REVIEWING THE NATIONAL

SURFACE TRANSPORTATION
POLICY AND REVENUE STUDY
COMMISSION REPORT:
TRANSPORTATION FOR
TOMORROW
(11098)

HEARING
BEFORE THE

COMMITTEE ON
TRANSPORTATION AND
INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
FEBRUARY 13, 2008

Printed for the use of the

Committee on Transportation and Infrastructure

(
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON

40815 PDF

2008

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 5121800; DC area (202) 5121800
Fax: (202) 5122104 Mail: Stop IDCC, Washington, DC 204020001

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00001

Fmt 5011

Sfmt 5011

P:\DOCS\40815

JASON

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia, Vice
JOHN L. MICA, Florida
Chair
DON YOUNG, Alaska
PETER A. DEFAZIO, Oregon
THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois
HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, JR., Tennessee
WAYNE T. GILCHREST, Maryland
Columbia
VERNON J. EHLERS, Michigan
JERROLD NADLER, New York
STEVEN C. LATOURETTE, Ohio
CORRINE BROWN, Florida
FRANK A. LOBIONDO, New Jersey
BOB FILNER, California
JERRY MORAN, Kansas
EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California
GENE TAYLOR, Mississippi
ROBIN HAYES, North Carolina
ELIJAH E. CUMMINGS, Maryland
HENRY E. BROWN, JR., South Carolina
ELLEN O. TAUSCHER, California
TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa
TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania
SAM GRAVES, Missouri
BRIAN BAIRD, Washington
BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington
JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts
SHELLEY MOORE CAPITO, West Virginia
TIMOTHY H. BISHOP, New York
JIM GERLACH, Pennsylvania
MICHAEL H. MICHAUD, Maine
MARIO DIAZ-BALART, Florida
BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania
RUSS CARNAHAN, Missouri
TED POE, Texas
JOHN T. SALAZAR, Colorado
DAVID G. REICHERT, Washington
GRACE F. NAPOLITANO, California
CONNIE MACK, Florida
DANIEL LIPINSKI, Illinois
JOHN R. RANDY KUHL, JR., New York
DORIS O. MATSUI, California
LYNN A WESTMORELAND, Georgia
NICK LAMPSON, Texas
CHARLES W. BOUSTANY, JR., Louisiana
ZACHARY T. SPACE, Ohio
JEAN SCHMIDT, Ohio
MAZIE K. HIRONO, Hawaii
CANDICE S. MILLER, Michigan
BRUCE L. BRALEY, Iowa
THELMA D. DRAKE, Virginia
JASON ALTMIRE, Pennsylvania
MARY FALLIN, Oklahoma
TIMOTHY J. WALZ, Minnesota
VERN BUCHANAN, Florida
HEATH SHULER, North Carolina
VACANCY
MICHAEL A. ARCURI, New York
HARRY E. MITCHELL, Arizona
CHRISTOPHER P. CARNEY, Pennsylvania
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY MCNERNEY, California
LAURA A. RICHARDSON, California
VACANCY

(II)

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00002

Fmt 0486

Sfmt 0486

P:\DOCS\40815

JASON

CONTENTS

Page

Summary of Subject Matter ....................................................................................

iv

TESTIMONY
Boylan, Christopher P., Vice Chair, Government Relations, American Public
Transportation Association .................................................................................
Mullett, C. Randal, Vice President, Government Relations and Public Affairs,
Con-Way, Inc. .......................................................................................................
Peters, Hon. Mary E., Secretary, United States Department of Transportation .....................................................................................................................
Rahn, Pete, Director, Missouri Department of Transportation ...........................

36
36
4
36

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Altmire, Hon. Jason, of Pennsylvania ....................................................................
Carnahan, Hon. Russ, of Missouri .........................................................................
Costello, Hon. Jerry F., of Illinois ..........................................................................
Rahall, Hon. Nick J., of West Virginia ..................................................................
Salazar, Hon. John T., of Colorado ........................................................................
Tauscher, Hon. Ellen O., of California ...................................................................

46
47
48
52
55
58

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Boylan, Christopher P. ............................................................................................
Mullett, C. Randal ...................................................................................................
Peters, Hon. Mary E. ...............................................................................................
Rahn, Pete ................................................................................................................

63
70
80
82

SUBMISSIONS FOR THE RECORD

Safe Routes to School National Partnership, Deborah A. Hubsmith, Director,
written statement .................................................................................................

(III)

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00003

Fmt 5904

Sfmt 5904

P:\DOCS\40815

JASON

89

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00004

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.001

iv

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00005

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.002

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00006

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.003

vi

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00007

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.004

vii

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00008

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.005

viii

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00009

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.006

ix

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00010

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.007

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00011

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.008

xi

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00012

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.009

xii

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00013

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.010

xiii

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00014

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.011

xiv

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00015

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

40815.012

xv

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00016

Fmt 6602

Sfmt 6602

P:\DOCS\40815

JASON

HEARING ON REVIEWING THE NATIONAL

SURFACE TRANSPORTATION POLICY AND
REVENUE STUDY COMMISSION REPORT:
TRANSPORTATION FOR TOMORROW
Wednesday, February 13, 2008

HOUSE OF REPRESENTATIVES,
TRANSPORTATION AND INFRASTRUCTURE,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2167, Rayburn House Office Building, the Honorable James L.
Oberstar [Chairman of the Committee] presiding.
Mr. OBERSTAR. The Committee on Transportation and Infrastructure will come to order.
It is with great appreciation for and admiration of those who
slugged their way through the icy Washington and suburban
streets this morning. I know that myself I had to dodge a few fallen
trees and fallen branches. But I made it through. Now, if my voice
will only hold up, I have been fighting an upper respiratory infection for the last month, and it is winding down.
So I will spare you a very long opening statement and simply say
that we heard from the majority members of the Commission on
the report, the national commission on the future needs of transportation, National Policy and Revenue Study Review Commission.
The Commission was very blunt in pointing out a clear assessment
of the needs and an analysis of solutions, a range of options, recommendations to achieve those investments in policy objectives
that were set out in the report that I thought was very clear and
very well written. I have read about 95 percent of it now.
It very clearly frames the choices facing the Congress as we develop policy options for the future for the traveling public, the
users of our great interstate and national systems. We are on the
threshold of a new transformational era of transportation. We
called it the Fourth Transformational Era in the history of transportation over the last century. Very stark in the Commissions report was their blunt assessment that there is no free lunch in
transportation infrastructure. Rebuilding the portfolio of highway,
transit, bridge needs in this Country is expensive. But we have a
very rich portfolio of surface transportation, and it is not an option
to ignore, it is a requirement for us to invest in, maintain it and
expand upon it.
The Department of Transportation in its 2006 report for the Bureau of Transportation Statistics, says that passenger vehicle miles
COMMITTEE

ON

(1)

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00017

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

2
traveled over the previous decade grew 50 percent. Truck traffic
grew 100 percent. But our roadway capacity grew .65 percent.
I dont think we need necessarily to have vehicle miles to expand
at the same ratio as vehicle miles traveled, but we do need to continue the upgrading and the capacity enhancement of at lest our
existing portfolio and I think the Commission has pointed us in the
right direction. I think that is two years of hard work, very intensive hearings across the Country, produced one of the finest Government reports that I have observed in my years of service in
Congress.
Secretary Peters was a minority view on that report. And we look
forward to hearing her contrasting views this morning.
Mr. Mica?
Mr. MICA. Thank you, Mr. Chairman, and thank you also for
granting the request of the minority to have the Secretary appear
in a separate panel.
Mr. OBERSTAR. We invited her to appear in the first panel, or to
appear separately on the same day but that was not possible.
Mr. MICA. Right. And she is here today, and we thank you for
affording her this separate opportunity to present her opinion.
Also, I highly recommend that you sell your car and that you afford yourself mass transit and move close to the Hill and walk like
I did this morning. I had no problem getting here. I got rid of the
car and I see Bill Millar up there, he will be glad to give you all
the bus and transit route. I think Metro was running on time in
spite of the ice and snow this morning. If we could get more folks
to do that, we would have less congestion.
But we do need, and I might take issue with the Administration,
more money for mass transit, so we will give everybody a little plug
here.
Mr. OBERSTAR. Sounds like we have a convert over here.
Mr. MICA. I am one of the strongest advocates.
But I think that what we need to do is, it is not always how
much money you spend, it is sometimes how you spend it. There
is no question we do need more money, and the Commission did
identify the fact that we have a huge demand. We need to be
spending three or four times what we have in building our infrastructure.
But there are some things that the Commission identified, Mr.
Chairman, again, for the record, long-term options, I think they
presented excellent long-term options which I support. I think political timing on the political reality we have to deal with, the 40
cent proposal went over like a lead balloon. And timing is everything in politics or dramatic proposals. But the need is there, we
will identify that.
And lastly, I loved the testimony from Commissioner Skancke,
and let me quote him: If you add one Federal dollar to a transportation project, that adds a minimum of 10 to 14 years to the project
before it actually gets started. That costs time and money. Then
as far as costs, for a billion dollar project today, by the time you
would finish it under a Federal schedule, would add $3 billion to
$4 billion in costs. So we could get more for sometimes the same
amount or a little bit more if we better utilize our funds.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00018

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

3
But the options that are presented are great. I look forward to
hearing the Secretarys comments. I apologize, too, Mr. Chairman,
I love the Secretary, she is very popular, very photogenic, but I am
on Government Reform and Roger Clemens is stealing the show
today. I am a senior Member of that Committee, so I will be hopping back and forth. I am required in both places and apologize in
advance.
And I welcome Kareem Golden, a student leader from my district, who is shadowing me today.
Thank you so much, Mr. Chairman.
Mr. OBERSTAR. Thank you for your opening comments, Mr. Mica.
We greatly appreciate your being here.
The Secretary is not under the same kind of scrutiny that Mr.
Clemens is in the hearing next door, by any means. She is drugfree.
[Laughter.]
Mr. OBERSTAR. Although I must say, we would welcome a surface
transportation on steroids.
[Laughter.]
Mr. OBERSTAR. Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman.
Mr. Chairman, I will be very brief so we can move ahead and
hear the testimony of the Secretary and get into questions.
The bottom line of the Commission was the reality that most
Americans recognize on a day to day basis, that our transportation
system is in dire need of major investment. I mean, not only do we
have bridges, as in your State, falling down, we have nearly
150,000 bridges that are either functionally obsolete or structurally
obsolete. I think if we posted all those bridges with big signs saying, caution, you are about to drive over a bridge that is structurally deficient, it might get the attention of the traveling public
and get them even more interested in seeing increased investment.
Increased investment at this time would also be opportune, given
both our problems internationally with our huge trade deficit. You
cant export the jobs and the economic activity that comes from
transportation investment, makes us more competitive internationally, and certainly we need jobs at this point in time. So for a host
of reasons, the report was timely. And I look forward to disagreeing
with the Secretary over how we are going to reach those goals of
investment.
Thank you, Mr. Chairman.
Mr. OBERSTAR. Thank you, Mr. DeFazio.
Mr. Petri.
Mr. PETRI. Thank you very much, Mr. Chairman.
I just would like to say briefly that our Country is in a competitive situation in a rapidly-changing world. Over the last 40 to 50
years, we have radically reformed major sectors of our economy by
deregulating different modes to lower costs, doing business in the
American economy, so that we could maintain our standard of living and have a future for our children.
If we under-invest in our infrastructure, we are going to be losing efficiency as a society and becoming less competitive going forward. So I frankly have been disappointed that the Administration
has not provided more leadership in this area in helping focus at-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00019

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

4
tention and gathering the resources necessary, not just throwing
money at the problem. But if we continue to decline as a society
in the efficiency with which we move goods and people, it is going
to raise costs and over time, move activity to other places in the
world and we will be poorer for it.
The Chairman spoke of this being a transformational period. I
hope it is a period where people use the opportunity, it is a crisis
because of the financial uncertainty right now surrounding the
bursting of some bubbles and so on. But it is also an opportunity.
Paul Krugman recently wrote a column sadly saying he thought
the economy might be slow for not just six months but for a number of years, and that infrastructure investment was a logical way
of helping to move through this period. I hope we do take that opportunity to think about it, get good advice and then build a program to not just deal with the economic slow-down in the short
term, but do that and help make our Country more competitive
longer term with adequate infrastructure.
The Commission recommended major restructuring of the way
we do this, which I think is wonderful, because it will increase public confidence that the money that is invested in infrastructure is
well spent, not frittered away on what are called earmarks or
projects sometimes misunderstood, sometimes probably appropriately understood as not appropriate. But in any event, thank
you, Mr. Chairman, for having this hearing, and I look forward to
hearing the Secretary.
Mr. OBERSTAR. Thank you. Thank you very much for those
thoughtful remarks, born of many years of serving as the Chair of
the Surface Transportation Subcommittee.
Madam Secretary, we welcome your comments and thank you for
participating with us this morning.
TESTIMONY OF THE HONORABLE MARY E. PETERS, SECRETARY, UNITED STATES DEPARTMENT OF TRANSPORTATION

Secretary PETERS. Mr. Chairman, thank you so much. Ranking

Member Mica, Members of the Committee, I do appreciate the
courtesy that you and the Chairman have offered me to appear
here today.
As was indicated, there is a Clemens hearing going on, which
may be more interesting, but I would argue that ours is the more
important hearing. And again, for the record, Mr. Chairman, I have
never taken human growth hormones, ever.
[Laughter.]
Mr. OBERSTAR. I am counting on that. And this is a more important hearing, believe me.
Secretary PETERS. We women really dont want to grow bigger,
we want to be smaller. That is what we look forward to doing.
Let me begin by saying, over the past 20 months, the Policy and
Revenue Commission met on numerous occasions, engaged in wideranging discussions with many people around the Nation about the
current and future transportation needs of our Nation. I believe
that this time has been very well spent, and I value and appreciate
the contributions by all of my fellow commissioners.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00020

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

5
Although I do disagree with some of the central elements of the
Commission report, that disagreement in no way detracts from my
respect for my colleagues on the Commission. They are to be commended for their hard work and their dedication.
Last week, the Administration released its fiscal year 2009 budget, which funds the final year of the $286.4 billion SAFETEA-LU
authorization. It is clear that we are just limping over the finish
line, with the Highway Trust Funds short-term future unclear and
its long-term in serious jeopardy. This highlights the significant
limitations in our current policies and it demands a new direction.
It is short-sighted to continue reliance on a fuel tax at the same
time we are pushing increased energy efficiency, better air quality
standards, and a reduction in our dependence on foreign oil.
Given the significance of our transportation challenges and the
resultant effective on our economy and quality of life, it is imperative that we work together to reach a bipartisan consensus on the
nature of these challenges. While we may not always be able to
reach complete agreement on the appropriate solutions to our surface transportation problems, we must come together and agree on
a common definition of what the problem is and recognize that fundamental change is indeed required.
I have spent many years working in this field, and I have concluded that the central problem in transportation today is not how
much we are paying for infrastructure, but perhaps how we are
paying for infrastructure. Our current transportation funding, an
indirect user fee, provides the wrong incentives and signals to both
users and owners of the system, resulting in over-use of the system, especially during peak periods. I often compare this to the
Tragedy of the Commons, when it was over-used, to a point that
the Commons, of course, was no longer productive. In fact, I believe
that the chronic revenue shortfalls that we face are more a symptom of the problem than the cause.
Americans overwhelmingly oppose gas tax increases, because
real world experience tells them that they dont provide a benefit
to them. This is evidenced by a failure in system performance. Over
the past 25 years, despite substantial increases in Federal, State
and local transportation spending, much of it from fuel taxes, we
have witnessed a rapid growth in highway congestion. In the past
25 years, highway funding has increased 100 percent, while congestion during this same period increased by 300 percent. The system
failure is impacting our families, our businesses and our environment.
Americans have become increasingly disgruntled about the declining performance of the transportation system, but also are unwilling to support transportation-related tax increases. Some in the
transportation field argue that we have simply failed to communicate the importance of transportation to the average American.
To me and to other observers, this represents a failure in public
confidence and traditional approaches.
Public opinion surveys confirm this view. A recently-released survey out of Washington State found that voters preferred high-speed
variable tolling to gas tax increases by a margin of 77 to 17. This
survey is consistent with a number of others conducted across the

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00021

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

6
United States that have found deteriorating support for gas taxes
and growing support for direct charges.
I agree with those who call for greater Federal leadership and
the Commission report does call for that. I do not concede, however,
that Federal leadership simply implies substantially greater Federal spending and dramatically higher fuel taxes. In fact, it is far
more critical that the Federal Government establish clear policies,
provide appropriate incentives and allocate resources more efficiently than it is for substantial increases in Federal spending.
It is essential that we on the Federal level work together and
demonstrate this type of leadership. I truly believe that there has
never been a more exciting time in the history of surface transportation.
Mr. Chairman, I agree that it is a transformational era. We are
at a point where meaningful change is not only conceivable, but is
actually being implemented in various parts of the United States.
We have before us a tremendous opportunity; an opportunity to
make significant changes that will reverse the substantial performance declines in the Nations surface transportation infrastructure.
This will benefit the American businesses and families that depend
on our infrastructure every day.
Mr. Chairman, again, I thank the Committee for allowing me to
testify. I look forward to working with you to address these transportation challenges.
Mr. OBERSTAR. Thank you very much for your statement. I found
it interesting that you made a distinction between how much and
how. You say the issue is not how much we pay, or I would say
invest, but how we invest.
Apart from Social Security, the most successful social experiment
in this Country has been the Highway Trust Fund, in my opinion.
I have leaders from transportation sectors of major industrialized
countries throughout the world coming to the U.S. to visit with,
and the first question they ask, whether it is the Minister of Transportation of France, last year about this time, or the Minister from
Argentina, the Chair of the Argentine Transportation Committee,
who say, how do you do it in America, how do you build this interstate highway system, how do you maintain this great network of
roads and create the mobility? The Highway Trust Fund, dedicated
revenue stream, it has been enormously successful.
I believe the Highway Trust Fund and the user fee must remain
the cornerstone of transportation financing for the future. Do you
agree or disagree with that?
Secretary PETERS. Mr. Chairman, I do agree that depending on
user fees is the best way to go. I think my question is, what kind
of a user fee is best.
Mr. OBERSTAR. You wouldnt do away with the existing user fee?
Secretary PETERS. No, Mr. Chairman, not the existing.
Mr. OBERSTAR. Okay. It is good to establish that. Proceed.
Secretary PETERS. At least not at this point in time, Mr. Chairman.
Mr. OBERSTAR. Not at any point in time, I will tell you.
Secretary PETERS. Let me talk about why I think there are problems with the gas tax and our continued dependence on the gas tax
into the future. It is a more indirect than a direct user fee. And

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00022

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

7
even though it is related to use of the system, when the interstate
highway system was being built, what was then established and
served us very well, as you said, Mr. Chairman, was a gas tax that
was incrementally increased to equate to the cost to complete the
interstate highway system. And again, it did deliver one of the
most impressive infrastructure projects this world has seen to date.
But today, there are problems with the gas tax. It is ineffective
at reducing congestion. And that really gets to the basis, Mr.
Chairman, of what I was saying, it is not how much but how. Because when we pay on a demand basis, and not every road, I concede, would be susceptible to that, but when we pay on a demand
basis, we gauge our use a little bit differently. It leads to over-consumption during peak periods.
The recently-completed household travel survey I think underscored some of the issues that we are facing. During peak periods
of time, we tend to think that most of the users of the transportation sytem are commuting to work and back. In fact, the truth
is, only about 50 percent of them are making commute trips to
work and back. Twenty percent of them are retired, which could
argue that they have some discretion when and how they use the
system. So this tells us that through a small change in pricing, we
can incentivize some people not to use the road during peak periods
and get much better use out of that road.
The gas tax contradicts our energy policy, a very good piece of
legislation that this body just recently enacted, that tells us we
want to increase fuel efficiency in our vehicles, we want to lessen
our dependence on foreign oils and we want to increase the use of
alternative and renewable fuels. And the yield is simply not sufficient, it is not reliable and it is not sustainable to carry forward
our transportation system in the future.
Further, we have what I call a failure of consumer confidence. If
the public were clamoring for the gas tax to have been increased,
we would have done it a long time ago.
Mr. OBERSTAR. Well, I have to interrupt you at that point,
Madam Secretary. I didnt mean for you to have a soliloquy on this
subject. Your statement that the public is overwhelmingly opposed
to an increase in user fee belies the failure of leadership at the top.
If the Administration, if you as Secretary were advocating for it,
a lot of people who are undecided about this or confused by it
would come around to support it.
When I am traveling in my district, when I am traveling in other
parts of the Country, and have a serious discussion about user fees,
people understand it, they know it is directly related to their transportation needs, they know that the money goes into the trust fund
and out in the form of improved roads and bridges and transit systems. So I think the advocacy of privatization, tolling and rationing
as the solution to the Nations transportation crisis is a narrow,
myopic, uninspired and fragmented approach. It does not rise to
the merit of being called a policy.
Mr. Petri?
Mr. PETRI. I have two questions. One, I know the Commission
was appointed by representatives from the Administration and
House and Senate, a number of people who took their responsibilities very seriously and had a lot of background. The Commission

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00023

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

8
worked very hard to attempt to reach a consensus, but ultimately
failed. The two questions are if you could discuss the areas of disagreement or the conflicting visions of the future where you were
unable to bridge; and secondly, the point you made about yes, there
is congestion, but only at certain times and in certain areas that
we could probably run the system more efficiently with some kind
of congestion pricing or other way of dealing with it.
Could you flesh that out a little? Would the idea be, that if you
were to, for example, raise the gas tax or some other fee on everyone and then give a discount if they didnt drive? It might work
better than charging people extra if they did drive. I dont know.
I am just curious as to how much thought has really been given
to how that sort of thing would work. We are familiar with what
has been going on in Europe and London and some other areas.
And cities do have, not pricing, but they do have rules, trucks
arent allowed in during certain hours, so they have to do deliveries
at night. It has been suggested for the Alameda Corridor, if we
would run trucks back and forth from the Port of Long Beach at
night, they wouldnt have had to go through this tremendous expense. But that involves changing a lot of systems and there is resistance from people who work there and everyone else.
Anyway, if you could address those in the brief time remaining,
I would appreciate it.
Secretary PETERS. Congressman, I would be pleased to do that.
There are many recommendations in the Commission report that
I do support and did agree with, as did other Members of the minority. The key importance of our transportation system, the multimodal nature of that system and how that must continue into the
future. The opportunity to simplify Federal programs and funding
categories was an area of agreement, as was the proposal for
streamlining the current planning and environmental processes.
We also agreed that we needed to make much efficient investment in transportation in the future, and that we needed to link
Federal participation to that in the case of the ten proposed programs that the majority commissioners recommended to more
clearly define Federal interest. I think is where, Congressman
Petri, that I really believe we need to focus in. We had a compelling
national interest when we were building the interstate system, and
people signed on to doing that, and there was a great deal of public
support for doing that.
But today, the Federal surface transportation programs are so bifurcated, some 108 of them, in our highway and transit programs,
that there isnt a compelling Federal interest that is being served.
This leads, then, I think, to sub-optimization of the revenues and
the resources that we have.
Where I disagreed with other members of the Commission was
the over-statement of future needs. I think that they used the highest investment instead of the most probable or that which is truly
cost-effective in making. Increasing the Federal fuel tax, we have
talked about, I do not concur with. And the large Federal role in
funding and managing the system, as well as the governance commission. I think that there is much we can do by streamlining
these programs and putting more of the authority and responsibility back down to the State and local level.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00024

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

9
I have spent most of my adult life in this field. If I truly thought
the gas tax was the way to go, I would be the first to advocate that.
But I simply do not. This is not an ideological opinion. It is an
opinion based on my serious examination of the gas tax over time.
The Federal interest, in terms of going forward, has to be defined
very, very clearly. We should collect, at the Federal level, only
those revenues that are attendant to those needs, and again, give
the State and local governments or the private sector more opportunity to invest.
Let me talk about what I mentioned and your question about
congestion pricing. Congestion pricing and pure revenue tolling are
actually two different concepts. Congestion pricing is designed to
spread traffic flows more efficiently to reduce the enormous economic costs of congestion and to reduce pollution. It does this by
incentivizing, via price signals, just a small number of people not
to use the road at that given period of time.
I would call to your attention what I call the August in Washington phenomenon. Many of us who happen to be in town
herethose who can get out of town dobut those of us who are
in town here in August find that the transportation system works
significantly better than it does the Tuesday after Labor Day, when
it all goes to heck in a handcart. What happens during August is
that, due to vacations and the like, approximately 50 percent of
commuters dont use the road. A small usage reduction makes an
enormous difference in how efficiently that road operates. Gas
taxes are use fees, but they simply are too indirect to influence decisions about when and how to use the road.
Mr. OBERSTAR. Thank you, Madam Secretary.
We are in the midst of a vote on the House Floor on the motion
to adjourn. But there are392 havent voted yet. So we will go
next to Mr. DeFazio. I just want to observe that while you critiqued
the Commission for having picked the highest end, the reality in
transportation statistics is that actual performance has outpaced
all projections in the history of transportation. We have always
seen greater use than was predicted.
Mr. DeFazio.
Mr. DEFAZIO. Thanks.
Thank you, Madam Secretary. First, to correct a problem with
your testimony, I am certain your staff would like to correct this,
because you presented it both to the Senate and here.
Actually, in Washington State, the history is two years ago,
state-wide initiative, they passed a gas tax, state-wide. Recent polling in the metropolitan area, general metropolitan area having to
do with a larger, more ambitious program, has about a tie between
the gas tax and congestion pricing. That is King County area, the
urban center.
The thing that is referred to in your testimony is a bridge. The
polling was only on the issue of tolling a bridge. Now, theres very
little controversy over tolling bridge projects. That was the issue.
So the statement here is totally inaccurate. That is not a general
sentiment shared by the people of Washington State, particularly
outside the urban area. It is about even in the urban area. But
when you look at one specific project, should you apply tolling, yes.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00025

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

10
Now, as to the issue of the private investment. We had
Macquarie come in, look at a project in Oregon, Newberg-Dundee
bypass, it is a big bypass, something that we cant fit in the State
plan, very, very expensive. They said, yes, we can build it. But in
order for it to pencil out for us, you will have to toll the existing
infrastructure in the vicinity to drive people onto our project. And
so do you support, taxpayers have paid for existing State or Federal highways, that we would toll those in order to facilitate some
private, for-profit investment to deal with another problem?
Secretary PETERS. Mr. Chairman, what I believe we need to do,
what our responsibility at the Federal level is, is to protect and ensure that the Federal interests are met in tolling projects. The way
we do that is incorporating standards for conducting, operating and
maintaining the interstate, connectivity with other parts of the
transportation system, the mobility of products, that it is conducive
to interstate commerce, that there is transparency in the process,
fair and open competition and safety is addressed.
In terms of dealing with tolling existing sections of highway
versus only those new, there is much less acceptability to tolling
existing sections of highway. I would also say, Mr. Chairman,
where there is an opportunity to increase the efficiency of the overall system, I wouldnt rule it out. I think State and local governments have to have the opportunity to look at it.
Mr. DEFAZIO. Thank you, but again, that is a problem here. People want to make a profit if they are going to invest. And to invest
they say, well, you have to toll your existing infrastructure. I tell
you, that would enjoy 1 percent or 0 percent support in my State.
I imagine Arizona wouldnt be too much different if you said, gee,
we are going to make you pay to use the highways you have already paid for. I dont think people in Arizona are that different
than the people up in the Northwest.
So that presents sort of a conundrum if we are going to depend
upon private investment. Then you used the word protect. I guess
I am puzzled that the minority report objects to the conditions that
are suggested by the Commission on the PPPs. Now, I understand
that you can attract a lot more interest from the private sector if
you say hey, we are going to give you a license to print money. You
are going to have non-compete agreements, we are going to toll the
surrounding infrastructure, you can control all the tolling, no limits, or like in Indiana, we will put a floor on your toll increases.
But the Commission said, if you want to protect the public interest, you need to have conditions. Why would the minority report
object to modest conditions to protect the public interest? Even Mr.
Duvall, when he was here, a year ago or so, admitted that noncompete and other things were problematic, people should be aware
of them. In fact, he said that you would post some of those things
on a web page next to the paean, your wonderful piece which extols
the virtue of PPP on your website. But we have yet to get that, I
have asked three times. There are some pitfalls here.
Would you agree that non-competes are a potential pitfall and
other things with PPPs?
Mr. OBERSTAR. Excuse me, on conclusion of the Secretarys statement we will recess for the vote. We have 36 seconds. I will leave,
because it takes me a little longer to walk over there.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00026

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

11
Secretary PETERS. I will try to get this in in the next 36 seconds.
In terms of tolling existing interstates, I favor it only if improvements are made that improve the overall system itself. In terms of
non-compete clauses, I do think those have to be looked at very,
very carefully. We know on State Route 91, one of the earliest
projects in the United States, a stringent non-compete clause became a limiting factor that later had to be dealt with. So I would
agree that there are problems with non-compete clauses.
My disagreement with the Commission majority on this issue is
that the Commission report would place numerous conditions on
public-private partnerships, beyond what I think is necessary to
protect the Federal interest. And in fact, the Commission purports
to substitute its judgment for State and local officials who are entering into these agreements with the private sector. So yes, there
do need to be some limitations to protect public interest. But those
can be done in a manner that doesnt kill the opportunity to attract
private sector investment.
Mr. DEFAZIO. But in giving total latitude to public officials and
ignoring some of the concerns raised by the Commission, lets look
at Mayor Daleys Skyway project. Money was diverted to the general fund of the city for one year consumption in general fund
projects from the payments they received for that project. You dont
believe we should have restrictions on these projects, that the
money would have to go back into transportation projects, or even
more specifically, as the Commission recommends, into the corridor
that is relevant to that transportation project, if you are going to
assess tolls or congestion prices?
Secretary PETERS. Mr. Chairman, as a transportation professional, I would prefer the investment go back into the system.
However, in the case of the Chicago Skyway, that route was actually losing money. It was costing the city of Chicago money, and
the mayor took and monetized an asset that was at the end of the
day in the public interest of the people in that region.
Mr. DEFAZIO. Right, but he did divert the money and you dont
agree with diverting the money to non-transportation as a policy.
So I think if we were protecting the Federal interest, the public interest, we would want to say that it is Federal policy, where the
Federal Government is a partner or has a significant interest in a
PPP or it has a significant effect on the national transportation infrastructure, that we would want to see that money used for widely-recognized infrastructure deficit.
You do agree that there is a current infrastructure deficit and we
do need more investment without determining where that money
comes from? You would agree with that statement?
Secretary PETERS. I absolutely agree with that statement.
Mr. DEFAZIO. That is good. I am going to keep going, because
that will save you time. If I miss the vote to adjourn, it is not going
to cost me my Congressional career, I can guarantee that.
[Laughter.]
Mr. DEFAZIO. So you used the word over-consumption, and
talked about the discretionary travel, 50 percent. At the same time,
you pointed to the fact that here in D.C., that when people are on
vacation, i.e., they dont have to go to work, I dont think they randomly go out and drive around at rush hour, that traffic problems

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00027

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

12
pretty much abate when those people dont have to work. I think
there is almost a contradiction here.
I really would like to see, I know there is one consultant out
there who is citing some thing to say that 50 percent of the travel
at rush hour is discretionary. I would assume what he is talking
about is, some people are driving their kids to school before they
go to work, and he would say that was discretionary. Some people
are picking up their kids after school and moving them around
after work.
I dont know where he gets it, but I have to tell you, the seniors
arent rushing, at least in my part of the Country, to get out and
drive around in rush hour, they are just not. I really would like to
see some real substantiation as opposed to one consultants opinion
based on one relatively small sample. I just really doubt that.
But beyond that, the question becomes, and Mr. Mica referred to
this, unfortunately he had to go to more important things, like
baseball, but he talked about mass transit, and the fact that you
need that option, and it worked, particularly today. But the problem is, if you raise the prices for congestion pricing and you dont
dedicate that money into building the mass transit, then the people
arent going to have an option in the future.
In the present tense, many people dont have an option when you
impose congestion pricing. You have just sent them a message that
is, sell your house, quit your job, get another job, if they dont have
a viable, comparable alternative in terms of time and cost by mass
transit. And there are a heck of a lot of people who dont have that
today, because of our lack of investment.
Do you recommend imposing congestion pricing when people
dont have a viable alternative and they are work commuters? Isnt
there an incredible equity issue here? The execs wont care. They
will get to work faster. And they can pay the 10 bucks. But the factory line worker is going to say, gosh, I cant afford 10 bucks to get
to work, I am going to have to leave an extra hour early, because
I cant take that road any more.
Secretary PETERS. Mr. Chairman, let me answer that question in
a couple of ways. First of all, increasing gas taxes, especially on
lower income people in our population, is very much a burden. In
fact, it is a bigger burden on those individuals than having the option of paying a congestion fee. Time is as valuable to people in the
lower income ranks as it is to everyone else. In fact, in some cases
it is more valuable. I have often used the example of a mother or
father trying to pick up a child from day care, and if they are late,
they pay pretty horrendous late fees for getting their own child
back at the end of the day. If they had the option of getting on a
HOT lane and paying that fee, then they would be very apt to do
that.
But it also frees up revenue. When we use pricing like this, it
frees up revenue for other routes. In fact, where those options are
available, in San Diego, for example, on the fast track on I-15, 60
percent of the support comes from those with incomes of less than
$40,000. In Orange County, State Route 91 express lanes, 51 percent of the support from those with incomes less than $25,000. And
Minnesotas I-395 MnPass, 64 percent of the support from low-income individuals there.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00028

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

13
Again, the gas tax is more regressive. It puts a greater burden
on those with low income. They often have strict work schedules;
they often have to live farther away from their jobs. Occasional use
of a congestion pricing system like this would be important.
I think what Mayor Bloomberg is proposing to do in New York
City is a very good example and speaks to the issue that you are
talking about. If he is successful in implementing a plan to have
a congestion pricing fee for lower Manhattan, which would put the
money that is earned from that into improving transit throughout
the region. I think that is a very good idea.
Mr. DEFAZIO. The problem, of course, is the improvements, and
people in New York have said, hey, all the people who live over
here dont have a transit option right now, they are just going to
have to pay, these people here do have it, and I dont know the geography up there. The problem is when you impose, because we are
not going to raise taxes in any way or increase other investment,
but we are going to sort of work toward the future of the congestion
pricing issue, create inequities. In fact, your own staff, and I dont
believe this was the Commission, I am told this was, well, Commission staff analysis, sorry, it is the Commission staff, which you
would disagree with, I guess, being the minority on the Commission, says that the fuel tax, the congestion pricing is at least twice
as inequitable as fuel tax by income group. And I dont think they
are talking about rich people.
And let me give another example. I drive a funky old car at
home. I can squeeze out 20 miles per gallon when I am really lucky
in my 1964 Dart. Now, here we go, we dont have tolls, but if I had
to pay a $1 toll, I live out east of Eugene in a smaller town, and
the 105 is getting kind of congested. So lets say we go to a $1 congestion toll. That would be basically, if I get 20 miles per gallon
and I had to pay a $1 toll, it figures out that I would have to drive
400 miles to break even here.
I have a question, and a lot of lower-income people are driving
less fuel-efficient cars. I hang on to mine for sentiment, I also dont
like making car payments. There are real questions here, between
the gas tax and I believe the congestion pricing, when you apply
it in the real world onto what the equivalents would be. I think
that is something that really needs to be done.
Let me get to another issue. As I understand the minority position, you are proposing basically to phase out Federal investment
in the system. Is that correct?
Secretary PETERS. Mr. Chairman, I would intend to do that over
time. But this is an area where I didnt disagree with the other
members of the Commission, in terms of over time, we should
phase into a vehicle miles traveled system, as opposed to either gas
taxes or tolling and pricing in the short term. And really a vehicle
miles traveled system is a form of pricing.
Mr. DEFAZIO. Well, what I meant is that you are proposing that
there would be no increase in the Federal gas tax not even to compensate safer construction inflation, which is running about 10 percent a year. So that means a year from today, the Commission
would say we are grievously under-investing at the Federal level.
You would disagree with that.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00029

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

14
A year from today, they would suggest we need a dramatic increase. If we freeze it, we actually in real dollars decrease our investment at the Federal level a year from today by about 10 percent. In fact, using the rule of sevens, basically within a very few
years, we are going to have cut our investment in half in real dollars. You do acknowledge that there is tremendous construction
cost inflation?
Wouldnt you even want to just hold the Federal portion?
Wouldnt you even want to just keep it at the current level, say
index it to construction cost inflation or something else?
Secretary PETERS. Mr. Chairman, I did suggest and do suggest
that we keep it at the current level.
Mr. DEFAZIO. In real dollars, so we would index it?
Secretary PETERS. No, sir, in actual dollars.
Mr. DEFAZIO. So only in nominal dollars.
Secretary PETERS. Here is also what I suggest we do. I talked
earlier about the Federal role. I refer also to a very good GAO report on this topic. We dont have a clearly-defined Federal role
today. That has manifested itself, as I said earlier, in 108 different
programs in highway and transit. We need to narrow the focus of
the Federal role, have the Federal Government do and collect
money to support only those things that are truly in the national
interest. Then we need to give more State and local discretion more
prioritization.
I would say hypothetically that of the 18.4 cent Federal gas tax
that we collect today, 12 cents supports Federal issues directly. The
balance of that should either be returned to or kept by the State.
Over time, we need to move to more direct pricing.
Let me give you just an idea of what is out there, the opportunity
that we have to bring in new revenues. If congestion pricing were
done on all congested roads, and this is based on the C&P report,
the cost to maintain that system would be reduced by $21.6 billion
a year, to $57.2 billion a year. That is less than we are paying
today.
Two economists at Winston and Langer did a study that said if
congestion pricing was used in the largest metropolitan areas, the
95 largest metropolitan areas, it would generate $120 billion a year
while solving congestion, allowing tax reduction. I am not suggesting that we reduce the taxes at this point in time, but I do
think we need to move to a more direct user pay over time.
Mr. DEFAZIO. Again, I find some contradiction there. If the cost
to maintain would drop so dramatically, that implies that those are
trips that would never be taken as opposed to congestion avoidance, congestion tax avoidance where people would choose alternate routes or different times. So we are now at the point of it, we
are not just saying that 50 percent of the travel at rush hour is
discretionary, we are saying that 50 percent of all travel is discretionary, which I find really hard to believe, particularly with current gas prices, that people are out there just kind of cruising
around at the worst times of day, for fun. I just dont find those
numbers credible.
I would like to relate to home things. So Phoenix has some traffic
problems now. Would you recommend that Phoenix impose tolls
and congestion pricing in the Phoenix area to deal with those prob-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00030

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

15
lems, or would you suggest additional investment and construction,
some transit and other things are necessary? That just seems to me
a real critical point here. For your home State, do you think where
you have no tolls, that they should start to impose tolls and congestion pricing to deal with their problems, rather than increasing investment, whether it comes at the Federal level or the State level?
Secretary PETERS. Mr. Chairman, I actually did try to implement
some of those projects when I was the director of the Arizona Department of Transportation.
Mr. DEFAZIO. You tried to implement congestion pricing or tolling?
Secretary PETERS. I actually tried to implement pricing of the
HOV lanes to convert them into HOT lanes and allow single occupant drivers to purchase rights to use those lanes. We also looked
at tolling the new crossing at Hoover Dam.
Mr. DEFAZIO. But someone didnt go along with that, like the legislature or someone?
Secretary PETERS. There were numerous people who didnt go
along with that. And the idea may have been a little early. Today,
in the Phoenix area, I think converting the HOV lane system,
which is a pretty mature system, to a HOT lane system, would help
tremendously. There is unused capacity in the HOV lane system
today. And I do think that Arizona, and other States, should look
at pricing as one of the options for raising revenue to do projects.
Certainly there is public opposition to these things. But you have
indicated that you dont necessary concur with the statistic I gave
earlier, and we will give you others. By the way, also, we will give
you the background documentation for that.
Mr. DEFAZIO. Yes, I just, again, if the avoidance is $23 billion,
then I mean, since the maintenance has to be done, and it relates
to, you werent talking about dealing with congestion and enhancing the system, you were talking about maintenance. Maintenance,
you can have the car bumper to bumper on the road, or you can
have one car driving down the road. If you have the same number
of cars, but, I suppose the speed does make some, well, actually it
probably costs more to maintain the road for the higher speed if
it is less congestion. That statistic just didnt make sense.
Secretary PETERS. Mr. Chairman, what I was referring to is in
the conditions and performance report, there are two levels of funding that are suggested. One is cost to maintain, the other is cost
to improve. Cost to maintain doesnt necessarily discount any additions or improvements to the system.
Mr. DEFAZIO. Okay. Mr. Mica? Is the vote over?
Mr. MICA. They are in fact nowhere near. I have been around
here 20 some years and I have never seen that kind of media show.
Mr. DEFAZIO. I did not know you would come back, I was waiting
for the Chairman.
Mr. MICA. You go out and say, Mica is attacking the Secretary,
and we will get them in here.
[Laughter.]
Secretary PETERS. Mr. DeFazio, for the record, my very first car
that I bought by myself was a 1964 Dodge Dart. It is a great car.
[Laughter.]

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00031

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

16
Mr. MICA. Thank you, Madam Secretary, and thank you, Mr.
DeFazio, for yielding.
Just a couple of quick questions. One of the thingsI heard they
are going to do this every 20 minutes. They are throwing their toys
out of the playpen on our side.
[Laughter.]
Mr. MICA. I think all of us agree that we need more net money
into the Nations infrastructure. That is pretty much agreed upon,
right, Secretary?
Secretary PETERS. Yes, it is.
Mr. MICA. There are some figures that are thrown around. We
did the $284 billion bill. The American Society of Civil Engineers
says that we need about $1.6 billion for five years investment.
The question is how we get there, and the Commission did bring
forth the 40 cent gas tax. I think that it would be interesting for
you, and I dont know if you have done the calculations, to come
back and see what can be saved by revamping the process, revamping some of the Federal guidelines. I have been through a couple
of projects. One was an interchange I started in central Florida. I
had dinner the other night at a restaurant just off of it. I showed
someone, I said, we broke ground there, but it took 15 or 16 years
to get the approvals. By that time, the funding had doubled or tripled, just like your fellow commissioner had cited.
So calculate what we could say in revamping the process, and
then we lack a Federal policy of public-private partnership. Some
people are slamming them, and maybe some of them arent appropriate. The Chairman and the Subcommittee Chairman sent out a
letter to secretaries of States saying there has to be this, and it
sent chills through the Country. What is his name, Mitch Daniels,
got into a deal where there was foreign investment money.
And there is lots of foreign investment money that could buy up
our infrastructure. But there are policy questions that remain unanswered. Rendell came before us and at first was going to put I80 on the open block, and then he got burned, and now they are
selling it to the Pennsylvania Turnpike Authority, raising the revenue. Now they have English and all the guys in upstate Pennsylvania yelling about, they are tolling us to put transit money in
Philadelphia. Again, I am just telling you what I hear.
You took, Administration people and our own candidates slam
earmarks, but you took $853 million when we failed to earmark,
well, we did earmark 1,155 projects. You turned it into five. I dont
remember having a public hearing on those five. I dont rememberI never met with the bureaucrats who made the decision. I
dont count you as a bureaucrat, I have met with you. But those
who made that intimate decision on how to dispose of the $853 million. You chose five projects to put it on. And that is earmarking
by bureaucrats.
What I am saying is, we need to sit down, and Mr. DeFazio, this
goes to you, Mr. Oberstar, the leadership of the Committee here,
to sit down and decide what public policy is in these public-private
partnerships, and how we do leverage that money. What are the
rules of the game? I dont know. I am the Ranking Member. I dont
have a clue. I dont think anybody can come before us right now
and tell us exactly what the rules of the game are.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00032

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

17
And when you are selling something, like they are going to sell
300 miles of I-80, I guess it is, to an entity, there is Federal money
in that. Certainly it is an interstate. Another thing, let me ask you,
I did not see any recommendation on expansion of the interstate
specifically. Was there in the Commission report?
Secretary PETERS. Yes, sir, there was.
Mr. MICA. I am sorry, I did not see it. Could you tell me what
the vision for the interstate is, which is our major Federal surface
transportation project we started some 50 years ago?
Secretary PETERS. Sir, the report did include improving the interstate as well as maintaining and operating it. I dont have the specific numbers, but I will get those and get back to you. I believe
they were broken out in the report, but I will check that and get
back to you.
Mr. MICA. Again, that is our major surface. And mass transit, of
course, I think you emphasized the need for mass transit, rail alternatives, things of that sort. So again, I think, Mr. Chairman, I
was just saying, we really need to sit down and decide what Federal policy is for these Federal public-private partnership sand define what can be done, who can invest, who can sell off the interest,
how the money can be used, if it is raised. I would hope that we
could work together.
Actually, this is a great building time because it is before the
next major transportation bill, and then have that definition so everybody knows the rules of the game. And we can meet the objections, if folks have objections, if people dont want foreign investment and buying up our interstate, if they dont want sale of interstate to some entity, and where the money is allowed to go.
So I think those are important questions. I would love your recommendations, and then I would also like to see how you could calculate where we could get toward the $1.5 billion in bonding, in
speeding up the process, in public-private partnerships, your recommendations of how we achieve that. Can we get that?
Secretary PETERS. Absolutely, sir, and I will answer that briefly
now. Probably about tomorrow afternoon, we will get that. Most of
it we have. Recently, I read a GAO report that talked about the
role that public-private partnerships are playing in transportation
and infrastructure in the U.S. They have identified a wide variety
of the benefits, but also talked about some of the parameters that
have to be placed on those. I have listed a little earlier in my testimony or my responses some parameters that I think are important.
I do think that we need to take this on very quickly and get together and decide, perhaps even through a rulemaking process in
the near term, in advance of the next bill, what are the important
parameters.
My concern with the majority Commission report is that they
placed numerous restrictions on public-private partnerships, beyond which I felt was prudent to do, in my opinion, and substituted
their judgment for that of State and local officials. I do think
whether or not there is Federal money, and certainly when there
is Federal money involved, there is a Federal interest, but whether
or not there is Federal money involved, we do need to make sure
that these roads are constructed to the operating and maintenance
standards of the interstate, if indeed they are on the interstate,

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00033

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

18
that they connect with other portions of the transportation system,
if they do provide mobility for people and products, they are conducive to interstate commerce. I have listed out about a half a dozen
or so requirements that I think would be prudent, and have that
discussion.
Let me go to your discussion about how we can save money. You
talked about what can be saved by revamping the process. When
I was highway administrator, we estimated at that point in time
that federalizing a project added somewhere between 12 and 24
percent to the cost. That would be if the project could be constructed in the same virtual time frame that it otherwise could. As
Commissioner Skancke pointed out, that is not the case today. And
as Mr. Chairman mentioned, when we have significant inflation
and construction costs and materials, well in excess of the rate of
inflation, then the sooner we can build these projects, the better off
we are, because we are saving money. There are Federal processes
that draw this out.
That is one of the reasons that I think it is so important to narrow the Federal focus to what is truly in the national interest, and
then let the States do the rest of the projects, with the balance of
the money, using other sources, diversifying, of course, we need to
do that as well.
In fact, when I was director of Arizona DOT, we had a program
that we called the HURF swap. HURF in that language is Highway User Revenue Fund. It was the State equivalent of the Highway Trust Fund. We would basically take the Federal money that
might have otherwise gone to a local government, because it was
so much hassle for them to use Federal money, and substitute
State money for that. But we would only give them 90 cents on the
dollar, because we were taking on the process burden requirements.
So that is an idea of what Mr. Skancke I think was trying to get
to in terms of how we could save money: narrow the Federal focus,
collect at the Federal level only that which is attributable to the
Federal role, and diversify or deploy the balance to the State. One
of the things that Fred Salvucci used when he was selling the central artery project, and I think this is important to remember, he
said to people, this is 10 cents on the dollar, we can get this project
for 10 cents on the dollar, we put up 10 cents, Federal Government
will put up the rest of it. So they didnt take the political heat for
raising fees, and that project, particularly because of the federal requirements to complete interstate system, as we all know too well
ballooned all out of proportion. There wasnt respect for the money
because they werent collecting it, they werent answering to citizens for collecting it.
Mr. MICA. You may have heard of my 437-day plan. That is the
plan that I propose for any replacement infrastructure projects.
That is how long it will take to replace the Minneapolis bridge, 437
days. The staff told me through the normal process it can take anywhere from four to seven years.
Secretary PETERS. Easily.
Mr. MICA. I am going to go vote, Mr. Chairman.
Mr. OBERSTAR. We will recess for this vote. I got about 90 percent back here, then I realized there was another vote.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00034

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

19
I just want to observe, Madam Secretary, about project acceleration. We provided new authority in SAFETEA-LU for permit approval process acceleration. I am disappointed that the Federal
Highway Administration has not called the States together to convene the State departments of transportation and move them in
the direction of implementing vigorously this permit acceleration,
permit streamlining procedure that we included in the bill.
In Seattle, when they were in the process of doing the monorail,
they used exactly this process that I crafted for SAFETEA-LU.
They completed permitting in 44 weeks instead of 44 months. If
there is a need to improve this process, we can do that. But I dont
accept an Administration that says, oh, we have to speed up the
process but then doesnt use the tool available in existing law to
encourage States to move ahead and to be vigorous and creative in
speeding up permit approval, while not in any way denigrating the
environmental process, the historic preservation reviews, and the
other permitting that is needed in our highway construction program.
Secretary PETERS. Mr. Chairman, if we are not aggressively implementing that, I assure you we will. Because having worked as
highway administrator during the time that that bill was passed,
I very much appreciate the work that you and others did to streamline the processes.
Mr. OBERSTAR. We will stand in recess pending this vote.
[Recess.]
Mr. OBERSTAR. With apologies for these interruptions, my votes
on the House Floor are procedural motions.
The Committee will resume its sitting. Mr. DeFazio will assume
the Chair, and pending that, Mr. Baird is recognized.
Mr. BAIRD. I thank the Chairman and I thank Madam Secretary
for being here.
I would like to get your thoughts a little bit on the issue of transit. I happen to have a great concern about congestion on our highways and also about global warming and our carbon footprint. I am
particularly interested in several question: how you think transit
should be funded, where should the resources come from; what do
you think the Federal share should be and how that should be calculated; and your thoughts about how the cost benefit index is calculated for the merits of transit vis-a-vis the cost.
Secretary PETERS. Congressman, thank you for the opportunity.
First of all, transit is important, it is a very important part of our
transportation network and one that is enjoying increasing ridership, as I think you will hear, from the next panel of witnesses.
Today that is funded approximately half by the general fund, and
20 percent of the Highway Trust Fund goes to support transit
today.
I think that is a fairly good mix. But as we look to the future,
I dont think we are going to be able to depend on the gas tax, and
therefore, the Highway Trust Fund, as much to do that. That may
push more of the expenses into the general fund, but I think there
are other ways to attract investment to transit also.
In terms of benefit cost, having served now a little over a year
as Secretary, and looking at the New Starts process, I am not sure
we are looking for the right things. The transit administrator and

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00035

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

20
I have talked about that as well. When you look at cost-effectiveness and how weby statutecalculate it today, I am not sure it
gives us the best read on which projects are most important to
fund.
At the end of the day, I think it is important for local officials,
metropolitan planning organizations, Governors, local elected people like county supervisors or mayors, to make a decision about
where transit makes the best sense for them, and then to have
more latitude to spend dollars that they get, where they think it
is most important to do it, as opposed to going through this very
difficult, and I confess it is a difficult process to get a full funding
grant agreement from the Federal Government.
Mr. BAIRD. Do you have some thoughts about the changes you
would like to see in terms of how cost benefits are calculated? It
sounds like you have some variation, or some ideas that would be
different from statute.
Secretary PETERS. I would. I think today we dont consider potential economic benefit of the project. I think that is one shortcoming
that we dont necessarily do today that we should. I will talk about
transit-oriented development, for example. Sometimes it is a chicken and egg thing, if the transit is there first, does the development
occur, or vice versa. But the two can complement each other substantially. I think to be able to take into consideration that type
of investment, especially when local officials have done the prerequisite zoning and are looking at what might build in that corridor, a multi-use housing, high-density housing, things like that,
I think those are factors that I personally would like to see us give
more credence to than we are able to today.
Mr. BAIRD. You mentioned that you would possibly see the general fund as absorbing a greater percentage of the cost of transit
projects. Given that the recent budget projects a minimum $400
billion surplus, not counting borrowing from Social Security and
not counting realistic costs for the war, it is hard for me to understand where we would get that money for transit from the general
fund, given that transit takes pressure off our highways, thus making road-based freight traffic more expeditious.
It seems to me that shifting the burden to a fund that doesnt
have resources from a source of revenue that actually benefits from
getting vehicles off the road, I am not sure I understand that rationale. Maybe you can elaborate on that.
Secretary PETERS. Congressman, you make such a valid point. I
think we have to, when we consider investments in surface transportation infrastructure across the broad range, we cant do that in
a vacuum. We cant assume that there arent other demands on the
funds. There are many demands, and as you talked about the entitlement programs that are taking an increasing share of our nondefense discretionary revenues in the future, so we have to look at
other sources of funding. We also have to look at the opportunity
cost of this money.
When I say the general fund, I dont mean move total dependence into the general fund by any means, because it certainly will
not sustain that. But I think for example, using tax increment financing, for example, when we know that economic development is
going to occur in a corridor, to be able to devote some or part of

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00036

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

21
the revenues toward building a transit system. I think certainly
fares are an appropriate user contribution. But we all know that
they are not going to eventually pay for the project in itself.
I would be more a fan of diversifying funds. My home town,
Phoenix, Arizona, has a half cent sales tax, half of which goes to
transit and half goes to road-building. I think those are ideas that
have certainly enjoyed favor in other communities around the
United States.
Mr. BAIRD. One last pitch for a proposal which I raised before
and probably wont go anywhere. But we have by estimates, a $1.6
trillion infrastructure deficit. Many of us are concerned that when
we put the Social Security funds in a so-called trust fund, which
we are going to immediately borrow back, there is really no tangible mechanism for paying back.
I have actually floated the idea of investing our Social Security
trust funds in the transportation infrastructure fund, so that our
people could use that money to build lasting infrastructure. What
is happening now is Macquarie Bank and others, retirement funds
from other countries, are investing in our infrastructure, while we
are just borrowing with no plan to pay back our retirement funds.
With that, I yield back and thank the Chair.
Mr. DEFAZIO. [Presiding] I thank the gentleman.
Mr. Coble?
Mr. COBLE. Thank you, Mr. Chairman.
Madam Secretary, it is good to have you with us.
Mr. Chairman, I want to associate myself with statements made
by the distinguished gentleman from Washington regarding vehicular congestion, congestion, Madam Secretary, involving hundreds
of thousands of passengers in our various airports. These are problems that are crying out for solutions, and they are problems that
are not going to vanish. Vehicular and airport congestion obviously
negatively impacts productivity.
On another point, Mr. Chairman, I believe the distinguished gentleman from Oregon touched on this earlier, involving bridges.
Madam Secretary, I dont want to be portrayed as a prophet of
gloom and doom, but I suspect most everybody in this hearing
room, prior to weeks end, will probably cross an unsafe bridge.
These are problems crying out for solutions. And I am not blaming
you for this, it is not your fault. But it is the nature of the beast,
I guess.
Let me put a two-part question to you, Madam Secretary, given
this disjointed day, you may have already touched on it, I think
you touched on the second on in response to Mr. Bairds question.
But my questions are, to share with us, in your opinion, what is
the appropriate role for private sector companies in building and
operating highways and transit facilities and systems, A, and B,
and this may be some overlapping, what are your most significant
points of disagreement with the majority position in the Commission report?
Secretary PETERS. Congressman Coble, I would be pleased to answer those questions. First of all, in terms of an appropriate role
for the private sector, I think there is a role. And as Congressman
Baird pointed out, pension funds from other countries, other areas,
are being invested in U.S. transportation infrastructure today. So

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00037

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

22
we have a lot of opportunity, I think, to attract private sector investments.
Where it is an appropriate role for the private sector to invest
is where we are protecting the public interest. I talked about some
of those requirements earlier. Building to standards, operating to
standards that we have on the balance of the interstate, not limiting interstate commerce, transparency, those are things I think
are appropriate.
Where the private sector will invest, though, is frankly going to
be where there is a level of congestion and a level of traffic that
make it cost-effective for them to do so. That is where I think this
whole concept of pricing is so important. Where there is demand
for projects based on congestion that is building or is there already
today, the private sector will look favorably upon those projects. All
of them are not going to pencil out, if you will, in terms of private
sector investment. But many of them will. And those are the opportunities, I think, to attract private sector investment, to add to
what we are collecting from the public basis here today.
The areas where I most disagreed with the rest of the commissioners, I will answer that. First of all in quantifying the overall
problem, they largely used the cost to improve, with some additions for passenger rail and other things. I think cost to maintain
is more appropriate funding level, supplemented by private sector
investment.
I think that increasing the gas tax by 40 cents is not the right
way to go, either in the near term or in the long term. I think we
need to move away from dependence on the gas tax, not increase
our dependence on it. This has to do with energy policy, the lack
of efficiency, issues like that that I think are important.
I think the Federal role needs to be very clearly, and I would
argue, narrowly defined, so that the Federal Government is only
taking responsibility for and funding those things which are truly
in the national interest. I would observe that 108 programs are not
all truly in the national interest, that we need to narrow that role.
Mr. COBLE. Thank you, Madam Secretary. Now, if not the increase in gas tax, and I dont disagree with you about that, where
do we go for the solution?
Secretary PETERS. Congressman, that is an excellent question. I
said earlier, I am not advocating that we stop collecting the 18.4
cents that we are collecting today. We should continue to do that.
But we need to prioritize where we are spending that money. Just
like you and I have to do in our homes, just like businesses have
to do, when we are dealing with tough times and not a lot of
money, we have to decide which is the most important to fund. So
I think we need to narrow the scope of what those funds are being
used for today. I suspect that we probably could do that by some
20 percent. I wont offer up any specific programs, but I think there
is an opportunity to probably recapture approximately 20 percent
of what we are spending in a variety of other ways today.
I think as has been pointed out earlier, streamlining the process
by which we do Federal project approvals, and making that happen
quicker and easier, can save us money. Because time is money
when we drive these programs out. And again, I think there is incredible potential in the private sector, and their willingness to in-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00038

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

23
vest in transportation infrastructure, if we create the right environment.
Mr. COBLE. That is a fair response. My time is expired, but I
would like for you, Madam Secretary, Mr. Chairman, if I may, perhaps submit to the Committee your detailed suggestions and recommendations regarding the prioritization, if you would do that.
Secretary PETERS. I would be happy to, sir.
Mr. COBLE. Thank you, maam. Thank you, Mr. Chairman.
Mr. OBERSTAR. Mr. Capuano.
Mr. CAPUANO. Thank you, Mr. Chairman.
Madam Secretary, I actually like some of the things you are saying. I like the concept of flexibility, I have no problems with publicprivate partnerships, according to the States, let them decide. Fine
by me. If it needs to be loosened up to let people do it, fine by me.
I actually dont think they will work, but I wouldnt mind being
proven wrong. That is fine.
I like the idea of flexibility. I would like to see some flexibility
in the split between the highway and the transit funds. Why not
give it to the States, let them decide if they want transit or highways? What is the difference? Some States want highways, some
States want transit. Either way, people are going to work, and
transportation is improved.
It is interesting to me, though, I do have a couple of questions.
You say the tolls are so popular. The Massachusetts Turnpike Authority just raised their tolls, and it now costs $3.50 for me to get
to the airport and home. I am just curious, how much do you think
it should cost me to get through that tunnel?
Secretary PETERS. Congressman, I dont want to hazard a guess
on that, because I dont know what the costs are.
Let me put it this way. I dont think people wake up in the morning and say, gee, I would like to pay a toll today. But I think when
faced with either increasing taxes or paying a toll, and a toll where
they might see immediate improvement in their commute, they are
more willing to do that. One of the issues that we have with public
transit authorities today is there isnt necessarily that nexus between additional tolls and infrastructure improvement.
Mr. CAPUANO. On the tolls, for instance, in Boston, there are two
ways in that you pay tolls, through the Mass Turnpike or through
the Tobin Bridge, but there are a dozen ways in that you dont pay
tolls. Are you suggesting we put tolls on every single road that goes
into Boston?
Secretary PETERS. Congressman, I am certainly not. And I am
very much with you in that I think those decisions ought to be
made by State and local governments, people who are answerable
to those who have elected them directly.
Mr. CAPUANO. Fair enough. And last I knew, I was, and your
boss is, I am answerable to people. I guess as far as the
politicization of the whole system, again, I dont disagree with you,
but I want to parse it a little bit. When you say politicization to
me, that means, for instance, we just tried to do something in this
Committee a little while ago to prioritize structurally deficient
bridges. I personally think it is a good policy, if we are going to
spend any Federal dollars, to tie some strings to it, such as, you
have to use this money to do structurally deficient bridges. It

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00039

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

24
doesnt matter which one you do. Every State that I am aware of
has more bridges that are structurally deficient that need to be
done than they have money or anybody has money to fix. I think
that is perfectly good.
Is that okay with you, or would you consider that a political interference?
Secretary PETERS. Congressman, I think it is okay, but I think
before we tax the public further to improve these bridges
Mr. CAPUANO. Even with existing money.
Secretary PETERS. No, I dont have a problem with that, identifying money like that. And Congressman, let me again state, I
dont have a problem with Congress letting their preferences be
known. But when we have 108 different highway and transit programs, we have a very confused Federal purpose. There is a very
good GAO report that deals with this issue, and we need to narrow
our Federal focus.
Mr. CAPUANO. I agree with that entirely. But in the final analysis, though, there is still going to be X number of dollars in the
Federal program, it may be one program instead of 108 or whatever the number is going to be. But there are still going to be Federal dollars and State dollars and private dollars all in that pot.
Secretary PETERS. I very much support what you said, give the
money to the States, if they want to build all transit, fine. If they
want to build all highways, fine.
Mr. CAPUANO. What I would like to see at some point, though,
I would like to see some numbers from your office or from those
who would disagree with this, that substantiates the fact that the
needs of this Nation can be met without gas tax revenues or a
change in that. I am not a gas tax advocate, I am just, I am a highway, actually transit advocate, and it costs money to build things.
I dont know any other way to do it.
Secretary PETERS. You are right. Roads are not freeways. That
is our problem, they called them freeways. They are not.
Mr. CAPUANO. Everybody knows they are not free.
My last point, too, it is interesting to me that we are talking
about highways and transit and ground transportation today. And
the answer to that is to basically limit access with congestion pricing, which I dont think is necessarily a bad concept, or to increase
toll access, to do something about the revenue side of it.
When I talk to my FAA friends, their way to fix their congestion
problem is just to build more runways. No discussion whatsoever
about access limitation or different fee structures. I would love it,
I mean, transportation is transportation. I dont understand these
silos that were built, but they need to be torn down. I would
strongly encourage you to talk to your friends at the FAA to enlighten them that, yes, on occasion a runway is necessary, not a
problem. But there might be other ways as well to address that
congestion issue that maybe you seem to be advocating a little bit
more than they are.
Secretary PETERS. Yes, sir, I certainly will, and last time I
checked, they worked for me.
Mr. CAPUANO. Then would you please remind them of that?
Secretary PETERS. Yes, sir, I will.
Mr. CAPUANO. Thank you.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00040

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

25
Mr. DEFAZIO. Congresswoman Drake.
Mrs. DRAKE. Thank you, Mr. Chairman. Madam Secretary, it is
nice to see you today.
We know that you do support strong accountability and reliance
on cost benefit analysis. What I am curious about is, are we certain
that both U.S. DOT, State and local governments have the tools
they need to really analyze these road projects, know that they will
accomplish the goals in the end? Are we using some of the new
technologies in modeling and simulation to really look at what this
road will do or what this transit will do in order to make sure that
we are making good decisions? That would be number one.
I also think we all agree with flexibility, and giving more flexibility to the States and local governments. One question I have always asked in my local government is why dont we allow businesses to contribute to a transit fund instead of requiring them to
meet certain zoning requirements on parking? Nobody is going to
ride the transit if you can go park your car. So I think we hurt ourselves as well as give people some of those choices.
I also think that there are other revenue sources out there, that
we are so hung up on gas tax and tolls, and all of us are aware
of John Peterson and the work that he has done in deep sea drilling of natural gas, which would give us revenue sources back to the
State and Federal Government as well.
I am also curious, just to ask the last question, how you would
look at other measures that give more flexibility to the States, such
as a bill that I have in, that would allow Virginia to decide how
to use their HOV lanes without being penalized. We all know HOV
works in Northern Virginia, and they have been very, very successful. But in the Hampton Roads area, we cant get people on them.
So the lane miles we could open up I think would be incredible.
So my question is about, are we using new technologies, are we
really looking at whether our investments are working, more flexibility to have other revenue sources and other measures that would
let States decided, how do we want to deal with our transportation
issues.
Secretary PETERS. Congresswoman Drake, thank you for the opportunity. One of my concerns with the Federal program today is
it is too focused on process and not focused on performance. We
need to change that. We need to do these benefit analyses, and as
you said, use technology that is available. Some States actually are
doing that. Washington State does that, and Director Pete Rahn
from the Missouri Department of Transportationwho will testify
on the next panelalso has done some very good work in that
area, particularly with prioritizing in a very innovative program to
improve bridges throughout the State of Missouri. So I would recommend your talking to him about that particular issue.
I do believe we need to have more flexibility. I think carving dollars up into silos the way we do today does not promote the highest
and best use of those dollars, and certainly doesnt let local communities make decisions about what might be best for them, where
and how to spend that money. All of these programs have strings
attached to them that we are dealing with today, that we monitor
today. I think there are much better ways to simplify that.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00041

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

26
In terms of how to pay for it, I truly think that direct user fees
are the best way, because then we make choices. Just like if I decide to go to an early bird dinner or the late dinner or a matinee
instead of an evening show, I make value choices. I make value
choices in the way I pay for my electricity by the time of day that
I use it. So I think pricing on our system would give us that flexibility. It could be adjusted for low-income people who could be subsidized, it could displace revenues that would otherwise not be
available for public projects. There are a variety of reasons that I
think it is the best method.
To go back to what Mr. Capuano talked about, I said earlier
today, and I dont think you were here, what we have I think in
infrastructure funding across the broad range, that I have responsibility for today, is the Tragedy of the Commons. It encourages overuse, at peak periods of time in the air, at the airports and on our
roadways. If we can price just a small portion of the population out
of those peak periods, we can get, in some cases, 40 percent greater
throughput by not letting it break down.
I think your idea of converting the HOV lanes to what works
best from the Hampton Roads area is a good idea. I dislike the fact
that we have so much to say about how and where you use your
roads in the State. I dont like that, and I am a former State official, so I have been on both sides of this.
Mrs. DRAKE. Thank you, Mr. Chairman.
Mr. DEFAZIO. Mrs. Napolitano.
Mrs. NAPOLITANO. Thank you, Mr. Chairman. I am glad that we
are having this interesting dialogue on transportation, simply because as I have spoken from here before, it is extremely critical in
my area. We have had great conversations with Secretary Peters,
thank you very much. She has seen the areas in the greater Los
Angeles and surrounding communities of how important transportation is and the gridlock we currently have.
So to me this is a conversation that bears more input and more
questioning. And I have shared that utilization of highways for pay
will not work necessarily in our area, because it is something that
has been inherently a failure in the past, with the State back in
the 1990s.
However, it is important for us to continue, and if you have the
flexibility you are talking about, to have the State focus on where
the greatest need it, and be able to continue to fund them. Part of
it, and we have discussed this with the State transportation as well
as Federal transportation committees, about being able to doubledeck, to be able to utilize a second level to, whether it is mass
transportation or truck traffic, then we could begin to talk about
the possibility of charging for the use of a faster area to travel on.
While we sometimes, those of us that are lucky to have good-paying jobs, that we can afford to pay for the passes, many of the
working class cannot. So that is another, one of the main reasons
it may not work in some of the major areas. Are you supportive of
in putting elevated highways to be able to accomplish this, especially in the greater areas of concern?
Secretary PETERS. Congresswoman Napolitano, I think it is a
good idea. The caution that I would say is, lets go on talking with
the public about this, because it would have more of an intrusive

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00042

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

27
effect on communities, especially if it is a residential area. If it goes
through an industrial area, I certainly wouldnt have a problem
with that. In fact, I considered double-decking Interstate 17 in Arizona when I was there.
Mrs. NAPOLITANO. And I talk about 5, because 5 runs through a
little bit of my district. I know before the Joint Power Authority
was established there, they were totally against building a second
level. Now they are asking for it simply because they see the impact when one vehicle causes a backup and people just stream off
the freeway into their areas, and their concern is for the safety of
their communities.
And it is something that is going to have to happen if we are
going to expand that freeway by two lanes. It is a Band-Aid. By
the time it is done, it will be outdated. So if you are going to be
able to work with the State and be able to promote utilization of
the infrastructure that is already there, to be able to add that second level, or at least be able to work with the State and those of
us who are very much interested in making that happen.
The container fees from the port is another issue. They are reticent to increase paying for per container increase. Yet we have congestion and the environmental quality for the trucks that back up.
I know that EPA is already working with the ports to ameliorate
part of the congestion. What suggestions do you have for the
freight industry to be able to address that?
Secretary PETERS. Congresswoman, I think one of the things that
is working very well in the L.A.-Long Beach areaand certainly
could be expandedis pricing the use of the port. By this I mean
higher prices during peak periods of the day, lower prices off peak.
In fact, we have already seen some pretty impressive results from
doing that in terms of spreading the demand out over a longer period of time. Again, we are getting better throughput from the infrastructure without adding infrastructure, which as you said is
very difficult to do in those areas.
I know that there are some environmental concerns that you and
I have talked about, and we certainly need to continue to deal with
these. I think your suggestion of perhaps an overhead structure
that is a high speed lane, that also could help a bit within a port
area, because you can get traffic out of the city more quickly, rather than the stop and go. So pay your money, get on the express
lane and get out a little bit more quickly. I think that would make
a lot of sense as well.
Mrs. NAPOLITANO. Right, and just to wrap up, just a comment
that people may complain, they complain about the high cost of
gasoline. But they are willing to pay for more gas tax, if it is going
to improve the infrastructure that they travel on. Californians have
a love affair with their cars, and unfortunately, that is not good for
the environment, but it is something we can certainly work on.
Secretary PETERS. Congresswoman, if I might go back to the lowincome folks who you said who maybe wouldnt be able to afford
these transponders or these passes, the beauty of the technology
that is available to us today on what we call open road tolling is,
you could credit some money on those transponders on for some
segment of low-income population and say, okay, we are going to
give you $50 or something like that and already credit that on their

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00043

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

28
transponder. The point is, there are ways to subsidize low-income
folks for things like this.
But also the fact that other people are paying for a part of the
infrastructure frees up money to improve their part of the infrastructure along the lines of what Mayor Bloomberg has proposed.
Mrs. NAPOLITANO. And not only that, but if you would come up
with some kind of a media blitz to be able to notify those that dont
need to use the freeways during peak hours, retirees, people going
somewhere, that that might help.
Mr. DEFAZIO. Representative Brown.
Mr. BROWN. Thank you, Mr. Chairman, and thank you, Madam
Secretary, for coming today and being part of this debate.
I know we are looking at, I guess, the next reauthorization bill
to TEA-LU, and I know it is probably already underway. Some suggestions I would make as we look at how transportation is going
to be addressed in the next five to six years, I know back in 1954,
I guess, somewhere thereabouts, when the original interstate system was actually presented and improvements started, it seems
like that we havent done much to address transportation needs on
a big scale since then, recognizing every 10 years we do a redistricting based on the current population. There has always been a
continuous population shift from the Northeast and Midwest down
to the South. I dont know that the interstate system addresses the
current needs that were presented back in 1954.
And also to even expand more on that, the need for movement
of goods has been also shifted. I know it is being shifted even as
we speak, we talked about Los Angeles and how that corridor was
adopted. But given the Panama Canal is going to be enlarged, and
with that, we will be able to shift larger containers from the West
through the Canal over to the East, which means there is going to
be more of an impact on the eastern ports, including the one at
Charleston.
I would hope that we could develop some kind of a new strategy
to address, I know we are looking at I-73, and I am grateful that
we were able last Friday to sign a decision so we can move forward
to buying right-of-way, which will help us a little. But you are
right, we recognize the tremendous cost of some $2 billion to complete that 35-mile stretch, just to connect us with our Interstate 95.
Back in 1954, when they developed the formula where 90 percent
was Federal, 10 percent was State, it seems like to me the Federal
Government is actually imposing more and more responsibility of
building highways, even Federal highways, back to the State level.
Weve done some creative things, even in South Carolina, when we
introduced the infrastructure bank and we allocate special funding
in order to fund it, even like a penny sales tax in some of the counties in my district who fund highways.
Could you share with me your vision of what the next generation
might look like? I was just proposing, like in I-73, which is a critical issue for our part of the Country, and I know there are other
corridors around the United States that need to be addressed. And
I would hope that somehow incorporated into the next reauthorization bill there would be some plan to build those highways, with
some kind of Federal initiative, with some kind of Federal earmark
funding to make it happen. Congestion is certainly heavy on the

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00044

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

29
roads we have now. I think instead of expanding some of those
routes, we ought to look at the new patterns of traffic needs and
create new routes.
Secretary PETERS. Congressman Brown, I think you make such
a good point. Back in 1956 and the subsequent years, when the
interstate system was laid out, it was laid out to connect Americas
major cities together. But it also was reflective of what the economy was and what freight patterns were at that point in time.
What we are seeing today is changes in those patterns. Freight
is moving in different routes, you mentioned the Port of Charleston, Panama Canal expansion, things like that. In the Southeast,
for example, where textiles and tobacco used to be the major portions of the economy, today that is not the case, it is high tech, it
is other things. So the interstate system as laid out originally
served a very good purpose for its time, but it isnt necessarily
where nor operating the way we need it to do today.
I think an important part of the Federal responsibility is looking
at freight and goods movement in the United States today, not just
where it is today but where we contemplate it will be in the future
and looking perhaps at projects of national and regional significance that would help us move that commerce in the future, and
perhaps adding to, or certainly adding connectors to our interstate
highway system. This is something that I think my fellow commissioners and I did a very good job of talking about, and suggested
that we do this freight analysis and we do something significant
about freight movement.
Mr. BROWN. I know that this highway 73, and I keep mentioning
it, its a connect from Canada down through to the Midwest, I
guess, to Myrtle Beach. Canada is our number one trading partner.
And so this would give us a direct connect route with Canada. I
know there are a lot of other needs out there that could be addressed, with similar importance. But I just feel like we could look
at a new image of where the interstate system has come and where
it might go to reach the further needs.
Secretary PETERS. Congressman, I think the thing we have to do,
though, is stop doing some of the things we are doing today. Our
money isnt always correctly prioritized in the best way it could be
today. So in looking at issues like this, and contemplating what we
need to do for the future, we need to also say what are we going
to stop doing, because Government doesnt ever do a good job of
stopping doing things.
Mr. BROWN. That is true, a lot of programs never end. I agree
with that. I look forward to working with you on the new reauthorization.
Secretary PETERS. Thank you.
Mr. BROWN. Thank you, Mr. Chairman.
Mr. DEFAZIO. Mr. Hall.
Mr. HALL. Thank you, Mr. Chairman, and Madam Secretary,
thank you so much for being here today.
As a representative of a district with 13 deficient bridges, and
with a lot of rail and passenger vehicle commuting going on, we are
very interested in how we can improve our surface transportation
system. I am pleased to see that the Commission included emis-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00045

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

30
sions reductions and environmental responsibility among the guidelines for our new era of transportation policy.
I wanted to ask you, given that Westchester County, which is
part of the 19th District, now has biodiesel hybrid buses doing
their bus loops around the country and have found it to be actually
a savings, a net savings and to improve their air quality and so on
and also there is a lot of public support and enthusiasm about this.
Would it be consistent with this approach to use transportation
funds to support the purchase and development of hybrid buses,
engine locomotives, transit fleets, that are either hybrids or run on
biofuels or both, associated infrastructure and other new transportation technologies?
Secretary PETERS. Congressman, I do think it is appropriate. In
fact, some laws today allow the purchase of those vehicles. It was
part of what the Commission recommended in the go-forward position as well. Where I would focus more on the issue of emissions
is back to talking about congestion. Cars sitting, stuck in traffic,
trucks, motorists who are not moving, such as what Congresswoman Napolitano deals with in her district, and you do as well
in yours, is where we have a tremendous, tremendous opportunity
to relieve congestion and to improve the air quality.
In fact some studies have indicated that if we are able to implement the program that Mayor Bloomberg has advocated in New
York City, it would have the same effect as the entire light duty
truck rule in terms of fuel economy standards and removing emissions from the air. I think it is a very important part of what we
have responsibility for doing, and another reason that I am less inclined to support the gas tax for the long haul.
Mr. HALL. Yes. Just an aside about the gas tax, the price of, or
the profit, I should say, for the major oil companies since 2001 to
today is up by a factor of 300 percent. That is felt by the average
family, the average working person, as if it were a tax. There is
no difference, really, in terms of the impact on them. The difference
is where it goes. It doesnt go into programs that can help us develop our new transportation technologies. It goes to wherever the
oil companies decide to invest it, which is usually in perpetuating
the same kind of energy use that they are already profiting from.
But that is a longer conversation than we can have in my five
minutes. I wanted to ask you about
Mr. DEFAZIO. I will give you extra time for that conversation.
[Laughter.]
Mr. HALL. I wanted to ask you about the Commissions vision of
growth as a driver, and development as a driver of transportation
demand, the demand on the surface transportation system. And if
you could elaborate somewhat on the degree to which smart growth
principles might prevent sprawl and decrease commuting times
and how much they were a favor, how you envision them affecting
the implementation of our work in the future.
Secretary PETERS. Congressman Hall, we did talk about the issue
of growth and development and how that impacts transportation
patterns. One of the very good things that came out of the report
was a new program called Metropolitan Mobility, what was suggested by the majority commissioners, to really look comprehensively at land use development, what is happening in communities

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00046

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

31
and then structure the transportation solutions to meet what that
community decides they want to do and how they want to develop.
And again, having a great deal of fungibility, so that the dollars
could be spent in a manner that best helps those communities meet
their needs.
So there was a lot of discussion about that. I support doing that,
I just dont think the Federal Government should collect the money
and then give it back to them to do it. I think states should collect
the money and keep it, instead of sending it to the Federal Government, where it takes on not only a Federal identity but a host of
other requirements that are not necessarily conducive to that community.
Mr. HALL. Thank you. One more question. In the Commissions
report there is a good deal of discussion of expedited siting, streamlining of project approval, and other initiatives to get projects moving faster, which of course everybody would agree is a good objective. However, as we have seen in other infrastructure debates,
sometimes these goals can get out of balance. In your discussions
of streamlining, was the use of eminent domain or the bypassing
of NEPA or environmental impact statement requirements considered or meant to be implied in the report?
Secretary PETERS. Congressman, in terms of NEPA, or other aspects of that, there was no consideration of bypassing those. There
was discussion of the overall process for getting an EIS done, environmental impact statement. The majority commissioners suggested that we go to a one step process. My concern with that, and
I am one of the biggest fans of streamlining the environmental
processes, but my concern is we dont want to impact any of the
public comment periods, the opportunity for the public to comment,
to be involved in project development. Because at the end of the
day, they are going to live with these projects. So I think that we
have to be very careful not to circumvent the opportunity for that
involvement while streamlining, but I think we can do both.
Mr. HALL. Thank you very much, and thank you for your work
with the Commission. I just wanted to comment that when I was
stuck in a traffic jam, coming down yesterday to catch the Acela,
which was the rest of my trip, and the best part of my trip to
Washington, my hybrid turned off at every traffic jam and every
stoplight and put out no emissions and used no fuels. So there are
a lot of good solutions available.
Thank you, Mr. Chairman. I yield back.
Mr. DEFAZIO. Thank you. Mr. Shuster?
Mr. SHUSTER. Thank you, Mr. Chairman. Thank you, Madam
Secretary, for being here today. I think there is no dispute that we
have to find money to invest in our infrastructure in this Country.
Across the Country, across the political spectrum, I think everybody agrees. The debate I guess we are having is, where do we get
it. I think sometimes as Republicans, we have a knee-jerk reaction,
whether it is fees or taxes, not to do any of them. Again, not that
you are taking a position against all of them, but as I talk to my
colleagues, some of them are against tolling, some of them are
against congestion pricing, some of them are against raising the
gas tax. None of those solutions are a perfect solution to finding the
money.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00047

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

32
Again, as Republicans, I think it is important to point out that
we have a role laid out in the Constitution, whether it is for national security, whether it is maintaining post roads or interstate
commerce. All those clearly state that we have a role as a Federal
Government to participate in a national transportation system.
And it is the core of our global competitiveness, we have to have
the roads to get to the ports to ship our goods overseas and ship
goods into America. So it really is a core of how we are going to
be able to compete going into the future, having a good transportation system, highways, rail, the whole system.
Looking the three major ways to raise money, the gas tax, tolling, and private-public partnerships, which in Pennsylvania, the
tolling issue with 80 and the private-public partnership with the
Pennsylvania Turnpike being sold or leased, are very hot-button
issues. I wondered if I could have you comment on the tolling of
I-80. Again, it is a very hot-button issue.
The greatest two concerns I have are the time it takes to get
money after you have tolled and then get the money coming in is
going to be years. That is an issue. But an even greater concern
is that that money will go into southeastern Pennsylvania, into
Philadelphia and into the transit system, and that money should
stay on the road bed on 80 and expanding our road systems.
Could you comment on that situation on Route 80?
Secretary PETERS. Yes, Congressman Shuster, I would be glad to.
In terms of I-80, the State has made an application to toll Interstate 80. The Department has not gone back to them to get some
information on their application, so we certainly havent made a decision on it yet. The process under which they have applied is the
Interstate Rehabilitation, and I forget some of acronyms that have
to do with it.
But it does place restrictions on where and how funding can be
used from tolling. The funding can be used first for debt service on
the facility and for the operation, maintenance and upkeep of the
facility. It can allow for a reasonable rate of return, assuming there
is a private sector investor or private party involved in the transaction. But it cannot be moved and used off-system. It has to be
used on that facility for the reasons roughly that I outlined. I will
follow up with you with a very specific response of everything that
is involved and where and how those funds can be used.
I wanted to briefly touch on the fact that even it tolls are implemented, there is some time before the money actually accrues.
What is available, though, is bonding against that money. There is
a pretty good system that says, if you are going to be collecting
these tolls, we can front-load that through bonding or loan programs or other things, and let the facility have the money up-front.
But there again, there are strict restrictions on where they can use
the money.
Mr. SHUSTER. And that is on the congestion pricing. I disagree
with my colleagues and agree with you. I think that the studies
prove that congestion pricing causes the traveling public, commerce
to be smarter, wiser, when they travel. I think that certainly is an
alternative, and a good one. Again, the timing issue on that, congestion pricing, if you are going to do it in New York, is it that the
money flows immediately or pretty close to it?

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00048

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

33
Secretary PETERS. It does. It will start being collected immediately. But again, knowing that that money is coming, you can go
to the bond market and basically front-load, so that you can have
the cost of implementation of the system up front, and then pay
that back over time.
Mr. SHUSTER. Right. And a final question. Pennsylvania was
have criticized in this Committee in that they spent, I forget the
exact figures, about $1.6 billion on the bridge program, or they
were supposed to spend $1.6 billion on the bridge program. It appears as though they didnt spend that money, and it is just an appearance, because of the way we wrote the law. Pennsylvania, if
you are going to reconstruct five miles of roadway and there are
four bridges on it, you have to have a separate contract under the
Federal law for each bridge and the roadway. Pennsylvania reflects
that money out of there to be able to come back and say, we want
to have one contract for that, because we will save millions of dollars.
Is there any way that you at the Department can change that,
or do we have to do that legislatively?
Secretary PETERS. I didnt realize that was a problem. I will look
at it, and if we need a legislative change, I will let you know. I
think you are exactly right, there is a misperception that bridge
money isnt always being used. As you said, too often it is incorporated in a larger project and isnt singled out as a bridge construction.
Mr. SHUSTER. Pennsylvania actually spent over $2 billion in a
two or three year period, $500 million more than what was supposed to be spent under the legislation. So again, thank you very
much for being here today. We appreciate it.
Secretary PETERS. Thank you.
Mr. DEFAZIO. Madam Secretary, we are having another series of
votes. I know your time is precious, these will be the last few questions.
Just back to the issue where you talked about all the additional
money we are spending, I guess at the time I didnt raise the point,
but I would like to raise the point, we have here a very interesting
study called Twenty Years Behind: Smart Investments in Minnesotas Transportation Infrastructure. I got out of a little bit of my
question previously, where I asked wouldnt you even look at indexing the existing gas tax, so that at least its contribution would
maintain at the current and adequate level, and you demurred on
that.
In this case, what they did is they looked back 20 years ago, over
20 years in Minnesota, they took all the Federal money, they took
all of the State money and they adjusted it for two things: inflation,
purchasing power, and vehicle miles traveled. And todays Federal
investment in Minnesota in terms of real dollars on the ground, because of construction cost inflation, and vehicle miles traveled, is
one half of what it was 20 years ago.
So I guess I come to a different conclusion when you say, gee,
we are investing this vast amount more money and it is failing us,
no, we are not really. In real dollars and in the growth of use of
the system, we are investing at about half the rate we did 20 years
ago. I think that is sort of a basic fallacy of this premise that some-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00049

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

34
how this vast amount of money is being spent inefficiently. There
is no vast amount of money being spent. We are spending less than
2 percent of our GDP on all our infrastructure. China is spending
9. We are not keeping up here. And I guess I just feel strongly that
when we talk about the money that I believe there is a significant
and continuing Federal role and you dont.
I guess I have a question about the 60/40 or the 12 of the 18
cents. Where does transit fit into that? Does transit come out of the
12 cents that would be retained for the Federal Government and
give the other 6 cents back to the States?
Secretary PETERS. Mr. Chairman, I actually differentiated, 60
percent to highway, roads and bridges, a good portion of which can
be flexed, by the way, 20 percent to transit. So we have basically
a 20 percent factor that we might be able to look at.
Sir, I do believe there is a Federal role. I do believe Federal leadership and Federal vision is important. I just dont think the Federal program should be as bifurcated as it is today.
Mr. DEFAZIO. Well, I think we could agree on that part, bifurcated. I am for simplification. I am also for more efficiency. We did
pass standards or changes in the environmental standards after an
incredible amount of work in SAFETEA-LU. To the best of my
knowledge, there is no rule implementing those changes that we
thought would streamline the processing and create more efficiency
for Federal programs. Can we expect a rule to implement those
some time?
Secretary PETERS. Mr. Chairman, I will go back and look into
that. I dont know where it is right now, but I can assure you that
it was a very high priority for me when we worked on the bill together.
Mr. DEFAZIO. That would be great, because the clock is ticking
and it has been a few years.
If I could, on another point which was raised, I cant remember
who was raising itoh, it was Mr. Baird, I believe, on transit-oriented development. We had Mr. Weyrich in, who was arguably as
far to the right as some of the advisors to the Administration, the
Reason Foundation people and all that. But he says his economists
can easily quantify the economic benefits of transit-oriented development, and in fact, he believes that he can prove that with the
Federal investment that is made, that the benefits are so high that
ultimately, the Federal Government is going to more than recapture its small investment.
But somehow the Federal Transit Administration is unable to
quantify the economic benefit and follow some of the other standards that we set in SAFETEA-LU for evaluating transit, in particular, streetcar, light rail projects, Small Starts-New Starts. Can
you enlighten us there why somehow someone who arguably represents a group pretty far to the right feels the investment can be
justified and can be measured and the Department cant figure that
out?
Secretary PETERS. Congressman, I want to make sure that I
speak accurately, so I am going to tell you what I know based on
my knowledge of this issue, and then I will get back to you on the
record. The process by which these projects are evaluated today
does not allow that comparison to be made. It is an issue that Ad-

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00050

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

35
ministrator Simpson and I have talked about at length, and believe
would be appropriate to be able to include the economic benefit of
the project
Mr. DEFAZIO. But the law does require that we include that.
Secretary PETERS. I will go back and look at the process. We
have both been a little frustrated by it.
Mr. DEFAZIO. Okay. That is great. And then I would just come
back to, I would like for people to either follow up or not follow up.
We had Mr. Duvall in last year and we pointed out that you put
up on your website this sort of model legislation for PPPs. We
pointed out there was no cautions in there about non-competes and
other problems. He said, well, that was coming. Then we had this
other fellow, who I always say should work for the State Department, Jeff Shane was in. He would be a great diplomat. And he
said, yes, it was coming.
It is still not there. I think you would agree, despite some of your
reservations about restrictions on PPPs, that non-competes are particularly problematic. We had the S.R. 91 problem in California,
where the State had to buy the road back to do what they said was
a safety improvement that the vendor said was violating the noncompete clause. As I pointed out to the folks from Indiana, lets just
say we had a proposal from a company that was looking at coming
to Oregon or going to Australia and there were some transportation
issues. And what I put to Indiana is, I said, you cant build it, if
someone in the middle of Indiana on some lower value farm land
wanted to build a huge industrial project and you were competing
with Australia, you would have to go to Macquarie from Australia
and get their permission to build the interchange. You have lost
control of the asset and/or your transportation system, and within
10 miles on either side of it, you cant build anything that would
compete with that road.
I think there are some pitfalls here, and we can disagree on the
margins. But I think, and Chairman Oberstar and I have undertaken to provide some direction, but I really would hope that the
Department will deliver on the promise that we had and granted,
it wasnt from you, but from Mr. Duvall and Mr. Shane over the
last year, that you would put up sort of questions, answers, problems, lessons learned kind of thing.
Secretary PETERS. Sir, we will do that, and my apologies if we
have dropped the ball on that. Again, I spoke earlier about the
GAO report that has just come out. I think it gives us a good basis
to move forward with some parameters to establish what is in the
Federal or the public interest.
Mr. DEFAZIO. Yes, they do say here in the GAO report, page 10,
Secretary of Transportation should direct the Federal Highway Administrator to clarify Federal Aid Highway regulations on the
methodology for determining excess toll revenue, including reasonable rate of return to private investors and highway, public-private
partnerships that involve Federal investment. They go on to say,
Congress should consider directing the Secretary of Transportation
in consultation with Congress to develop and submit to Congress
objective criteria for identifying national public interests in highway public-private partnerships.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00051

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

36
Secretary PETERS. I agree. In fact, I dont know that we have to
wait for you to direct us. We will go ahead and start working on
that and consult with you.
Mr. DEFAZIO. Great. With that, I will thank you for your generous allocation of time and your testimony. Apparently we have
five votes, so the Committee will stand in recess until those five
votes, then we will take up the next panel. Thank you, Madam Secretary.
Secretary PETERS. Thank you, Mr. Chairman.
[Recess.]
Mr. DEFAZIO. The Committee will come back to order.
We will go in the order as was listed. Mr. Pete Rahn, Director,
Missouri Department of Transportation; followed by Mr. Christopher P. Boylan, Vice Chairman, Government Relations, American
Public Transportation Association; and then Mr. C. Randal Mullett,
Vice President, Government Relations and Public Affairs, Con-Way,
Inc. Please proceed.
TESTIMONY OF PETE RAHN, DIRECTOR, MISSOURI DEPARTMENT OF TRANSPORTATION; CHRISTOPHER P. BOYLAN,
VICE CHAIR, GOVERNMENT RELATIONS, AMERICAN PUBLIC
TRANSPORTATION ASSOCIATION; C. RANDAL MULLETT,
VICE PRESIDENT, GOVERNMENT RELATIONS AND PUBLIC
AFFAIRS, CON-WAY, INC.

Mr. RAHN. Mr. Chairman, Members of the Committee, I am Pete

Rahn, Director of the Missouri Department of Transportation and
President of AASHTO. Thank you for this opportunity to provide
the perspective of State DOTs on the report of the National Surface
Transportation Policy and Revenue Study Commission.
AASHTO commends this Committee for establishing the Commission and we are proud that one of our own, my colleague, Frank
Busalacchi, Secretary of the Wisconsin Department of Transportation, served on the Commission.
Through the testimony of our members and a series of reports,
AASHTO provided substantial input into the Commission. In May
2007, we convened transportation leaders from around the Nation
in a transportation vision for the 21st century summit. The resulting vision document was co-signed by 21 national transportation
organizations. Much of that input has been reflected in the Commissions report.
We believe the Commission got the big ideas right, including the
need for fundamental reform of the Federal transportation program, the need for significant additional investment, a strong Federal role and a shared funding responsibility by Federal, State and
local governments, the need for a multi-modal approach with greater emphasis on transit and inter-city passenger rail, an increase in
Federal revenues, be it through taxes or other means, the need to
transition to an alternative revenue source 20 years from now,
greater use of tolls and public-private ventures to supplement revenues at the State and local levels, systematic planning to guide investment to where it is most needed, a performance-based program,
accountability for results and investment focused on matter of genuine national interest.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00052

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

37
We believe the Commission was accurate in its assessment that
the U.S. needs to invest $225 billion per year from now to 2050 to
meet national needs. Today, we are investing less than 40 percent
of that amount. We also believe they were correct in their assessment that the only way to increase funding to the levels needed is
for all levels of government to continue to fund their share.
State and local governments, even with the aid of private partnerships, will not be able to meet national investment needs without a strong Federal partner. With the explosion of international
trade and the expansion of the global economy, we must improve
the reliability of our freight system for interstate commerce. Now
more than ever, we need a strong Federal partner. With the continuing growth of this Nation and the concentration of population
in urban areas that produce 86 percent of our Nations GDP, we
must reduce congestion so that people and freight can move freely.
Now, more than ever, we need a strong Federal partner.
The Commission called for reform of the Federal program to ensure that it is performance-based, accountable and focused on
issues of true national significance. They call for restructuring the
program to address ten priorities: preservation, freight, metropolitan congestion, safety, connecting with rural America, inter-city
passenger rail, environment, energy, Federal lands and research.
We want to work with Congress to make sure that these reforms
are implemented in ways that can work at the State level and also
to craft programmatic solutions that meet the needs of all of our
States, large and small, rural and urban. We agree with the Commission that it takes too long to deliver transportation projects and
that reforms must be instituted to speed project delivery.
When Congress first proposed the idea of creating the national
commission, one of its fundamental questions was whether it could
continue to rely on the Federal fuel tax as the main source of revenue to support the Highway Trust Fund. We find it instructive
that the Commission determined that the fuel tax will continue to
be a viable source of funding, but that a transition to an alternative, such as a VMT tax, will be needed by the year 2025.
It will be up to Congress to determine how to sustain the solvency of the Highway Trust Fund and how to increase future revenues, so that the Federal share of the surface transportation funding can be increased to the levels needed. We are depending on the
Senate and House to find ways to avert the immediate funding crisis pending this year, so that States receive highway and transit
funding at the levels guaranteed in SAFETEA-LU.
When these programs come up for reauthorization in 2009, unless Congress finds ways to sustain highway and transit funding,
over the short run, States will face a dramatic cut in their highway
and transit programs. Frankly, over the longer term, both the Federal Government and the States must step up to the plate with additional funding to meet current and future demands on the highway and transit infrastructure.
As one way to help, AASHTO proposed the creation of a national
BRAC-like commission with limited responsibility to address user
fee rates to the Highway Trust Fund.
Mr. DEFAZIO. Thank you.
Mr. Boylan?

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00053

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

38
Mr. BOYLAN. Thank you, Mr. Chairman and Members of the
Committee.
Before I start my remarks, I would like to preface it with a little
bit about the MTA system which I represent, and also the 1,500member American Public Transportation Association. The MTAs
history is one of dis-investment in the 1950s, 1960s and 1970s that
left us in dire straits. In the last 10 or 12 or 20 years we have
spent over $60 billion to rebuild the system. In the process, we
have reclaimed what was a regional and national treasure.
The numbers from that investment, the reinvestment in that system, have spoken for themselves. Our ridership over the last 10
years is up nearly 50 percent. In fact, we are seeing riders that we
havent seen since 1952, before everyone had a car in their garage.
Our on-time performance is up from the low 80 percents into the
upper 90 percents. Our mean distance between failure is down.
Our bridge and tunnel traffic moves faster than it had moved before, because of investments in technologies.
And when we talk to our customers, they tell us because it is because of the improvements and the investments that we have made
in the reliability and the performance of our system. None of that
would be possible without a strong commitment from New York
State, New York City, our other local partners, and of course, Mr.
Chairman, the Federal Government. We are grateful for that continued and stable support.
So that is why the work of the Commission holds such relevance
and resonance for the MTA and for my transit colleagues at APTA.
Their work was thorough and they clearly drew a link between a
successful and internationally competitive U.S. and the investments needed to improve our national infrastructure. They also understand that if we retreat on investing in that infrastructure, or
if we do only the bare minimum, we will exacerbate what we call
our growing crisis of capacity in terms of our systems, as populations grow over the next 20 years and our systems are operating
at capacity today.
Either scenario will leave us at a competitive disadvantage in the
global marketplace as Europe and Asia continue to invest. I found
some of the comments about Asia and the folks who are visiting
here in Washington very interesting this morning. We have had no
less than eight to twelve systems visit us in the past year, five of
which were from China, Beijing, Shanghai and others who are
building systems in the next five years that will equal or surpass
the system that it took us a hundred years to build. So there are
some pretty significant national competitive issues at play.
We naturally liked the fact that the Commission calls for a bold
approach and reinforces a strong Federal role. We also particularly
like the fact that they believe that transit has a pivotal role in a
balanced, inter-modal system. We like the idea of performance
measures, increased efficiencies, improved product delivery, and
even private participation. They are all good areas to explore. But
as we know from past experience, none of those alone, or perhaps
even collectively, will solve the transportation problems or adequately address the magnitude of the need. They are just too great.
Substantial, immediate and real investment is needed.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00054

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

39
Now let me turn my attention to a few of the areas highlighted
in the Commissions report quickly. The report notes that public
transportation infrastructure needs about $13 billion a year in investment, something that will grow to $21 billion to $34 billion by
2020. Our own industry sees the need today at about $40 billion
a year. So we know that the need is considerable, real and growing.
As I mentioned earlier, at APTA we are particularly pleased that
the Commission calls for an expanded Federal role. The report
notes that public transportation and inter-city passenger rail will
play a significantly larger role in Americas mobility. Our transit
systems work symbiotically with highways to alleviate congestion,
allowing for more efficient transportation of passengers and goods.
And the inter-relationship is readily acknowledged by our partners
at AASHTO, ARTBA, the Chamber of Commerce and others with
whom we work. It will continue to be critical as our population and
economy grow.
One thing we find particularly troubling, as I wrap up, Mr.
Chairman, we are troubled that some people see public investment
in transportation as a drag on the Federal budget on the economy,
rather than the catalyst that it is. It certainly has been a catalyst
in the New York area, with many transit systems. We believe that
there is continued return on investment. Maybe they dont show up
on the balance sheets of our transit system, but they certainly
show up on the balance sheets of companies throughout the Country.
I will wrap my remarks up, thank the Committee, and I would
be happy to answer questions as we go forward.
Mr. DEFAZIO. Thank you.
Mr. Mullett?
Mr. MULLETT. Thank you. Mr. Chairman and Members of the
Committee, thank you very much for the opportunity to testify
today.
My name is Randy Mullett. I am Vice President of Government
Relations and Public Affairs for Con-Way, Inc. I am testifying
today on behalf of the U.S. Chamber of Commerce.
Last fall, the Chamber testified in front of this Committee that
there is abundant evidence that Americas infrastructure is not
only showing its age, but also showing that it lacks capacity to
handle the growing volume of people and goods that are moving
today. We wholeheartedly agree with the commission that continued under-investment and business as usual transportation policies
and programs will have a detrimental effect on United States competitiveness and on the everyday lives of all Americans. To avoid
these dire predictions and to meet the needs of the economy of the
future, the next era in surface transportation will require a multimodal and intermodal approach that will assure U.S. competitiveness in the global economy. This is a name that emphasis the need
for the Federal Government to play an important role.
Although every level of government will need to step up to the
plate, it is the Federal Government that bears primary responsibility to ensure that infrastructure investment is better aligned to
support our national interest of economic growth, personal mobility, interstate commerce and foreign trade.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00055

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40
The Chamber is pleased to see that the Commission calls for a
transportation system that explicitly values freight movements. On
a typical day, about 43 million tons of goods, valued at $29 billion,
moves nearly 12 billion ton miles on the Nations interconnected
transportation network. According to the Federal Highway Administration, without new strategies to increase capacity, congestion
may impose an unacceptably high cost on the Nations economy
and productivity.
We also agree with the Commission that metropolitan mobility,
congestion relief and small city and rural connectivity deserve national focus and resources. Increasingly, congestion imposes additional costs on employees and employers alike. State and local
chambers of commerce known well that their communities need
transportation choices. Those options are a valid aspect of economic
development strategies.
The Chamber commends the Commission for its strong statements on the need to speed project delivery. It is appalling that
major highway projects take approximately 13 years to advance
from project initiation to completion. Regulatory red tape and lawsuits can bring even the most common-sense improvements to a
grinding halt. We concur with the Commission that it is possible,
and indeed essential, to speed project delivery while adequately addressing environmental and community impacts. This must be a
top priority in the next authorization.
When it comes to funding and financing, every option must be
considered to address the enormous needs of our Nations transportation infrastructure. As a nation, we must face this fundamental
fact. We cannot separate transport growth from economic growth.
We are a growing people and a growing country with aging infrastructure. We must fix what we have, and if we want a new road,
a new runway or a new transit system, we must pay for it.
Additionally, while chronic under-investment is a major contributor to problems across all modes of transportation, the Chamber
encourages Congress to examine ways to spend infrastructure dollars more wisely. We must address the diversion of funding away
from intended uses and the lack of resource prioritization that
marked many Federal transportation programs. The public must
have confidence that transportation programs will deliver real solutions to real problems or they will not support increased investment in any form.
In conclusion, last fall when the Chamber presented testimony to
the full Transportation and Infrastructure Committee, it pledged to
engage the business community through the Lets Rebuild America
campaign. The Chamber has followed through on that pledge by
waging a battle in the media to make infrastructure a core national
economic priority, by identifying regulations that get in the way of
private investment, and by speaking out on the need for increased
public investment.
With the release of the Commissions report, all transportation
and infrastructure stakeholders have started coming to the table.
Working together, we are going to put an end to the intramural
squabbles that have traditionally divided these stakeholders. We
are going to rally and unite around an urgent and compelling mission: to rebuild America.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00056

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

41
Thank you very much for the opportunity to be here today. I look
forward to answering any questions.
Mr. DEFAZIO. Thank you.
We will have a quick round of questions. I will direct mine, I
know Mr. Rahn has a plane to catch, so I will direct a question to
you and then if John has any questions of you, we will direct them,
then we will dismiss you, then we can go to the other two members
of the panel.
From the perspective of your State, the congestion pricing discussion that we had earlier on public-private partnerships where even
the Commission leans fairly heavily, at least for their lower number, on congestion pricing. Obviously, Secretary Peters puts all of
her eggs in the congestion pricing and private-public partnership
tolling basket.
As secretary of a State department of transportation, how much
do you think this would help your State with your problems? No
more Federal investment, Federal investment frozen and declining
because of the cost of construction in real dollars. And we are now
giving you license to go out there and do congestion pricing, private-public partnerships and all these other things. Do you think
that will do the job for you? No tax increases in your State, either.
Mr. RAHN. Mr. Chairman, the scenario that you have just painted is a very limited one from the standpoint of actually being able
to address all of our problems. The Missouri system, and I am not
speaking on behalf of AASHTO at this point. Of our 32,000 mile
system for which we are responsible, 265 miles carry 20 percent of
our traffic. Then, I have 27,000 miles that carry 20 percent of our
traffic. So obviously, public-private partnerships are not a solution
for those 27,000 miles of our system, but they might very well
apply to those very few roads that carry a lot of traffic.
So I believe, both from the State of Missouri, and I would also
add that the position of AASHTO is that public-private partnerships do have a role. But it is a relatively small roleit might represent somewhere between 7, 8, 9 percent of the resources we need
to have available to us. But it is not the silver bullet that is going
to solve the problems of transportation.
Mr. DEFAZIO. So you dont think a private-public partnership
pricing model is particularly viable for those 27,000 miles of not
heavily populated and utilized road area?
Mr. RAHN. That is correct.
Mr. DEFAZIO. One other quick question. I was puzzled, and we
were trying to gather some information from the States, both about
projects ready to go, and we appreciate your organizations cooperation on that in terms of a stimulus package. I still feel it was a
mistake to omit that.
But the second part is, I was puzzled because I thought the nobrainer is, we have to fix the trust fund issue. We heard from the
California Department of Transportation, the Commission, they
have a paper they have written saying, not one smidgen of impact
if the trust fund goes into deficit in the State of California. How
about, are there any other States in that position and/or do you
think that is a credible thing for California to say?

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00057

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

42
Mr. RAHN. Mr. Chairman, I wouldnt comment on Californias
view. I dont know what the facts are that drove them to that conclusion.
Mr. DEFAZIO. Have you heard from any other States who feel
like that?
Mr. RAHN. I have not. There might be one or two other States
that are in a position to have a view that it would have a minimal
impact on them. But the fact is, my estimate would be that at least
45 States, if we see a 45, 50 percent loss of funds in 2010, that that
is going to have a devastating impact on our highway programs
across the Country.
Mr. DEFAZIO. And wont it roll back? Because many of these are
multi-year. My State, for instance, has balanced budget requirements and everything like that. If we looked out into next year saying, the money might not be there to finish this project, wouldnt
there be some people who wouldnt initiate projects this year because of that uncertainty?
Mr. RAHN. I believe that for those projects for which multi-year
commitments are going to be necessary, I think that for that sort
of a project, you are going to find them being put on hold. There
is, however, a current estimate I have heard now that the Federal
program, given the deficit for 2010, might well be a $20 billion program instead of the current $43 billion. We have already adjusted
our STIP, and it is devastating in 2010 to see the projects that are
now being shoved to the side just in the event that in fact Federal
funding does go away. And it is going to have a noticeable impact
on the citizens of Missouri and those people who choose to travel
through Missouri.
Mr. DEFAZIO. Thank you.
John, do you have any questions of him? We dont want him to
miss his plane.
Mr. BOOZMAN. Just very quickly, being from Arkansas, we adjourn Missouri. I want to compliment you on your leadership. I
have had several projects that we are working with Missouri with,
and again, we appreciate your hard work and your leadership.
And that is really all I have to say. I know that you have a flight
to catch. But again, we appreciate your hard work and like I say,
the leadership on a lot of different projects that we are trying to
get accomplished.
Mr. RAHN. Thank you.
Mr. DEFAZIO. Thanks, Mr. Rahn. We are going to dismiss you
now so you can catch your flight without too much anxiety. I know
how that is.
Mr. RAHN. Thank you, Mr. Chairman.
Mr. DEFAZIO. We will have some questions for the other two.
And if we have any other questions for you, we will submit them
in writing.
Mr. Boylan, Mr. Mullett, I raised an issue with the Secretary
about essentially what freezing the gas tax means in terms of the
diminished buying capacity, used the example of the Wisconsin
study over time. Do you think it would be prudent, I mean, not
even getting into increasing, saying, okay, lets look at it, but
wouldnt it at least be prudent to index the gas tax to the cost of,
say, construction inflation or something else, so that the Federal

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00058

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

43
share wouldnt diminish and ultimately head toward insignificance
or zero? Would you support such an approach?
Mr. BOYLAN. I would suggest that the need is so great now beyond what the present resources provide that there needs to be
some credible and immediate method to get there. Again, our history at the MTA is that we present the program of needs and the
political environment determines what it is. But I will tell you that
the need has grown dramatically in New York and throughout the
transit industry. We definitely need a new and dedicated and predictable source of revenue. The most immediate one that comes to
mind is the existing revenue stream.
Mr. DEFAZIO. Mr. Mullett?
Mr. MULLETT. The Chamber has gone on record as saying that
they would support reasonable increases. I dont believe that we
have tied that to a specific index. They have tied those reasonable
increases, though, to be more certain that the projects that they
would be funding would have national significance and would not
be diverted off into things that did not meet that criteria.
Mr. DEFAZIO. Mr. Boylan, somehow your agency is able to quantify economic impact from your investments in transit. Do you
think you could help the FTA with that, because they are having
a heck of a time trying to figure out how to calculate economic impact with transit investment?
Mr. BOYLAN. Both we and the American Public Transportation
Association do have models that show what we think.
Mr. DEFAZIO. Really? You have models?
Mr. BOYLAN. We have models.
Mr. DEFAZIO. Do you mean like in a computer and stuff, where
you could plug in some assumptions and come up with something?
Mr. BOYLAN. Yes. We created one back in the 1980s, along with
the Port Authority of New York.
Mr. DEFAZIO. Maybe you could lend a laptop to the FTA with
that hard drive model in there and let them run it, see what happens.
Mr. BOYLAN. We would be happy to do so.
Mr. DEFAZIO. That would be great.
Mr. Mullett, the Chamber, we dont usually see the Chamber
wanting to talk about any increases in taxes or fees unless they are
expecting something reasonable to result to your constituents, your
membership. Do you think there are measurable impacts, such as
those Mr. Boylan has laid out from transit investment that benefit
the larger business community and the value of property?
Mr. MULLETT. I think there is great evidence that supports those
conclusions. There is also, I think, even more evidence that supports the downside for not making those investments.
Mr. DEFAZIO. Really. So where would we look there, like the
numbers on hours lost in terms of just-in-time delivery or hours
lost by individuals in terms of being caught in congestion? Is that
what you are talking about?
Mr. MULLETT. Yes. I think there is plenty of that kind of evidence that has been found.
Mr. DEFAZIO. So if the Secretary, or at least the Department in
an earlier hearing said that they measured, I think she said in her
minority report, actually, the cost of congestion at $200 billion a

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00059

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

44
year, if indeedthat is a little higher than most other estimates
but if it is that high, wouldnt it be prudent to invest some increment of $200 billion a year in order to lower that number? Couldnt
we kind of come out ahead in the end there?
Mr. BOYLAN. Our rule of thumb in New York is that if they
eliminated our system, they would have to build 15 extra lanes on
the Long Island Expressway just to handle the current traffic. We
know that we are doing something that helps alleviate potential
congestion in our region. Certainly, the region could not survive if
it had 15 lanes on the LIE. So I think we know there is a connection.
Mr. MULLETT. And I think given the framework that you have
established, the cost benefit in that is pretty obvious. If you will
indulge me for a second, I will put on my trucking hat for a minute
and I will put forth that the highway system is our assembly line
that we must use but have no authority to improve or invest in
ourselves. So we are hopeful that by looking at these things, you
all will make a determination that wherever the funding comes
from, that investment certainly is necessary if we are going to continue to allow ourselves to grow.
Mr. DEFAZIO. Great. Thank you.
I have a large group here, I am going to turn the conclusion over
to Ms. Hirono. I appreciate her coming here on very short notice.
She will have some final questions and unless some other Member
appears, that will be the end. Again, I thank you for your time. We
look forward to a better transportation future jointly, together.
Thank you.
Ms. HIRONO. [Presiding] Good afternoon. It is just us now.
[Laughter.]
Ms. HIRONO. I do have a couple of questions for our panel. Mr.
Boylan, the FTA currently provides the New Starts projects with
a full funding grant agreement which is one of the most reliable
agreements in transportation financing today. But if the Commission would have us move to a cost-to-complete scenario, these successful FTA grant agreements may be discontinued.
What is your opinion of the value of an FFGA? I have a particular interest in this, as you may be aware that the city and
county of Honolulu is one of the New Start projects on the books.
Mr. BOYLAN. I think there needs to be an overhaul, of sorts, of
the New Start process, if you will. Whether the cost-to-complete is
the accurate alternative or not, I dont think I am prepared to comment on that. But I will tell you that the process of getting a full
funding grant agreement and the hurdles that one has to go
through for what are in many instances on their face wise local decisions and good investments for Federal dollars and the like, the
process is burdensome, laborious. We just signed two full funding
grant agreements in the last two years, both of which took anywhere from eight to nine years to complete.
In that eight or nine years, the cost of the projects necessarily
escalate. And not all on the FTA, by the way. I dont want to suggest that all the time in that eight or nine years was the responsibility of the FTA. There were local issues, obviously, that had to
be overcome. But the process does need to be slimmed down. There
certainly needs to be cost-effectiveness criteria.

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00060

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

45
You dont want to have the Federal Government spending money
inappropriately. But there has to be a better way to do some of
this. We are very happy to work with the Committee to construct
something new. But something has to be done to change that, because if you speed that product delivery, you save time and money
and at the end of the day, we want to deliver a project that you
want to finance and not the process to get to the end.
Ms. HIRONO. So probably something short of cost-to-complete
kind of a process would be advisable?
Mr. BOYLAN. Something between the two that I think will probably work for us.
Ms. HIRONO. And you will be happy to work with us as we try
to figure that out?
Mr. BOYLAN. Absolutely.
Ms. HIRONO. For Mr. Mullett, the Commissions minority calls for
a vision that would devolve the highway program back to the
States and allow the private sector to fill in the gaps. We heard the
Transportation Secretary talk about that. Do you believe that such
a system would develop and maintain a national system designed
to move interstate commerce?
Mr. MULLETT. I believe that there is a strong role for the private
sector, there is a strong role for local and State governments. But
the primary responsibly for interstate commerce and our Federal
national highway system has to remain with the Federal Government. A cobbled-together bunch of local solutions does not make a
national system that is going to be efficient or effective for our
economy.
Ms. HIRONO. Is that a position that the Chamber has taken as
a body?
Mr. MULLETT. Yes. The Chamber is supportive of all solutions
that are on the table now being part of the total solution. But they
do believe that a strong Federal presence is important.
Ms. HIRONO. I think I read in one of their earlier testimonies
that something like 40 percent of funding from the Federal Government is desirable, and you would agree with that, to continue that
level of participation?
Mr. MULLETT. Yes, and I cant comment on that previous testimony, because I am not familiar with that.
Mr. BOYLAN. It is about right. In the transit part of the ledger,
it is varied over the last 20, 25 years from 40 to 50 percent of the
investment. It certainly needs to be in there, certainly at greater
levels, but yes.
Ms. HIRONO. Having served in State government, I would agree
that we need to maintain a really very strong Federal role in our
national transportation system.
That is it, folks. This hearing is adjourned. Thank you very
much.
[Whereupon, at 1:45 p.m., the Committee was adjourned.]

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00061

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00062

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.013

46

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00063

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.014

47

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00064

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.015

48

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00065

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.016

49

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00066

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.017

50

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00067

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.018

51

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00068

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.019

52

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00069

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.020

53

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00070

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.021

54

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00071

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.022

55

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00072

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.023

56

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00073

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.024

57

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00074

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.025

58

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00075

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.026

59

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00076

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.027

60

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00077

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.028

61

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00078

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.029

62

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00079

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.030

63

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00080

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.031

64

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00081

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.032

65

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00082

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.033

66

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00083

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.034

67

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00084

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.035

68

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00085

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.036

69

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00086

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.037

70

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00087

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.038

71

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00088

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.039

72

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00089

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.040

73

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00090

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.041

74

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00091

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.042

75

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00092

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.043

76

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00093

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.044

77

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00094

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.045

78

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00095

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.046

79

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00096

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.047

80

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00097

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.048

81

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00098

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.049

82

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00099

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.050

83

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00100

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.051

84

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00101

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.052

85

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00102

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.053

86

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00103

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.054

87

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00104

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.055

88

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00105

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.056

89

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00106

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.057

90

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00107

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.058

91

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00108

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.059

92

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00109

Fmt 6633

Sfmt 6633

P:\DOCS\40815

JASON

40815.060

93

94

VerDate Aug 31 2005

18:12 Jun 27, 2009

Jkt 000000

PO 00000

Frm 00110

Fmt 6633

Sfmt 6602

P:\DOCS\40815

JASON

40815.061