[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
        FY 2008 PRESIDENT'S BUDGET REQUEST FOR THE DEPARTMENT OF 
           TRANSPORTATION AND ENVIRONMENTAL PROTECTION AGENCY 

=======================================================================

                                (110-6)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            FEBRUARY 8, 2007

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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35-030 PDF                 WASHINGTON DC:  2007
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
Columbia                             JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
JUANITA MILLENDER-McDONALD,          JERRY MORAN, Kansas
California                           GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        HENRY E. BROWN, Jr., South 
LEONARD L. BOSWELL, Iowa             Carolina
TIM HOLDEN, Pennsylvania             TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington              TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington              SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts    BILL SHUSTER, Pennsylvania
JULIA CARSON, Indiana                JOHN BOOZMAN, Arkansas
TIMOTHY H. BISHOP, New York          SHELLEY MOORE CAPITO, West 
MICHAEL H. MICHAUD, Maine            Virginia
BRIAN HIGGINS, New York              JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
JOHN T. SALAZAR, Colorado            CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California      TED POE, Texas
DANIEL LIPINSKI, Illinois            DAVID G. REICHERT, Washington
DORIS O. MATSUI, California          CONNIE MACK, Florida
NICK LAMPSON, Texas                  JOHN R. `RANDY' KUHL, Jr., New 
ZACHARY T. SPACE, Ohio               York
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa                CHARLES W. BOUSTANY, Jr., 
JASON ALTMIRE, Pennsylvania          Louisiana
TIMOTHY J. WALZ, Minnesota           JEAN SCHMIDT, Ohio
HEATH SHULER, North Carolina         CANDICE S. MILLER, Michigan
MICHAEL A. ACURI, New York           THELMA D. DRAKE, Virginia
HARRY E. MITCHELL, Arizona           MARY FALLIN, Oklahoma
CHRISTOPHER P. CARNEY, Pennsylvania  VERN BUCHANAN, Florida
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY McNERNEY, California

                                  (ii)




            Subcommittee on Water Resources and Environment

                EDDIE BERNICE JOHNSON, Texas, Chairwoman

GENE TAYLOR, Mississippi             RICHARD H. BAKER, Louisiana
BRIAN BAIRD, Washington              JOHN J. DUNCAN, Jr., Tennessee
DORIS O. MATSUI, California          WAYNE T. GILCHREST, Maryland
JERRY F. COSTELLO, Illinois          VERNON J. EHLERS, Michigan
TIMOTHY H. BISHOP, New York          FRANK A. LoBIONDO, New Jersey
BRIAN HIGGINS, New York              GARY G. MILLER, California
RUSS CARNAHAN, Missouri              ROBIN HAYES, North Carolina
JOHN T. SALAZAR, Colorado            HENRY E. BROWN, Jr., South 
MAZIE K. HIRONO, Hawaii              Carolina
HEATH SHULER, North Carolina         TODD RUSSELL PLATTS, Pennsylvania
HARRY E. MITCHELL, Arizaon           BILL SHUSTER, Pennsylvania
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
STEVE KAGEN, Wisconsin               CONNIE MACK, Florida
JERRY MCNERNEY, California           JOHN R. `RANDY' KUHL, Jr., New 
ELEANOR HOLMES NORTON, District of   York
Columbia                             CHARLES W. BOUSTANY, Jr., 
BOB FILNER, California               Louisiana
ELLEN O. TAUSCHER, California        JEAN SCHMIDT, Ohio
MICHAEL E. CAPUANO, Massachusetts    CANDICE S. MILLER, Michigan
GRACE F. NAPOLITANO, California      THELMA D. DRAKE, Virginia
MICHAEL A ARCURI, New York           JOHN L. MICA, Florida
JAMES L. OBERSTAR, Minnesota           (Ex Officio)
  (Ex Officio)

                                 (iii)




















                                CONTENTS

                                                                   Page
Summary of Subject Matter........................................    vi

                               TESTIMONY

 Peters, Hon. Mary E., Secretary of Transportation, U.S. 
  Department of Transportation...................................     2

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Altmire, Hon. Jason, of Pennsylvania.............................    25
Brown, Hon. Henry E., Jr., of South Carolina.....................    28
Costello, Hon. Jerry F., of Illinois.............................    29
Mica, John L., of Florida........................................    34
Mitchell, Hon. Harry, of Arizona.................................    42
Oberstar, James L., of Minnesota.................................    55
Walz, Timothy J., of Minnesota...................................    62

             PREPARED STATEMENT SUBMITTED BY THE WITNESSES

 Peters, Hon. Mary E.............................................    64

                       SUBMISSIONS FOR THE RECORD

 Peters, Hon. Mary E., Secretary of Transportation, U.S. 
  Department of Transportation:

  Responses to questions from Rep. Oberstar......................    67
  Responses to questions from Rep. Carney........................    70
  Responses to questions from Rep. Hall..........................    75
  Responses to questions from Rep. Brown.........................    79
                                  (v)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


   FISCAL YEAR 2008 PRESIDENT'S BUDGET REQUEST FOR THE DEPARTMENT OF 
           TRANSPORTATION AND ENVIRONMENTAL PROTECTION AGENCY

                              ----------                              


                       Thursday, February 8, 2007

        House of Representatives, Committee on 
            Transportation and Infrastructure, Washington, 
            DC.
    The committee met, pursuant to call, at 2:00 p.m., in room 
2167, Rayburn House Office Building, the Honorable James L. 
Oberstar [Chairman of the committee] presiding.
    Mr. Oberstar. The Committee of Transportation and 
Infrastructure will please come to order.
    Regrettably, I have just been notified from the floor that 
there will be a series of floor votes that could take as much 
as 25 minutes. I would hope that we would be able to get on 
with the Secretary's testimony right at the outset. I know all 
members have statements and pronouncements and points they want 
to make and flags they want to lay down, but we can do that in 
the course of the questioning.
    We are here to hear the Secretary's presentation, her first 
presentation before the full Committee, on the Administration's 
Transportation Budget, which for some of us is a great 
disappointment in many regards. There are other bright spots in 
it, but overall I have some real concerns about the short 
funding for transit, short funding for AIP, the under-funding 
of Amtrak. There are a number of other areas that others have 
concerns about.
    We also will have from EPA, Ben Grumbles and Susan Bodine, 
whom I welcome as former Transportation and Infrastructure 
Committee staff members, and they are always dangerous when 
they go over to the other side. They know how the legislative 
side works, and then they take that expertise and go over to 
the executive branch.
    That will conclude my statement to welcome the Secretary. 
We really appreciate your time spent with us.
    I will yield to the Ranking Member, Mr. Mica, for comments 
that he might make.
    Mr. Mica. Well, thank you, and I will try to be brief too 
and welcome Madam Secretary.
    I too did receive the President's budget. Hopefully, it is 
a good framework in which to start. Both Mr. Oberstar and I 
have questions and concerns. We have already discussed some of 
them.
    As you know, I am a big fan of mass transit, and I am 
concerned about some of the cuts that have been proposed. We 
want to keep the trust fund whole, and I think we are committed 
to that and try to get as many dollars as we can in there to 
get distributed to our States. Amtrak, while you have a lowball 
figure, I continue to encourage elimination of waste and 
hopefully better management, and we will look at that.
    There are other things that we will have questions about, 
the State revolving fund and some of the investments that you 
have in fact proposed and then also looking at some of the EPA 
funding provisions.
    I do have a lengthy statement, Mr. Chairman. I ask 
unanimous consent that we put the entire, every morsel of 
choice words into the record.
    Mr. Oberstar. Every thoughtful comment by the Ranking 
Member will be included in the record, without objection, and 
my statement and those of other members.
    Mr. Mica. Thank you.
    Mr. Oberstar. Madam Secretary, the microphone is yours.

    TESTIMONY OF THE HONORABLE MARY E. PETERS, SECRETARY OF 
       TRANSPORTATION, U.S. DEPARTMENT OF TRANSPORTATION

    Secretary Peters. Mr. Chairman and members of the 
Committee, I want to thank you for this opportunity to be here 
with you today to share the highlights of President Bush's 
fiscal year 2008 budget plan for our Nation's transportation 
programs.
    Transportation lies at the core of the freedom that we 
enjoy as Americans, the freedom to go where we want, when we 
want, freedom to live and work where we choose and freedom to 
spend time with our families.
    Our goal is to deliver a transportation system that frees 
people to make daily decisions, confident that they can reach 
their destination safely, without worrying about how they will 
get there or even if they can make it on time. To reach that 
goal, the President's budget requests $67 billion for America's 
transportation network.
    Nearly one-third of the Department's resources will be 
devoted to transportation safety. There is no acceptable 
fatality rate when our loved ones, our communities, our friends 
are at risk. The President's fiscal year 2008 budget proposes 
resources for equipping our Nation's airports and roadways with 
new safety technologies for targeting growing problems like 
motorcycle crashes, something I have had personal experience 
with, and for supporting aggressive inspections of trucks, 
tracks, and pipelines to ensure the safest standards are met.
    In addition to supporting our efforts to raise the bar on 
safety, the President's budget will help cut congestion and 
bring our transportation system into the 21st Century.
    For those who use our aviation system, it provides the 
framework for reforming our approach to paying for safety and 
technology improvements needed to keep air travelers, freight 
and pilots on schedule. We have put together a package that 
will tie what users pay to what it costs the Federal Aviation 
Administration to provide them with air traffic control and 
other services. Our plan puts incentives in place that will 
make the system more efficient, as well as more responsive to 
the needs of the aviation community. Without reform, we can all 
expect to spend more time waiting in airports or strapped in an 
airplane seat, sitting at the end of a runway.
    We will announce the full details of our aviation proposal 
soon. I can tell you that the budget targets almost $175 
million for a 21st Century satellite navigation system that 
will replace the current dated air traffic control architecture 
and over $900 million for additional capital projects that will 
support this move to the Next Generation system.
    For travelers, this system is going to bring greater 
convenience and reliability, thanks to state of the art 
technology that can safely handle dramatic increases in the 
number and type of aircraft using our skies without being 
overwhelmed by congestion.
    For drivers stuck in traffic, the budget proposes a record 
$42 billion in funding for highway and highway safety programs. 
Our budget proposes resources to help move traffic on clogged 
highways and city streets, directing $175 million to support 
the comprehensive Department-wide congestion relief initiative 
that Secretary Mineta announced last year.
    This funding will help growing metropolitan areas that want 
to test leading edge solutions. It will help commuters get 
real-time traffic information, so they will know in advance if 
roads are congested and be able to make alternative 
transportation plans, and it will allow us to accelerate the 
development of travel corridors that will be key to moving 
freight and people without congestion in the future.
    Accessible and cost-effective transit projects also help 
fight congestion, and our budget provides $9.4 billion for 
transit programs. This funding includes $1.3 billion for major 
projects that will help provide commuter rail and other travel 
options in large urban areas, and another $100 million will 
support transit alternatives through the Small Starts program.
    Even as we make these investments, we realize that a 
business-as-usual approach to funding these programs is simply 
not going to work much longer. There is and will continue to be 
money coming into the Highway Trust Fund from gasoline taxes, 
and the revenues are growing every year, but so is spending and 
even at a higher rate. The bottom line is that we are spending 
more than we take in, and we have nearly run through the 
balances that had built up in the fund. The highway funding 
problem is not going to go away, nor can we put it off until 
the last minute.
    As we go through this budget process, I look forward to 
working with Congress on solutions to these issues. In the long 
term, we need serious reform of our approaches to both 
financing and managing our transportation network to win the 
battle against congestion. Serious reform must include reform 
of the legislative process itself.
    The explosive growth of earmarks in recent years has hit 
transportation programs especially hard. I support President's 
call for transparency and a 50 percent reduction in earmarks in 
the coming year. As a former State Department of Transportation 
Director, I strongly support giving States freedom to set 
priorities and use Federal dollars where they know they will 
provide the maximum benefits.
    Mr. Chairman and members of the Committee, thank you for 
the opportunity to testify before you today. I look forward to 
working with each of you and the transportation community to 
ensure a safe transportation system and to begin to break free 
of the stifling congestion. I also look forward to answering 
any questions you may have.
    Mr. Chairman, if I may, I would like to introduce our 
Assistant Secretary, Phyllis Scheinberg, who is here with me 
today. Thank you, sir.
    Mr. Oberstar. Ms. Scheinberg, welcome. Thank you for being 
here.
    Ms. Scheinberg. Thank you.
    Mr. Oberstar. Thank you, Madam Secretary. It was a very 
succinct statement, remarkable.
    Ms. Scheinberg, you have no statement? No, OK, thank you.
    One question, your aviation user fee proposal, such as we 
know of it, by our calculations--we spent some time working 
over this--would raise $600 million less than the ticket tax is 
now raising and the other user fees. How can that be consistent 
with the Administration's argument that a user fee system is 
needed because there is a revenue crisis?
    Secretary Peters. Mr. Chairman, the $600 million difference 
that you refer to was based on the 2008 budget year. We would 
not begin collecting that tax until 2009, so it was a 
hypothetical example. The Assistant Secretary could certainly 
provide more details if that would be helpful.
    Mr. Oberstar. I yield the balance of my time to the 
gentleman from Oregon, Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. I appreciate the 
opportunity.
    Madam Secretary, it is good to see you again. Thank you for 
being here.
    We are concerned. I am concerned, and I believe other 
members of the Committee would share my concern about cuts 
proposed in the Small Starts program. Can you explain the 
rationale for these cuts, New Starts and Small Starts?
    Secretary Peters. Mr DeFazio, yes, I would be happy to 
explain those. The overall FTA budget for the year is $9.4 
billion as I indicated, and it is a reduction of $309 million 
below the fiscal year 2008 levels authorized in SAFETEA-LU. The 
problem is, sir, that we had difficult budget choices to make.
    We have made a choice to provide historic levels of transit 
funding and in this budget we have proposed funding every 
project that is ready to go. There are no projects that are 
sacrificed in our budget. That includes 11 existing full-
funding grant agreements, two pending agreements and two 
proposed agreements. We have also set aside $72 million in 
funding for 6 projects that are not yet ready to be funded.
    We have also included $100 million for the Small Starts 
program. We believe that the new regulations will not be 
finalized until early 2008 which would make it difficult to 
award more projects.
    Mr. DeFazio. I guess if I could, I appreciate that, but it 
has been quite some time since we passed the legislation. Why 
can't we have the regulations for Small Starts sooner than 
that? Why would it take another year to get the bureaucratic 
regulations published?
    Congress expressed its will. We will be near the end of 
this highway bill before we get to that. Couldn't we move that 
up a little bit?
    Secretary Peters. Congressman DeFazio, I understand your 
concern, and I will do everything in our power to get those 
regulations moved up sooner.
    Mr. DeFazio. There are some in the transportation community 
that think the Administration doesn't like the idea of Small 
Starts and New Starts, and I would hope that that is not true.
    The $275 million you are saving, where is that going? Is 
that going to your new congestion whatever program, the one you 
are pushing communities to do?
    I have heard from communities saying well, gee, DOT has 
been out here. They have all this new money. They have got 
these new programs they want us to do for congestion 
mitigation. They want us to do time of day tolling and other 
things. Is that where that money is being moved to?
    Secretary Peters. Sir, that is not where that money is 
being moved. The money that we are using for the congestion 
initiative is money that came from inactive projects, projects 
that were as old as the 1991 Intermodal Surface Transportation 
Efficiency Act.
    Mr. DeFazio. OK. Then where did the $275 million from 
transit go? What are we dong with that?
    Secretary Peters. Sir, that is within the balance of our 
overall budget which includes some small portion of general 
fund monies.
    Mr. DeFazio. We are cutting an authorized program paid for 
by user fees in order to offset some of your administrative 
overhead costs that are reimbursed out of the general fund in 
order to provide the illusion of moving toward a balanced 
budget, is that correct?
    We are foregoing real investments in transportation in 
order to satisfy the green eyeshade trolls over at OMB who want 
to pretend they are providing us with a fiscally responsible 
budget.
    Secretary Peters. Sir, the reduction in the transit program 
comes from the general fund portion.
    Mr. DeFazio. So, again, we are cutting real programs that 
could provide transit alternatives for Americans at a time of 
escalating fuel prices, a time of concern over our dependency 
on imported oil, and we are doing all that to offset this 
general fund contribution in order again just to try and 
provide the illusion of fiscal responsibility.
    Secretary Peters. Congressman, the President has asked us 
to keep non-defense discretionary spending at or below 1 
percent. We have actually allocated more money than that to the 
surface transportation and transit programs, but the need to 
have budget discipline this year is what led us to this level.
    Mr. DeFazio. Right, but again this is something authorized 
by the Congress and authorized to be paid for by a trust fund 
tax paid by the American people for a dedicated purpose, a 
purpose for which there is no shortage of demand out there in 
America, and we are cutting it. Bottom line, is that it is 
because the President says, well, we just can't. We don't have 
that money, and we are going to spend it somewhere else or we 
are going to use it for tax cuts for rich people.
    Secretary Peters. From the general fund portion, sir.
    Mr. DeFazio. My time is about expired, but I guess I have 
one other quick question about the fuel tax.
    I just had a State legislator in, a Republican State 
legislator. There is a big conference at the White House 
tomorrow to push privatization projects. I am concerned, and I 
raised this with you privately and I have raised it publicly, 
about the push toward privatization. It can be appropriate in 
some instances. In others, it might not be. But overall we have 
to protect the integrity of the national transportation 
infrastructure and its interconnected nature. We need to 
protect the public interest.
    I fear that, particularly that you have got a fellow from 
the Reason Foundation and you have got a staff person who has 
produced a one-sided document on this issue. I looked at the 
panel members. There is no balance. You are not talking about 
the fact that there is a way to do it right and another way 
that may not be in the public interest. I am very concerned 
about that, Madam Secretary.
    Secretary Peters. Sir, I understand your concerns.
    Mr. DeFazio. Thank you, Madam Secretary.
    Mr. Oberstar. Mr. Mica?
    Mr. Mica. Thank you. Again, welcome, Secretary Peters.
    We find ourselves, and I guess we have done this before, in 
one of our more unique funding situations and budget situations 
in that the fiscal year that started in October of last year, 
we have not resolved financing, at least Congress has not 
finished it with a CR. I have a question about the impact of 
the CR, the 2006-2007 CR, that we should be financing 
Government with now as far as your Department-wide 
responsibilities, are you going to be able to meet your goals 
as far as safety and programs?
    Secretary Peters. Congressman Mica, if the H.J. Resolution 
20 includes some 2007 fiscal year levels of funding, we will be 
able to do so. If it is flatlined at 2006 levels, it would 
require drastic action in the Agency, particularly with regard 
to our FAA air traffic controllers as well as safety inspectors 
and other positions.
    What we would ask, in those areas that are held to the 2006 
levels, is that we would have the flexibility to reprogram so 
that we may ensure that the highest priority needs are met.
    Mr. Mica. Because I think they are going to play a game of 
chicken at the end here for folks to try, from what I heard, to 
eliminate some amendments in the Senate and messing with it.
    You just testified the Administration doesn't want to see a 
lot of earmarks. This may be the biggest earmark in history, 
and you will also have discretion in how to distribute those 
funds if there are not specific earmarks, isn't that correct?
    Secretary Peters. Yes, sir, that would be correct. We 
would, however, follow Congressional guidance in establishing 
the programs.
    Mr. Mica. OK, because we did have a discussion, the 
Chairman and I, earlier about procedures, and I think that is 
going to be important.
    We don't have your whole FAA financing plan. If you can't 
tell us the plan, can you tell us the rollout schedule?
    Secretary Peters. Congressman Mica, we expect to roll out 
that proposal next week.
    Mr. Mica. Is that everything? Is that the PFCs? We got a 
little glimpse in here, and some of this does possibly look at 
user fees.
    Secretary Peters. It does.
    Mr. Mica. Do you want to talk about that for a minute?
    Secretary Peters. I would, Congressman, and if I may take 
just a moment to talk about the need for the change in system 
because that has been the subject of some discussion.
    The current funding structure for FAA has significant 
limitations. These limitations have resulted in less than 
optimal service. Many of us saw an article in the Washington 
Post this morning about significant delays in aviation travel. 
Safety of the program is and remains our highest priority, but 
there have been delays and a lack of reliability due to the 
capacity and the capability of the current 20th Century system, 
and these are only going to get worse as demand on the system 
increases.
    In just less than 10 years, the Nation's air space will be 
30 percent more crowded than it is today, and by just 2012, FAA 
projects 23 percent more passengers will be flying. By 2025, 
commercial carriers will be carrying 1.4 billion passengers, 
which is an 87 percent increase. By 2012, FAA projects that 
aircraft handled by FAA en route centers will be 17.6 percent 
higher than in 2006. By 2025, demand will increase to 86.5 
million aircraft, which is an 87 percent increase over 2006.
    Our current funding structure is largely based on the price 
of a ticket, and bears no direct relationship between the taxes 
paid by users and the air traffic services provided by FAA. In 
order to meet the future demand as well as some of the current 
demand, we need to transition to a dynamic 21st Century 
structure that ties use of the system to costs, a system that 
is equitable and a system that is responsive to growing demand.
    Sir, we have talked about user fees, but there are a number 
of policy considerations that will be addressed in the 
reauthorization proposal itself. I understand that people are 
concerned, and I understand the general aviation community is 
concerned. But I would ask that we have that discussion after 
the proposal is released so that we can look at the policy 
implications and decisions together.
    Mr. Mica. OK. Final question, to actually get us to deal 
with the aviation congestion, we have got to go to the next 
generation of air traffic control. For the new members, the 
acronym, and you will lots of these, is NGATS, Next Generation 
Air Traffic Control.
    The schedule for NGATS and then our preliminary discussions 
to date, we are looking at about a billion dollars additional 
per year in financing that for 18 to 20 years to keep up with 
it because you can never hire enough air traffic controllers to 
keep up with that as per the MITRE. I strongly recommend if you 
get a chance, and I think they are coming up here with a little 
display, you should see the MITRE study on NGATS. Could you 
respond quickly?
    Secretary Peters. Congressman, I think you make a valid 
point. Today's system is largely dependent on ground-based 
radar, and so as planes fly across the Country, they are 
tracked from one system to another based on the ground towers. 
The new system, which we call Next Generation, will be based on 
satellite technology and will allow planes to fly closer 
together, and land closer together without compromising the 
safety of the system. This system will require not only changes 
with the infrastructure within the air traffic control system, 
but also within the airplanes and the architecture that is part 
of that system today.
    So, as Congressman Mica said, this is a long-term, highly 
capital-intensive investment. We are developing a business plan 
for that investment, and we will be able to share it with you 
in the reauthorization proposal. But, as the Congressman said, 
this is a very significant investment that will move us into 
the 21st Century and allow us to be able to handle the type of 
aircraft traffic increases that I spoke to earlier.
    Thank you, sir.
    Mr. Oberstar. Ms. Johnson?
    Ms. Johnson. Thank you very much, Mr. Chairman.
    I think most of my questions might be for the second panel, 
but I will ask if by chance you are recommending user fees 
anywhere else because of the shortness of the budget.
    Secretary Peters. Congresswoman, we are not recommending 
user fees at any other part of our budget at this time.
    Ms. Johnson. Well, do you think you are going to have 
enough money to deal with the New Starts and all the projects 
that are ongoing considering the fact that the gas tax fund 
will, run out in 2009?
    Secretary Peters. Congresswoman, you make a valid point. In 
fact, the Congressional Budget Office (CBO) has projected 
already a $3.62 billion deficit in the highway account of the 
Highway Trust Fund for 2009. The Administration is recommending 
several steps to help mitigate that and protect the solvency of 
the trust fund. However, we still anticipate that a projected 
$238 million shortfall will occur in 2009.
    The two steps that we are taking: Our first, a new 
accounting procedure that transfers cash to the flex funding 
from the highway account to the mass transit account (MTA) when 
the money is needed for outlays as opposed to when the actual 
contract authority and obligation limitation are transferred it 
doesn't hurt the MTA because these outlays go out at a slower 
rate. The second, and probably the bigger recommendation that 
we are making is that the President's 2008 budget proposes not 
spending $631 million in revenue-aligned budget authority. 
These two mechanisms will reduce the anticipated shortfall to 
$238 million anticipated.
    But, as you said, Congresswoman, we really need to talk 
about what we are going to do for the transportation funding 
well before 2009.
    Ms. Johnson. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Oberstar. Mr. Petri?
    Mr. Petri. Thank you.
    Madam Secretary, there are a lot of areas that I would like 
to ask about, but there is one that my colleague, Mr. Duncan, 
who is not here right now, and I think you might want to expand 
on. It is kind of plowing new ground in a way, and that is the 
area of congestion pricing. What is the Administration's 
proposal and what are the implications of that? The ideas to 
get greater utilization out of infrastructure, something that 
the transportation professors talk about all the time but the 
people where the rubber hits the road, so to speak, and have to 
manage the system have trouble implementing. Could you talk 
about that and what the merits and problems are associated with 
what you are doing in the area of congestion pricing?
    Secretary Peters. Congressman Petri, I would be glad. 
Congestion pricing, or dynamic pricing as it is sometimes is 
known, is the differential pricing based on time of day and use 
of a system. Probably the longest going project in the United 
States today that uses congestion pricing is State Route 91, 
Riverside County in California. Their sytem does dynamically 
prices the system to keep the traffic free flowing at all 
times. On several projects in Southern California, we have seen 
a 40 percent greater through-put by using this congestion or 
dynamic pricing than we do with the same lane configurations on 
adjacent so-called free lanes.
    Congestion pricing can help us get more throughput out of 
our transportation infrastructure but also can keep that 
transportation infrastructure safer because it keeps most of 
the traffic moving at relatively the same speed of travel which 
is always safer than the dangerous stop and go that you 
sometimes see in congested areas.
    Mr. Petri. Could you explain it a little bit more 
concretely? How would people pay more at different times of day 
as mainly it would be commuters, I assume, going into and out 
of congested areas?
    Secretary Peters. Yes, in most cases, it is commuters. The 
way the system works is the tolls or the fees are charged 
electronically through a transponder that is mounted in the 
car. Signs approaching the entrance to these lanes would state 
what the price is at that time so people could make a conscious 
choice whether or not to get on those lanes. If they choose to 
get on the lanes, the price does not change during the time 
that they are on the lanes. The price only changes at the onset 
of the facility not during the time that you are on the 
facility.
    Mr. Petri. You would be using, in effect, HOV lanes for 
congestion pricing?
    Secretary Peters. Congressman Petri, that is where it works 
extremely well. Converting an existing high occupancy vehicle 
or HOV lane to what is sometimes called a high-occupancy toll 
lane uses the available capacity that is already there on an 
existing HOV lane. In many cases it can capitalize on existing 
infrastructure so that single-occupant drivers can use those 
lanes by paying the fees. The pricing structure helps keep the 
traffic moving or free flowing for the entire facility.
    Mr. Petri. Thank you.
    You may have mentioned this--I was distracted for a 
minute--the Next Generation Air Traffic Control System. I 
realize it is not a turning off one system and turning on a new 
system. The technology will be deployed in a sequential way and 
layered into the system, and a lot of people are working on it. 
Do you have some idea going forward the next 5 years and 10 
years what the cost implications are?
    Is it going to be manageable within the budgets or will 
there be a surge? Can you give us some sense of what you are 
thinking in terms of the cost of the new system?
    Secretary Peters. Congressman Petri, we are looking at a 
variety of ways to pay for this system right now as well as 
developing a budget. We are looking at a variety of ways where 
we might be able to access funding, including possibly the 
private sector, to build and operate the system. That is all 
part of a business plan that we are developing and should get 
to you in the next few weeks, or the next few months rather, as 
well.
    A very important part of what you said, Congressman Petri, 
is the fact that this system has to migrate in over time. It 
isn't just flipping a switch and changing from the existing 
system today to the Next Generation system. As I mentioned 
earlier, it will involve changes not only to air traffic 
control infrastructure but to the aviation equipment itself. 
The airplanes, airports, et cetera will also have to be 
retrofitted with this equipment.
    We believe, sir, that this will indeed cost several billion 
dollars. As I said, we are in the process of developing a 
business plan and should have more firm information to you in 
the coming months.
    Mr. Petri. Thank you.
    I think the benefit is that it will improve safety and 
expand the capacity of the system enormously.
    Secretary Peters. Sir, it absolutely will. The truth is the 
existing system simply cannot handle the growth in aviation 
traffic that we are going to be seeing in the future.
    Thank you.
    Mr. Oberstar. Mr. Costello?
    Mr. Costello. Mr. Chairman, thank you. Madam Secretary, 
welcome to the hearing here today.
    I share what I expect what many of my colleagues expressed, 
and that is I am concerned that the fiscal year 2008 
Administration budget does not adequately meet the needs of our 
Nation for the expectation of investment in critical 
infrastructure, and specifically let me address a couple of 
issues concerning aviation.
    For the past several years, the Administration has proposed 
massive cuts in the AIP program. I have opposed those cuts for 
obvious reasons. When we look at airports, much of the 
attention is put on security. However, we have a capacity issue 
that we have to address to avoid costly delays in the future.
    My question has just a few concerns about the proposed 
budget for aviation. We have a hearing next week which will get 
into specifics, but I understand from an earlier question that 
you noted that your 2008 comparison for the proposal to the 
current tax structure was, you indicated, hypothetical, that it 
was hypothetical because the user fee structure would not be in 
place.
    We did a preliminary analysis of the analytical perspective 
accompanying the budget, and it indicates that the 
Administration user fee proposal will actually generate $900 
million less in revenue than the current tax structure between 
the years 2009 and 2012. I just ask you, is that correct?
    Secretary Peters. Congressman Costello, I don't know if 
that is correct. I would be happy to look at the numbers with 
you and see if we could reconcile that, but I don't have that 
number with me today.
    Mr. Costello. My understanding is in response to Chairman 
Oberstar's question, you had indicated that it was hypothetical 
because the user fees would not be in existence in 2008. They 
will be if your proposal is enacted by Congress in that period 
of time. You have not run the numbers for 2009 through 2012?
    Secretary Peters. Yes, we have. If I may, I will ask the 
Assistant Secretary for Budget and Programs to answer that 
question.
    Mr. Costello. The question is our analysis shows it is 
about $900 million less during that period of time with the 
user fee system than the current tax structure, and I just want 
to know if that is correct.
    Ms. Scheinberg. I won't disagree with those numbers, but I 
wanted to say that the user fees in the future are now just 
estimates. Our user fee proposal will be directly tied to the 
needs and costs of the system. As the needs and costs go up, 
the user fees would go up. So, right now, we are not showing 
what would probably be the accurate numbers. Those numbers 
would be adjusted the closer we get to 2012. This is pretty 
much an estimate at this point.
    Mr. Costello. But you would not disagree. You would not 
quarrel with the numbers if your preliminary analysis says it 
is $900 million less than the current tax structure. You 
wouldn't have reason to doubt that.
    Ms. Scheinberg. I don't have the numbers in front of me, 
but I wouldn't disagree if you say so, yes.
    Mr. Costello. Let me also ask, Madam Secretary. The issue 
of the general fund contribution, in the Administration, we 
have seen a reduction over a period of time now. I happen to 
believe in a robust general fund contribution because I believe 
it benefits everyone, the system does, and an efficient air 
transportation system benefits the economy.
    Let me ask your feeling about a general fund contribution. 
It went from about in the high twenties to 25 percent down to 
21 percent and now I believe down to 19 percent. What is your 
feeling about a general fund contribution to support the system 
and the modernization program?
    Secretary Peters. Congressman Costello, we believe that a 
general fund contribution is important to fund those things 
that are inherently governmental functions, or those things 
that are in the interest of the public as a whole. Some of 
those things would include defense uses of the air traffic 
control system. We believe the general fund contribution ought 
to be equitable to inherently governmental or public use 
functions.
    Mr. Costello. The current projections that I have seen for 
the AIP program, and if these are correct in front of me, the 
President's proposal is $2.75 billion. You know and I know that 
under the current entitlement program for airports, when the 
figure falls below about $3.2 billion, then the primary 
airports that are entitled to a minimum of $1 million, that 
would drop down to about $650,000 and the non-primary airports 
would be cut out of the process, the entitlement process 
altogether. I wonder if you might comment as to how the FAA 
intends to address that if the President's AIP budget proposal 
is adopted by the Congress?
    Secretary Peters. Congressman Costello, our reauthorization 
proposal will contain changes to the Airport Improvement 
Program (AIP) formula and passenger facility charges.
    Today we support a level, as you said, of $2.75 billion. 
This amount, based on our projections, will provide enough 
funds for us to meet the high-priority airport capacity, 
environmental, safety and security needs of the airport system. 
The proposed changes that will be contained in our 
reauthorization proposal will ensure that funds flow to 
projects that further National goals and airports that depend 
heavily on AIP to meet their capital financing needs.
    Mr. Costello. Last question, the Administration has been 
promising to deliver their proposal for the reauthorization of 
the FAA since last summer, and I have heard it was going to be 
June and then the fall and then the first of the year and now 
we are hearing next week. Will we get the Administration's 
proposed reauthorization plan next week and, secondly, will it 
be in one part or will it be divided up into three parts as we 
have heard?
    Secretary Peters. Congressman Costello, I do apologize. I 
can't speak for the past, but since I have been at the 
Department, it has been our target to get that proposal to you 
right after budget rollout which would be next week, and it is 
my expectation that we will do that.
    Mr. Costello. In one package or in parts?
    Secretary Peters. One package, sir.
    Mr. Costello. Thank you.
    Secretary Peters. Thank you.
    Mr. Oberstar. Mr. Hayes?
    Mr. Hayes. Thank you, Mr. Chairman.
    Madam Secretary, welcome.
    Secretary Peters. Thank you.
    Mr. Hayes. We appreciate the challenge and opportunity 
before you. The Department of Transportation is a tremendous 
contributor to commerce and employment and jobs and the overall 
health and well-being of the Nation, whether it is highways, 
rails, ships.
    Aviation is a particular area of interest to me, and I am 
sure you will get a couple of other questions about that going 
forward. Looking at aviation, and let me say up front that I 
think the idea of user fees is just very, very frightening and 
damaging to the potential for maintaining and increasing the 
aviation community's contribution to the whole process. Talk 
about increased congestion, that is a problem in the air and on 
the ground, but in the air it is three-dimensional as opposed 
to one on the ground. The FAA, in modernization, has almost 
doubled the air space with the advent of RVSM equipment and 
some other things that the community is paying for.
    My question becomes then as well look forward, we want to 
make sure that these tax dollars are getting the maximum 
effect. Now on increasing capacity, there are a number of 
obsolete systems. When I say obsolete, they still work but very 
few people use them, VORs and NDBs, those types of things. I 
hope and I would assume that going forward you all will look 
very carefully at the savings generated, kind of like cleaning 
out your closet, as we move into more technology-driven areas. 
Is that a big part of your planning process when it comes to 
what the FAA will ask for in the reauthorization?
    Secretary Peters. Congressman Hayes, it is. I think you 
make a valid point that some of these systems will no longer 
need to be used.
    The only difference, I would say, is the transition period. 
As Congressman Petri pointed out, we can't simply turn off one 
system and turn on another. So it will be a migration over 
time. But yes, we are calculating the cost savings from the 
systems that will no longer be used.
    Mr. Hayes. I appreciate that, and I will look forward with 
Mr. Costello and others to sitting down and talking about that 
in detail. If I fly from here to Concord--and under the rules, 
that is now questionable--there is only one VOR involved in 
that. The other one is still out there. There are a lot of 
things that could happen.
    The FAA has had some issues with recent audits. It is a big 
agency and has a lot going on. I hope we would make sure, 
particularly under the threat of huge tax increases on fuel and 
potential user fees, that we get that cleared up. I want the 
folks, particularly in the name of safety, to have everything 
that they need but making sure that those dollars are well 
spent and that we do not put undue strain, particularly on that 
segment of industry where hundreds of thousands of people are 
employed in building airliners and all the way from 747s all 
the way down to unmanned aerial vehicles.
    Any thought or is it premature since the final document is 
coming out next week, where is the whole user fee issue? 
Chairman Mica mentioned it earlier. What is the latest and 
greatest on that and can you give us a preview of what proposed 
tax increases on fuel there are and kind of how that is going 
to shake out?
    Secretary Peters. Congressman, I am at a bit of a 
disadvantage due to the fact that we don't have the 
reauthorization proposal out yet, and because some of those 
issues are being decided, I would not be comfortable talking 
about what the components of charges would be. I would be happy 
to talk with you next week.
    You obviously have much greater knowledge about the 
technical aspects of this than I. In fact, I think I have just 
about exhausted my technical capability here, but I do 
understand your concern about the audit and about 
responsibility for public funds. I think the issue is a very 
important one.
    Air traffic modernization has been on the Government 
Accountability Office's (GAO) high risk list for years. 
Administrator Blakey and I take these issues very seriously, 
and we have been giving the programs and accountability for the 
programs very careful attention. Ninety-seven percent of FAA's 
major capital programs were on time and on budget in 2006, and 
that number will be even higher for 2007. Both GAO and the 
Department's Inspector General have noted FAA's improvement in 
major project management.
    Now in terms of calculating the fee, sir, it is intended 
that an advisory group would be structured and would work with 
Congress in determining what the actual fees would be.
    Mr. Hayes. We certainly, again, welcome you to the Hill and 
appreciate your efforts. If I have more knowledge that you do, 
it is got to be in very limited areas. So, again, thank you and 
we look forward to working with you and make sure that 
everybody wins at the end of the day.
    Thank you, Mr. Chairman. I yield back.
    Secretary Peters. Thank you.
    Mr. Oberstar. Thank you, Mr. Hayes.
    Ms. Norton? No questions.
    Mr. Cummings?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Madam Secretary, welcome. Madam Secretary, I wanted to ask 
you about two areas, water and Amtrak.
    The President has proposed significant cuts in the 
Environmental Protection Agency's budget for wastewater 
infrastructure. Cuts are also proposed for the Clean Water 
State Revolving Loan Fund programs to mitigate runoff and 
programs to restore brownfields. The Targeted Watershed Grant 
program is proposed to be zeroed out. Obviously, these are also 
cuts that would target the safety of our water supply and cut 
the meager environmental protection programs we currently have 
in place. I just wanted to know what was the thinking behind 
those cuts?
    Secretary Peters. Congressman Cummings, I unfortunately am 
not qualified to answer those questions. I believe the 
witnesses on the second panel from EPA would be able to do so.
    Mr. Cummings. No problem.
    Let us go to Amtrak. You believe Amtrak ought to be 
privatized?
    Secretary Peters. Sir, I believe that the Nation needs an 
inter-city passenger rail service, but we need one that 
operates on a business model that is sustainable.
    Mr. Cummings. So I take it that, as you probably know, in 
the last few Congresses, there seems to have been an effort 
afoot by the Administration to move towards privatization, but 
even the Republican Congress has repelled that. You know that, 
right?
    Secretary Peters. Sir, I do. Having fairly recently come 
through the confirmation process, it became abundantly clear to 
me that there is support for the Amtrak program in Congress, 
albeit for the funding to be used responsibly.
    I have had the opportunity to meet with the Amtrak board, 
the chairman, as well as the new head of Amtrak, Alex Kummant, 
to talk about what they are doing. We have seen some progress 
in the last year by the Amtrak board and by management to 
control costs and to raise revenues. The President's 2008 
budget for Amtrak recognizes that the corporation has made some 
necessary budget reforms, and we have included $900 million in 
our budget just as we did last year.
    We also are aware of the fact that Amtrak has some 
substantial resources in addition to the amount proposed in the 
President's budget. Those resources include approximately $2 
billion in normal operating revenue as well as $250 million in 
State subsidies.
    One of the reasons we structured our proposal the way we 
did, allowing for $100 million for proposed inter-city 
passenger rail grant programs, is that it could be matched with 
State funds to gain another $100 million for the Amtrak 
program. The reason we feel that those State partnerships are 
so important is that over the last 10 years, ridership on 
inter-city passenger rail routes that benefit from State 
support and State involvement has grown by 73 percent. 
Ridership on Amtrak routes that are not supported by States has 
increased by only 7 percent.
    Mr. Cummings. Now you realize that both Republican and 
Democratic governors are looking for resources--and my 
governor, the Republican that was in there and now the Democrat 
in Maryland--are just screaming, just trying to figure out how 
they are going to deal with the responsibilities they have 
presently. Basically, what you are saying is that you want to 
put more, the President wants to put more responsibility on the 
States to give more to Amtrak, is that an accurate statement?
    Secretary Peters. Congressman, we believe that where States 
choose to do so and can provide money, which is then matched at 
a 50 percent level by this program, it can have very positive 
results. For example, Washington State, California, and a 
number of other States who already put money into commuter rail 
programs are putting money into Amtrak programs and seeing 
significant increases in ridership.
    Mr. Cummings. You have the belief that the Northeast 
corridor should be separated from the Amtrak system?
    Secretary Peters. Sir, I have not arrived at that decision. 
The Northeast corridor is very important, and that is one of 
the reasons that we put $500 million for capital costs in our 
budget, to help the maintenance and repair of capital 
infrastructure across the system, but particularly in the 
Northeast corridor.
    Mr. Cummings. Just very briefly, tell me about this. It 
seems like there has been built up this structure to plan 
basically to have private and public going against each other, 
I guess in some type of competition. Is that right?
    Secretary Peters. Sir, I am not aware of that. In fact, 
what I would prefer to see is public and private contributions 
working together for the greater good. I am not aware of an 
effort to contract out Amtrak nor has that been mentioned to me 
by the CEO or the board members with whom I have spoken.
    Mr. Cummings. You are not anxious to see it privatized, is 
that what you are saying?
    Secretary Peters. Sir, I am not sure that that is on the 
table as an offer. If it is, I would certainly want to know 
what the parameters of that offer were and whether or not it 
was in the public interest at the end of the day.
    Mr. Cummings. Thank you, Madam Secretary.
    Secretary Peters. Thank you, sir.
    Mr. Oberstar. Mr. Graves?
    Mr. Graves. Thank you, Mr. Chairman, and thank you, Madam 
Secretary, for being here today and coming up and visiting with 
us.
    My biggest concern is with the FAA and with the new 
proposals, and I have got a real problem. We talk a whole lot 
about this funding proposal and how we are going to pay for 
this thing, but you stated yourself you are still working on 
the business plan for the Next Generation Air Traffic Control 
System. Is that going to be available next week with your 
funding proposal?
    Secretary Peters. Sir, the business plan will not be 
available next week. What will be available next week is the 
product that came out of the Joint Program Development Office. 
That office includes representatives not only from FAA, but 
from Department of Commerce, Department of Defense, Department 
of Homeland Security, NASA, as well as aviation stakeholders 
who have put together the parameters of the plan that will be 
included in our proposal.
    Mr. Graves. But we still don't know what it is we are going 
to have. We still don't know what the Next Generation Air 
Traffic Control System is going to be.
    Secretary Peters. We do not, sir.
    Mr. Graves. We still don't know what it is going to cost. 
We still don't know. We really don't know a whole lot about it 
except for a concept, but yet we are coming up with a funding 
proposal to pay for it.
    We talk all about congestion and how crowded the skies are 
going to be, but I am specifically talking to those GA pilots, 
those VFR pilots who are out there in Class D air space. They 
are not using this system, and if they are not using this 
system, then how can congestion be a problem?
    I have heard rumors of as much as a 300 percent increase in 
the gas tax in and the aviation fuel tax for these GA pilots. 
That is the word that I got, a 70 cent gas tax. Right now, what 
is it? It is about 22 or something like that. Now that is a 
horrendous increase if that is what the case is, and that is 
for pilots that aren't using the system. That is for pilots who 
aren't a problem with the system.
    I know pilots out there that have got thousands of hours, 
and they are operating strictly in Class air space. They are 
not going into Class B air space. They seldom cross through 
Class C air space. They are just not a drain on the system, but 
yet they are going to be taxed to help pay for this.
    Now I understand through the Aviation Trust Fund, what this 
money goes to. Truly, the Aviation Trust Fund, and Mr. 
Oberstar, I know can surely speak to this because he has 
institutional knowledge about everything when it comes to 
transportation. The Aviation Trust Fund was developed to build 
runways and infrastructure, not pay for operating costs. I 
understand GA has a role in that, and we have the whole 
reliever airport system to get GA off of the big airports so 
that the airlines can get in there and we don't have 
congestion.
    But now all of a sudden we are talking about safety in the 
system. We are talking about crowded skies. We are talking 
about a Next Generation Air Traffic Control System. That brings 
me to a whole other point, and that is new equipment.
    I can't afford the equipment that is being put in some of 
these airplanes now. The equipment is worth more than the 
airplane is in many cases, and now you are talking about a 
whole new system that is going to require new equipment. Just 
through certification costs and everything that is associated 
with that, I can only imagine what that is going to cost, and 
it concerns me a great deal for those GA pilots out there. 
Those are the ones that I am worried about. They can't afford a 
300 percent increase in aviation fuel costs. I don't what it is 
going to be, and I am sure you don't know what it is going to 
be either. We will see next week what the proposal is going to 
be.
    More than anything else, I am venting, and I don't expect 
you to necessarily respond to it because I have a whole lot of 
questions next week and I have got reams of questions that I 
have about this system that we still don't know what it is and 
what it is going to cost and how we are going to use.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Graves. Yes, yes.
    Mr. Oberstar. The gentleman is not venting. The gentleman 
is just making a very profound, compelling statement that 
reflects the views on both sides of the aisle about the 
Administration's plan or non-plan or incomplete proposition. So 
when that proposal comes out next week, it better not just be a 
concept. It better be something very specific.
    Secretary Peters. Mr. Chairman, I understand.
    Congressman Graves, we do understand the concerns of the 
general aviation community. There are a number of policy 
considerations that will have to be made by the Department, 
working together with Congress, as this reauthorization 
prospect goes forward in the coming months. Those policy 
considerations will have a great deal to do with some of the 
concerns that you have expressed by the general aviation 
community.
    Again, in terms of the concept of Next Generation, what we 
want to do is work with you and work with experts in the field 
so that together we identify the correct technology because 
sometimes Government is a little behind the curve when it comes 
to the best available technology. That is something that we 
want to work together with you on.
    I know that Administrator Blakey will be able to address 
those issues when she appears before this Committee next week .
    Mr. Graves. In closing, I do want to thank you for coming 
up here, and I appreciate your answering our questions or 
talking about them.
    Secretary Peters. Thank you, sir.
    Mr. Oberstar. I thank the gentleman for this very 
perceptive and compelling statement.
    Mr. Holden?
    Mr. Holden. Thank you, Mr. Chairman.
    Madam Secretary, I really don't have a question. I have a 
comment, but I welcome your opportunity to respond to it when I 
am finished.
    On your comment that you believe that earmarks should be 
reduced by 50 percent, I couldn't disagree with you more if I 
tried. Those of us on this Committee and particularly those of 
us from rural districts depend upon the opportunity to steer 
dollars to our districts for hazard mitigation, for congestion 
problems, for economic development, and quite frankly, our 
state DOTs do not have endless resources. We do not give them 
endless resources. The money naturally gravitates to the 
metropolitan areas. We need that opportunity to take care of 
those concerns that we have.
    The Chairman has been to my district two times. The former 
Ranking Member of the Subcommittee on Highways, Mr. Rahall, was 
there once looking at projects. While you are thinking about 
reducing earmarks, I am just going to give you three examples 
of projects, two complete, one in progress right now that would 
still be on PennDOT's planning if it were not for my ability 
and Senator Specter's ability to earmark funds for these 
projects.
    In my home county of Schuylkill, Route 61 was deemed one of 
the most dangerous highways in the Commonwealth of 
Pennsylvania. It was a four lane highway, not wide enough, no 
divider on it. Two highway bills ago, I earmarked $15 million. 
Senator Specter put a little bit on top of it. Now it is a four 
lane highway with jersey barriers, and there has not been a 
fatality there in six years.
    Route 222 in Berks County, one of the fastest growing 
counties in the Commonwealth of Pennsylvania, had the esteemed 
pleasure of being known as the Home of the Road to Nowhere. 
Route 222 is a highway between Reading, Pennsylvania and 
Lancaster, Pennsylvania which was two lanes in two fast growing 
counties. It would still be a road to nowhere if we were not 
able to earmark a sufficient amount of funds to have that 
complete. They are open and operating and safe.
    Chairman Oberstar was in my district in Lebanon, 
Pennsylvania, the City of Lebanon. Norfolk Southern comes 
through a city of 35,000 people 40 plus times a day. Since I 
have been representing that county, people have been killed by 
trains. The ambulance service, the fire service are separated 
when the trains are coming through from getting to the 
hospital, getting to the fire sight. As the result of an 
earmark, it is now a land acquisition. So earmarks are not a 
dirty word. It is an opportunity for us to help our districts, 
and I hope you will consider that.
    Secretary Peters. Congressman, if I may clarify, what the 
President is concerned about are earmarks that are not done in 
the light of day, those things that happen away from the 
decision-making part of Congress. We absolutely understand that 
while the Administration proposes, Congress disposes, and we 
will always follow the law. But what we ask is that those laws 
be made in the light of day so that your fellow members and the 
American people can know where those monies are going.
    I don't question your judgment, sir.
    Mr. Holden. Thank you, Madam Secretary. Believe me, they 
were transparent. We had six newsletters out on those projects.
    I yield back, Mr. Chairman.
    Mr. Oberstar. I thank the gentleman. He made a very 
powerful statement about the high priority member projects that 
are designated.
    Just for the Secretary's edification, although she was 
Federal Highway Administrator during the process of SAFETEA-LU, 
we circulated, then Chairman Young and I circulated a 22 point 
questionnaire to all members that they had to fill out and sign 
to identify projects in their districts that they would like to 
have included in the Transportation Bill. All of that was 
included in the Committee report. Those submissions by members 
were all vetted. They had to be included in the STIP, that is, 
the long-term Surface Transportation Improvement Program of 
their State, and a whole host of other requirements. The 
specific geographical location of the project, and their 
identification by member were part of our Committee report and 
part of the bill that went to the House floor and through 
conference and in the conference report.
    There is no night time designation and no night time fly by 
night operation in this Committee. It is all done in the light 
of day.
    Secondly, in the aviation reauthorizations, we have never 
during the time that I was Chair, during the time that Mr. 
Duncan was Chair, during the time that Mr. Mica was Chair, 
allowed in the reauthorization of FAA, any airport designation. 
There were hundreds of requests from members to have a tower, a 
runway, a taxiway, terminal improvements, all that sort of 
stuff. We kept it out.
    It is the appropriation process that is bad, and I can 
guarantee, Madam Secretary, that if they cross our line in this 
Congress, this Chairman is going to be on the floor and raise 
points of order.
    Secretary Peters. I understand, sir.
    Mr. Oberstar. Mr. Coble?
    Mr. Coble. Thank you, Mr. Chairman.
    Madam Secretary, I arrived late because of another meeting, 
but I don't think this question has been put to you. The 2008 
budget does not include any funds for the new Department of 
Transportation building in Southeast D.C. Two questions, when 
are you moving into the new building, and do you have 
sufficient funds in the 2007 continuing resolution to make the 
move?
    Secretary Peters. Congressman Coble, thank you for asking 
the question. If the 2007 H.J. Resolution 20 is enacted as it 
passed the House, we will have sufficient money to complete the 
new building, and we will be moving in beginning in 
approximately April of this year through the end of June of 
this year. In fact, I am very pleased to report that that 
project is coming in under budget and on time, should H.J. 
Resolution 20 pass both chambers of Congress.
    Mr. Coble. Good news, we don't hear that very often on this 
Hill, do we, Mr. Chairman?
    Secretary, let me ask you one final question. Do you 
believe that there are opportunities to move more cargo on our 
waterways as part of the intermodal transportation system, (a) 
and (b), what can be done to encourage greater or widespread 
use of our waterways as a means of addressing some of the 
congestion problems of other modes?
    Secretary Peters. Congressman Coble, I think you make a 
valid point. We are looking at more than doubling the freight 
transportation of our Nation just within the next 10 years. 
Estimates are that there will be as much as two and a half 
times the trucks on the road that you see out there today than 
trains. So, absolutely, using our inland waterways, using a 
concept called short sea shipping is something that we 
absolutely should look at. It is something that I am talking to 
our maritime administration about to determine where and how we 
might propose to you to make better use of the waterways.
    Mr. Coble. Thank you, Secretary Peters.
    Mr. Chairman, I yield back.
    Mr. Oberstar. I supplement the gentleman's inquiry by 
saying that this Committee, the Coast Guard Subcommittee 
actually will have a hearing on short sea shipping for the 
purpose of exploring wider opportunities to use our maritime 
inland waterways and the salt water as well as the Great Lakes 
coastal system to move goods more efficiently and at least cost 
and least environmental impact.
    Short sea shipping has been in practice in other countries. 
We have not used it, I was going to say sufficiently. We have 
hardly used it at all in the United States. The purpose of the 
hearing is to explore exactly the point of the gentleman's 
question.
    For example, containers that come into the United States 
from the West Coast to the Port of Vancouver by the Canadian 
Pacific Railway and the Canadian National Railway, the CN 
brings those containers, about a half million of them now, 
through International Falls on the U.S.-Canadian border in my 
district and then by rail down through the heartland of the 
United States.
    Those containers could be offloaded at Duluth, placed on a 
lake-size container vessel, moved past the choke point in 
Chicago where it takes as long for a container to move through 
Chicago seven miles as it does to move 1,800 miles from the 
West Coast to Chicago. Now we can relieve the congestion, 
reduce the cost and move containers more efficiently. We are 
going to explore that issue in the coastal regions, the salt 
coastal regions and the Great Lakes.
    Mr. Bishop?
    Mr. Bishop. Thank you, Mr. Chairman.
    Madam Secretary, thank you for your testimony.
    One of the goals that this Committee has adopted on a 
bipartisan basis is to examine the connection that exists 
between transportation policy and energy policy. The President 
in his State of the Union message in 2006 said that we were 
addicted to oil. The President is now acknowledging that human 
activity contributes to global climate change. It is imperative 
on all of us obviously to bend our policies in a way that 
reduces our dependence on foreign oil, reduces carbon emissions 
and so on.
    My question to you is really very straightforward. Does the 
Administration believe that increased reliance on mass transit 
is a means by which we can reduce our consumption on foreign 
oil and in the process thereby reduce carbon emissions?
    Secretary Peters. Congressman Bishop, mass transit 
certainly has a place in meeting the Nation's transportation 
demand, and with the right systems in place, mass transit can 
relieve some of the congestion that we are experiencing on our 
roadways today.
    Mr. Bishop. Then let me be more specific. How is it if the 
Administration shares that belief, how is it that the 
Administration can cut funding by $300 million below the level 
authorized in SAFETEA-LU?
    You made the point that what the Administration was trying 
to reach was historic levels of funding. I believe that is how 
you characterized it.
    Secretary Peters. That is correct.
    Mr. Bishop. I guess my question is: Is this the time that 
we can settle for historic levels of funding?
    We passed, on a bipartisan basis, a reauthorization bill 
that included a level of funding for mass transit that we 
thought was prudent. The Administration is now cutting that by 
$300 million. How can you justify that?
    Secretary Peters. Congressman Bishop, we recognize the 
importance of mass transit. We have funded overall 
transportation programs well in excess of the 1 percent 
limitation that the President has asked us to meet for non-
defense discretionary spending. In crafting our proposal for 
transit this year, while mindful of that goal, we funded every 
project that was ready to go, every project that has a full 
funding grant agreement, that is pending or we believe will be 
at that point during the year.
    When SAFETEA-LU was passed by the Congress and signed by 
the President in August of 2005, it was a very different 
picture in terms of the health of the Highway Trust Fund and 
the Highway Account. We have to make tough choices, and those 
were the choices we made, sir.
    Mr. Bishop. I understand that. At the risk of being 
argumentative, the 1 percent cap that the President imposed 
clearly is an arbitrary number. I mean the Pentagon's budget is 
going up by 11 percent. We are spending more in that area 
because the President believes that that is a priority. The 
Nation believes that that is a priority.
    I guess what I and a number of us are struggling with is 
how are we going to move this issue, this issue of climate 
change and the way in which Government policy can impact our 
ability to bend that. How are we going to move that to a 
priority that eclipses some arbitrary 1 percent barrier?
    Secretary Peters. We believe that those systems are a 
priority, and we have allocated more than the 1 percent to 
those programs. I certainly understand where you are coming 
from, and I believe that we share those concerns. We will work 
hard with you to resolve these issues.
    Mr. Bishop. OK, thank you, Madam Secretary.
    I yield back, Mr. Chairman.
    Mr. Oberstar. I thank the gentleman.
    We have about 10 minutes remaining on this vote, and then 
we have 50 minutes of voting. I can't ask the Secretary to stay 
for an hour.
    We will go to other members and ask them to fire one 
question off, and I hate to do this, but then we will negotiate 
with the Secretary about a return encounter.
    Mr. Duncan?
    Mr. Duncan. Mr. Chairman, in light of your statement, I 
will just go ahead and submit my questions for the record. 
Thank you.
    Mr. Oberstar. As the former Chairman of the Aviation 
Subcommittee, you are entitled to a question.
    [Laughter.]
    Mr. Duncan. Well I am curious. I am curious about two 
things. One, the recission of these almost $8 billion in 
highway funds and what we are going to do about that and also 
are you making any recommendations about new ways to finance 
the aviation system? I am interested in both of those things, 
but that is two questions.
    Mr. Oberstar. All right, she can answer. She talks fast.
    Secretary Peters. Congressman, I am going to ask our 
Assistant Secretary to discuss the recisions.
    In terms of new ways to fund aviation, we are looking at 
new ways to fund aviation and trying to find ways to meet the 
increasing demand without putting any undue burdens on our 
aviation community, as Congressman Graves mentioned. When we 
get our proposal out next week, we will talk to you in more 
detail about those.
    Mr. Duncan. All right.
    Ms. Scheinberg. Sir, there are four proposed cancellations, 
as we call them. Two of them are from the Miscellaneous 
Appropriations Account, one is contract authority that 
correlates with the Revenue Aligned Budget Authority (RABA), 
that we are proposing not be instituted in fiscal year 2008, 
and the fourth one is unobligated balances of contract 
authority, similar to what the Congress did last year and is 
doing in H.J. Res. 20.
    Our level is at $1.4 billion compared to the $3.5 billion 
that the Congress is proposing. These are similar to what has 
been done in the past, but we have four different pieces from 
the Highway Account.
    Mr. Duncan. I am concerned about that because our vehicle 
miles traveled keeps going up at three or four times the rate 
of the increase in population.
    Mr. Oberstar. Exactly.
    Mr. Duncan. At any rate, I could say a lot more, but I will 
let it go.
    Thank you very much for being here with us.
    Secretary Peters. Thank you, sir.
    Mr. Oberstar. That last point is so vital.
    Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chair. I will make mine 
very brief also.
    We have been searching with great interest any of the 
increase in dealing with some of the transportation issues in 
Southern California which is where I am from, and I would like 
to submit a letter to you. It is not a question.
    It is rather we need congestion relief in California on 
that bottleneck of I-5, the Santa Ana freeway and also on the 
Alameda corridor east simply because that brings the economy to 
the rest of the Nation, and it is heavily impacting my 
district, not only because of the pollution but because of the 
building of the third rail and also add to that, out of 54 
grade separations, only 20 are being geared for building or for 
setting up. The funding is not there, not even for those 20. 
Never mind the other 34.
    That is going to create not only a health hazard, a 
pollution hazard, more trains derailments because we have had 
five in my district in about a span of less than a year. I will 
give credit to Union Pacific, they are going through and 
putting down concrete ties and longer rails and upgrading which 
we have been having a big battle over because of those 
derailments. Those are the things I would like to submit to 
you.
    Also, I understand that you will be in Los Angeles. I 
invite you to my district to have a bird's eye of what we have.
    With that, Mr. Chair, I yield back the balance of my time. 
I will submit the letter to the young lady.
    Secretary Peters. Thank you, Congresswoman, and I look 
forward to the visit to your district.
    Ms. Napolitano. Thank you.
    Mr. Oberstar. Mr. Boozman?
    Mr. Boozman. Thank you, Mr. Chairman.
    I would just like to reiterate that I am very, very 
concerned about the Highway Trust Fund. We have got a situation 
where if you look at the tremendous inflation in our highway 
projects with the cost of steel, the shortage of concrete and 
things and you look at the last time we had an increase and you 
look at the purchasing power of those dollars, we have lost 
tremendous purchasing power and have not kept up that way. 
Earlier we had some of our truckers come in, and they were 
telling about how they had reduced fuel consumption by up to 25 
percent in the last year by going straighter routes and things 
like that.
    We are looking at increasing the standards on fuel 
efficiency and things. We have got the strongest economy that 
we have ever had and not keeping up now when that dips back 
down.
    I guess really what I would like to know from you is you 
said that we need to get with you and work this out. Do we have 
a plan to get where we need to go and specifically what is that 
plan?
    Secretary Peters. Congressman Boozman, I also am very 
concerned, and I know the Chairman is as well.
    Right now we have a commission that was authorized by the 
SAFETEA-LU legislation, which I have the privilege of chairing, 
that is working very hard to come up with recommendations for 
you. Those recommendations are due in December of this year. 
Because of the very urgent nature of this situation with the 
Highway Trust Fund I am working within the Department, and 
within the Administration. We will work with you to try to come 
forward with recommendations even sooner if we can do that. You 
make a valid point about the cost of construction materials, 
sometimes approaching 13 percent growth in the cost of those 
materials, well in excess of the rate of inflation.
    Mr. Boozman. Mr. Chairman, do you think we possibly could 
have that group over to give us some preliminary as to what is 
going on with them, the commission?
    Mr. Oberstar. Oh, yes, we will. We have periodically in the 
past had a briefing with the executive director of the 
commission, and with Mr. Mica's participation, we will schedule 
another one.
    Mr. Boozman. Thank you very much.
    Thank you, Madam Secretary.
    Mr. Oberstar. Mr. Lipinski?
    I would just say that while there are 4 minutes remaining 
on the vote, 338 have not yet voted, and it is a 2 minute and 
38 second hike from here to the House floor.
    Mr. Lipinski. We have plenty of time there.
    I just want to quickly say I also have concerns, Madam 
Secretary, about Amtrak, rail infrastructure funding, transit 
funding. Focusing specifically on Chicagoland which I represent 
part of it, there are massive congestion problems in aviation, 
rail, highways.
    I certainly would invite you to come out there and see some 
of these and discuss more that we can do.
    On aviation right now, we are working on a remodernization 
project and rail, the CREATE project which I have been the 
leader on to reduce rail congestion. In terms of highway 
congestion, we have groups like Metropolis 2020, Metropolitan 
Planning Council. These are civil organizations, think tanks 
working on innovative ways to address highway congestion. I am 
just wondering what you could quickly say about the highway 
congestion initiative and how that may be able to help in 
Chicago.
    Secretary Peters. Congressman Lipinski, the congestion 
initiative can help you. Secretary Mineta established the 
Department's National Strategy to Reduce Congestion on 
America's Transportation Network last May before he left the 
Agency. I think that is a wonderful idea and have picked up on 
that. Accordingly our budget proposes $175 million to be 
devoted to this initiative. The money supports four programs 
that are consistent with the SAFETEA-LU legislation: $100 
million for the value pricing pilot program, which complements 
the $12 million that was already in SAFETEA-LU for that 
program; $25 million to Corridors of the Future; $25 million 
for real time traffic information systems; and $25 million for 
intelligent transportation systems (ITS) and research and 
development which will disseminate technology more quickly.
    Certainly, we are very interested in working with Chicago, 
and I have had the opportunity to be there. By the way, the 
commission will be there this spring to see firsthand some of 
the challenges. When I was in the private sector, one of our 
main offices was in Chicago, I spent much time in the City and 
can understand what you are saying about congestion.
    Mr. Lipinski. Thank you, Madam Secretary. I look forward to 
working with you and seeing you in Chicago.
    Secretary Peters. Thank you, sir.
    Mr. Lipinski. I yield back.
    Mr. Oberstar. Thank you.
    Ms. Hirono?
    Ms. Hirono. Thank you.
    Madam Secretary, is it your Department's position to 
support New Starts mass transit programs' systems especially 
where the localities have made a commitment to the system by 
passing tax increases to pay for their share?
    Secretary Peters. Congresswoman, yes, it is.
    Ms. Hirono. Good, thank you.
    Thank you, Mr. Chair.
    Mr. Oberstar. The Committee will stand in recess, pending 
the seven votes, and we will reconvene within five minutes 
after the last vote for which I cannot set a specific time.
    Mr. Hayes, did you have a question at all that you wanted 
to ask? You are going to talk individually, all right.
    Thank you very much for being with us today. We will see if 
there is interest among members in having you come back at 
another time that would be convenient, but we thank you very 
much for the time you have given us today.
    Secretary Peters. Thank you, Mr. Chairman. I appreciate the 
opportunity.
    Mr. Oberstar. We hold you excused.
    We will ask our water panel to be patient. You can have a 
free cup of coffee over here in the lounge and make yourself at 
home.
    The Committee stands in recess.
    [Recess.]
    [Whereupon, at 3:20 p.m., the committee stands adjourned.]
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