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tional transportation system which really is mandated in the Constitution. When you back away from a national system and when you declare inoperable what the Secretary says one year, barely a year later, and you tell me now that you have not looked into a way of getting the major airlines to serve some of these airports they used to serve before deregulation, it makes me think it may be necessary to consider service requirements. You know, telephone service works that way. Power service works that way. You serve all the needs in an area.

And I would hope, Mr. Burnley, that you and the Department would look at it.

I have some other questions that I will submit for the record.
Senator Lautenberg?
Senator LAUTENBERG. Thanks again, Mr. Chairman.
Possession is nine-tenths of the mike here.
Mr. Burnley-

PREPARED STATEMENT Senator ANDREWS. A prepared statement from Mr. Burnley will be made part of the record.

(The statement follows:)

STATEMENT OF JIM BURNLEY

Mr. Chairman and members of the Committee, we are pleased to have the opportunity to appear before your committee to discuss the

fiscal year 1986 budget request for the Office of the Secretary.

For fiscal year 1986, we are requesting appropriations of

$56.2 million for the Office of the Secretary.

This includes

full-year funding of functions transferred from the Civil

Aeronautics Board (CAB), except for Payments to Air Carriers, for which we are requesting no FY 1986 appropriation. For FY 1985, CAB functions were funded in the Department for 3/4 of the year. The increased cost for full-year funding of continuing CAB functions is more than off set by management savings, elimination

of staff associated with the Essential Air Services program, and

the proposed governmentwide 5% pay reduction. The specific appropriation requests for the Office of the Secretary are as

follows:

SALARIBS AND EXPENSES

For the Salaries and Expenses appropriation, which provides for

the overall management and direction of the programs of the

Department, we are requesting $50.7 million, a decrease of

$180 thousand from fiscal year 1985.

Included in the fiscal year

1986 program is $4 million for continuing contract support of the

Minority. Business Resource Center (MBRC) at the 1985 appropriation level, of which $3.5 million is to be provided by new budget authority and $0.5 million from anticipated carry over of prior

year recoveries.

On January 1, 1985, the Department of Transportation acquired 309 positions through transfer of functions from the former Civil Aeronautics Board, of which 259 are in the Office of the

Secretary. The transition was effected smoothly and without interruption in critical CAB operations. Our FY 1986 request for Salaries and Expenses proposes to continue funding the transferred positions, except for those associated with the Essential Air Services program which is proposed to be terminated at the end of

the current year.

Last year, the Secretary established the Office of Commercial

Space Transportation within the Office of the Secretary to

encourage and promote commercial expendable launch vehicle

activities by private sector enterprises. For this office, we are requesting 11 positions through FY 1986. In FY 1986, the Space Office will also continue to receive contractual research and

planning support funded by the Transportation Planning, Research, and Development appropriation.

The remaining portions of the Salaries and Expenses request maintain their approximate fiscal year 1985 appropriation levels as adjusted for management savings and for the proposed

governmentwide pay reduction of 5%.

Total staffing in this

appropriation is proposed at 713 positions in 1986, a reduction of

67 from the 1985 level, including 54 associated with elimination

of the Essential Air Services function and 13 as the result of

management savings.

PAYMENTS TO AIR CARRIERS

This appropriation has provided funding for subsidy payments to

air carriers under the Essential Air Service program.

That

program was created by Congress as a ten-year program, expiring in 1988, to help communities adjust to airline deregulation.

We are

propo sing legislation to move the termination date up by three

years.

Airlines and consumers have adjusted to deregulation, as

evidenced by the airline industry's 1984 profits, which were the

highest since deregulation.

Many of the affected communities have

been served by expanded new commuter-class air service without reliance on the EAS program, and nearly half of the cities that still receive subsidy under the program are located within 100

miles of a major hub airport.

We therefore believe that this

program has served its purpose, and we are requesting no

appropriation in FY 1986.

TRANSPORTATION PLANNING, RESEARCH AND DEVELOPMENT

We are requesting $5.5 million for the Transportation Planning,

Research and Development (TPR&D) appropriation, a decrease of

$177 thousand from FY 1985.

This appropriation provides for

contract studies and research done in support of analysis,

planning, and policy development in the Office of the Secretary

and for university research.

of the total request, $2.5 million will fund the TPR&D staff and

$1.3 million will continue current support levels for University

Research, the Commercial Space Office, the Science Advisor, and

special projects.

The remaining $1.7 million will be allocated

for projects in the Office of the Assistant Secretary for Policy

and International Affairs that are concerned with improving transportation safety, monitoring the progress of regulatory reform, supporting the development and implementation of international transportation policy, and study ing such domestic transportation policy issues as airport financing trends, analysis

of the motor carrier and maritime industry structures, and

preparation for the 1987 census of transportation.

WORKING CAPITAL FOND

No separate appropriation is required for the Working Capital

Fund, but a limitation of $66 million is proposed, a slight

increase over the FY 1985 level to accommodate full-year support of transferred CAB functions. The Working Capital Fund provides for expenses necessary for the maintenance and operation of common

administrative services in the Department. Staffing financed by the Working Capital Fund is being reduced by 28 positions from the 1985 level, including 25 through management efficiencies and 3 associated with termination of the Essential Air Services program.

This concludes my prepared statement, Mr. Chairman; we would be

glad now to respond to the Committee's questions.

ADDENDUM TO MR. BURNLEY'S STATEMENT REGARDING CONRAIL SALE

ANTITRUST IMMUNITY

.

A threshold question that must be confronted as Congress

considers whether to approve the merger between Conrail and the

Norfolk Southern, proposed by the Department of Transportation, is whether that merger should be granted legislative antitrust immunity. Inevitably, this question implicates the wisden and propriety of DOT's proposal in the first instance and the

adequacy of the analysis conducted by the Department of Justice,

at DOT's direction, approving the merger (with sone, divestiture) as a predicate for the extraordinary immunity request. All three questions suffer from a common problem: the public record does not contain sufficient information to guide our judgments, nor (because of the speed urged upon Congress by DOT to conduct its deliberations) will we be likely to gain sufficient information.

To date, there has been no public disclosure of the

facts and circumstances which underlie the proposed transaction, there have been no public hearings allowing interested parties to participate fully and meaningfully, and there has been no thorough analysis by an independent regulatory agency based on

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