehensive community planning. HUD guidelines and standards have had a major influence on the urban planning process and have shaped the goals and objectives of metropolitan development plans throughout the United States. As a result, HUD has played an important part in planning the environment in which urban highway transportation and public mass transportation operate and compete and in which urban airports are located.

Since 1972 HUD has participated jointly with the Federal Aviation Administration, the Federal Highway Administration, and the Urban Mass Transportation Administration in integrating and coordinating Federal involvement in community and transportation planning at the metropolitan level.

Pursuant to the Uniform Relocation Assistance and Real Properties Acquisition Policies Act of 1970, HUD assists persons displaced by federally funded airport, highway, and water projects.

HUD also works jointly with the Department of Transportation in research on urban transportation. Current joint research projects include a study of transit terminal integration with the urban community, and the BART Impact Study to evaluate the impact of the Bay Area Rapid Transit System on the San Francisco area.

B. FEDERAL TRANSPORTATION PROGRAMS: MISSION AND ISSUES

This section presents a brief survey of the numerous and varied transportation issues dealt with by the Federal Government. Our intent in the following discussion is not to specify solutions to the Nation's various transportation problems. Instead, our survey of the issues is intended to illustrate the wide range of complex and interdependent problems which the Federal Government is asked to solve— and the pressing need for consistent Federal goals and a coordinated Federal organizational structure in transportation.

1. RAIL TRANSPORTATION

Since World War II, fundamental changes in the Nation's transportation needs and in transportation technology have caused severe

economic problems for the railroads. Intercity rail passenger service has become a minor element in the passenger transportation system. Despite modernized service and equipment and large Federal subsidies, rail passenger service continues to experience serious operating losses. Determining the future role of rail passenger service in the U.S. transportation system is a fundamental issue in transportation policy. a. Rail freight

The Nation's railroad freight system has also experienced serious economic problems in recent years. Railroad freight transportation remains a vital component of the total freight transportation system, responsible for carrying more than one-third of the 2.5 trillion ton miles of freight generated by the economy. However, the continued financial difficulties of most privately owned railroads-exemplified by the bankruptcy of the Penn Central and other Northeast railroads present a serious threat to the future existence of a private enterprise railroad freight industry in the United States.

One source of the railroads problems, as previously indicated, has been the regulatory policies and practices of the Interstate Commerce Commission. Another source of problems has been the Balkanized corporate structure of the railroad industry, which forces economically strong and efficient railroads to depend on the reluctant cooperation of economically weak and inefficient railroads. This discourages railroads from making needed innovations in service, pricing, marketing and technology, and has a particularly detrimental effect on the efficient handling of long, cross-country shipments that must be interchanged between several railroads-potentially the largest and most profitable market for rail freight.

These and other factors have prevented the railroad industry from efficiently adapting to changes in the market for rail freight transportation and have drastically decreased railroad industry earnings. Inevitably, the railroads have found it extremely difficult to finance needed maintenance and capital improvements. In a vicious cycle, deferred maintenance has led to increased operating costs and deteriorating freight service, which has caused loss of traffic to competing transportation modes, and has decreased revenues and earnings. Over the period 1925-1975, the railroads' share of intercity freight traffic dropped from 80 percent to 37 percent of total cargo ton-miles. This process had had particularly adverse effects on the railroads in the Northeast where changes in the composition and geographic distribution of rail freight shipments have made modernization and rationalization of obsolete or duplicative physical facilities especially important.

Recognizing the national importance of an economically viable railroad industry, the Congress has played a major role in reorganizing the bankrupt Northeast and Midwest railroads. After the Penn Central bankruptcy, the Congress enacted the Emergency Rail Services Act of 1970. This legislation provided $125 million in Federal loan guarantees for continuation of essential transportation services by the bankrupt railroads. In 1973 the Regional Rail Reorganization Act

U.S. Department of Transportation, Study of Federal Aid to Transportation, January 1977, p. II-3.

established the U.S. Railway Association (USRA) to develop plans for a reorganized and economically sound Northeast-Midwest rail freight system, and authorized a new for-profit corporation-the Consolidated Rail Corporation (Con Rail)-to operate the reorganized system."

More recently, the Railroad Revitalization and Regulatory Reform Act of 1976 authorized $6.4 billion in Federal aid for rail transportation, including funds for the startup of ConRail (the restructured Northeast-Midwest freight railroad) and for improving and maintaining of railroad roadbed and facilities. The act also reforms ICC regulatory procedures for setting freight rates, and streamlines Commission hearings.

Future prospects for the rail freight transportation system are uncertain. Railroads play an essential role in freight transportation, particularly in times of a national emergency, and are unlikely to be satisfactorily replaced by their primary competitors-trucks, pipelines, and barges. The present institutional arrangement of competing, privately owned, independent railroad systems is much less permanent. Many observers believe that the long-range economic viability of rail freight transportation may require continued and massive Federal financial assistance and a fundamental nationwide restructuring and economic rationalization of the industry.

b. Rail Passenger Service

The future role of intercity rail passenger service in the U.S. transportation system is not certain. Despite the efforts of the National Railroad Passenger Corporation (Amtrak) to revitalize the rail passenger system, there is increasing public and congressional concern that the present Amtrak route system of 25,000 miles is too large and too costly.

Since the formation of Amtrak by the Rail Passenger Service Act. of 1970, Federal financial support for intercity rail passenger service has totaled over $2 billion in grants and loan guarantees. The Department of Transportation's budget authority for grants to Amtrak in 1978 is $647 million, including $108 million for capital improvements and $489 million to subsidize Amtrak's operating deficit. Currently, the Department estimates that 50 percent of the cost of each Amtrak ride is subsidized by the Federal Government. In addition, the Railroad Rehabilitation and Regulatory Reform Act of 1976 authorizes $1.9 billion to improve rail passenger service-including $1.6 billion to upgrade the Washington-New York-Boston route for high-speed

service.

This route, which accounts for more than 50 percent of Amtrak's passenger traffic, and possibly other medium distance urban corridors such as the San Francisco-Los Angeles route, appear to have substantial market potential for modern high-speed service. Such service can both be profitable and relieve congestion in the Nation's most congested

Report to the Subcommittee on Federal Spending Practices, Efficiency and Open Government. Senate Committee on Government Operations, by the Comptroller General of the United States. Information Available on Estimated Costs to Rehabilitate the Nation's Railroad Track and a Summary of Federal Assistance to the Industry, (CED-77-44) November 21, 1975.

areas. Amtrak's other services, particularly the longer distance routes, seem to have little potential for achieving economic viability.

2. URBAN MASS TRANSIT

Another transportation mode with serious economic problems is urban mass transit. Federal financial assistance for mass transit in the Nation's older urban areas has largely succeeded in halting the rapid decline in transit ridership. However, existing mass transit systems continue to experience large and growing operating deficits, placing a difficult financial burden on already strained municipal finances. New high-speed rail transit systems have proved to be very expensive and to have a limited ability to divert traffic from automobiles to public transit. There is also increasing recognition that fuel prices and Government policies which encourage automobile travel may have to change before mass transit programs can become more effective.

The effectiveness of Federal aid to mass transit is the subject of considerable controversy. On the one hand, Federal aid (together with even larger amounts of State and local government aid) has successfully halted the rapid deterioration of urban public transportation services. Antiquated equipment and facilities have been replaced in many transit systems, and the decline in ridership appears to have ended. On the other hand, most efforts to promote urban mass transportation as an environmentally superior alternative to the automobile have not been successful. Only about 5 percent of all metropolitan area trips are made by public transportation. Modern high-speed rail rapid transit systems, such as San Francisco's BART, have proved to be extremely costly and to be relatively ineffective at reducing automobile use. Also, the billion dollar gap between fare-box revenues and transit operating costs appears to be achieving permanent status as a municipal and Federal budget expense.

The basic causes of the transit industry's economic problems are clear cut. As personal incomes have risen, automobile ownership has become increasingly widespread. The transit industry has retained traditional peak-hour commuter traffic and travelers for whom automobile travel was unavailable-primarily the poor, the young, and the old. But the transit industry has lost shoppers, other off-peak travelers, and workers in the new auto-oriented suburbs.

The transit industry has faced a difficult economic dilemma during the post war era. To retain peak-hour commuter ridership, it was necessary to maintain high-capacity physical facilities and the numerous employees needed to operate them. However, during the offpeak hours, these costly facilities and employees were little used. When fares were raised, the transit industry lost more riders, but when services deteriorated because revenues were inadequate to pay for new equipment and to maintain facilities, transit lost even more. riders. Over the period 1945-1974, total transit ridership declined from 23 billion passengers to 7 billion passengers.

Beginning in 1961 an extensive body of legislation has been enacted to provide Federal financial and technical assistance to urban mass

American Public Transit Association, 1974-75 Transit Fact Book, p. 16.

transportation. These programs initially were intended to aid economically distressed transit systems in the older cities. Recently the programs also have been directed at alleviating the problems of air pollution and energy conservation.

Currently, Federal aid to mass transit is administered by the Department of Transportation's Urban Mass Transportation Administration (UMTA). The Federal aid consists primarily of grants to transit systems to buy equipment and defray operating deficits. In fiscal year 1978 UMTA program costs and obligations (including transfers from the Federal highway program will amount to an estimated $2.365 billion.

3. TRUCKING REGULATION

Federal economic regulation of the commercial trucking industry is currently a major transportation issue. Critics of the motor carrier regulatory system charge that regulation causes economic inefficiency and excessively high freight rates. Defenders of regulation believe that it protects small shippers and communities and preserves the stability of the trucking industry. Recent proposals for changes in motor carrier regulatory practices have become the focus of substantial controversy and debate by the public and the Congress.

The trucking industry was brought under Federal economic regulation during the economic depression of the 1930's. Within the trucking industry, support for regulation came from established trucking firms who believed that ease of entry for new firms and unregulated rate-setting were forcing freight rates down to uneconomic and financially destructive levels. In the railroad industry, there was similar concern that unfair competition from truckers was forcing rail freight rates below economic levels. Among some shippers, there was also concern about instability among carriers and rates. These pressures eventually led to the Motor Carrier Act of 1935, which became part II of the Interstate Commerce Act. ICC is responsible for administering the act.

Today, many economists believe that regulation helps cause inflation, not only because regulation shuts off competition between trucks and railroads but also because it prevents true competition among the 17,000 trucking firms. These critics argue that restrictions on entry of new firms into the trucking industry and on competition through price adjustments have caused widespread economic inefficiency. Some critics estimate that the resulting increased freight rates cost consumers as much as $3 billion a year. As an alternative, they recommend regulatory reform, up to and including total deregulation.

Supporters of regulation, including the American Trucking Association and the Teamsters Union, argue that trucking regulation has served the Nation well by producing a high quality motor freight transportation system. They believe that deregulation would result in decreased truck service to small towns and small shippers, and would cause financial instability within the trucking industry.

There is legislation presently pending (H.R. 3100) which would address many of the major criticisms of trucking regulation by easing entry into the industry, prohibiting carrier association rate agree