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


 
               INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY 

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

                               (110-176)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                            OCTOBER 29, 2008

                               ----------                              


                       Printed for the use of the
             Committee on Transportation and Infrastructure










               INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY 















                      INVESTING IN INFRASTRUCTURE
                                THE ROAD
                              TO RECOVERY

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

                               (110-176)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                            OCTOBER 29, 2008

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

                               ----------
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice 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
Columbia                             WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York             VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida               STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California               FRANK A. LoBIONDO, New Jersey
EDDIE BERNICE JOHNSON, Texas         JERRY MORAN, Kansas
GENE TAYLOR, Mississippi             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
TIMOTHY H. BISHOP, New York          JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine            SHELLEY MOORE CAPITO, West 
BRIAN HIGGINS, New York              Virginia
RUSS CARNAHAN, Missouri              JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado            MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            TED POE, Texas
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ARCURI, New York          JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee               ROBERT E. LATTA, Ohio
JERRY McNERNEY, California
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland

                                  (ii)















                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Abramson, Hon. Jerry E., Mayor of Louisville, KY, Former 
  President, U.S. Conference of Mayors...........................    17
Black, Doug, Chief Executive Officer, Oldcastle Materials........    86
Buechner, Dr. William, Vice President of Economics and Research 
  at the American Road and Transportation Builders Association...    86
Burgett, Brian, President and CEO, Kokosing Construction Company, 
  on behalf of the Associated General Contractors of America.....    86
Corzine, Hon. Jon S., Governor, State of New Jersey..............    17
Crosbie, William L., Chief Operating Officer, National Railroad 
  Passenger Corporation - Amtrak.................................    52
DeCota, William R., Director of Aviation, Port Authority of New 
  York and New Jersey............................................    52
Dillon, Terry, President, National Utility Contractors 
  Association, Chief Operations Officer, Atlas Excavating, Inc...    86
Drakos, Peter, President, Coastal Connect, Stanford, Connecticut.    86
Enck, Hon. Judith, Deputy Secretary for the Environment, State of 
  New York.......................................................    52
Engler, Hon. John, Former Governor of Michigan, President and 
  Chief Executive Officer, National Association of Manufacturers.    17
Gallegos, Gary L., Executive Director, San Diego Association of 
  Governments....................................................    17
Herrmann, Andrew, Senior Partner, Hardesty & Hanover, LLP, 
  Member, Board of Directors, American Society for Civil 
  Engineers......................................................    52
Irons, John, Research and Policy Director, Economic Policy 
  Institute......................................................    17
Kiernan, Thomas C., President, National Parks Conservation 
  Association....................................................    52
Leyden, Thomas, Managing Director, Sunpower Corporation Systems, 
  on behalf of the Solar Energy Industries Association...........    86
O'Sullivan, Terrence, General President, Laborers' International 
  Union of North America.........................................    86
Porcari, Hon. John D., Secretary of Transportation, State of 
  Maryland, on behalf of the American Association of State 
  Highway and Transportation Officials...........................    52
Scott, Beverly A., Chair, American Public Transportation 
  Association, General Manager, Metropolitan Atlanta Rapid 
  Transit Authority (MARTA)......................................    52

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Arcuri, Hon. Michael A., of New York.............................   116
Carnahan, Hon. Russ, of Missouri.................................   119
Costello, Hon. Jerry F., of Illinois.............................   120
Cummings, Hon. Elijah E., of Maryland............................   124
Drake, Hon. Thelma, of Virginia..................................   135
Hall, Hon. John J., of New York..................................   136
Inslee, Hon. Jay, of Washington..................................   138
Miller, Hon. Candice S., of Michigan.............................   139
Mitchell, Hon. Harry E., of Arizona..............................   141
Oberstar, Hon. James L., of Minnesota............................   142
Reyes, Hon. Silvestre, of Texas..................................   147
Richardson, Hon. Laura A., of California.........................   149
Sutton, Hon. Betty, of Ohio......................................   154
Walz, Hon. Timothy J., of Minnesota..............................   156
Young, Hon. Don, of Alaska.......................................   159

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Abramson, Hon. Jerry E...........................................   161
Black, Doug......................................................   170
Buechner, Dr. William............................................   180
Burgett, Brian...................................................   193
Corzine, Hon. Jon S..............................................   199
Crosbie, William L...............................................   204
DeCota, William R................................................   232
Dillon, Terry....................................................   243
Drakos, Peter....................................................   266
Enck, Hon. Judith................................................   275
Engler, Hon. John................................................   283
Gallegos, Gary L.................................................   291
Herrmann, Andrew.................................................   310
Irons, John......................................................   320
Kiernan, Thomas C................................................   332
Leyden, Thomas...................................................   339
O'Sullivan, Terrence.............................................   349
Porcari, Hon. John D.............................................   353
Scott, Beverly A.................................................   358

                       SUBMISSIONS FOR THE RECORD

Abercrombie, Hon. Neil, a Representative in Congress from the 
  State of Hawaii, written statement of Anasstassis P. 
  Margaronis, President of Santa Maria Shipowning and Trading, 
  Inc............................................................   364
Mica, Hon. John L., a Representative in Congress from the State 
  of Florida:

  Letter to Rep. Charles B. Rangel and Rep. Jim McCrery..........   368
  Written statement of LifeSpan Technologies.....................   371
DeCota, William R., Director of Aviation, Port Authority of New 
  York and New Jersey, responses to questions from Rep. Costello.   242
Kiernan, Thomas C., President, National Parks Conservation 
  Association, supplement to testimony...........................   335

                        ADDITIONS TO THE RECORD

Aerospace Industries Association, written statement..............   378
Airports Council International, Gregory Principato, President - 
  North America, written statement...............................   381
American Bikes, written statement................................   385
American Association of Port Authorities, Kurt J. Nagle, 
  President and CEO, written statement...........................   387
American Council of Engineering Companies, written statement.....   403
American Highway Users Alliance, Gregory M. Cohen, President and 
  CEO, written statement.........................................   406
American Public Works Association, Noel Thompson, President, 
  written statement..............................................   408
American Rivers, Betsy Otto, Vice President, Strategic 
  Partnerships, written statement................................   412
American Shore and Beach Preservation Association, Harry Simmons, 
  President, written statement...................................   417
American Traffic Safety Services Association, written statement..   419
American Trucking Associations, written statement................   421
Americans for Transportation Mobility, written statement.........   423
Appalachian Regional Commission, Anne B. Pope, Federal Co-Chair, 
  written statement..............................................   424
Association of American Railroads, Edward R. Hamberger, President 
  and CEO, written statement.....................................   426
Association of State Floodplain Managers, Inc., Larry Larson, 
  P.E., CFM, ASFPM Executive Director, and Al W. Goodman Jr., 
  CFM, ASFPM Chair, written statement............................   439
California Association of Sanitation Agencies, Harry T. Price, 
  President, Fairfield-Suisun Sewer District, written statement..   445
Cargo Airline Association, Stephen A. Alterman, President, 
  written statement..............................................   447
Chamber of Commerce of the United States of America, R. Bruce 
  Josten, Executive Vice President, Government Affairs, written 
  statement......................................................   449
Community Transportation Association, Dale J. Marsico, CCTM, 
  Executive Director, written statement..........................   451
Delta Regional Authority, Pete Johnson, Federal Co-Chairman, 
  written statement..............................................   452
Horizon Lines, Charles G. Raymond, Chairman, written statement...   455
Intelligent Transportation Society of America, Scott Belcher, 
  President and CEO, written statement...........................   457
Milwaukee Metropolitan Sewerage District, Kevin Shafer, Executive 
  Director, written statement....................................   461
National Association of Clean Water Agencies, written statement..   465
National Association of Counties, written statement..............   475
National Association of Development Organizations, Sharon Juon, 
  President, written statement...................................   478
National Association of Railroad Passengers, Ross B. Capon, 
  President, written statement...................................   482
National Business Aviation Association, Ed Bolen, President and 
  CEO, written statement.........................................   490
National Complete Streets Coalition, Barbara McCann, Coordinator, 
  written statement..............................................   492
National League of Cities, written statement.....................   494
National Railroad Construction and Maintenance Association, and 
  Railroad Cooperation and Education Trust, Charles Baker, 
  President of the NRC and Trustee of RAILCET, written statement.   500
National Steel Bridge Alliance, Conn Abnee, Executive Director, 
  written statement..............................................   508
National Stone, Sand, and Gravel Association, Jennifer Joy 
  Wilson, President and CEO, written statement...................   511
Navajo County, Board of Supervisors, written statement...........   515
Owner-Operator Independent Drivers Association, Todd Spencer, 
  Executive Vice President, written statement....................   520
City of Pico Rivera, Office of the City Manager, Charles P. 
  Fuentes, City Manager, letter to Rep. Napolitano...............   526
Rails-to-Trails, Kevin Mills, Vice President of Policy, written 
  statement......................................................   528
Railway Supply Institute, Inc., Thomas D. Simpson, Executive 
  Director - Washington, written statement.......................   578
San Juan County Commission, written statement....................   582
States for Passenger Rail Coalition, Frank J. Busalacchi, Chair, 
  written statement..............................................   585
Transportation Departments of Idaho, Montana, North Dakota, South 
  Dakota, and Wyoming, written statement.........................   587
Transportation disadvantaged Commission, State of Florida, J.R. 
  Harding, Ed.D., Chairman, written statement....................   590
Turnpike Authority, State of North Carolina, David W. Joyner, 
  Executive Director, written statement..........................   594
Water Infrastructure Network, written statement..................   596
Water Resources Coalition, written statement.....................   604
Waterways Council, Inc., R. Barry Palmer, President and CEO, 
  written statement..............................................   608

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


           INVESTING IN INFRASTRUCTURE: THE ROAD TO RECOVERY

                              ----------                              


                      Wednesday, October 29, 2008

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 9:35 a.m., in Room 
2167, Rayburn House Office Building, Hon. James Oberstar 
[Chairman of the Committee] presiding.
    Mr. Oberstar. The Committee on Transportation and 
Infrastructure will come to order.
    I am delighted to see so many participants in today's 
hearing, both witnesses and Members, who are having great 
difficulty getting here on our congested transportation 
systems, including our Ranking Member who was delayed en route. 
It is usually me, but Members are unaccustomed to starting at 
9:30 in the morning. But this is a very popular subject, a very 
critical issue, one that has attracted a great many, a wide 
spectrum of interests, and so we thought we had to start early.
    Today the hearing will highlight the role of infrastructure 
investment as a critical factor in restoring the Nation's 
economic health, like creating jobs--real jobs--real jobs in 
our economy. Nearly a million construction workers are on the 
bench. The construction industry is suffering the highest 
unemployment rate, 9.9 percent, of any industrial sector, and 
construction firms are operating on the margin or worse.
    Those alone are three compelling reasons for decisive 
action to invest in America, rebuild our economy, put Americans 
back to work. Going back to the Works Progress Administration 
of the Great Depression; the Accelerated Public Works Act of 
1962, which President Kennedy wanted but did not ask Congress 
for, but Congress delivered it to him; and the Local Public 
Works Capital Development and Investment Act of 1976, initiated 
in this Committee, we have turned consistently in times of 
severe national recession to investment in the public 
infrastructure of the Nation to create and sustain jobs in 
difficult times. And we have to do that again, and we will.
    In September, the House overwhelmingly passed the Job 
Creation and Unemployment Relief Act of 2008, $61 billion to 
restore the economy, $30 billion for highway, bridge, public 
transit, Amtrak, airport, wastewater, Corps of Engineers, 
infrastructure investment projects, all within the jurisdiction 
of this Committee. Those funds were to be distributed through 
existing statutory formulas or administrative competitive 
selection processes. And the bill had no earmarks, no Member 
high-priority projects, no designations allowed for either the 
executive branch at the Federal level or the State level.
    Unfortunately, the White House threatened a veto, Senate 
Republicans stalled, and the bill died just before the 
September adjournment. But had the White House chosen to 
partner with us, construction workers would have been looking 
forward to real jobs this December.
    The need for real jobs since then has only become more 
acute. This Congress will not lament the Nation's economic 
downturn from the sidelines. This Committee will not stand idly 
by and watch things continue to go downhill. We have, within 
our jurisdiction, within our authority, capacity to revive this 
economy, to put people back to work, to stimulate the 
industrial sector.
    And we know specifically in this Committee, that 
infrastructure investment creates family-wage construction jobs 
and spin-off benefits that radiate throughout the economy. 
Those construction jobs, furthermore, cannot be outsourced to 
any other country. You don't build a road in front of your 
house with a call center in Bangalore. Those transit systems, 
those bridges, those highways, those rail systems, our 
airports, our waterways, our wastewater treatment facilities 
are here in our towns, in our cities, our metro areas, our 
rural communities.
    But in addition to the onsite construction jobs, there are 
all the other supporting--the cast of supporting jobs in our 
economy, those who produce the aggregates. We will hear today 
from the sand and gravel aggregate association, 40 percent 
unemployment, closing in on 50 percent unemployment, in that 
sector and businesses on the edge of bankruptcy. Some that 
already have; three in my district that have already closed.
    The cement sector, that is a vital underpinning in all of 
our construction sector. Steel, the most versatile building 
material in the industrial era, is down. In fact just 
yesterday, two iron ore mines in my district announced that 
they are cutting back. They are shutting down two production 
lines producing the taconite pellets that fuel the steel 
industry, because demand for steel is down. China and India 
were driving the hunger in the steel sector, but even their 
continuing force cannot sustain steel production, so we are 
seeing a downturn.
    The construction sector requires equipment. Equipment 
manufacturers have been cutting back. I have heard from them 
over the last several months.
    Funding for transit agencies, funding for Amtrak to buy 
rolling stock will generate U.S. jobs. Virginia Railway Express 
tells us that, if funding were available, they would 
immediately exercise options under a contract with MotivePower 
to buy 15 commuter rail locomotives, and that will help VRE 
meet its demand as people shift from car to rail for their 
commute. But it is not helping only northern Virginia. Buying 
those rail cars in northern Virginia helps Boise, Idaho, 
because that is where MotivePower manufactures those 
locomotives.
    The Muncie Indiana Transit System says that, if additional 
funding were available, they would exercise options under a 
contract with Gillig Corporation to buy four hybrid electric 
buses. Well, that will help Muncie, but it will also help 
Hayward, California, because that is where the buses are built.
    At New Flyer, a bus manufacturer in St. Cloud in our State 
of Minnesota, they are producing 23 buses a week. They could 
have a 50 percent increase in production and about a 25 percent 
increase in jobs if they had other orders coming in that they 
are capable of filling.
    So these infrastructure investments will put construction 
workers back on their jobs, but they also improve our 
deteriorating infrastructure.
    With the level of investment we are doing today, we are 
falling further and further behind, as the National Commission 
of Transportation Policy and Revenue reported. That has impacts 
on economic growth. It adversely affects our quality of life. 
It has effects on safety.
    Various economists, however, over many years--I have been 
in this room for a lot of years, 44, 45 going on, in fact. I 
started here as clerk on the Subcommittee on Rivers and 
Harbors. And I have heard the same tired, old arguments: "Oh, 
they are too slow. These infrastructure projects take too long 
to get going." And then, when the recession is over, they tell 
me, and they tell us, year after year, "Those people are still 
working." Well, my God, isn't that a bad thing? How awful. The 
trouble with those economists is that they have never had their 
hands on a number-two shovel. They have never had a callus on 
their hands among them.
    So we have had the experience of moving people to work with 
projects and the authority under our jurisdiction, and we know 
that we can put people to work on projects that are ready to 
go, designed, engineered, right-of-way acquired, EIS completed, 
all they need is the money. They can be under construction in 
90 to 120 days, 120 days in the northern part of the country 
because we are starting so slowly. Snow has already fallen in 
my backyard in Chisolm yesterday. I got out just in time, 
although I am coming back with a shovel.
    In January of this year, AASHTO surveyed its members and 
identified 3,071 ready-to-go highway and bridge projects, with 
a total cost of $17.9 billion, that could be under construction 
in 90 to 120 days. Public transportation agencies, APTA, 
surveyed their members and identified nearly 560 ready-to-go 
transit projects, with a total investment cost of $8 billion. 
And the Council of Infrastructure Financing Authorities and the 
State and Interstate Water Pollution Control Administrators 
identified $9 billion-plus of ready-to-go State revolving loan 
projects. But they can't fund them because they don't have the 
money.
    So there is a backlog, there is a demand, there is a 
hunger, there is a need to invest. Our cities are crying out. 
Our cities are the front line of congestion, front line of the 
economic downturn in this country, and cities are the first 
ones to feel it. States are next.
    Governor Corzine, thank you for being here. And so we are 
delighted that you have come here to share with us.
    And I just want to close with some observations by Mayor 
Daley. He spoke to the American Road and Transportation 
Builders conference in Chicago last week. He said, "Chicago, 
like other cities, is facing declining revenues, slow growth, 
and increased demand for services. Every level of government in 
this country is facing the same. But over the years, with 
decline of funding from State and Federal Government for 
capital projects, I have been committed in our city to building 
what we need to do to keep the city moving forward: $900 
million in our neighborhoods, $1.5 billion to reimburse 
development projects through the TIF program, the O'Hare 
Modernization Program."
    "And I will tell you," says Mayor Daley, "that whoever is 
the next President of the United States needs to address what 
has been an inadequate level of Federal investment into our 
infrastructure, including roads, bridges, highways, water 
systems, public transit, and school construction. We need to 
substantially increase Federal funding in these projects in 
order to help cities maintain and rebuild infrastructure, 
create jobs, and stimulate the economy."
    I tried to get the mayor to come out here and speak to our 
hearing today. He said, just read my statement. So I just did. 
And he said, "When we reduce rail and driver congestion, we 
improve passenger rail service, we enhance public safety, we 
improve air quality, we reduce noise, and we generate economic 
development." That is what this hearing is all about.
    We are not going to, as I said, stand on the sidelines and 
bemoan the conditions. We are here to do something substantive 
for this country, and we will. After this hearing is concluded, 
our Committee staff on both sides will meet again, as we did 
just in September just before recess, and assemble the elements 
for a bill to be introduced, to be considered when the House 
reconvenes November 17th.
    I want to thank my good friend, Mr. Mica, John Mica, our 
Ranking Member on the Committee, for the partnership that we 
have had in reviving and revitalizing Amtrak, one of the great 
successes of this Congress, something that we can all look 
forward to and that will, in its own, not only produce jobs, 
reduce congestion, but move America forward.
    Thank you, Mr. Mica.
    Mr. Mica. Well, thank you.
    And I have to start out first with a couple points of 
personal privilege. And one deals with the working 
relationship, the bipartisan working relationship I think could 
be an example for everybody in Congress that I have shared with 
Mr. Oberstar. From the very first day he took the gavel, we sat 
down and set priorities.
    We are batting 1,000, Jim. I can't tell you how proud I am 
of you and what we have been able to do together. The water 
resources bill, although you finked out on me, you went to the 
hospital, left me on the floor, and I had to go to the floor 
and pass the--I never realized this, by the way, it was the 
107th veto override in the history of the Congress. But we did 
it together, because we are committed to build the Nation's 
infrastructure. That was on water resources.
    In all the fog of the election, everyone lost sight that 
the President signed--and you heard the Chairman refer to it--
the first rail passenger authorization in 11 years. Of course, 
we beat--our record was 7 years for a water resources measure, 
but in 11 years. We put reforms, as he said, in there for 
Amtrak. We opened the door to high-speed rail in New Jersey, 
the whole Northeast Corridor, 11 corridors across the United 
States. And we have a whole host of provisions in there--safety 
for passengers, to try to make sure we don't have another 
California.
    But I can't personally thank you enough at the conclusion 
of this. And I look forward to working with you, as we tackle 
the biggest transportation highway infrastructure measure. And 
we are both committed to make that come in on time, and we will 
figure out the budget together. But thank you, again.
    I just also want to take one moment. In the campaign 
season, sometimes things that happen--and I just have to 
mention this. And it does, in a way, relate to transportation. 
But last Saturday night in my district, we lost an absolutely 
beautiful, wonderful, young lady. Her name was Clare Skinner. 
Today, actually in just a few minutes, they are going to have a 
service in Deland, Florida, for her. She was killed in an 
automobile accident. She was leaving a campaign office. She was 
a graduate of the University of North Florida and had 
volunteered on the McCain campaign, was leaving later in the 
evening, and was killed just north of St. Augustine, Florida. I 
visited with her family yesterday, and my heart and soul is 
with them today.
    And, you know, I was thinking about this, Mr. Chairman. I 
asked the staff, they said since 2001 about 280,000 people have 
lost their lives in automobile accidents. And that is something 
we really need to concentrate on, a component of our next bill, 
in memory of Clare and all the other families that have had 
that horrible news. I can't even imagine what they have 
experienced.
    But today my heart, my soul, my prayers are with the 
Skinner family at this most difficult time. And I think we will 
remember Clare as we look at some of the safety measures and 
other things that we can incorporate into new legislation.
    Mr. Oberstar. I will join with you in offering my prayers 
for her and for her family.
    Mr. Mica. Thank you.
    And I do also want to thank you for the manner in which you 
have conducted this. I know you got a call from the Speaker, 
and she said she wanted our input on our measure and asked me 
to join with you, and we are here. We can't get everyone here. 
I think we got 18 witnesses. We will all probably have 
hemorrhoids by the time this one is over.
    [Laughter.]
    But I did have some that we couldn't get in, Mr. Chairman. 
And I would ask unanimous consent--these are statements. We 
start out with aerospace industry, Airports Council, it goes on 
and on, air transport, right down to the trails folks. But, if 
we could, I----
    Mr. Oberstar. Without objection, all testimony we receive 
will be included in the hearing record.
    Mr. Oberstar. I thought it was All-Bran, also, for 
hemorrhoids.
    Mr. Mica. All-Bran? Okay, you recommend that. We will put 
that in the next stimulus package, too.
    But the other thing--well, this is a very important 
hearing. And we do have people that are hurting. We need to 
move the economy forward, and we have to create jobs. I think 
sometimes it is not always how much money you spend, it is also 
how you spend it. And we want to do that in a responsible 
fashion.
    I told a group of local leaders yesterday, you know, that 
you can tell the difference--we were talking about earmarks, 
and some of this bill will be earmarks and projects--but you 
can tell the difference between a bad earmark and a good 
earmark. A bad earmark is sort of looking at pornography. It is 
hard to define it in sort of legal terms, but you know what it 
is when you see it. And we don't want bad earmarks as part of 
this stimulus package, and particularly coming from the T&I 
Committee.
    Mr. Oberstar and I, I think we have a pretty firm agreement 
in not larding this bill down with a whole host of pork 
projects. I think we are both committed to making certain that, 
in fact, the measures that are approved would be projects that 
have been vetted, that have been approved at various levels, 
that aren't airdropped in unexpectedly at the last minute. So I 
think we have a pretty good firm commitment on that, and we 
don't want this to become a vehicle for everyone to be putting 
another ornament on a Christmas tree in the coming holiday 
season.
    But we do know that every billion dollars in spending on 
infrastructure, on highway and transportation expenditures does 
result in 35,000 new jobs. And I think that people out there 
that I have talked to--I have been on the campaign trail, like 
many of you--they would prefer a paycheck rather than an 
unemployment check. And we could do it.
    There are some innovative things that are pending, too. I 
have tried to get one of our colleagues here today, Thelma 
Drake, who is on the Committee. And it is amazing, you know, 
sometimes you think you know quite a bit. I have been on the 
Committee for 16 years; you have been on twice as long almost, 
Mr. Chairman. But Thelma Drake took me down to Norfolk, 
Virginia. And we discussed maritime highways, cost-effective 
ways of moving goods in the United States. Thelma Drake showed 
me the Heartland Corridor project. It goes not only from her 
district in Norfolk, but all the way to Columbus, Ohio. Ohio 
certainly would need that help.
    But building the infrastructure in a coherent fashion is so 
important. It is also important that we have an energy 
component. You spoke a bit about that. I mean, you are starting 
to sound like a Republican here. I got some of the things that 
we want to do. And one is to create jobs through energy-
effective measures. And nothing could be more effective than, 
again, moving goods in a fuel-efficient, energy-efficient, 
environmentally efficient manner.
    There are two things, Mr. Chairman, that I want to mention 
that are not within our reach but have come to my attention, 
and maybe we can work with the other Committees.
    One, I have gone back and I have heard some of the 
governments are having trouble, because of the financing 
meltdown, in obtaining financing for these projects. So we need 
to talk to the other Committees of jurisdiction, and maybe we 
could do a joint letter or something, to get them to help us 
make certain that, if we do a package, that we can help other 
States. It is nice for us to stay we are going to do this 
project or that, but if they can't get the financing or they 
can't move the project or they are stuck, then they don't go 
forward. So I think that that is something, in a bipartisan 
manner, we can do.
    And one of the things on our side of the aisle that we want 
to do is provide some tax relief for American businesses to 
create jobs. And that deals with section 179 that allows 
businesses to expense equipment. And that will really start the 
wheels in motion. We have seen some of that in the past.
    Those things are not in our jurisdiction, but I hope that 
you and others would lobby, me, for them.
    So, we are the largest Committee in the Congress, and 
sometimes, you know, everybody else is out there campaigning; 
this falls to us to kind of get the job done. I think people 
are counting on us on move the economy, job creation forward.
    And the great thing is, when you go back out there--Mr. 
Oberstar and I have been here quite a bit, trying to keep the 
Committee and the Subcommittees and our legislation; and we 
have been the most productive Committee in Congress, bar any--
but you do see the greatness of this country, and anything is 
possible. If government sometimes works as a partner, not as an 
obstacle, and properly works with the private sector, all 
things are possible in this country.
    So I look forward to you, in a difficult time, moving 
forward a positive package. And thank you again.
    Yield back.
    Mr. Oberstar. Thank you very much. I greatly appreciate 
those comments and your suggestions about tax relief for 
business. Going back to John F. Kennedy, investment tax credit 
has helped to stimulate the economy. The rail industry is 
looking for such relief. And that is something we could partner 
on.
    I want to thank, again, Members for coming long distances 
to participate in today's hearing. You come from the Pacific 
Northwest, from California, from Iowa, and even from a long 
journey, probably in time, across the District of Columbia.
    Mr. DeFazio?
    Mr. DeFazio. I thank you, Mr. Chairman. I will try to be 
brief.
    I just think what we are talking about here today is the 
potential to make a major change in direction for the country. 
And that is to begin to practice what I would call trickle-up 
economics, as opposed to trickle-down.
    I was one who didn't vote for the bailout. And I think 
throwing that money at the top at Wall Street hasn't done a 
whole heck of a lot of good for the underlying economy. And I 
think the stock market reflects that.
    What we really need to do is get back to basics. We need to 
put people back to work. We need to rebuild our infrastructure 
so we are not detouring trucks, as in my State, over the 
Cascade Mountains--they head south to California; we are not 
seeing bridges collapse, as in your State, Mr. Chairman, and 
elsewhere. We have long-neglected our infrastructure.
    These are jobs that can't be exported. They are jobs that 
will be constructed with American goods, American labor. They 
will spill over into supporting small businesses, local 
communities. They will make the United States of America more 
efficient in terms of just-in-time delivery and its economic 
competitiveness around the world; improve our public health, if 
we are dealing with water and sewer systems. And if we are 
dealing with transit, they will help us resolve our issues in 
terms of dependence on foreign oil.
    As you documented, and I won't go back over it again, there 
are billions of dollars of projects ready to go. I am tired of 
hearing from the pointy-head economists who say, oh, these 
infrastructure projects take too long. Well, even if they did 
take too long, they are investments we need to make. And, 
secondly, there are some economists now, including a recent 
Nobel laureate, who said, actually this recession is probably 
going to be so long and so deep, that argument won't hold sway 
anymore; that we are going to need this investment, we are 
going to need jobs 6 months from today as much or more than we 
do today.
    So hopefully we will not be yet deterred as a Congress into 
giving back more tax benefits for people to either, you know, 
save--that is very meritorious--to pay down credit card bills--
that is good because we are overindebted--or to buy junk made 
in China, which puts the Chinese back to work, which doesn't 
help our economy a whole heck of a lot.
    So direct investment in our infrastructure would be of much 
more benefit to the Nation today and for many years to come.
    Thank you, Mr. Chairman.
    Mr. Oberstar. I thank the gentleman.
    Ms. Miller, thank you very much for coming all the way back 
from the neighboring State of Michigan.
    Mrs. Miller of Michigan. Thank you very much, Mr. Chairman. 
Let me just say how delighted am to be here, and I certainly 
appreciate your calling this hearing. I think it is incredibly 
important.
    It is no secret that my great State of Michigan is probably 
the most economically challenged State in the entire Nation. As 
it is often said, the Nation gets a cold and Michigan gets 
pneumonia. And we have some unbelievable challenges right now.
    But I am a firm believer that the economics throughout 
history, quite frankly, has always followed the transportation 
grid. I don't care if that was wagon trains back in the early 
part our Nation or the railroads, the interstates, the aviation 
links, et cetera. And so I think if the Congress does have an 
economic stimulus package, that focusing on transportation 
needs is an incredibly critical component of how we do put 
people back to work.
    And I think it is very important, as we look at projects 
that really are ready, that have been vetted, as has been 
mentioned--when you called this hearing, I have five counties 
that I represent, I called all five of my county road 
commissions just to see how many projects they thought could 
happen rather immediately. And there are certainly many, many 
of them. And I know that is not inherent to my counties; that 
is throughout the entire Nation. And it is very important that 
we do put people back to work.
    And I also wanted to make mention and welcome one of the 
greatest Governors that Michigan ever had, Governor John 
Engler, who now is with the National Association of 
Manufacturers. I am appreciative of him being here today. And 
when he was the Governor of our State, he did a number of 
things to help build our transportation grid, build Michigan 1 
and build Michigan 2, where for a very conservative Republican, 
he recognized how important it was for the State to take on 
bond indebtedness and look for the match so that we could 
advantage our State of Federal transportation dollars. And 
that, I think, commitment obviously will be demonstrated again 
today.
    But I am delighted to work shoulder to shoulder with you, 
Mr. Chairman, and our Ranking Member and everybody on this 
Committee as the Congress does move forward, hopefully, for an 
economic stimulus package, which is very, very important, that 
a large part of it is transportation. It does put people back 
to work; it is a jobs program. It keeps us competitive in the 
global marketplace, and we see what is happening in China and 
India, et cetera. It is very important for us to do this.
    And, at the end of the day, as you say, people continue to 
work. It feeds on itself. It is a wonderful synergy there. And 
we have something to show for the dollars that we have expended 
that help as a component, again, for economic stimulus going 
forward.
    Thank you very much.
    Mr. Oberstar. Thank you. I appreciate those comments and 
your words about Governor Engler. We remember very well in 
Minnesota, when we were struggling with Jesse Ventura, how 
Michigan leaped ahead.
    In order of seniority, Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman. I know you 
know how much I appreciate this hearing, because I have been 
pressing for an economic recovery package for some time, as you 
have, Mr. Chairman.
    I certainly do believe that we had to do some kind of 
bailout for the top of the economy, for the frozen credit 
markets and financial institutions. But I believe that the 
anger of the American people came from seeing a bailout at the 
top of the economy while the real economy was left struggling. 
And, at that time, I thought we would have been much better off 
if we had done the economic recovery simultaneously.
    Actually, the House tried, because before we left we did 
get an economic recovery package of some kind out. Of course, 
it failed in the so-called other body. Now we are back, and we 
are going to have to do an even bigger one, because the longer 
you wait, the more you have to pump in quickly.
    Now, the motto of this Committee has long been "Jobs, baby, 
jobs," if you will forgive me, because when the transportation 
and infrastructure programs create jobs, they will have the 
most beneficial effect on a flailing economy, because T&I 
ripples through the rest of the economy and wakes up other 
sectors. Pure and simple, that is the history of T&I. As Chair 
of the Subcommittee responsible for Federal real estate and 
development, I know firsthand the beneficial effect Federal 
construction can have on employment and overall economic 
development throughout the United States.
    In the 106th Congress, for example, in a bipartisan bill in 
this Congress, we passed the Federal Center Public-Private 
Development Act. And this was a very short piece of 
legislation. It has transformed a part of Southeast Washington, 
the Federal development along M Street, brought in the private 
sector with new office buildings, hotels, housing, and the 
neighborhood gym, the Nationals Baseball Stadium.
    Now, the GSA owns 196 million square feet of space and 
leases an additional 150 million square feet throughout the 
United States. Well, you can't lease if people aren't building. 
And we lease much more than we buy. This scale of ownership and 
leasing makes the GSA the most important factor in the 
commercial real estate market.
    When the economic recovery and jobs bill is enacted, GSA, I 
want to assure you, Mr. Chairman, is ready to commit within 90 
to 120 days several nationwide contracts for major repair and 
alteration projects and energy conservation and alternative 
energy projects with a value of approximately $1.5 billion. GSA 
is also prepared to infuse an additional $500 million into the 
economy with contracts for Federal construction.
    Two other entities close to home, Mr. Chairman, with 
significant real estate needs are the Smithsonian Institution 
and the Architect of the Capitol. Both entities are posed to 
commit contracting funds within 90 to 120 days after enactment 
of the economic recovery and jobs bill. The Smithsonian has 
identified the Arts and Industries Building and repairs at the 
National Zoo as pressing needs. The Office of the Architect of 
the Capitol is also ready to immediately commit $22 million for 
construction projects grounded in energy savings and energy 
conservation.
    And if I may say so, Mr. Chairman, if the Federal 
Government starts up this alternative energy sector by 
indicating that we are prepared to put our big foot in there 
and invest, then you will see the prices go down and you will 
see others more rapidly use energy alternatives and 
conservation.
    The Federal entities, Mr. Chairman, are ready and eager to 
participate in the economic recovery, and along with Federal 
leasing and construction to stimulate the private sector which 
we know stands ready to continue if there is the kind of 
stimulus that would get private-sector development moving 
again.
    Thank you very much for this hearing, Mr. Chairman.
    Mr. Oberstar. Thank you for that compilation, which I think 
is very important, extremely important for us to understand. It 
is a good point of departure.
    Mr. Boswell?
    Mr. Boswell. Thank you, Mr. Chairman. I will be very short.
    I would associate myself with what you said earlier, and 
other Members, the few with us. Something that you and I have 
discussed at some length over the last several months is, you 
know, stimulus, you know, we are better than roads and 
infrastructure, so we have to do it any way. We have to do it. 
It must be done.
    And much has been said, and I will just echo, it is good-
paying jobs that can't be exported. A dollar spent in the 
community and all of your communities is going to turn at least 
three times, maybe seven. That is stimulus. And we have to do 
it anyway. So it is very, very important.
    It might be the time--I was thinking about the Ranking 
Member's statement about what else we could do in this--to do 
the laboratory investigation on how to make these roads last 
longer. It might be time to think about that, or at least start 
it.
    And lastly, I would like to ask those of you from your 
extensive background, we are going to have to fund--this is not 
the purpose of this hearing, but it is on the table, it is 
coming--how are we going to raise the revenues to keep up with 
our transportation infrastructure. We have to do that. And just 
doing it like we have been doing it is not going to work. And 
it is going to be a heavy lift, a big decision, but I think 
those of you that are Governors and mayors and involved so 
much, with all the background you have and information at your 
fingertips, that you have to participate. And we might as well 
be prepared. And if you want to make some comment today, we 
would probably welcome that. But we are here to try to 
stimulate the economy, which we must do, we must do.
    So, Mr. Chairman, I thank you for calling this. I will have 
to be out for an hour because of another commitment, but I will 
be here until then, and I will be back for the rest of the 
time. Extremely important. Thank you for making sure this is 
happening. Thank you very much.
    Mr. Oberstar. I appreciate your coming from Iowa. And, you 
know, from University of Iowa, ITS Service, that they are 
engaged in work on pavement longevity.
    Mrs. Napolitano, thank you for participating, from 
California.
    Mrs. Napolitano. No, sir, thank you. And I am very, very 
happy to be here even though I haven't been to bed yet. I took 
the red-eye to be here with you and the rest of the Committee.
    This is a much-needed critical recovery plan for America. I 
won't reiterate what everybody else has been saying over the 
good-paying jobs, over the reduction of congestion and 
addressing some of the other things that are really quite 
critical to our communities.
    I also did meet with some of my leaders. In fact, yesterday 
I was in Sacramento talking to the--can't even think of his 
title--Mr. Garamendi, in regard to some of the issues we were 
talking about in the paper. And not only are they interested in 
transportation, but also with some of the implications of water 
and what it can mean for California and some of the other areas 
that are close to us.
    My home, of course, in southern California is--we deal with 
20 percent of Nation's cargo, roughly. And that creates a lot 
of environmental safety, economic issues. And so, yes, we would 
be more than happy to provide some of these ready-to-go 
projects that have really been hanging, because, as you well 
have noted, there is not enough funding at the local level, 
State level, to be able to carry out those projects.
    I would like to just point out, there are two specific 
ones; in one of my cities, there is a boulevard which 
separates, it is grade-separated but the sides have been 
starting to buckle. And the city has been trying to get the 
railroad--I have been trying to get UP to work and try to 
ameliorate it, because that will stop 40 trains a day bringing 
cargo to this area, to the rest of the United States. And that 
is getting to a critical situation. And the other area is, of 
course, the expansion of the Santa Ana Freeway. I call it the 
largest parking lot in the United States, because it is bumper 
to bumper almost 24/7. And the list goes on.
    But I also have a request of you, Mr. Chairman, and that is 
to accept into the record a copy of a letter from the city of 
Pico Rivera in regard to the grade separation; and also a 
letter from the California Association of Sanitation Agencies 
that refer to some of the issues that they are facing and would 
like to have considered.
    Mr. Oberstar. Without objection, the letters will be 
included in the record.
    Mrs. Napolitano. Thank you, sir.
    We do have grade separations that are ready to go. In fact, 
they are working on them right now. So that we would hope that 
we can be able to be successful in getting them into the list, 
because they are ready to go.
    A lot of other things that I would love to--I will maybe 
put some of the questions later on that clarify some of the 
issues that I know that I have and some of my constituency 
have. But I certainly thank you and those that came up to be 
able to be with you today.
    And I yield back.
    Mr. Oberstar. Well, of course we thank our Speaker, who is 
another Member of the California delegation, for her 
persistence in pursuing the issue of infrastructure, and thank 
her for the initiative in moving forward and giving us this 
directive.
    Mr. Cummings, Chair of our Coast Guard and Maritime 
Subcommittee.
    Mr. Cummings. Thank you very much, Mr. Chairman. And I want 
to thank you for convening this critical hearing to give us 
this opportunity to examine how investments in needed 
infrastructure improvements can help support our Nation's 
economic recovery while contributing to our renewed economic 
growth over the longer term.
    Mr. Chairman, I join you in feeling the pain of the 
American people. And I am trusting and hoping that, just as we 
were able to bail out Wall Street almost overnight, that we 
will be able to bail out Main Street through the stimulus 
package.
    Our Nation confronts a staggering economic crisis that 
reaches now to every industry, every community and essentially 
every family. Despite unprecedented interventions, 
interventions which I believe should come with strict 
conditions, a recession appears likely. Our Nation has already 
lost 760,000 jobs so far this year, including 340,000 jobs lost 
in the construction industry alone.
    Too often in the past, Congress has failed to take action 
to support economic recovery until after the worst of an 
economic crisis has passed. To ensure that we don't make the 
same mistake again, the Congress should enact legislation now 
that will support both our immediate economic recovery and our 
long-term growth.
    Though it is not the purview of this Committee, I believe 
that such legislation must include the extension of 
unemployment benefits and the expansion of food stamps and some 
type of job training provisions.
    This legislation must also provide funding for 
infrastructure projects that can be initiated during the coming 
months. Declining revenues into both the Federal and State 
transportation trust funds are destroying jobs, leaving States 
struggling to keep up with maintenance needs and causing States 
to delay planned projects. My own State of Maryland and that of 
Ms. Edwards recently announced more than $1 billion in cuts to 
its multiyear transportation program, as Maryland 
Transportation Secretary John Porcari will be discussing during 
his testimony.
    In this economic environment, investments and 
infrastructure, unlike apparently bailouts to banks, can 
effectively create good-paying jobs while supporting the repair 
and expansion of the infrastructure that will carry a 
recovering economy forward.
    Importantly, Mr. Chairman, as Chairman of the Subcommittee 
on Coast Guard and Maritime Transportation, I believe that it 
is imperative that the Federal infrastructure investments 
target waterborne transportation as well as the other surface 
modes. For example, under the Truman-Hobbs program, the Coast 
Guard is currently altering several bridges around the country 
to ensure that they are not obstructions to navigation. 
Accelerating these bridge modifications will provide additional 
jobs while improving navigation.
    Additionally, I note that the second hearing I convened in 
the Coast Guard Subcommittee during the 110th Congress examined 
short sea shipping, Mr. Chairman, which is the movement of 
goods by water from one U.S. port to another or between a U.S. 
port and a port in Canada. During that hearing, the 
Subcommittee received compelling testimony indicating that one 
of the biggest impediments to the expansion of short sea 
shipping is the harbor maintenance tax.
    The harbor maintenance tax adds costs to waterborne 
transportation that are not applied to land-side 
transportation. Additionally, because the tax must be paid by 
each shipper with a piece of cargo on a ship, rather than by 
the owner of the ship, and because cargo can even be double-
taxed under certain circumstance, the harbor maintenance tax 
has the perverse effect of encouraging transportation by modes 
other than water, which only adds to congestion on our roads.
    I introduced legislation, H.R. 1499, to exempt short sea 
shipping from the harbor maintenance tax. The CBO has prepared 
a preliminary estimate indicating that this measure would cost 
only $12 million in total forgone revenue to the Harbor 
Maintenance Trust Fund over 10 years. Given the Harbor 
Maintenance Trust Fund's multi-billion-dollar balance, this is 
an affordable investment to expand the environmentally friendly 
movement of freight by water. And I urge that it be considered 
for inclusion in any new legislation enacted by Congress to 
support economic recovery.
    Again, Mr. Oberstar, I thank you for convening this hearing 
and for continually pushing for our Nation to invest in our own 
future by investing in our infrastructure.
    Thank you.
    Mr. Oberstar. Thank you very much for that very thoughtful 
statement, well-expressed.
    Mr. Sires, we will skip over you, because I am going to 
give you the introduction of one of our star witnesses, and you 
can make your statement at that time.
    And, Ms. Richardson, also from California, great to have 
you here.
    Ms. Richardson. Thank you, Mr. Chairman. I am pleased to 
join you and Ranking Member Mica and the rest of my colleagues 
today as we examine the impact of transportation employment 
stimulus from the Federal Government that could provide, 
really, a shot in the arm to our economy and to the job market. 
There is no more important issue facing Congress, and I thank 
you for holding this timely hearing today.
    As you know, Mr. Chairman, this is not the first time the 
House has traveled down this road. As far back as FDR's 
administration in the 54th Congress, they worked on creating 
the Works Progress Administration to create construction jobs 
and to stimulate the economy in the aftermath of the Great 
Depression.
    Just last month, we passed a job creations package here in 
Congress. Unfortunately, though, the Senate and the 
administration did not support its passage, and the efforts for 
hardworking Americans failed.
    Now it is time to take a second bite at that apple. To 
combat this trend, the Congress has to act responsibly and to 
act now. We know that, for every $1 billion spent on 
transportation infrastructure projects, it creates over 35,000 
jobs. There are thousands of highway projects right now that 
can be undertaken that many of us have alluded to this morning.
    Specifically, in my district, the Southern California 
Association of Governments, also known as SCAG, which is 
mandated by the Federal Government to research and draw up 
plans to address the region's transportation needs, has 
transportation initiatives in aviation, goods movement, and 
corridor planning, amongst many others, that could really 
impact our transportation planning. SCAG has identified 58 
State highway projects and over 200 transit projects listed for 
LA County alone. These projects are proposed over a 6-year 
period and could provide a steady source of employment for our 
region.
    I can tell you unequivocally that, without significant 
public funding, the bridges and roads critical to our 
competitiveness will surely decay if we don't make the 
commitment now.
    Finally, Mr. Chairman, it is no secret unemployment is on 
the rise. In my district, there are some portions that are as 
high as 14 percent. A new, bold economic recovery plan is 
critical. The best investment has been and will continue to be 
for America to get Americans working again.
    I thank you for your time.
    Mr. Oberstar. Thank you very much.
    Ms. Edwards of Maryland, fresh off a resounding endorsement 
from The Washington Post for re-election. They don't often cast 
such kind words in their editorials. And the first term, to 
earn that, that is terrific.
    Ms. Edwards. Thank you, Mr. Chairman.
    I have the good fortune of having The Washington Post as 
our hometown paper, Ms. Norton.
    Thank you, Mr. Chairman, and really for your leadership on 
transportation and particularly for your commitment to 
investments that I believe we need to make in mass 
transportation.
    And this is a really important hearing that we are holding 
today, and I, too, associate myself with my colleagues' 
remarks, who commented about our failure to include an economic 
stimulus package in the bailout bill that we passed just 
several weeks ago. And I think we are seeing the results of 
that failure today. And so it is important that we act now.
    I also want to thank all of our panelists here today, and 
particularly our MarylandSecretary of Transportation John 
Porcari. He is here on behalf of AASHTO today, but we never 
want to forget to mention that he is really from Maryland. And 
I know his commitment, as well as our State, to deep 
investments in mass transportation in our transportation 
infrastructure.
    And as my colleague, Mr. Cummings, has already pointed out, 
in our home State, Maryland has already faced $1.1 billion 
worth of transportation projects that have been cut or delayed 
because of our State's budget concerns. And this at a time when 
we need those investments, as we do around the country, not 
just to stimulate the economy, but to create jobs, to improve 
quality of life, and to make the kind of investments I believe 
we need in infrastructure. It is not just about the short term, 
but also about our long-term global competitiveness.
    I know the feelings of so many people in my congressional 
district and like myself who, this morning, thought I only 
really needed 40 minutes to get to work here, and it turned out 
that, in fact, I needed an hour and 40 minutes to get to work. 
And this happens routinely because we are stuck in traffic. I 
live in the Wilson Bridge corridor, a corridor that really 
should be open down 95 to facilitate our commercial development 
all along the 95 corridor. And yet so many of us as commuters 
are stuck in that corridor, actually hindering the movement of 
goods throughout the 95 corridor.
    And so I share the concern that we may, you know, spend 
some time in the short term widening some of these roadways 
when really what we need to be doing is making investments in 
mass transportation for the long haul so that we improve our 
competitiveness.
    You know, in our district, our parents are challenged to 
get home to child care and pick up their children from daycare, 
and they are paying $1 a minute and $2 a minute in overtime 
because they are stuck in traffic, and at a time when wages 
are, in fact, flat-lined. So this goes deeply to the quality of 
life and the affordability of families that is impacted by the 
kind of transportation infrastructure we have or we don't.
    And, you know, we know that transportation projects provide 
growth and create opportunity and prosperity. And so I am 
looking forward to us figuring out a way to make investments in 
the short term and marry those with the kind of investments we 
need for the 21st-century economy. And I know that there is 
always a challenge of doing a project that is in the hopper 
today, and I think that that is really important. But it is 
also important for us to look at some of those long-term 
projects and figure out what we can jump-start today so that, 
10 years from now, we are not faced with exactly the same 
circumstances, wondering why we made the mistake in the failure 
of not investing for the long-term.
    And so, Mr. Chairman, I thank you.
    Mr. Oberstar. Thank you very much. You really touched the 
core of living in urban congested America.
    The Chair yields to the gentleman from Florida, our Ranking 
Member, for a unanimous consent request.
    Mr. Mica. Just a quick request here. This will actually 
follow up Mr. Cummings' comments which I support, which is 
repeal of the harbor maintenance tax. It is a tax on the 
domestic movements of goods by vessels.
    I had mentioned before there are some things outside the 
purview of our Committee, and the letter I have is addressed to 
Mr. Rangel, Mr. McCrery, the leaders of that Committee, signed 
by 27 of my colleagues on this side of the aisle. And there 
will be things in this package that will impact jobs and the 
economy and transportation of a tax nature and so we support 
that and ask that it be put in the record.
    Mr. Oberstar. Without objection it will be included in the 
record.
    It is also a matter I supported in the previous Congress 
that was not acted on and hasn't been acted on in this 
Congress.
    So let us proceed. All right. Witnesses, you have heard 
from Members of the Committee and now it is our turn to hear 
from you. And to begin, I will ask the gentleman from New 
Jersey, Mr. Sires, to introduce our--make his opening comments 
and introduce our first witness.
    Mr. Sires. Thank you, Mr. Chairman. And thank you for 
holding this very important meeting. I would also like to thank 
you for coming to the district. I think you and I saw a very 
prime example of investing in our infrastructure: all of the 
jobs that were created, all of the development around the 
areas. And they were all permanent, good paying jobs, so I just 
want to thank you for coming to the district.
    Mr. Oberstar. I am glad that there is still work for the 
gentleman to do after Chairman Jim Howard and Chairman Bob Rowe 
presided over this Committee for many years. I didn't think 
there was anything left to pave in New Jersey. But there 
clearly is work yet to be done, and you are going to do it.
    Mr. Sires. Again, thank you. And I have the honor today of 
introducing our great Governor from the State of New Jersey. As 
a former CEO of Goldman Sachs and a former Member of the United 
States Senate Banking Committee, his testimony is especially 
relevant to the current economic issues that we are facing. 
Governor, I am very interested in your experience in trying to 
get financing for some of the projects that we need in New 
Jersey. I know that you have been working very, very hard. So 
if you could address that as you address the Committee, that 
would be very helpful to us.
    You know, New Jersey has been hard hit by the troubles in 
the financial market and the rise in unemployment rate is a 
cause for concern. At the same time, New Jersey is proud of its 
varied transportation and infrastructure systems. Enhancement 
of these systems will create thousands of good paying jobs and 
benefit the entire State.
    I am pleased to have Governor Corzine testify today. His 
unique perspective, both the economic and the transportation, 
would surely guide the Committee as we do our work in putting 
together a good stimulus package. Governor, I know what you 
have inherited, I know what you are going through. I was part 
of the New Jersey process. So it is with a great deal of 
pleasure that I introduce the great Governor of the State of 
New Jersey, Governor Corzine. Thank you.

   TESTIMONY OF HON. JON S. CORZINE, GOVERNOR, STATE OF NEW 
JERSEY; HON. JERRY E. ABRAMSON, MAYOR OF LOUISVILLE, KY, FORMER 
    PRESIDENT, U.S. CONFERENCE OF MAYORS; GARY L. GALLEGOS, 
EXECUTIVE DIRECTOR, SAN DIEGO ASSOCIATION OF GOVERNMENTS; HON. 
 JOHN ENGLER, FORMER GOVERNOR OF MICHIGAN, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, NATIONAL ASSOCIATION OF MANUFACTURERS; AND 
   JOHN IRONS, RESEARCH AND POLICY DIRECTOR, ECONOMIC POLICY 
                           INSTITUTE

    Governor Corzine. Thank you, Congresman Sires. And it is 
great to be with you, Chairman Oberstar. I appreciated your 
quick remarks on how well we had done in history. I can only 
hope that that is not a warning for the future. Ranking Member 
Mica, it is good to be with you. I want to say to everyone on 
this Committee, one of the great things about it is its great 
bipartisanship and how people work together. That has been true 
of the Congressman from New Jersey, Frank LoBiondo and 
certainly Congressman Sires and I. I am grateful for that. This 
is not a subject that has an R&D next to it.
    I also want to compliment you on the rail passenger 
reauthorization which is extraordinarily important for the 
Nation as well as those of us who are quarter States that 
benefit from it, and your foresight in H.R. 7110, which is 
putting transportation and infrastructure at the forefront of 
the stimulus package. The rest of the world will catch up, and 
that is what we are all here to support today. It is through 
your efforts that I think we will move directly in that area.
    Two weeks, ago as the Congressman suggested, I called an 
emergency session of my State legislature to talk about the 
deteriorating economic conditions. They are really quite 
substantial. We are looking forward, not positively, but 
looking at three or four quarters of negative growth, 
unemployment rates reaching perhaps 8-1/2 percent, a serious 
dislocation from the financial services industry compounding 
what is happening in the national economy. And this is going on 
across the Nation in every State, every local community and 
numbers are quite staggering. And without some kind of help 
from the Federal Government, you are going to see the State and 
local governments become a very negative force in aggregate 
demand in the upcoming months. Our red ink will be about 4- or 
500 million more than we anticipated when we put a budget 
together at the end of June; and next year, 3-1/2 to 4 billion 
necessary cuts just to balance our budget for which we have a 
constitutional responsibility.
    I clearly and respectfully recommend that we move strongly 
with an economic package, one that I hope will be in the 1-1/2 
to 2 percent GDP. That would be 250- to $300 billion range and 
it should happen post-election, not post-inauguration. And 
within that package, as what we recommended in the State of New 
Jersey, it should have a very strong component of 
infrastructure.
    Surely we have to deal with our most vulnerable, the 
housing crisis, those struggling with the cost of food and fuel 
and unemployment. And we need to have tax structural changes 
that would promote business climates, and we are doing that in 
the State. But there is nothing more important than this 
infrastructure investment.
    The centerpiece of my program was to push every one of my 
cabinet officers to accelerate, ready-to-go projects; 3-1/2 to 
4 billion of these we think we can put on the ground in the 
next 6 months; 1.5 billion of them in the next 90 days. This 
will create 40,000 jobs that would not be otherwise in place. 
And it has to be done, in my view, on a national basis.
    And the last recommendation I made to my legislature was 
catch the next Amtrak to Washington and come down here and 
shake the tin cup and talk to all of you, because we really do 
have a serious problem. Without action by the Federal 
Government, you are going to offset in State and local 
governments much of what is taking place.
    Wall Street needed some kind of stabilization action. We 
need stabilization action at the local level. I will say that 
it is important that one understand that these projects can 
move now, and it is important to understand something I heard 
one of the Congresswomen say: We need to align these projects 
with our long-term objectives. We shouldn't be doing make-work 
projects. We need to make the projects that are aligned with 
our long-term objectives and needs consistent with where we go. 
This is not pork barrel, this is about win-win.
    And your package that you put together that was resisted in 
the White House would have created 834,000 jobs; 834,000 out of 
the infrastructure program that you put together, according to 
the numbers that your staff suggested. That has more than 
offset what jobs we have already lost in this economy. It is 
time to move if you want to put people to work.
    And I will say, parochially speaking, I am glad the 
Chairman has come to the greater New Jersey/New York area. One 
of those long-run aligned projects is that mass transit tunnel 
we have talked about. This time of adversity should be 
translated into a time of opportunity with respect to our 
infrastructure projects. We should not lose the opportunity to 
invest in our future, our children and our grandchildren's 
future. I have much more I can say on the subject. Thank you 
very much for having me.
    Mr. Oberstar. Thank you, Governor Corzine. I compliment you 
and your predecessor, particularly you, for making New Jersey 
the template for America in a mode shift to transit. New York 
City has certainly a more than 10 percent mode shift to 
transit. Chicago does. But New Jersey as a State achieved it. 
If we did that nationwide we would save the equivalent of all 
the oil we import from Saudi Arabia, and that is 550 million 
barrels a year.
    And the tunnel project you referenced just a moment ago, 
you and I talked about way back when you were still in the 
Senate, late one night--maybe it was early one morning about 
1:00 a.m.--in the Member's Dining Room, and I regret that it 
has taken so long. I think the Federal Transit Administrator 
regrets that it has taken so long to move things along, but the 
CEI will be gone next year. Cost Effectiveness Index out, done, 
through. No more manipulating of the law beyond the law.
    Mayor Abramson.
    Mr. Abramson. Thank you, Mr. Chairman. Thank you to the 
Ranking Member, Mr. Mica, and thanks to the Members of the 
Committee for allowing the mayors to be here. I am a past 
President of the U.S. Conference of Mayors and I am very 
pleased to submit to you the Conference's Mainstream Stimulus 
Plan that has been submitted into the record.
    Now, everyone in this room clearly understands the economic 
crisis that our country is going through, but I can tell you 
that on Main Street, in the cities and counties throughout this 
country, we are feeling it directly. The unemployment rate is 
raising. As was said earlier, close to 800,000 jobs have been 
lost in 9 months. Families in our hometowns are losing their 
savings; retirement nest eggs are being literally evaporated; 
they are losing their homes. Sales are down, businesses are 
going through difficulties they haven't gone through in a 
generation.
    Mr. Chairman, the mayors--in our stimulus package, we are 
not asking for a bailout. We are not asking for a rescue. But 
we are asking for an investment that immediately will create 
real jobs and I emphasize that "immediately" will create real 
jobs.
    Now, the city of Louisville is a merged city-county with a 
population of about 700,000, and we reflect the crisis that is 
going on in every other community throughout this country. And 
yet the metropolitan communities like Louisville are truly the 
economic engines of this country. And if we are going to move 
this country out into a nationwide recovery, I would submit to 
you the economic engines are going to have to lead the way.
    Mr. Chairman, following your philosophy throughout your 
tenure in Congress, now more than ever a partnership between 
Washington and the local communities must be reestablished, and 
we feel like the Mayors' Main Street Stimulus Package that we 
submitted is the first step in that direction. The Mayors' 
stimulus plan will improve the country's infrastructure that is 
literally falling apart, will deliver real jobs immediately, 
and will help small businesses on Main Street be able to 
energize and create local jobs themselves.
    Earlier this week, Majority Leader Steny Hoyer visited 
Louisville, and I had around the table for him to listen, my 
director of roads and bridges, my director of sewers, my 
director of water and transit and schools and workforce 
training and my director of housing. And he heard ready-to-go 
programs, proposals that were on the table, literally ready to 
go within a 90- to 120-day period, of over $250 million in 
Louisville alone, and that we estimate, without any question, 
not only would stimulate the economy but we could finish those 
projects by the end of 2009. Ready-to-go projects like school 
modernization, bridges and road repairs, sewer and water 
repairs, public housing modernization, and the purchase of 
hybrid buses to expand our transit services. Literally, in 90 
to 120 days we can be ready.
    Let me summarize the points of the Conference of Mayors' 
proposal, and you will notice that many of them draw directly 
from the September House-passed stimulus package. We asked $9 
billion be set aside for transit agencies to purchase rolling 
stock. The demand for public transportation is up, and yet none 
of the bus systems and none of the public transportation 
systems are able to meet it at this point in time. We need more 
hybrid buses and more vans on the streets, $1-1/2 billion ready 
for the airport improvement program. That fund has been 
stagnant for several years. A billion--$250 million for Amtrak.
    You did an outstanding job, as was said by the Governor, in 
terms of your most recent passage of Amtrak investment, but 
track, bridges and tunnels still need assistance. And over $18 
billion we request in water and wastewater grants to assist in 
rehabilitating aging water and sewer infrastructures. As you 
know, 740 cities have consolidated sewer overflow problems in 
their communities. We just signed--EPA has these enforceable 
consent decrees. We have one in Louisville that is going to 
cost us $800 million. You have one in Duluth, Mr. Chairman, 
Cincinnati, Pittsburgh, Birmingham, et cetera. We need 
assistance to ensure that our water and sewers are ready to go.
    We are $7.5 billion to repair and modernize schools and 
$2.5 billion to repair and upgrade public housing.
    Mr. Chairman, there are three other quick ones that I want 
to go through that I think are important: $32 billion we 
request for critical ready-to-go highway projects in metro 
areas and throughout States, throughout the rural areas of our 
States. Repair the bridges, repair the roads, widen the farm-
to-market roads.
    We agree that the STP program is the right vehicle to 
deliver the funds. It provides the maximum flexibility for 
these projects. But we are strongly opposed to dropping local 
communities out of the decision making as the September bill 
that was passed in this House did, because we believe as you 
set up the MPOs around this country, that the local folks need 
to be a part of that decision making process to know where that 
investment will both assist both the folks who live in the 
community as well as business folks.
    We talked about a $10 billion infusion of community 
development block grant moneys. You used that in New York City 
post September 12th. You used community block grants post 
Katrina. You used community block grant moneys again in your 
neighborhood stabilization program most recently passed. We 
think that would create immediate jobs for construction of 
public facilities, et cetera.
    And, finally, we really agree with the statements that were 
made dealing with green jobs for Main Street. And you could, 
with $5 billion invested in the energy efficiency conservation 
block program that you, Mr. Chairman, have strongly supported, 
as have other Members of your Committee. It would make a 
significant difference.
    We are ready to go at the city levels. We can create those 
jobs now. Not government jobs, but private sector jobs. And 
when you put it all together, 90 to 120 days, you put 
investment out there, we will make sure people go back to work 
in cities and counties throughout the United States. Thank you, 
Mr. Chairman.
    Mr. Oberstar. Thank you very much for a spirited 
presentation. I love the energy and the enthusiasm. And your 
Main Street Stimulus which I read last night--and I will make 
sure we distribute that widely in the House.
    Mr. Abramson. Thank you, Mr. Chairman.
    Mr. Oberstar. Louis Mumford, whom I call America's urban 
philosopher, wrote: The city is the academy of learning, it is 
the temple, it is the hall of justice, it is the crossroads 
where the issues of civilization are joined. I concur. They are 
joined in your testimony.
    Mr. Abramson. Thank you.
    Mr. Oberstar. Mr. Gallegos, on behalf of the----
    Mr. Gallegos. Good morning. And thank you, Chairman 
Oberstar and Ranking Member Mica and Members of the Committee. 
I am honored to be before you today to testify on the important 
role that our Nation's regions can play and are playing on 
developing and implementing infrastructure. Please accept my 
written statement for the record to supplement my remarks that 
I will make here today.
    Again, I am Gary Gallegos. I am the executive director of 
the San Diego Association of Governments. I am a member of the 
National Association of Regional Councils and Executive 
Director's Council. I am here today to stress the need for 
Federal investment.
    Mr. Mica. Excuse me. If you could move the mike over.
    Mr. Oberstar. There is something wrong with it. We are 
going to get a replacement for you.
    Mr. Gallegos. Thank you.
    Mr. Oberstar. We will get a replacement.
    Mr. Gallegos. Again, I am Gary Gallegos, the executive 
director of the San Diego Association of Governments. And I am 
here to stress the need for Federal investment in our Nation's 
infrastructure and to illustrate how regional councils are part 
of the solution.
    SANDAGis a statutorily created agency serving more than 3 
million people in the San Diego region. The 18 cities in the 
county comprise SANDAG, which serves as a forum for regional 
decision making. SANDAG serves as the Federal designated 
metropolitan planning organization for the San Diego region and 
is responsible far beyond what is required for the typical MPO. 
Unlike many MPOs or council of governments nationwide, 
California invests in SANDAG the authority to decide and direct 
where State and Federal funding in a region will be used. 
Vesting this degree of authority within the regional agency is 
in large part what has helped SANDAG be so successful in moving 
infrastructure projects.
    Mr. Chairman, all of our region's face severe 
underinvestment as our needs outstrip our ability to fund 
critical infrastructure. Both urban and rural America are 
sitting on billions of dollars of unfunded dormant projects, as 
we have already heard this morning. The convergence of a 
softening economy, rising unemployment, population growth and 
the clear need to invest in our national infrastructure 
provides us with a unique opportunity, we believe. The question 
is: How can Congress best direct funding both to provide jobs 
and at the same time create a world-class globally competitive 
transportation system in the process?
    Let me offer San Diego as a successful example. Absent 
clear Federal leadership, the State of California and SANDAG 
are pressing forward with many self-help projects that are 
funded using SANDAG's $14 billion voter-approved local sales 
tax program known as TransNet, which is funding highway transit 
and local projects throughout our region.
    The State of California has also made an investment in the 
State's infrastructure. In 2006 our voters approved a $43 
billion infrastructure bond for transportation in a wide range 
of projects. SANDAG is currently pressing on several 
infrastructure projects that will create a better 
transportation system and bolster our economy.
    In September we opened the first segment of our I-15 
managed-lane project, which will create a 20-mile multimodal 
facility that includes a BRT and public transportation 
incorporated into a multimodal facility. This $1.3 billion 
investment is an example of a successful partnership at all 
levels of government. SANDAG invested local sales tax dollars 
and successfully competed for over $400 million in funding 
through the infrastructure bonds passed at the State level. 
Congress has also appropriated funds for this project.
    At the regional level we have the capacity to undertake and 
deliver major transportation infrastructure. The tremendous 
progress is based on our commitment that our region is made the 
focus on corridors and not just on individual modal projects. 
Within I-15, we planned for, secured environmental clearance, 
and developed the concept for the entire corridor. This 
approach has allowed us to treat these projects much like an 
accordion, where we can either contract them or expand them to 
meet the investment. And this has allowed us to be competitive 
and to be able to get construction projects quickly to 
construction.
    We have several other corridors totaling about $3 billion 
in the San Diego region that are ready to go: pieces like 
Interstate 5, Interstate 805, State Route 52 and our rail 
corridors.
    Mr. Chairman, we are also continuing to press the 
innovation cycle in San Diego by undertaking a third border-
crossing project in partnership with CALTRANS. SANDAG has now 
obtained the authority to set tolls and levy fees on a new 
highway. This revenue would not only pay for the highway but 
would pay for the border crossing itself.
    Arguably, a new international border is a Federal 
responsibility. However, SANDAG's elected officials and other 
leaders recognize the importance the border infrastructure 
plays in our economy, and these improvements mean more jobs and 
more income flowing into the region. Regions and States have 
moved forward aggressively to address our transportation 
challenges, but we cannot invest in our Nation's transportation 
infrastructure alone. As a Nation we recognize the value of 
building the national network through the interstate program. 
Today we have an even more urgent need to rebuild and grow the 
system.
    Mr. Chairman, in conclusion let me conclude by stating that 
we and other regions across the Nation are ready to partner 
with the Federal Government in the stimulus program that will 
put people to work. Thank you.
    Mr. Oberstar. Thank you very much for your statement. You 
have much more detail in your written presentation than you 
could possibly deliver and that will all be included in the 
record. And I make the point for all witnesses. But I was very 
impressed last night as I read through all of the details.
    Governor Engler, in your role as the CEO of NAM, we are 
doubly delighted to have you here. With Ms. Miller, I remember 
your years as Governor and our adjoining States, although on 
the map it doesn't look like we adjoin, but you have that 
little stretch of Lake Superior that is just a bit offshore in 
my district. So we are really neighbors. So we certainly 
appreciate your leadership in Michigan at a time when we had 
our problems at home in Minnesota. Thank you for being here. 
Your statement is an excellent resounding support of 
infrastructure.
    Mr. Engler. Thank you very much. Thank you, Mr. Chairman, 
Ranking Member Mica, Committee Members. Thank you for the 
opportunity today to come and represent the National 
Association of Manufacturers about infrastructure investment 
and economic recovery.
    We represent nearly 11,000 members, over 13 million men and 
women who work, making and inventing things in America. The 
adequacy and the efficiency of our Nation's transportation 
infrastructure underlies the core of our economic prosperity 
and helps keep our manufacturers competitive both domestically 
and internationally.
    NAM members are predominantly reliant on motor carriers to 
deliver finished products to their customers, but many also 
rely on air fright to deliver time-sensitive and high-value 
cargos; railroads for raw materials as well as finished 
products; the inland waterways for efficient and bulk-sized 
movements; and seaports for export to overseas markets. So we 
welcome today's hearing on public investments that improve and 
modernize our transportation infrastructure.
    At this time of great economic uncertainty, we will assist 
in the national recovery by doing, Mr. Chairman, as you spoke 
earlier, assisting steel mills in keeping going, cement trucks 
rolling, engine and equipment manufacturing lines moving, and 
Americans employed. Eighty percent of our Nation's freight 
measured by value moves across our roads, highways and bridges 
by truck. The deteriorating condition of our surface 
transportation infrastructure and an estimated $78 billion in 
costs associated with traffic congestion have a negative impact 
on the manufacturing economy. Beyond wasted time and added fuel 
consumption, there is a fact that the cost of this congestion 
tax doesn't even tell the whole story.
    An internal NAM study showed nearly 20 percent of our 
small- and medium-sized manufacturers reported that they risk 
now losing a customer due to bottlenecks or other traffic 
delays that have worsened over the last 5 years. There are many 
more industries and NAM members; you are going to hear from 
Oldcastle Materials. Doug Black later on will testify they 
could use the assistance, and additionally we believe more 
Federal transportation investment will be of great relief to 
the States and localities; we are hearing that testimony this 
morning. And even the Federal agencies to make progress on 
transportation infrastructure projects that are ready to go and 
are critical, as Governor Corzine mentioned, as part of an 
overall strategy for the economy.
    At the same time, the condition of our Nation's 
infrastructure where transportation has reached a breaking 
point, and we can't continue to defer critical maintenance and 
capacity-enhancing projects. America's manufacturers believe 
strongly as you do, Mr. Chairman and Ranking Member, that we 
have a national infrastructure crisis. And we need the long-
term, 25-year strategy that goes well beyond these short-term 
fixes.
    The current revenue going into the highway trust fund is 
unstainable. The $8 billion fix last month was necessary, but 
as we recognize, only a temporary patch. We certainly express 
appreciation for all of the work that went into that effort 
over a period of time at this Committee, in the Congress, and 
ultimately getting the signature.
    However, we come here today because we certainly don't feel 
we have to wait for surface transportation reauthorization in 
the fall. There is an opportunity now to provide the States 
with $18 billion in critical funding for transportation 
infrastructure projects that Governor Corzine testified to and 
we are talking about, and will throughout the day. This project 
is ready to go.
    Although Federal infrastructure investment by itself 
certainly can't calm the financial markets, although maybe the 
news of this hearing yesterday jumped that market to 900 
points--I would have to rely again on Governor Corzine to put 
it in its context for us. But there is no question targeted 
funding to transportation infrastructure in a stimulus bill 
will provide a solid down payment to future investments and 
will have lasting economic benefits.
    To ensure those benefits are realized, States should agree 
to be held accountable for these projects. Again, the Governor 
touched on that. We should not allow unnecessary red tape also 
to prevent quick action, additional highways and bridges. There 
are other opportunities along the inland waterways which move 
major energy and agriculture commodities, both export and 
domestic use.
    A billion to a billion and a half dollar Federal investment 
would expedite 16 job-creating lock and dam projects that this 
Congress has already approved, while the aviation sector 
anticipates 1 billion passengers as soon as 2015.
    Right now we have got the right environment to undertake a 
billion dollars in airport construction projects that would 
support safety and security and projected capacity needs, as 
well as, I think, consider fast-tracking our transition to a 
satellite-based air traffic control system.
    Our global competitors already heavily invest. Anybody 
watching the Olympics saw the progress in China. Now China's 
government has recently announced they are going to allocate 
even more infrastructure building in the wake of the downturn. 
Australia, a similar move there. Other countries, the same 
thing.
    To keep U.S. business manufacturers competitive, we are 
going to have to invest more than 2.4 percent of our GDP in 
public infrastructure spending. At the same time, I believe 
strongly that private investment must be welcomed and 
encouraged in this economic climate.
    In closing, the NAM supports and believes the case is 
strong for the Federal Government to commit resources to 
transportation infrastructure projects that are ready to go, 
will provide meaningful and long-lasting public benefit to our 
economy.
    We had a recent meeting in D.C. I even cite the CEO of 
Verizon who gave this wisdom, I think, to the NAM Board of 
Directors. He said if there was a lesson in the Wall Street and 
financial services implosion, it is the importance of 
allocating capital to those things that really add value, build 
businesses and create wealth for American workers and 
investors.
    Mr. Chairman, Mr. Mica, Members of the Committee, that is 
exactly what you are talking about. We appreciate the 
opportunity to testify today and look forward to your 
questions.
    Mr. Oberstar. Thank you very much, Governor Engler. And if 
you hadn't cited that from your--the last comment from your 
testimony, I was going to paraphrase it because I think it is 
so pertinent, so to the point. Things that really add value, 
build businesses and create wealth, and that is transportation. 
Maybe we can just stop right there.
    Dr. Irons, I heard you on public radio this morning. You 
made a splendid statement which is covered in your written 
remarks. Please proceed.
    Mr. Irons. Thank you. Thank you, Chairman Oberstar and 
Ranking Member Mica. Thank you for the opportunity to testify 
in front of the Committee. And I am glad to hear you are still 
inviting economists back to the Committee. I hope my head is 
not too pointy for your taste.
    I would like to spend a couple of minutes to describe the 
prospects of the job market and also to address one of the main 
critiques of the use of infrastructure in a recovery package: 
mainly that these investments would be too slow to impact the 
economy. As you know, the U.S. Labor market has been struggling 
with job losses since the start of the year. The economy has 
lost 760,000 jobs since January, and the unemployment rate has 
risen to 6.1 percent, up from 4.7 percent one year ago.
    The future is bleak as well. The credit crunch appears to 
be spilling over from Wall Street to Main Street, with both 
consumers and businesses having trouble obtaining credit. The 
forecasts of future unemployment vary, but looking at past 
recessions suggests that unemployment in the range of 8 to 9 
percent would not be surprising.
    The total number of jobs lost in the last two recessions as 
measured from the start of the downturn to the bottom was 1.6 
million jobs lost in the 1990 to 1991 recession and 2.7 million 
lost in the 2001 recession.
    Labor market weakness can persist for months or years even 
after the start of a recession. In the 1990 to 1991 recession, 
it took 11 months for employment to hit bottom and it took a 
total of 32 months to fully recover to pre-recession levels. In 
the 2001 recession, it took 30 months to hit bottom and a full 
4 years to recover.
    If we look at employment only in the private sector, the 
recovery was even slower. The bottom was reached between 2 and 
3 years after the start of the recession, and the recovery took 
between 3 and 4-1/2 years after the onset of job losses. Thus 
we can expect continuing weakness in the labor market for 
another 2 to 3 years with total private and construction 
employment taking as much as 4 years to fully recover.
    Let me turn now to the role of infrastructure investment in 
an economic recovery package. My written testimony contains 
additional analysis of the economic impact, but let me address 
one aspect here. These investments have often been criticized 
as being too slow, as you noted, to have an impact in an 
economic downturn.
    It is true that infrastructure projects have not always 
been timely; however, there are several reasons why such 
criticisms are less founded today and why a properly designed 
package can have a swift impact on jobs in the economy. First, 
Congress itself can reduce the delay by quickly passing a 
recovery package. You can also require that States and 
localities must begin projects within a certain time period, 
such as 90 days or 120 days from date of enactment.
    Second, in a time when there are huge unmet needs, spending 
can have a more immediate impact because virtually every State, 
locality and school district will have already identified 
ready-to-go projects that are simply waiting for funding. And 
you heard about many of those today and you will hear about 
some later on today as well. Many of these projects include 
maintenance-and-repair backlogs that exist because of 
inadequate funding.
    Third, recent experience demonstrates that major projects 
can be implemented quickly. As you know from your own 
statement, the tragic collapse of the I-35 bridge in 
Minneapolis occurred in August of 2007. Concrete was flowing 
this past winter and the bridge is now open for business. So we 
know that we can undertake major projects and complete them 
quickly.
    Fourth, a well-maintained infrastructure is clearly in the 
national interest and there are many projects that will need to 
be undertaken at some point. For example, we will need to 
eventually repair or replace many aging sewer systems across 
the country. And we know that demand for public transit is 
increasing as energy prices rise. An acceleration of funding 
for these projects will address needs and create jobs at the 
same time. Even if a project is not perfectly timed, the 
funding should not be considered to be wasted or ineffective.
    Finally, infrastructure investments should be seen as an 
insurance policy against a prolonged downturn. As I mentioned 
before, it can take a substantial amount of time for the labor 
market to recover, and so Congress is unlikely to miss the 
window of opportunity. A broad-based recovery package should be 
at least as large as the package passed in January and should 
include at least $75 billion in infrastructure investments with 
a focus on ready-to-go and fix-it-first projects. Such an 
investment would by conservative estimates create over 1 
million jobs. If you look at estimates that are more in line 
with what you mentioned here today, then we could create 
significantly more than 1 million jobs, up to 2-1/2 million 
jobs if you look at it in terms of 35,000 jobs created per $1 
billion spent.
    My written testimony contains additional information on the 
industry-by-industry impact of such an investment. But let me 
just note that the investments would spill over beyond just the 
construction industry to impact a wide range of industries 
across the country and across industries. You will likely hear 
today about a range of ready-to-go projects. It is clear to me 
that there are enough projects to allow Congress to invest 
significant resources and see resulting job creation and 
economic growth in a relatively short period of time.
    Again, let me thank you for this opportunity to present to 
this Committee, and I also look forward to your questions.
    Mr. Oberstar. Thank you very much, Dr. Irons.
    And it is always delightful to have positive testimony from 
an economist.
    I had referenced at the outset the Works Progress 
Administration of the Roosevelt years. And characteristic of 
our investment in real things, those projects are still there 
serving America. We have a baseball field in my hometown, which 
was the inspiration for Field of Dreams. It is still there: the 
stadium, the wall, and city hall and the fire department in 
Chisholm. All were built in 1936, 1937, 1938. Seventy years 
later they are still serving the public. You can travel all 
around America and see these projects that were built to create 
jobs but to last a lifetime.
    Now, Governor Corzine, AASHTO at our request, our 
Committee's request last year, produced a list of projects that 
has grown to 3,000-plus now, submitted by each of the States. 
If you get these funds, and we are successful with the 
Speaker's rigorous initiative here and her very firm commitment 
to move this infrastructure proposal ahead, will the New Jersey 
DOT fund the projects in the priority listing as submitted to 
AASHTO, depending on the amount of money?
    Governor Corzine. It absolutely will adhere to the 
prioritizations that are established both from the Federal 
regulations and what we have established at the State, and 
those were submitted under those formulations. And this is a 
precious resource. And so I think that there is an absolute 
commitment. At least I know that is the case in New Jersey and 
I know among most of the Governors that I have close 
relationships with, that this is not about pork-barrel feeding. 
This is about making sure that we are putting money against the 
most important needs.
    There are always going to be arguments about regions within 
States as there are regions within the country. But we will 
adhere very strictly to objective standards and those that have 
been submitted. I would add, we are going to do this, what I 
talked about in our testimony, whether there is an additional 
stimulus package or not. We are so convinced that we can lean 
against the winds of this rising unemployment in the real 
economy, that we have put new toll hikes in place at some 
political capital being expended, both at the Port Authority of 
New York, New Jersey, and also in our toll roads. But it is 
essential that we create these jobs now and it is the right 
thing to do if you are going to take those kinds of risks to 
move forward. It needs to be done by objective standards and 
that is what we will follow through as is in the submissions.
    Mr. Oberstar. I very much appreciate that. The Congress 
gets a lot of bad rap for Member high-priority projects, as we 
call them. And the surface transportation earmarks come out of 
appropriation bills and are in a different arena, totally 
different from what we do here. And yet there are designations. 
There are changes at the executive branch, at the national 
level, that the State level make once they get their hands on 
the list. You have submitted the list and you have made the 
commitment that you will adhere to it.
    Governor Engler, you talked about targeted funding. I 
assume that is what you mean, being specific with the State 
revolving loan fund projects, water and sewer, wastewater 
treatment. You know what the needs are in Michigan, you know 
what they are from your members all across this country. 
Industry can't expand their production if the wastewater 
treatment facility can't absorb that increased output.
    Mr. Engler. That's right, Mr. Chairman. I think the 
Governor hit on it. You would work through a priority list. 
Most of those priority lists--I know we began the process of a 
5-year plan and tried to lay out for 5 years ahead what 
projects should be worked on in what order.
    And I am sure--I haven't seen the specifics in Michigan--
but in State after State we have seen notification of projects 
being pulled back as the revenues have fallen short. And States 
like Michigan are interesting. New Jersey probably has some of 
this, where the construction season isn't completely year 
round, too. You have to get ready to go. And one of the things 
I think is so smart to hold this hearing now, even though there 
is an election next week, is to get ready because you want to 
get your bids done in the winter States. Minnesota would be 
this way. You want to get those done in the winter so the 
minute that frost is out, if you are talking about a highway 
project, you are ready to go. You have got that work planned, 
and you can get more work done in a short construction season 
if you have got the planning done.
    Our friends in California work at this year round, but it 
is a little different organizational approach. And the 
targeting I think is to get these highest priority projects in 
some order to be done.
    You have had a lot--I am more talking transportation 
infrastructure. We have had other kinds of projects that get 
raised here. But I do think that the recipients in this case, 
certainly, also should be willing to come back and say this is 
what this means in terms of jobs. This is the economic impact. 
That information is almost always available. We talked about 
that when we do local projects.
    Mr. Chairman, I don't want to answer long, but I do want to 
read just from a release out of Australia that was kind of 
interesting because it involved the new Prime Minister there. 
And he talked there about the bank-rolling local councils to 
deliver small projects with short lead times such as local 
roads, bridges, to keep the economy moving, shield communities 
from job losses, reduce growth that will stem from the crash of 
the global and capital stock markets. And in this case they are 
talking, in that Nation, about $600 million. That is a big 
number for them. But that is what they are thinking. China, on 
the other hand, they budgeted for rail investment $175 billion 
from 06 through 2010 to make up their underinvestment in the 
past. A little different story.
    Mr. Oberstar. Good examples. And you go from a nation that 
has a population the size of California or a little bit 
smaller, to one who has more people after the decimal point 
than we have in the whole United States.
    I will withhold there and recognize our Ranking Member, Mr. 
Mica.
    Mr. Mica. Thank you. I will dive right in here on a couple 
of issues.
    First of all, Governor Corzine, I want to extend an 
invitation to you and the State of New Jersey. On Thursday, 
November 20th, I will, at 2:30 in the afternoon--you don't have 
to come, but I want your highest-ranking transportation person 
on rail issues. I am going to convene a meeting to make certain 
that this administration moves forward on the passenger rail 
and high-speed rail provisions that we put into law recently. 
Of course, New Jersey is one of the biggest players in this, so 
we look forward to your participation on Friday, and that is at 
2:30 on Friday, the 21st. I will have a meeting at a location 
to be determined. And that will be the 11 other corridors 
across the United--10 other corridors. You are one of the key 
ones, because that is the only real right-of-way that Amtrak 
owns, and one of the most logical for a high-speed railway that 
would solve many of our problems, aviation congestion, take 
folks off the highway. So I would hope that you could 
participate in that.
    Governor Corzine. I will try very hard. Either myself----
    Mr. Mica. Well, it is not necessary for you, but someone 
that can move this forward. The provision we put into law does 
kick this off. I am not sure if you are aware of it. The day 
the President signed it, within 60 days the administration has 
to issue RFPs, requests for proposals. So we want yours to be 
one of the first and hopefully one of the most successful. And 
it would have one of the biggest impacts. If we have success in 
that corridor, not only will we change the dynamics of 
transportation, but we will impact all the other corridors that 
want to have a successful effort in dragging the United States 
kicking and screaming into the 21st century of high-speed rail. 
So thank you. And I welcome your participation.
    And this is going to transcend administrations. This isn't 
a Republican or a Democrat project. This is a project for the 
benefit of the--or these are projects for the benefit of the 
Nation.
    Dr. Irons, I think you are the one that talked about the I-
35 bridge. Yeah. I stood on the I-35 bridge in Minneapolis and 
held up a sign that had three numbers on it, 437. 437. It 
wasn't a mismatched sporting event. It was the number of days 
it took to complete that bridge. But the problem we have is 
process, and it takes so long. I mean, Governor Engler and 
Governor Corzine and the rest of you leaders from some of the 
local communities know how long. We had sitting in those same 
chairs some of the folks from the TEA-LU Commission that looked 
at what we should do in the next transportation bill. They said 
that if the Federal Government gets involved, it takes two to 
three times as long and sometimes costs three to four times as 
much. Is that your observation, Dr. Irons?
    Mr. Irons. Well, I think it depends on the project. Brand-
new projects where you are building, say----
    Mr. Mica. Changing the footprint, the dynamics, right?
    Mr. Irons. Yeah. If you do something that is a brand-new 
project it is obviously going to take longer.
    Mr. Mica. But we can speed up the process.
    Mr. Irons. We can absolutely speed up the process. And you 
will hear people that have firsthand knowledge----
    Mr. Mica. 437 would be a great model. So maybe as a 
component, it doesn't cost anything to speed up the process. 
Certainly we don't want to run over the environment. We want to 
make certain everybody gets a shot at some, say, maybe their 
legal right to contest a project, et cetera. But we can speed 
up the project. No money, just speeding up the process would 
help maybe in some things that we do.
    Got another question for you. You know, you gave us some 
figures, 201--we lost 2.17 million jobs at a previous time. 
1.6. I have heard about 800,000 we have lost in the last year. 
And if I use my math of 35,000 for a billion, well, we could 
cover ourselves with maybe--well, get to a $30 billion 
package--we could cover the jobs we have lost. And if you 
multiply that out if we got into this bad shape, even a $90 
billion package would take care of the whole thing.
    Now, my question would be money spent versus tax incentives 
for the private sector to undertake some of these things. What 
kind of balance--I mean, we are going to probably do a package 
of over 200 to $300 billion. Well, even 90 billion, if I spend 
a whole lot on transportation infrastructure, will cover me for 
recreating the jobs, or at least providing money to cover the 
jobs that have been lost. What should the mix be?
    Mr. Irons. I will trust your math on those numbers. But you 
are right, there are different ways you can stimulate this kind 
of investment, either direct spending or tax incentives. The 
evidence I have seen out there shows that a direct expenditure 
tends to have a bigger bang for the buck than does tax 
incentives for these kinds of projects. Or for economic 
activity, more generally speaking. And I think when you look at 
the projects that are available out there, we know these are 
things that can be done right away. The advantage of doing it 
in a direct expenditure way, you know they are going to be 
done, you know the money is going out the door in a specified 
amount of time.
    With tax incentives you are a little bit unsure about what 
that impact will be. With the tax incentives, it depends very 
much on how they are designed. You can design tax incentives 
that just reward companies for what they are going to do 
anyway, and you can design tax incentives that actually create 
new economic activity. So it is hard to answer that question in 
the abstract, you have to know how those incentives are 
designed. But we do know there is a significant bang for the 
buck with direct expenditures.
    Mr. Mica. Governor Engler, tax policy is important. You 
have heard my 179 stimulating jobs through, again, tax policy. 
It is not our Committee, but there are things that--in fact, 
transportation creating jobs. How do manufacturers feel about 
that?
    Mr. Engler. Manufacturers love tax cuts. Especially when we 
have got the highest tax manufacturing economy in the world, 
virtually. Our very high corporate tax rate, very high 
corporate capital gains tax rates, are tough to deal with in 
terms of global competitiveness.
    Now, you take a small- to medium-sized company that is 
maybe a supplier in one of these areas. I would say that, you 
know, they are helped by any type of tax reduction. But you are 
talking big projects here that need public investment. I mean, 
I am not--it is hard to get there. We aren't ever going to have 
a bunch of small businesses get together and build a road very 
easily. So we have got to have them healthy.
    I would say if we look at one of the real advances in the 
way in which we have been able to leverage transportation 
infrastructure--which has been through a lot of innovation--you 
yield--some of that is in the Oldcastle testimony. You will 
hear from them later. But a lot of new things that are done, 
R&D credits are very helpful. That ought to be permanent and 
much more substantial because new technologies, new ways of 
building better, whether it is a bridge or just a surface for a 
road.
    But I really think on this that, you know, we have got to 
come up with financing tools, we have got to come up with--I 
think there are certainly public/private partnerships that can 
work for part of it. I don't think that they can do as much as 
maybe U.S. DOT believes can be done.
    And sometimes users have to pay. I mean, that is one of the 
things that, you know, Governor Corzine addressed this. 
Depending on what you are talking about, historically we always 
felt school buildings had some relationship to property values. 
So the idea that, you know, somebody built them and somebody 
doesn't, you know--those are different kinds of things. Sewer 
water, again user pay has been kind of a way that gets done, 
electric transmission.
    But you were on to something with the question to Dr. 
Irons, if I can just quickly close on this point. You can save 
billions and billions of dollars by wringing delay out of the 
process. I am not sure that the Federal Highway Administration 
needs to overlook--once Governor Corzine's transportation 
department has finished all their planning, it needs to sit for 
a year in Washington being checked again. I don't think that 
the Environmental Protection Agency under a NEPA claim, if 
something is already an interchange, it has to spend a year or 
2 with the State and the regional people doing full-blown 
environmental impact statements to see if the bridge which has 
weakened in its construction, because it has been there 45 
years now, can be rebuilt in the same spot. It is still going 
to be a bridge. Pretty much the same impact on the environment.
    That is a lot of cost that we are--and what that does is 
let people come in and try to hijack some of the budget for 
some other purposes often. So there is a lot that could be done 
to wring this out of the system and facilitate some type of 
fast-track authority. That is what you had in Minneapolis to 
get that bridge done that fast. And can we fast-track some of 
these projects here?
    Now, most of these that are ready to go, in fact, are ready 
to go because they have already walked through the gauntlet. 
You might have some new projects that will be ready to go if 
you can fast-track the permitting, and that is a complicated 
thing that we have got to work with you on.
    Mr. Mica. Well, thank you. In the short term we do have to 
address the stimulus package. In the long term I am sure we are 
going to invite you back, because I do--I am a strong advocate 
of a national strategic infrastructure and transportation plan, 
which we do not have, and then also a way to finance it and 
then speed up the process is key components of our long-term 
solution. Thank you, Mr. Chairman.
    Mr. Oberstar. Thank you very much for those comments and 
for your observations, Mr. Mica.
    Governor Engler, on that point--and Governor Corzine--in 
the current, SAFETEA legislation there is a provision--about 20 
pages of legislative language that I crafted at the request of 
our then-Chairman, Don Young, to expedite projects, to take 
this vertical process, turn it on its side, put them all 
together, all the interests that have permits to issue, not 
just EPA, not just National Trust for Historic Preservation, 
but all of them together at the same time to come together, 
agree on a time frame, a timetable in which they can expedite 
moving ahead on the project.
    Now, it hasn't been used by all States and I am 
disappointed that that hasn't been done. But in the next 
transportation legislation, we are going to create an Office of 
Permit Expediting in the Federal Highway Administration, along 
with an Office of Livability. And to do that, Mr. DeFazio will 
be leading the charge.
    So I yield to the gentleman from Oregon. I recognize him at 
this time.
    Mr. DeFazio. Thank you, Mr. Chairman. I would note there 
seems to be a decided lack of interest on the part of this 
administration in fully implementing and utilizing the 
streamlining you spent so much time in reaching consensus on, 
and it was not an easy consensus between those in the 
construction industry and the States and the various 
jurisdictions and environmental representatives. And I think 
that there is a lot of unrealized potential there that could 
save a lot of time in these projects. And I am--hopefully, we 
can make it even more clear in the next bill that we want that 
done and we want it--we just have no patience with this.
    Not all economists, Mr. Iron. I am sorry, I shouldn't have 
been so global. I didn't say all economists. I said those 
pointy-headed ones that constantly criticize infrastructure. 
And you in your testimony say that you envision we would do 
this enhanced investment with deficit spending; is that 
correct, right?
    Mr. Irons. That is right.
    Mr. DeFazio. Is there anyone on the panel that disagrees 
that this would be a circumstance under which we would look at 
basically borrowing to invest in these sorts of projects? 
Anyone disagree with that?
    Mr. Engler. I don't disagree with the premise. But I think 
in fairness to the work that gets done, there is a significant 
benefit to the Treasury when we do this kind of work. And for 
hesitancy here of getting counter with the CBO, it might be 
somewhat dynamic if you put thousands of people back to work, 
companies start building roads, there is economic activity. And 
that has a positive effect on GDP. And so it is not--the 
deficit that sometimes gets scored is a lot less in reality 
than might be reported, because we are not getting credit for 
the income that is being generated over here on the other side.
    Mr. DeFazio. But, you know, the fight likely to be here on 
the Hill is there has been, you know, commitments made to 
continue with pay-as-you-go, and I expect we will have some 
discussion of that. But I believe in this circumstance, you 
know, waiving those congressional rules, I can certainly 
justify borrowing money to invest in roads, bridges, highways, 
transit, other projects that actually put Americans back to 
work, utilizing American products, make the country more 
productive, help with just-in-time deliveries and a whole host 
of things that will last for 30, 50, 80 years than many other 
things the government does. So I just wanted to make sure there 
was consensus. Governor.
    Governor Corzine. I would say you raise a point, and the 
response from Governor Engler is consistent. There are a lot of 
us on both sides of the aisle that would argue that there needs 
to be a separation of operating budgets from capital budgets, 
so that you could actually do greater return and objective 
analysis of how long-term investments were made, and therefore 
would not give up the disciplines of pay-as-you-go, but would 
look at long-term return factors on how that would be done.
    I happen to have a burr on me on this one. I ran a National 
Commission on Capital Budgeting, and would love to see that 
outside the budget process. Some of us do more of that rather 
than less in our State budgets. I would say it is not nearly as 
good as it should be. But I think there needs to be a 
separation in the public's mind about these kinds of efforts 
that end up having, as the Chairman suggested, impact for great 
grandchildren and great-great grandchildren as opposed to only 
the impact in the short run. So I think this is a topic that I 
hope would actually get some centerpiece of discussion as time 
goes on.
    Mr. DeFazio. No. I have long advocated we should have 
capital budgets. I wasn't familiar with the Commission, I will 
have to get my staff to find that report and dust it off. But I 
absolutely agree with you.
    Mr. Gallegos. Congressman, if I could add, I might suggest 
that at the local level, with local sales tax, we have a 
process where we go through to make that evaluation whether we 
should wait until we collect enough tax or whether we should 
borrow and move forward. And we have found that in most cases 
it has been more to our advantage to move forward because the 
cost of delaying the project and the cost to the public 
outweighs the cost of interest. And in most cases, for over 20 
years we've been making that calculation at the local and 
regional level, and there may be some wisdom to be found in 
what local and regional governments are doing in terms of 
trying to make that decision and decide whether they wait until 
they've got enough money or whether they borrow to do the 
project. And we have, I think, had a fair amount of success in 
doing that and been able to leverage literally billions of 
dollars to advance our infrastructure.
    Mr. DeFazio. Excellent suggestion. And of course, today, 
you probably were doing that with tax anticipation notes or 
some other form of bonding that might be a little difficult in 
the current market. But that certainly is a good suggestion.
    And what we are proposing--and I think this was addressed 
by a couple members of the panel--is that, first off, what we 
propose in the stimulus is a 100 percent Federal share. So we 
are not having to worry about the local jurisdictions raising 
the match, particularly in this environment. And then we also 
said that--and there was some disagreement represented between 
urban areas and States, but we just didn't feel we could target 
the money down to particular metropolitan areas because some 
might be ready to go, some might not. So we did choose the 
States. And we wanted ready-to-go projects. And we also do have 
a provision that if the money isn't committed within 6 months, 
that someone else is going to get it. I mean, we are serious 
about spending this money.
    So we've got that. And I think we have got some good 
consensus here. But if I could, just for a minute, look to the 
future, Mr. Chairman, because I am going to be wrestling with 
this, ideas about further infrastructure investment, 
particularly dealing with the deficit longer term. If we can't 
get the capital budgets, Governor, we are looking at a gas tax 
where the revenues are actually falling and the needs are 
growing. And I am just curious if anybody here has any great 
insight or ideas on where we might raise some additional funds, 
or could we again justify longer term, if we don't have capital 
budgets, we have a scoring problem, but more borrowing to fill 
some of the gap in our transportation infrastructure?
    Mr. Engler. I certainly want to associate myself with the 
remarks of Governor Corzine. The capital budget is very key 
because it is what every company uses, it is what virtually all 
of the States use, and it should be separated. And then this 
makes us--it still isn't free, but at least it is a better way 
to visualize this. And we are on State balance sheets now under 
Gadby actually reporting, we are showing some of that capital 
side which never was showing before, so you can actually find 
that in State fiscal reports.
    But I think you are looking at a combination--and I think 
capital budget is key, but I do think there is going to have to 
be new revenues. Actually, in Michigan, one of the toughest 
fights we had, and Congresswoman Miller referred to it, is we 
actually raised the nickel of gas tax, tried to--and then 
earmarked back just a few years ago, a penny. But for bridges 
at the time, we had some of the earliest interstates, therefore 
we had the earliest problems on bridges. The rest for capacity, 
and obviously sharing with local. I do think that there is a 
lot of creative energy out around public and private 
partnerships and the way that they can work. And we are seeing 
some things being done there.
    Michigan is a State that didn't toll roads initially; we 
have only got a couple of bridges with tolls on them, but the 
new technology is allowing for some types of congestion 
pricing, perhaps. There is lot of conversation. We have been 
trying to have this conversation through our association with 
lots of different groups because what do you pay for and what 
do you get credit for. The point I made earlier, there was an 
awful lot of work done in States and localities on sort of a 
TIFA model of a tax increment financing that's making 
investment. The valuations came up and there was a revenue 
flow.
    In one sense, that model does work in the Federal budget. 
As I said, if you start spending a few billion in 
transportation, you are generating revenue for the Treasury, 
does that then just become extra money and the Treasury goes 
over to help pay for health care, Social Security, or could 
there be a gains sharing on some of that? I think it ought to 
be looked at as part of that.
    And I think debt does matter. It has been mentioned, Mr. 
Gallegos has mentioned it in terms of their data, but look at 
the price of the inputs over the last couple of years, if you 
had had money and been able to maintain a steady program, your 
pricing on steel and cement and all of these other--fuel, 
asphalt, would have been much different; you would build many 
more miles with the same dollars had you been out there in the 
market.
    One of the benefits of this stimulus is probably catching, 
timing-wise, a pretty good time because a lot of those prices 
have come back down a bit. So there is a benefit for that. But 
we are happy to gauge long term on the important question you 
are posing.
    Mr. DeFazio. Infrastructure investment on sale.
    Mr. Irons. I think when you look at the investments in 
infrastructure, they benefit the general economy. So looking 
beyond just a dedicated revenue stream I think is important. 
Looking at general revenues would be a valid way to find 
additional revenue for infrastructure spending.
    The second piece is, these are investments, they fit the 
classic definition of investment; you invest money today, you 
get a return tomorrow. And as such, financing for these kinds 
of projects seems completely reasonable to me. So I think it is 
important to raise additional revenue to help finance this, but 
I don't think it necessarily needs to stop you from investing 
today.
    Mr. DeFazio. Anyone else have a quick thought?
    Mr. Gallegos. I would add to that, at a bare minimum, we 
have got to protect what we have got right now and at least 
look at indexing it, because I think the buying power of the 
gas tax is going down, we are not investing enough, and at a 
bare minimum, there are going to be no free lunches, but at a 
bare minimum, we have got to protect the buying power that we 
have today.
    Mr. Abramson. And I would just say that, when you are 
talking about a country that has an energy policy to drive less 
and drive hybrid, the paradigm has got to be changed in terms 
of how you are going to fund highways and public 
transportation, it simply has to be completely changed because 
it is out of sync with the rest of the policy that we are 
implementing.
    And one of the things that you said, Congressman, I am not 
sure that I agree--in fact, I don't agree--with your statement 
that the States would be able to get those founds out much more 
quickly than the MPOs that you all set up for those local 
communities that understand where it is needed and where it is 
most effective to have----
    Mr. DeFazio. What I said is, if Congress were to, say, 
direct money to the MPOs, there may be some who have projects 
ready to go, there may be others who don't. We thought if we 
sent it at the higher level, that the States would work in 
concert with the MPOs. We don't want the MPOs to be ignored, 
and perhaps we need to clarify that to the States.
    Mr. Abramson. And the STP funds, as it exists now, a 
portion of them go to the MPOs to be designated and developed. 
And we would hope that that would continue. We have great 
relationships with our brothers and sisters at the State 
capitals, but the reality is, as you all saw when you set up 
the NPO, the reality is the folks who have got the boots on the 
ground right there on the sidewalks in those intersections and 
in those metropolitan areas really understand in a much keener 
way, we would submit, the flow and the need of traffic 
enhancements.
    Mr. DeFazio. Thank you. Thank you, Mr. Chairman.
    Mr. Oberstar. Thank you for those very thoughtful 
observations, stimulating and very good discussion.
    I just want to come for a moment to capital budgeting. In 
this room 20 years ago, my colleague on the Republican side, 
Congressman Bill Clinger from Pennsylvania, I was Chair of the 
Investigations Oversight Subcommittee, held an extensive 
hearing on capital budgeting. And in the course of the hearing, 
we had David Stockman of the Reagan OMB who said he was totally 
opposed to a capital budget. And we asked him why. And he said 
because if you establish it, then Congress will want to fund 
it. We said, we are funding it now aimlessly, without a plan, 
without priorities. And eventually he came around to the idea 
of a capital budget and said he would include one. And we moved 
a bill, ultimately, to direct establishment of a capital 
budget. But under the Reagan administration it became an annex 
to the U.S. budget, where it remains today.
    Ten years ago, there was the Clinton administration 
commission to study capital budgeting, but it was staffed with 
OMB experts, so to speak. Well, they are the same crowd that if 
Castro came, they would grow a beard; they never changed, they 
never changed their mind. And it doesn't make any difference 
who is in the White House, the OMB crowd doesn't like this 
stuff. So we have to start all over again. We have to do, as 
Governor Engler, you said, and Governor Corzine, as you are 
doing--excuse me, with a beard--and establishing a capital 
budget. We have got to do that, and we will next year. We will 
move it from this Committee.
    Mrs. Miller, you've waited a long time. Glad to have you 
here.
    Mrs. Miller of Michigan. Thank you very much, Mr. Chairman.
    In fact, I want to make a similar observation to the 
question that you started out with, because the Congress is 
often criticized for our earmarking process, and sometimes 
justifiably so, but I think there are many, many earmarks that 
are really done with the best of intentions of local Members of 
Congress trying to make sure that their area gets attention 
that perhaps is not being--they think is not being directed 
from the governors sometimes. And so I would just mention, 
respectfully, that governors are not immune from subjective 
criteria, I think, sometimes, of where some of these funds are 
going. And even in our State of Michigan, under a former 
governor, the amount of administrative costs and many Federal 
resources that were sent back to the States were very low; they 
were maybe 6 or 7 percent.
    Under our current administration, they take right up to 20 
percent off the top for almost all the Federal resources that 
we send perhaps because of the budget challenges that we face, 
some of it may be understandable. But still, I just wanted to 
raise that concern because we do want to be certain that local 
municipalities are being heard very clearly in this process and 
that the funds are getting into the locals, as the Federal 
Government really wants to from a stimulating standpoint.
    And I would also mention, and I think Mr. DeFazio mentioned 
about the match program. And I want to talk about that just for 
a moment because I will tell you, if we have any kind of 
criteria for match under this program, which we normally do, 
communities in my area, certainly in Michigan, we don't have a 
match. That is why we have this enormous backlog, there is just 
not the match. Everybody is just crying out for what are we 
going to do. We are leaving all these Federal resources on the 
table because we do not have the matches.
    And actually, in the House, that we passed on September 26, 
I will just read this briefly, that "the Federal share payable 
on account of any project or activity carried out with funds 
made available under this heading shall be 100 percent of the 
total costs thereof." Unfortunately, this did die in the 
Senate, as was mentioned. It would have been a great thing to 
do before we broke for October here. And I just mention that 
because, if there is any comment on how important it is that 
there not be a requirement for a match, that it is greatly 
reduced or it won't be able to be utilized.
    And also, just looking for a comment, you know, the highway 
funds are distributed under this current formula that we have. 
I am very sensitive to this because Michigan is a donor State. 
We did a little better in the last transportation bill, but we 
still are a donor State. And I just wonder if there is any 
comment on, if you really go to the core of economic stimulus, 
don't you want to put the dollars where it is most needed? And 
wouldn't it be most fair to be using a formula that is 
reflecting the current economics? For instance, a State that 
has the highest unemployment in the Nation, yet is not going to 
be getting the economic stimulus that other States that have 
less than half the unemployment rate that we might have in a 
State like Michigan, or the Governor mentioned almost 8 percent 
in New Jersey? What are the thoughts of the panel on really 
getting the economic stimulus to the States that need it rather 
than using a formula that does not reflect what the intent of 
the Federal Government is right now to help the patients who 
are really sick?
    Governor Corzine. Let me just make the point that I was 
projecting that I thought we were going in that zone. We have 
actually been paralleling the Federal or the national 
unemployment average. We are actually slightly lower than that 
5.8 percent. But it is, I think----
    Mrs. Miller of Michigan. We wish we were at 5.8 percent.
    Governor Corzine. The comment that you put the money 
against the needs I think is a fair concept. We had that with 
regard to homeland security allocations of resources, which is 
a fair debate. And to some extent, particularly when you are 
talking about a stimulus package, that may be more the case 
than what you would do on an ongoing fundamental SAFETEA-LU or 
SAFETY-TEA, or whatever the next program will be called, where 
you have to have a more fundamental allocation of resources by 
the negotiation process that happens here.
    But I think that--you point out that governors can have 
their own prejudices. I think what you need to do is make sure 
that each State has a process on how those funds are actually 
distributed that is objective and can meet some kind of 
criteria. And I think the Chairman asked me whether we were 
going to live with the kinds of allocations or distribution of 
funds as according to the historic submitted and approved 
projects. And I think that is one way that you could handle 
that.
    We are certainly not trying to hurt our local communities; 
we want to work together on those. But you do have to have some 
kind of allocation process. And you have the same problem with 
one region versus another region. We have north and south 
Jersey getting all kinds of hootenannies about who is getting 
what in those kinds of projects. And so you need someone to 
make sure that standard objectives are allocated as we go 
across the entity that receives the money.
    Mr. Gallegos. I would add that, in addition to just a 
formula, that having some performance metrics to ensure that 
the investment being made is generating the rate of return that 
you are looking for would be also helpful instead of a peanut 
butter approach that spreads it all over the country. But 
having said that, and at the risk of sounding more than just a 
Californian, but more like an American, is I think the 
interstate system is a good example of what makes it work as a 
system. And I think from my perspective, every time we get into 
a debate about which State won and which State lost, I think we 
all lose because we have got to figure out how to raise the 
tide so that we can develop a system that will make this Nation 
competitive globally. And for California, having a 
transportation system that works, but when we get to Arizona or 
Nevada or Oregon it doesn't work may not do a lot for us in the 
long run. So as we have those performance metrics, I guess I 
would advocate with you, Congress, that we need to have sort of 
a national vision and look as how we pull this together as a 
system.
    Mrs. Miller of Michigan. With the Chair's indulgence, I 
know I am running over my time, but I would like to ask one 
question, particularly of the Mayor--and by the way, I happened 
to be in your beautiful city for the Kentucky Derby 2 years 
ago, and bet Barbaro actually wins, first and only time ever 
been at a horse race. He only had $20 to bet, but he won. And I 
thought, what is the big deal with this horse racing? You bet, 
you win, you leave.
    Mr. Abramson. Nothing to it.
    Mrs. Miller of Michigan. I am kidding. But Louisville is 
certainly a beautiful, beautiful town.
    And as you were mentioning about the performance standards, 
perhaps I could ask this question: The local communities are 
about to have, hopefully, a huge infusion of these 
transportation dollars, and there will be enormous public 
pressure to make sure that we have transparency, that the 
dollars are audited, that there is not waste, fraud, abuse, et 
cetera. And do you believe through the Mayors Associations, et 
cetera, that the communities are ready with project managers, 
that there is enough expertise on the ground? I mean, all of a 
sudden here is all of this, go make sure it is all spent 
properly. Is there a comfort level that we can have with that?
    Mr. Abramson. You know, over the years, we have had Federal 
programs like the Community Development Block Grant that we 
have had to dot the I's, cross the T's, be clear in terms of 
the transparency for not only our constituents, but for the 
Federal oversight that occurs. So there is no question about 
that, that we can follow that avenue.
    What you are asking is, will there be enough project 
managers? And I can tell you that in terms of cities and 
counties across this country, if we are given the opportunity 
to be able to have these found funds where we are making a 
commitment to you that within 90 to 120 days we will be ready 
to go and they have already been reviewed, assessed, and the 
bridge needs to be fixed and the road needs to be widened and 
the school needs to have the library upgraded, et cetera, there 
is no question that additional project managers will come on as 
part and parcel of the overall program to ensure that we can 
dot the I's, cross the T's, and be transparent as you would 
request and as we would want.
    Mrs. Miller of Michigan. Thank you very much. And thank you 
very much, Mr. Chairman.
    Mr. Oberstar. That raises a very important--before I go to 
the next member, Dr. Irons, if we don't follow strictly the 
allocation formulas for the Federal Aid Highway Program and the 
formulas that are established in the Transit program, how would 
you otherwise distribute these dollars; according to 
unemployment rate by State? Unemployment rate by economic 
sector? Unemployment rate by construction sector? Unemployment 
rate by industrial sector within States?
    Mr. Irons. That is a very good question. We can write as 
complicated a formula as we can dream up. You know, I would 
look, first and foremost, at unemployment rates as being an 
indication of the overall health of a State. So that would be 
the first place I would look. Now, you can look at unemployment 
rates by industry, by construction industry or other 
industries. First of all, I would hesitate to do that because I 
wouldn't want to get too precise because you are basing this on 
estimates and unemployment rates by sector by sector. And the 
more finely grained you get, I think the less accurate you can 
be in a lot of ways. So I might stop it at unemployment rate 
and use that as a guide to help allocate funds to different 
places.
    But let me add to that that, in thinking about a recovery 
package, the infrastructure piece is only one piece of that 
package. And if unemployment extension is part of that package, 
that will automatically help States with high unemployment 
rates. If we have some assistance to States in terms of direct 
State aid through Medicaid formula or other formulas, that will 
provide aid to States that need the most help already.
    So I just want to urge you to think about this in terms of 
a larger recovery package, not just as the infrastructure piece 
alone. But I think beyond that, if you were to write a formula, 
I would start with unemployment rate to begin with, and maybe 
look one level down at construction employment. But I think 
probably unemployment is the right level to be at.
    Mr. Oberstar. Thank you. And Mrs. Miller, it is something 
that we will have to talk further about.
    Now, Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I have got one question for Dr. Irons, and then a question 
that is really for both Governor Corzine and Mr. Gallegos.
    I had a town meeting in one of these rooms. Among those 
here was Alice Riven, who happens to be a resident--we are very 
fortunate for that--and a number of other Federal experts and 
local developers. You say in your testimony, Dr. Irons, that 
you think $75 billion is what you propose, but you can see that 
this would not fully even offset the losses. Ours, of course, 
is only $30 billion.
    Now, Alice, although not at the town meeting because this 
question wasn't particularly asked of her, but I heard her 
say--as they say on CNN--that it would take several hundred 
billion dollars to have an effect on an economy of this size 
and on a crisis of this size. You say that you expect that 
doing, I suppose, the $75 billion could have a "swift impact on 
jobs and the economy."
    Now, the reason I ask this question is I began to wonder. 
You talk about recessions in your testimony, page three of your 
testimony, since 1945, but you, I think quite rightly, focused 
on the most recent recessions. I am telling you, I find those 
figures absolutely frightening. You cite 1990-1991 and 2001, 
both of those recessions lasted only 8 months. Now, only 8 
months, nothing like this kind of crisis. And you said it took 
the labor market 11 months to 30 months, respectively, to 
finally hit the bottom--I am not talking about recovery now, 
but financially sail on down to where it was going to rest. And 
you said further, with sluggish growth even hitting bottom, it 
took 32 months and 48 months to regain the total number of jobs 
that existed prior to the downturn.
    You know, one reason one wonders, well, whether it would 
ever get back to that number of jobs--because some of it may 
have been falsely "created," and I am really trying to avoid 
the kind of disappointment we see at the bailout. People did 
not understand that we didn't know what we were doing, that we 
were dealing in a global economy, that we are feeling our way. 
We didn't even invest in the banks at first until Europe did. I 
mean, we know at least as little about what we are doing as 
Roosevelt did, and it took him 5 or 6 years to even get to a 
stimulus package because they were so afraid of inflation.
    So I looked through your testimony to see whether or not 
you did what economists hate to do, which is to say, look, this 
is when we think you will begin, you in the real economy will 
begin to feel some impact of, God help us, $30 billion or even 
$75 billion. So could I just ask you to take, you know, call it 
a wild guess if you want to, but given the figures you have 
given us, the first thing I have to ask is, there weren't any 
stimulus packages then, were there, in those two recessions of 
any kind?
    Mr. Irons. There was a very small one that came right after 
President Clinton was elected, but it was nothing of the 
magnitude that we are thinking of.
    Ms. Norton. Because remember, those were back in the day 
when everyone thought that if you spent Federal money, whew, 
that is a terrible thing to do, you ought to be cutting taxes. 
Now, we at least are going back to the Keynesian notion that 
you have got to spend money when there is a recession.
    All right. So we did nothing then. And what bothers me, Dr. 
Irons, is doing nothing got us these horrific figures. I really 
hate the one about 11 months to 30 months to even hit the 
bottom, when I don't think any economist of our stature would 
say that we are probably going to do that more quickly now. If 
so, please put that on the record so as to give me some hope 
here. But I would like to know your guess at how long people 
out there would say oh, yes, Congress has done something, I can 
tell it, as they are not saying yet because the bailout is 
harder to understand.
    Mr. Irons. Yeah, I come to this as somewhat of a pessimist, 
as you see from the testimony. Unfortunately, I am not out of 
line with the rest of my profession. The economists think that 
this is going to be a bad recession, that the 2001 recession, 
which recovered relatively quickly compared to past recessions, 
is not really in the cards. We had a construction boom right 
after the 2001 recession; this time we are going to have the 
opposite. We have seen the opposite. So I think the numbers are 
going to be at least as bad as I have presented there, which I 
am not happy to say.
    Now, the question becomes, what do we do about it? And the 
package that I have proposed in this testimony and elsewhere is 
on the order of $175 to $200 billion spread out in a number of 
different policy areas, not just infrastructure. Other concepts 
are thinking bigger numbers, $300 billion to $400 billion. The 
economy is about $14 trillion, so you need to have a big enough 
stimulus to have an impact. The $150-200 range is about 1 
percent of GDP. That is not going to solve your whole problem. 
It will make the bottom less bad, it will make the recovery 
quicker, but it will not stem the tide that we have seen 
already and that has been building, both with financial 
markets, gas prices, housing markets and the credit crunch.
    So let me just add one piece, which is, I think the 
advantage of what you are doing here today is that people 
understand job creation through building roads, bridges, public 
transit, and doing everything that we have talked about here 
today. People don't understand the Wall Street bailout. I 
barely understand the Wall Street bailout, and I have studied 
this for a long time. People understand if you build a road, if 
you put a shovel in someone's hands, that creates a job.
    And so I think the advantage is, if you put significant 
resources into creating jobs through infrastructure, people get 
it. And a lot of the economy is driven by confidence. If people 
see, okay, there is a package coming that is going to be 
putting people to work, that is going to create the confidence 
for businesses to start to invest again, that is going to 
create the confidence for banks to start loaning again. And I 
think the bailout package, from my perspective, was something 
that was needed, but it is not sufficient to get things going 
again. This kind of a project can really help to create a core 
in the real economy to make the recession shorter and to make 
it less steep. It is not going to solve everything, but it is a 
start.
    Ms. Norton. And I suppose you would say this is not a time 
to worry about deficits. We are going to keep deficits in line, 
but that has been the major, frankly, concern here, that you 
have to pay for everything, et cetera. Well, that was the 
Roosevelt mistake near the end of the `30s; they were calling 
it the "Roosevelt Depression." And that is when he began to do 
all the programs that stimulated the economy. And I hate to say 
it, but what really stimulated the economy was World War II. 
And, by the way, you are in a war now that is not going to do a 
thing because they are making these tanks and all the material 
throughout the world and not here.
    Finally, Governor Corzine, I don't know if you listened as 
closely as I did to what Mr. Gallegos said about the regional 
approach. Now, my understanding is that approach is 
particularly effective in a large rural area. Here in the 
National Capital Region we have taken a regional approach to 
homeland security, a large portion of the Homeland Security 
money in particular. A lot of it has to do with things that if 
they weren't coordinated with the States would be wasteful.
    I spent some glorious years in New York City and remember 
Port Authority, controlled by New York and New Jersey as I 
recall it. But I am wondering whether or not metropolitan 
areas, which seem to be dominated by big cities, but which also 
have rivers, have many kinds of projects, highways that cross 
boundaries, I wonder if there is any chance for Gallegos 
approach of regional work to be successful in big city areas 
which have regions around them which also are pretty citified, 
or whether it is more efficient for these areas to simply work 
piece by piece without that kind of coordination.
    Governor Corzine. Well, first of all, you mentioned one of 
the greatest success stories, I think, in America with regard 
to regional coordination, which is the New York/New Jersey Port 
Authority. It has its bumps in the roads on occasion, but we 
have a tremendous bi-state infrastructure, our highways, 
airports and ports, that is really quite extraordinary in the 
context of American infrastructure. We have something that 
works a little less well in the Delaware Port Authority, which 
is Pennsylvania and New Jersey, although, depending on the 
relationship of the Governors at a particular time, it works 
very well, or sometimes a little less effectively.
    And there are a number of other regional transportation 
groupings that we have in the State of New Jersey that are 
really quite effective. And if we don't actually work 
together--I admire what is going on in Louisville and the 
county that surrounds it that the Governor--excuse me, maybe 
will be Governor someday--the Mayor actually believes is a 
classic example of looking for the economies of scale and the 
synergies that exist there.
    So, yes is the answer. And I think, actually, the concern 
about this--and this is where the Mayor and I might disagree--I 
think the majority of States will use those resources through 
its existing facilities, much of which requires the 
collaboration of the State through these regional organizations 
to start with. If we were to receive the kind of potential 
support that has been talked about here this morning, we are 
going to use the facilities we have because that is where the 
priorities came from to start with. That is how we built those 
priorities and that is how we will fund those priorities.
    So I think you have to be concerned about it because there 
will be situations where that cooperation hasn't been practiced 
in history, but I think it has very much so here.
    Mr. Oberstar. I have to intercede at this point. We 
committed to Governor Corzine that he would be able to leave at 
noon. I think Governor Engler has a similar commitment.
    I want to recognize Mr. Sires at this point for a comment 
or question, and then, Governor, we will hold you excused.
    Mr. Sires. I would also like to add, Governor, as you know, 
they just regionalized the Emergency Management Services 
between New York and New Jersey also. So it is a great example 
for the rest of America.
    Governor, unemployment is rising across the country. In New 
Jersey, for example, I know that you mentioned before it went 
from 4.2 to 5.8. Knowing your efforts in the last few months 
and the investment that New Jersey has made, how would this 
stimulus package add to stop this rising unemployment, and how 
many jobs do you anticipate this will impact? I know that 
working on the Hudson-Bergen Light Rail extension, there are 
approximately 20,000 jobs that are there. But for the rest of 
the State, how is that impacted?
    Governor Corzine. Well, first of all, let me identify with 
Dr. Irons' remarks. This is one of those places not only can 
you see palpably what job creation will occur, because people 
are holding shovels, but it actually is the single best near-
term way to put the economy into motion. Now, some of the other 
things that are included in Dr. Irons' package and others are 
going to protect the economy from shriveling in other areas. 
And I am not here saying don't do anything about Medicaid or 
Federal matching programs there or food stamps, but if you want 
to put the bridge to get us into a strengthened position and 
get the economy restarted, you used the word Keynesian, Ms. 
Norton, this is the time to do that. This is where you create 
jobs.
    And I use a lower denomination, I use about 10,000 jobs per 
billion dollars for school construction and transportation 
projects in New Jersey. Other people I have seen 47,000. I have 
a hard time counting the heads that actually fit with that. But 
we are creating real jobs when you do what you all have already 
committed to do here in the House, and certainly out of this 
Transportation Committee.
    You know, I passionately believe that you should take the 
steps that will allow us to bridge this recessionary valley 
that we are going through and do it in conjunction with our 
long-term best interests. It is not like we have overspent on 
maintaining the safety of our bridges or the adequacy of our 
highways or the air traffic control system or any of these 
things; these are things that we should have been doing anyway. 
So this is not make-work, this is getting us into a position 
where we are creating real work at a time when it would not 
otherwise be done.
    And I am very sensitive to the pay-as-you-go and believe in 
fiscal responsibility, but this is one of those times if you 
thought $700 billion was necessary because there was a crisis, 
there is going to be a crisis--there is a crisis in the labor 
market, it is going to grow, as is demonstrated by history, and 
it is time to act on these issues.
    I congratulate you for having this hearing and for what you 
are doing, and I hope we can get to a positive conclusion.
    Mr. Oberstar. Thank you very much, Governor. Thank you for 
overstaying your time. And we hold you excused, and we are 
grateful for your contribution that you give both as Governor, 
Senator and as financier from Wall Street, which was 
discredited after you left.
    Ms. Norton. Mr. Chairman, could I hear the answers from Mr. 
Gallegos and perhaps Mr. Abramson to the question I asked 
before?
    Mr. Oberstar. Briefly.
    Mr. Gallegos. Very quickly, I would offer that the San 
Diego model, I don't think you need the San Diego, but if we 
look at that same model is working in Los Angeles, it is 
working in the San Francisco Bay area, it is working in the 
Sacramento area. And I would also submit that, as we try to 
tackle climate change, that that is another element that I 
thing is going to force more of this regional collaboration 
because we have got to connect the dots between how we are 
using land use and transportation and energy policy and all 
these other policies have got to come together. And I think 
California has a good model to share.
    Mr. Abramson. And I would only add that the MPOs that you 
all set up do go across State lines. In my own community, you 
have an urbanized southern Indiana which is right across the 
Ohio River from Louisville, we sit with colleagues from the 
counties and cities in Indiana joining with us. And those kinds 
of area development approaches, where you have got to literally 
flow economic products, services and people back and forth 
across the river and throughout the region end up being very 
successful. And they have gone forward in many communities 
across State lines toward developing what we would all want for 
our hometowns.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Oberstar. Now Ms. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman. And I share some 
of the concerns that my colleagues have brought up, but I would 
like to ask Mr. Gallegos, one of the things that bothers me, 
Mr. Gallegos, is that the small cities sometimes do not have 
the ability to have a place at the table because the larger 
cities end up taking most of the funds and sometimes what is 
left is divided amongst many that cannot afford to have their 
own representation, their own ability to attract those funds.
    You state that the stimulus would help regions across the 
country to implement ready-to-go projects, and the region 
States would benefit from concerted efforts to streamline 
Federal processes. I have a question about Federal process. 
What specific streamlining would you suggest, as a Sandbag--and 
SCAG would be the same thing, I would ask them the same 
question--what would be some of the processes that need 
streamlining to be able to effectively cut the time frame that 
would put these projects on the go immediately or at least 
within a short frame of time instead of having to wait, given 
that sometimes some of these Federal agencies do not have 
enough staff to be able to do the job?
    Mr. Gallegos. I would offer as a very quick example, in 
California we have the California Environmental Quality Act, 
CEQA, that by a lot of arguments is just as complicated as the 
National Environmental Quality Act, NEQA, and yet we can get a 
CEQA level document done in our State project of moderate 
complexity in 1 to 2 years. The moment we Federalize that 
document--and we very often choose to Federalize them because 
we want flexibility to use as many different colors of money to 
make the projects work--it takes a minimum of about 5 years to 
get a NEQA document worked through the Federal level. And it is 
the same stuff, it is just more people are looking at it.
    And there is a case in point where in the last bill you did 
do some streamlining, and you are sending some of that back to 
the States. But there is an example where you can cut a couple 
of years out of the process and still not hurt the environment.
    Mrs. Napolitano. Mr. Chairman, maybe we can look at that in 
the future.
    But you also mentioned that sandbag issues bonds backed by 
sales tax revenues, and plans to continue issuing bonds backed 
by toll revenues. Any chance that the credit crisis would 
affect those revenues?
    Mr. Gallegos. Obviously, yes. But I am very proud to say 
that we have recently received a Triple-A bond rating from the 
rating agencies. And I think the key to that is these are local 
decision makers that understand land use policies that are 
making decisions. And the credit markets are looking for these 
kinds of investments. The McCrorys of the world, as an example, 
are investing in these kinds of investments because they are 
steady; these roads are going to be there for a while, they are 
going go continue to generate revenue. And who better to put in 
control than your local mayors?
    Mrs. Napolitano. Well, coming from local government I 
couldn't agree with you more, because it takes time to filter 
down to the local level in many instances.
    I would like to ask Dr. Irons, would you describe the type 
and number of jobs that would be created by additional 
infrastructure investment? And beyond the impact of jobs, if 
you would touch upon the link between the infrastructure 
investment and the increased productivity in economic growth, 
and its sustainability.
    Mr. Irons. Yeah. I mean, like I said in my testimony, when 
you create jobs through infrastructure investment, I think a 
lot of people think of those purely as construction jobs, but 
they do have a reverberating effect throughout the economy. 
Some early work that we have done, which is included in my 
written testimony, illustrates exactly what industries those 
jobs in.
    The best we can tell, and it is very hard to link some of 
these jobs estimates, is that these are good jobs, meaning that 
they tend to pay above average based on what industries they 
are and some other characteristics of the people that are hired 
in those jobs. For example, I am giving you a number here, for 
every thousand jobs created in construction, there will be a 
total of 610 upstream jobs, meaning supplier jobs, as a result. 
Most of those are in manufacturing, retail, professional, 
scientific and technical services, administrative support, and 
waste management. So what we find is, when you look at how many 
jobs created and kind of jobs, they are very broad based, and 
they tend to pay slightly above average compared to an average 
job.
    Mrs. Napolitano. But given the situation we have found 
ourselves in the last almost 10 years--a decline in training, a 
lot of recidivism in some of the industries, loss of 
manufacturing--will we be able to have enough adequate trained 
personnel, adequate working labor to be able to fill, if we are 
going forth with all of these projects and putting this kind of 
money in, because then we may not have enough engineers to be 
able to complete the projects, we may not be able to have--I 
don't know, it is just something that I would like for you to 
address.
    Mr. Irons. My impression, and I have not done the research 
to fully substantiate what I am going to say, but it is my 
distinct impression that we do have the capacity out there to 
engage in this. Part of the reason why I say that is, is when 
you look at the job losses that have already occurred in the 
construction industry and in the manufacturing industry, 
manufacturing job loss is not just a recent phenomenon, this 
has been going on for years, construction, we all know what is 
happening with construction jobs from the housing downturns. So 
we have seen declines in two of the primary industries that 
would support this kind of investment. So that leads me to 
believe that there is excess capacity out there to engage in 
these projects. And frankly, I would love to test that; I would 
love to see if 75 billion, or however much, would exhaust our 
supply. I think it is going to take a long time to do that. But 
like I said, it is my impression that we do have the capacity 
out there.
    Mrs. Napolitano. Were you able to take a look at what 
happened back in--I can't remember the years, maybe in the '30s 
and '40s with the WPA, the circumstances about creating work 
projects to be able to get the economy going during that 
depression?
    Mr. Irons. In a lot of ways, the two time periods are not 
necessarily comparable, I don't think. I think a lot of the 
jobs that were created during that time period were more of the 
shovel variety of building roads, bridges, and using very 
simple technologies. A lot of the construction sites today are 
more high skilled in terms of the level.
    Mrs. Napolitano. Excuse me, Hoover Dam is not a small site.
    Mr. Irons. No, I agree. But there is a variety of resources 
that were created then compared to now.
    So I think two things; one thing, I think there is 
capacity, but I think there will likely need to be some job 
training done--not necessarily this year, but next year or the 
year after, and without the jobs there, it makes no sense to 
train. So this is going to be a case where you have what is 
called a demand-pull in economics, where you have the demand 
for jobs, that will then lead people into the job market, it 
will create the demand for job training, and then, if we can 
couple these investments with expanded job training, that 
creates a recipe for a growing economy.
    Mrs. Napolitano. Where would the job training come from?
    Mr. Oberstar. We are going to conclude on that point 
because we have two more Members and we have 14 more witnesses.
    Mr. Cummings.
    Mr. Cummings. Thank you, Mr. Chairman. I want to approach 
this from another angle.
    Mr. Irons, basically what I have seen, and I sit on the 
Government Reform Committee where we do investigations, looking 
at AIG and others, one of the things that I have noticed is 
that when the public see those hearings and hear about the 
misuse of funds, the bailout, they get very angry. And what is 
happening in our country is that there is a distrust on the 
part of government with regard to the bailout, And this is my 
concern. And I am trying to figure out how do we make sure we 
deal with this.
    Here we have what I believe to be a project that we need to 
do--as a matter of fact, I would be very upset and disappointed 
if we don't do it. But how do we make sure that we put the 
kinds of provisions in there--and I think we all agree, several 
of you have said it, these are jobs that people can feel this, 
I think you, Governor Engler, talked about it, they know that 
this is happening and they feel good about it. And you said 
that, too, Mayor. But how do we make sure that they fully 
understand that it is just not for the construction worker, but 
it is something that is going to truly go to--as a piece of 
dealing with this economic situation?
    Now, there are two other pieces to that. We know that two 
of the major problems is consumer confidence and investor 
confidence. How do you see what we are doing here impacting 
those things? Because this is very important. In other words, I 
want to make sure that when the Chairman is defending his 
portion of this bill, that he has every single argument that he 
can possibly have to say, okay, we are not only creating jobs, 
we are not only dealing with infrastructure, but we are also 
doing some other things, if you deem it appropriate, that we 
are helping to build up consumer confidence, build up investor 
confidence, which is very important. And what kind of 
provisions do we need to put in the legislation to assure that 
we are getting that word out? Do you follow me? And I see, 
Governor Engler--this is directed at either one of you, or both 
of you.
    Mr. Irons. I very much take your point. And I think the 
advantage that this kind of bill has, this kind of spending has 
is that this could actually get things moving--I echo the 
Governor's remarks. A lot of the bailout package that you have 
worked on is to stop things from getting worse. This is helping 
things get better. So I think that argument can be made very 
forcefully and I think it would help consumer confidence and 
investor confidence.
    The other piece I would add to that as well is, if this is 
part of a comprehensive package, then I think it helps out 
consumer confidence and investor confidence. I think that the 
trouble we got into with the financial bailout package was, for 
this entire year, from AIG to individual investment banks, it 
was a piecemeal approach, we did one bank, we did another bank, 
and then finally we did a big $700 billion bailout package; of 
course by then things had gotten much worse. So I think this 
kind of a package, you know, has potential--I am not saying it 
will--but it has potential to restore some of the confidence on 
the investor side and the consumer side.
    Exactly how you put in place the mechanisms necessary to 
create trust that this is going to have an impact is a really 
hard question. I don't think I have a very good answer for you. 
But I agree that whatever we can do to do that, I think it is 
important to go ahead and do that.
    Mr. Cummings.  Governor Engler.
    Mr. Engler. I think it is probably more of a political 
question than an economics question because I think you are 
touching on something I think is really important. I think it 
is the performance of elected officials and their institutions, 
and it is at every level. And so this is one that offers an 
opportunity to engage, as you have done today with this panel, 
a governor, a regional official, a local official, and to talk 
about really a partnership that is being formed. That is what 
you are offering. And the creative way in which you are 
structuring this is to say, look, in the immediate right now, 
we have got projects ready to go, local projects across the 
country are going to get built, local officials are going to 
defend those, and they are going to be on board with this. And 
I think that is how you deal with the idea.
    And I think Mr. Chairman mentioned it and Mr. DeFazio 
mentioned it, and actually Mr. Mica did as well, the 
transparency of the letting the people who are going to be 
getting this money to put a list out there within a certain 
number of days, and be open about that. I think all of that 
shows that you are acting, you are not micromanaging, you have 
set some policy guidelines from Washington, you have made some 
funds that are urgently needed available.
    And then the local people engage, and they help sell that 
story. And frankly, that is something they can do on this issue 
that they couldn't do on the rescue package. I know in your 
case, your meeting with Drew Greenblatt, you listened very 
effectively and communicated that. But I think on this one, you 
get a lot more help because people actually understand it and 
they can explain it right alongside you. I have watched some of 
the Members out on the trail try to explain this rescue 
package, and it is painful. And it is not their fault, it is 
just so big and so globally interconnected it is very difficult 
to say, by voting this way or that way this is what changed.
    Mr. Cummings. I see my time is up. Let me just close with 
saying this. We really need to emphasize the things that you 
all have said this morning, that if you get one construction 
job, it then has the benefit of having this rippling effective 
to all of these other jobs. And I think that is the kind of 
thing that we really have to get out, too.
    My time is up. Thank you, Mr. Chairman.
    Mr. Oberstar. The technical answer to the gentleman's 
question is to introduce into this process, which I have 
directed staff to undertake, is to have a monitoring mechanism 
that we will have a report on the progress of implementing this 
legislation within 2 months of enactment, what is happening to 
these dollars--and maybe it is 3 months. And then every month 
to have a report on progress on these projects. It is something 
that I learned from the Local Public Works Act of `75, and then 
of `78, that we were weren't able to measure--I held hearings 
on this subsequently--we weren't able to measure month to month 
or 2-month or 3-month periods the progress being made. Only at 
the end did we come back and evaluate, and then we had reports 
from the GAO and the inspectors general and said, oh, well, you 
should have done these things.
    Well, we have learned some of those lessons. We need to 
reintroduce them into the process and to have a monitoring. 
That is something we are going to do in the next transportation 
bill; we are going to have to have a periodic progress report 
on investing of those next transportation dollars so that when 
we come to the end of the 6-year period and then scratch our 
head and say why is this transit project still taking 14 years 
to get off the ground? Why is it taking 3 years to do a one-
inch overlay on a rural road? Governor, you know from sitting 
in that Governor's chair that is not a pleasant question to 
answer. Well, I don't want to have to have us answer to those.
    Ms. Edwards, you have been very patient.
    Ms. Edwards. I just want to point out that, in addition to 
other pointy-head economists, Paul Krugman notes in The New 
York Times on October 17th that this is exactly the environment 
in which we need to engage in deficit spending to support 
infrastructure. And I just want to quote here that he notes, 
"This is a good time to engage in serious infrastructure 
spending which the country badly needs in any case. The usual 
argument against public works as economic stimulus is that they 
take too long.
    By the time you get around to repairing the bridge and 
upgrading that rail line, the slump is over and the stimulus 
isn't needed."
    And he concludes that, "The responsible thing right now is 
to give the economy the help it needs," and he is directing 
whomever the next President is and certainly this Congress now 
that it is not the time to worry with the deficit.
    And so, Dr. Irons, I want to go back to your point on this 
kind of deficit spending and ask you, what is the harm if we 
sort of overshoot the mark, in terms of spending for 
transportation infrastructure, especially if that is exactly 
what we need over, you know, a course of time?
    Mr. Irons. Well, of course, the harm is you might have safe 
roads, efficient transportation, clean schools.
    [Laughter.]
    I am of the variety that these are investments that need to 
be done, let's do them sooner later than rather than later, 
let's create jobs now. And I think a lot of the spending is 
money that would spent anyway. Let's accelerate it to the 
current time, where we need it the most.
    So, in the long run, I think we should view this as moving 
money from future years to current years. And what we really 
care about is the long-run deficit, not the deficit of this 
year or next.
    And so I think it is important to have some level of fiscal 
responsibility over the long run. But this is exactly the point 
in time. And Paul Krugman, having just won the Nobel Prize, I 
think maybe we should listen to him on this. This is not the 
time to worry about the short-run deficits. We have long-term 
challenges that everybody knows about, but this is not the time 
to worry about those.
    Ms. Edwards. Thank you.
    I am curious on transportation construction industry jobs. 
We have a set of folks who are, for those 120-day projects, 
they are moving ready to move into those jobs right now because 
they have lost their jobs. And then we have a set of projects 
that need to be invested in that may be 6 months and out for a 
whole bunch of folks who need to be trained up for those jobs.
    And so, wouldn't you agree that we need the investments in 
that job training at the outset, so that by the time those jobs 
are created 6 months down the line we have folks in the 
workforce trained up and ready to go?
    And, again, these are complex jobs. These are not, you 
know, the pitch and shovel jobs of old. Transportation industry 
jobs now are incredibly complicated, and we need to train up a 
workforce for them.
    Mr. Irons. Yeah, I absolutely agree with that. I think it 
is especially true when you look at a lot of the efforts now on 
green jobs. And there is, I think, an aspect of green 
infrastructure, green transportation. And a lot of these jobs 
are more skilled jobs than just working with a shovel.
    So I think you are absolutely right. If we know we are 
going to have to fill some of these jobs because we have the 
demand for the jobs through investments that might get done 
soon, we should put into the pipeline training so that we can 
take advantage of those opportunities down the road.
    Ms. Edwards. And lastly, I would appreciate a comment from 
any of the other panelists. We had a hearing just a few weeks 
ago on regional planning processes. And I am curious about how 
one could prioritize those kind of projects that have value in 
a region that may cross States, say, the I-95 corridor in this 
region. Or we talked with a mayor in Denver about their 
transportation project. That we might find a way to privatize 
those things that have broader consensus within a region that 
have a deeper impact across State lines.
    Mr. Gallegos. Maybe I could share at least how in San 
Diego, I think the key to this has been trying to establish, 
adopt an evaluation criteria before you start politicizing who 
screams the loudest and what gets what project. And so we have 
been blessed in that our elected officials have bought into 
adopting the evaluation criteria before we start for the call 
of projects.
    And, quite frankly, that has allowed us to be disciplined 
and make sure that we are not just spreading the peanut butter 
around, but that we are going doing what I call "wow" 
projects--"Wow, it finally get started," and, "Wow, it is 
done," and, "Wow, it works"--because we are making these 
corridor investments and we are not just sprinkling the 
resources around the region.
    But I think it starts at the regional level with having 
really good evaluation criteria to help you ground yourself on 
how you make some of the investment decisions you make.
    Mr. Abramson. And I would also say, since the work was done 
by Bruce Katz over at the Brookings Institute, to focus on 
metropolitan economies and to understand that really the 
economic engines of this country are no longer just a State or 
a county or a city, but they are metropolitan areas, wherever 
they may be located geographically, to create the jobs, to 
create the economic growth, and it goes on and on.
    So, to me, that is the future. And, to me, that kind of 
thinking, you are hearing it among mayors and county officials 
more than ever before, getting beyond the sort of parochial 
approach and realizing that we are an economic unit outside my 
border, across the Ohio River into Indiana, into rural counties 
surrounding me. And all of a sudden now, we are in this 
together. And we begin economic development approaches as a 
region, we begin investment in roads as a region, education as 
a region.
    That is going to keep the strength of those metropolitan 
areas to help this country move out of the present economic 
crisis into a much brighter day for America.
    Mr. Engel. My comment, just to close the door, goes back to 
the workforce. Just a caution: On workforce training, it is 
very important to have the long-term funding in place. We have 
done way too much workforce training in this country for jobs 
that weren't there.
    And so I see it as not as requisite a part of a short-term 
stimulus package but essential, given the demographics of our 
workforce, to longer-funded--when we get into reauthorization, 
we start thinking of a 10- and 20-year strategy. Then there are 
all kinds of opportunities, and we really can talk to people 
about having a future.
    But to train them up and know not know there is a long-term 
program at the back end of that training ends up leading to 
disappointment. And we have had plenty of that in those kinds 
of programs.
    Ms. Edwards. Thank you.
    I think my time has long expired.
    Mr. Oberstar. Thank you.
    And, on that point, Governor, closing the door, we are 
going to be closing the door on this panel. But Mr. Mica and I 
have both talked about that very point you raised, of training. 
The building trades have a great relationship with the 
construction industries in which jointly they develop training 
programs. And in the TEA-21, Mr. Shuster suggested and I 
concurred that we establish funding for the building trades. We 
created 3 million jobs in that 6-year period.
    Mr. Mica, our Ranking Member, do you want to close out this 
panel with any observations or questions?
    Mr. Mica. Well, again, I appreciate their coming out. I 
think we all see the need to move forward, move forward in an 
expedited fashion.
    One of my concerns is the thing getting bogged down. In 
fact, I just, while we were talking, I got this picture. This 
is an 80-foot, 60-foot, I guess, fiberglass bunny. I guess you 
could term it an infrastructure project, but I guess it is 
going to be a nice art addition to the Sacramento airport, is 
it? I have to make sure I get this right. They voted 3-2 to put 
this up.
    But, you know, we don't want fiberglass bunnies being 
financed by a stimulus package. This may be well-intended. It 
may be very good art. But someone just told me that this is a 
project being promoted by an entity. And we have to put 
protections in that we do create jobs and that we do build the 
infrastructure but not support things or, again, pork kind of 
projects that don't merit Federal investment of hard-earned 
taxpayer dollars.
    I can't submit the red bunny for the record, but I have a 
story about it that we will put in the record.
    And I thank you all for being with us.
    Mr. Engel. We will just hop on out of here.
    Mr. Mica. You are going to hop out of here?
    Mr. Oberstar. I would assume that that bunny is in the 
terminal, it is not on the air side of the airport and not 
eligible for AIP financing.
    Mr. Mica. I hope and pray.
    Mr. Oberstar. No, it is not.
    All right, I thank this panel for their splendid 
contributions. We will come back to you at a future time.
    Governor Engler, we look forward to working with you next 
year in the authorization bill on a whole host of ideas that we 
have discussed and that you have expressed here.
    And, at this time, I ask unanimous consent to include in 
the record a statement from the California Association of 
Sanitation Agencies and from the city of Pico Rivera, relevant 
to the statement that they submitted by the gentlewoman from 
California, Mrs. Napolitano.
    Our next panel includes the Honorable John Porcari, 
Secretary of Transportation with the State of Maryland; Dr. 
Beverly Scott, now Chair of the American Public Transportation 
Association and general manager of MARTA and a friend of long 
standing, a dear friend of long standing.
    It is so good to see you, as is Dr. Porcari.
    The Honorable Judith Enck, Deputy Secretary for the 
Environment, State of New York; Mr. William DeCota, director of 
aviation, Port Authority of New York/New Jersey; Mr. William 
Crosby, chief operating officer for AMTRAK; Mr. Andrew 
Herrmann, senior partner, Hardesty & Hanover, American Society 
of Civil Engineers Board of Directors; and Mr. Thomas Kiernan, 
president of the National Parks Conservation Association.
    I am so glad to have all of you here. And thank you for 
your patience. We initially had thought we would have a lunch 
break, but 1 hour of statements by Members, 2 hours for the 
previous panel. Happily, we are not interrupted, as we usually 
are in hearings, with votes on the House floor and motions to 
do this and that, so we can continue uninterrupted. And we will 
just continue without a lunch break. Those who are hungry can 
enrich the Rayburn cafeteria, if you wish. It is right one 
floor below us.
    And now we will begin with Mr. Porcari.
    Thank you very much for being here. It has been a pleasure 
working with you over the several years that you have served 
the State and served the cause of transportation nationwide.

TESTIMONY OF HON. JOHN D. PORCARI, SECRETARY OF TRANSPORTATION, 
  STATE OF MARYLAND, ON BEHALF OF THE AMERICAN ASSOCIATION OF 
 STATE HIGHWAY AND TRANSPORTATION OFFICIALS; BEVERLY A. SCOTT, 
  CHAIR, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION, GENERAL 
MANAGER, METROPOLITAN ATLANTA RAPID TRANSIT AUTHORITY (MARTA); 
 HON. JUDITH ENCK, DEPUTY SECRETARY FOR THE ENVIRONMENT, STATE 
  OF NEW YORK; WILLIAM R. DECOTA, DIRECTOR OF AVIATION, PORT 
AUTHORITY OF NEW YORK AND NEW JERSEY; WILLIAM L. CROSBIE, CHIEF 
 OPERATING OFFICER, NATIONAL RAILROAD PASSENGER CORPORATION - 
 AMTRAK; ANDREW HERRMANN, SENIOR PARTNER, HARDESTY & HANOVER, 
  LLP, MEMBER, BOARD OF DIRECTORS, AMERICAN SOCIETY FOR CIVIL 
  ENGINEERS; AND THOMAS C. KIERNAN, PRESIDENT, NATIONAL PARKS 
                    CONSERVATION ASSOCIATION

    Mr. Porcari. Thank you, Mr. Chairman and Ranking Member 
Mica and Members of the Committee. I am John Porcari, secretary 
of the Maryland Department of Transportation.
    I am here today on behalf of the American Association of 
State Highway and Transportation Officials. We would like to 
thank the House leadership for aggressively moving forward with 
an economic recovery package and for this hearing today on how 
infrastructure investment can have an immediate and long-
lasting impact on our economy.
    Today I would like to cover three points. First, an 
immediate and long-lasting economic gain can be realized from 
investing in our transportation capital assets across all 
modes--highway, transit, rail, aviation, ports and waterways. 
Second, the unprecedented fiscal crisis already facing at least 
half of the States is taking a toll on our ability to preserve, 
maintain and operate our transportation systems. And third, 
States have highway and transit projects that are planned and 
ready to go, and the construction industry has machinery and 
people ready to go to work. These projects can support 
thousands of good-paying American jobs. Congress can help get 
projects moving.
    I point out that capital investments are fundamentally 
different from other kinds of government spending. 
Transportation dollars are converted to physical assets that 
will last 50 to 100 years to provide future generations with a 
modern, globally competitive system. Such investments create 
and maintain well-paying, made-in-America jobs. Getting 
projects under way this winter and spring will support much-
needed employment and put vital equipment back into operation.
    We would respectfully suggest that the economic recovery 
package contain two types of transportation infrastructure 
projects: first, the quick turn-around projects, such as bridge 
re-decking or pavement resurfacing, for which bids could be 
awarded within 120 days. With funding, more than half of the 
States could initiate construction in late winter or early 
spring on these projects. States with a year-round construction 
season could work over the next few months, as well.
    Second, we need funding for more complex, larger projects 
that are ready to go but may need up to 6 months to award bids 
and begin construction. In Maryland, for example, we could 
obligate within 120 days nearly three dozen highway projects, 
costing approximately $150 million. One, for example, would 
overlay a three-mile section of an urban interstate, which 
would add 15 years to the pavement surface life. We know we 
need to do this now; we are not able to do it now. We have 
similar projects in our rural areas.
    Today's economy, coupled with last month's unprecedented 
Highway Trust Fund cash flow crisis, has resulted in ever-
increasing numbers of postponed or cancelled projects 
nationwide. As you know, 9 months ago, States identified more 
than 3,000 projects totaling over $18 billion for which 
contracts could be awarded within 90 days. Today, that number 
in dollar value is considerably greater.
    Due to State budget crises, almost half the States have 
been forced to shelve projects, reduce services and eliminate 
State agency positions. In Maryland, we have deferred $1.1 
billion in transportation capital projects in our 6-year 
capital program because we simply do not have the State revenue 
to proceed.
    Last month's cash shortfall in the Highway Trust Fund and 
crisis on Wall Street has had a chilling effect on the 
municipal bond market as well, tightening States' abilities to 
move forward with critical projects. Maryland has postponed 
$425 million in a GARVEE bond issuance. We are hopeful that 
recent activity in the market will allow us to move forward 
with a bond sale sooner rather than later. Today, we simply do 
not have the State revenue to proceed.
    While the funding we are discussing today will not 
alleviate the problems in the bond market, this new infusion 
will dramatically help States address some of the immediate 
needs in their infrastructure programs.
    AASHTO supports emergency funding, as well as the following 
program adjustments to accelerate the transportation 
investments: First, temporarily suspend the 20 percent State 
matching requirement on Federal funds. Second, apportion the 
funds to States based on their overall levels of apportionments 
or using the obligation authority formula. A category-neutral 
apportionment is needed, as well. And third, Congress must 
eliminate this year's $8.5 billion proposed rescission of 
contract authority that is required in SAFETEA-LU. That looming 
rescission has caused many States to delay project planning and 
contract awards.
    Beyond highway projects, States have critical needs in 
transit, rail, maritime, aviation infrastructure and the like, 
such as resources for the Army Corps of Engineers to maintain 
the proper depth and width of shipping channels, system 
preservation for transit, as well as funds to accelerate safety 
and operational improvements, and passenger rail projects under 
the Intercity Passenger Rail Program.
    Mr. Chairman, these infrastructure investments are 
literally the foundation of America's future economic growth 
and prosperity.
    Thank you for listening. The State departments of 
transportation are happy to work with you and your Committee 
and the Congress on this important legislation. I will be happy 
to answer any questions you may have.
    Mr. Oberstar. Thank you very much, Mr. Porcari. And, of 
course, I will have some questions later, but I can't resist an 
observation.
    You referenced providing sufficient resources for the Corps 
of Engineers. As Mr. Mica said at the outset, we overrode the 
President's veto on that water bill, the Water Resources 
Development Act. But then the President didn't include a single 
one of those 920 projects in his budget for the current fiscal 
year, not a single one, none. It was almost an act of spite: 
"You override my veto, I won't fund the projects. You figure 
out a way to do it, Congress." Now, that is not acting in the 
best public interest.
    There was an overwhelming vote by the House, by the Senate, 
to proceed with those investments that are necessary, to 
restore the Everglades in Florida, restore the wetlands in the 
gulf, protect against hurricanes, the levees in Louisiana and 
all along from east Texas through to Florida.
    And as Governor Engler referenced earlier, the locks on the 
Mississippi River; there are five locks that slow down--because 
they were built in the 1930s, 600-foot length. Barge tows are 
1,200 feet. It takes 820 hours round-trip from northeast Iowa 
to bring grain through the export facility in New Orleans. You 
need a second lock at Sault St. Marie in the Great Lakes to 
facilitate downbound grain and coal traffic and downbound iron 
ore to the steel mills. We need to upgrade the St. Lawrence 
Seaway. We have work on the east coast, the ports in your State 
of Maryland, the port of New York/New Jersey.
    All of these, we would have had people working if the 
administration had put money into it and respected the will of 
the Congress, which is the will of the people.
    Dr. Scott, thank you very much for being with us.
    Ms. Scott. Thank you, Chairman Oberstar, Ranking Member 
Mica and Members of the Committee.
    I do not have to tell you how much our national public 
transportation industry and American families across our 
country desperately need your continued leadership as well as 
your urgent and bold action to get America moving. We firmly 
believe that your leadership, combined with plain old American 
grit, ingenuity and tenacity, must combine to turn this 
economic crisis and set of serious global environmental 
challenges into an opportunity to be better, do more, and 
hopefully keep the faith by providing for future generations 
what our parents did for us: hope in the future by planting the 
trees whose shade most of us will not live under.
    Today, with the impact of fuel costs and the devastating 
economic uncertainty from failing banks and falling stock 
prices, people from all walks of life in communities of all 
sizes from everywhere across our country are looking for 
immediate relief to help with basic necessities, like daily 
transportation needs that can unfortunately consume up to 25 to 
30 percent of some household incomes--common-sense solutions 
and long-term investments that significantly move the needle on 
our economic prosperity, overall quality of life 
andunquestionably restore America's premiere global position.
    Candidly, while I am not much of a betting woman, I often 
say that if I had only one sure bet to make that would 
appreciably move our national needle forward, I would place 
that bet on a significantly greater investment in national 
public transportation infrastructure and services and, in so 
doing, provide much-needed affordable transportation options to 
immediately help the household budgets for millions of 
Americans, put Americans to work, improve economic 
competitiveness, help our energy independence and homeland 
security, and positively impact our environmental 
sustainability.
    As you prepare for our next Federal transportation 
authorization, your work to make transportation infrastructure 
a critical element of this stimulus package will help to set 
the stage for that critical legislation.
    In my own State of Georgia and across the Nation, transit 
providers are stretching every available dollar to meet the 
rapidly increasing demand for transit service. Last year, 10.3 
billion trips were taken on U.S. public transportation. That is 
the highest number of trips taken in 50 years, and ridership 
continues to soar.
    Unfortunately, many transit projects on the drawing boards 
are unfunded because of a lack of dollars at the State and 
local levels. So your earlier discussion today about local 
match relief for these critical investments is vitally 
important.
    APTA has just completed a new survey of transit systems, 
and it identified a minimum of $8 billion in ready-to-go 
projects that could move ahead within 90 days. These projects 
will create new economic activity and put thousands of people 
to work building much-needed infrastructure.
    In the Atlanta region, MARTA carries more than 450,000 
passengers per day, or the equivalent of moving the population 
of the entire city of Atlanta every day. We provided service 
for over 14 million customers in September of this past year, 
which was a 13.3 percent increase over the prior year. And 
other regional transit providers, like the Georgia Regional 
Transportation Authority, Cobb Community Transit, and Gwinnett 
County Transit, are also moving additionally thousands and 
thousands of more people and cars off of our congested freeways 
every day.
    I want to cite just a few examples of how transit agencies 
across Georgia could make immediate use of an increased Federal 
investment.
    The Columbus transit system, METRA, could immediately use 
$900,000 to acquire three replacement clean fuel buses. And 
Hinesville Liberty County, home of Fort Stewart, could use 
200,000 to purchase smaller passenger buses under an existing 
contract option.
    At MARTA, we could use stimulus funding for several 
facility projects. We have an immediate need for $12.4 million 
to construct a new park-and-ride facility in suburban DeKalb 
County, which is the most densely populated county in the State 
of Georgia. This project's design is complete. Construction 
could proceed within 90 days of our ability to be able to, in 
fact, have increased funding.
    In Clayton County, the ridership has been absolutely 
staggering. They need to immediately wind up increasing by an 
additional 12 buses.
    These projects in Georgia are just the tip of the iceberg. 
I have many projects that we noted in my testimony. Just to 
highlight some from other parts of the country, not 
surprisingly the Chicago Transit Authority's ridership has also 
grown exponentially, up 21 million rides compared to 2007. They 
could immediately use $166 billion to replace aging buses with 
New Flyer diesel-electric hybrid buses. With another $18 
million, they could quickly begin a much-needed track renewal 
program. And California, the Capitol Intercity Rail Corridor 
can immediately use $6 million for construction at the San Jose 
rail station.
    But the reality for us is, unfortunately, today, as the 
demand and the desire for public transit is clearly on a 
significant rise, many transit providers are currently being 
forced to choose between raising passenger fares or cutting 
service to make up for shortfalls in local funding and the 
increased cost of diesel fuel. Thirty-five percent of transit 
providers in a recent survey conducted by the American Public 
Transportation Association reported that they have cut their 
services or are examining that possibility. And many others are 
having to do the same thing as it relates to fares.
    Here is just one example. Very recently in Eugene, Oregon, 
Lane Transit, they have in fact experienced a 17 percent 
increase in terms of ridership, and at this point in time they 
are having to look at making a 15 percent reduction in service. 
So there are Lane and hundreds of systems like Lane Transit 
across this country that are trying and wanting to do more and 
are doing more with less but they cannot make bricks without 
hay. And an increased investment is urgently needed.
    So we applaud your efforts, Chairman Oberstar, Ranking 
Member Mica, Mr. DeFazio, and the other sponsors of the Saving 
Energy Through Public Transportation Act of 2008. This bill 
provides important relief for transit systems facing severe 
cuts, and it is essential that its provisions be included again 
in the next stimulus bill.
    I am going to go very quickly.
    As you are likely aware, in addition to shrinking local 
sources of transit funding, 31 of the Nation's largest transit 
systems in 18 States, including MARTA, are facing an immediate 
financial crisis as a result of the current trouble in the 
credit markets that is resulting from the lease-in/lease-out 
sale-leaseback transactions that were largely conducted in the 
1990s through 2003, 2005. These transit agencies, through no 
fault of their own, are being forced into technical default on 
these deals, because AIG and other insurers who served as 
guarantors for the leased assets in the deals have lost their 
credit ratings.
    The effect of this spend-down, if you will, wind-down, 
could in fact have as much of an implication as somewhere 
between $2 billion to $4 billion on local transit agencies. We 
are not the only ones who have entered into such transactions. 
We would suggest that if you look at many municipalities across 
the country, there could be unintended consequences as a result 
of some of these actions.
    So what we are asking is that the U.S. Treasury has the 
power under the recent bailout package to take over the role of 
AIG and other insurers in SILO/LILO transactions. We hope to 
work with this the Committee to contact Treasury and urge them 
to act on our behalf immediately. And if that fails, we will 
certainly be looking to work with you to have a specific 
legislative remedy.
    In spite of all these challenges, as a veteran of more than 
30 years in this industry, I can honestly say that what we are 
experiencing is a transit renaissance. We have more riders now 
than any time in the last 50 years and increasing numbers of 
Americans who would use transit service if it were reasonably 
available.
    There is a growing national recognition of the need to 
preserve our environment for future generations and an 
understanding that changes in personal travel behavior and 
freight movement that reduce carbon dioxide emissions are key. 
And finally, there is recognition that we cannot build our way 
out of traffic congestion any more than we can rely on just 
gasoline for our future energy needs.
    We urge the Congress to move forward with an economic 
stimulus package that recognizes the value of investing in our 
Nation's public transportation infrastructure. This is the kind 
of essential public investment that provides both a vital and 
common-sense set of real solutions, and, in the final analysis, 
an investment that keeps on giving by making it possible for 
people and communities to help themselves.
    Thank you very much.
    Mr. Oberstar. Thank you. Your complete testimony has a 
great deal more detail that is very, very valuable for our 
purposes.
    Ms. Enck?
    Ms. Enck. Good afternoon. My name is Judith Enck. I am 
Deputy Secretary for the Environment in the office of Governor 
David Paterson. Thank you, Chairman Oberstar and Members of the 
Committee. I really appreciate you shining the spotlight on 
these issues. And I am going to talk about water, where we have 
severe funding needs, specifically wastewater infrastructure.
    Today in New York, we have 200 municipalities that are 
under consent orders for violations of the Clean Water Act. 
Typically, these communities are discharging inadequately 
treated raw sewage into our waterways, and they are doing it 
because they don't have the money to upgrade their sewage 
treatment plants.
    I believe that this is the environmental sleeper issue of 
the decade. I believe that the public doesn't know the full 
scope of this problem. If they did, I think they would support 
investment in wastewater infrastructure.
    And, more interestingly, I think they would also support 
investments in green infrastructure. We need to lay the pipes, 
but we also need to take some common-sense, environmentally 
sustainable steps to deal with wastewater and storm water.
    Our wastewater infrastructure is in dire straits. One 
reason is because Federal funding has declined 70 percent--70 
percent--over the last two decades. This inadequate investment 
today is putting the environment and public health at risk. 
Sewage is harmful to public health, the environment and the 
economy. It contains viruses, bacteria and toxins. And if 
people have contact with polluted water, they can be exposed to 
a range of water-borne diseases.
    Today, in New York State, one in seven water bodies do not 
meet water quality standards. Beach closings are a regular 
event, including in many tourist towns. We have 70 major 
shellfish beds that remain too polluted to use, and that is 
really hurting our commercial fishing industry, particularly on 
Long Island.
    The Governor requested with the legislature, our DEC, to do 
a study of wastewater needs in New York. So we did this study 
last year and found that New York State alone needs $36.2 
billion over the next 20 years to upgrade our sewage treatment 
plant and make a commitment to green infrastructure.
    New York is not alone. The Association of State and 
Industrial Water Pollution Control Administrators recently 
surveyed States. They found, of the 25 States that responded, 
there was a $9 billion need from these 25 States for projects 
that are ready to go today. So this is not just over long span 
of time, but projects that could move right away.
    When it comes to this water pollution challenge, I am 
afraid we are facing a perfect storm, because States like New 
York are facing unprecedented budget deficits. Governor 
Paterson testified this morning, documenting that our State is 
facing a $12.5 billion deficit next year alone, and we project 
a $47 billion deficit over the next 3 1/2 years. Our State has 
never faced a deficit of this level. So we very much need 
Federal funding in this area.
    I want to specifically say that, in New York, we have 412 
projects ready to go if only we had the funding. And the way we 
do our SRF, we leverage the funding, so we spread the dollars 
out more. We have a number of applications before us and 
believe that this year we can only fund 16 percent of the 
applications before us.
    Making these commitments will also create scores of new 
jobs. Various analysts say that some 30,000 to 47,000 jobs are 
created for every $1 billion invested in infrastructure. We 
very much need these jobs in New York, particularly in upstate 
New York.
    One final point: My written testimony has lots of examples 
of projects that are ready to go today. We think that 
reinvigorating the Clean Water SRF through the legislation that 
you introduced earlier this year would go a long way in 
addressing the problem. And we are particularly interested in 
the loan forgiveness provision for hardship communities.
    We are also very interested in green infrastructure 
improvements, whether it is vegetated wetlands, tree plantings, 
porous pavement. These are all strategies that not only reduce 
runoff and save tax dollars in treating the runoff, but they 
also improve the quality of life in our cities. When you think 
about the majestic lakes and rivers and bays in your home 
State, the public has a real affinity for these natural 
resources. They don't want them degraded. There is a real 
aesthetic value to it, along with an economic value.
    New York depends a lot of tourism. We have communities up 
and down the Hudson River where, not long ago, people didn't 
want to live or play or recreate or work in these communities. 
And because of the investment in improving wastewater 
infrastructure plans up and down the river, these waterfront 
communities are now magnets for economic growth. So not only do 
these investments make environmental sense, they also make 
economic sense.
    We know the State has a role to play, but getting an 
infusion of cash into the SRF program is absolutely critical.
    Thank you very much.
    Mr. Oberstar. Thank you very much for your testimony and 
for the wealth of detail you provided with it.
    Mr. DeCota?
    Mr. DeCota. Thank you very much, Mr. Chairman. I want to 
thank you, I certainly want to thank Ranking Member Mica and 
other Members of this Committee for holding this hearing.
    You have heard from a lot of different industries. I am 
representing my own airport system, ostensibly one of the 
largest airport systems in the world, but also the other 439 
airports in this country in discussing infrastructure needs.
    I don't need to tell you about the economic challenges that 
have confronted the airline industry, which, of course, have 
also impacted airports themselves--the decrease in air travel, 
upon which we depend for revenues, the slowing economy, the 
financial market crisis. This Committee recognized that early. 
In fact, the House did include $600 million in additional AIP 
funding in the last economic stimulus bill that the House 
passed in September. We appreciate that very much, because you 
were very early in the process of recognizing the need for 
investment.
    And as Congress considers a second economic stimulus 
package, I really can't think of any clearer linkage between 
transportation investment and the road to recovery than 
investment in infrastructure. The economic impact that such 
infrastructure has is absolutely enormous in terms of, not just 
the impact of the construction, the measurable economic benefit 
of the operations, but also the trade, the travel, the 
commerce, the tourism, the ripple effect is absolutely massive.
    In the New York-New Jersey region alone, the aviation 
industry that is anchored around Kennedy, Newark, and La 
Guardia Airports serves more than 200 cities, serves 70 
different countries. And it is all through that investment in 
infrastructure and it is all through the visitor spending. And 
it is 500,000 jobs, it is $20 billion in wages, it is $60 
billion in economic activity. In fact, Newark Airport, Mr. 
Chairman, I will mention was developed in 1934 under a program 
similar to the WPA, which you discussed. It was built under the 
CWA. And that original terminal is still an active part of our 
airport. So you are absolutely on target.
    On behalf of my colleagues at airports, I would like to 
encourage you to include the $600 million again in this 
economic stimulus bill, and even to consider something higher, 
perhaps $1 billion. The higher funding level would help 
stimulate the economy and create 35,000 jobs. It would expedite 
construction of critical safety, security and capacity projects 
across the country. And investing in airport infrastructure 
creates more than just jobs; it creates jobs in the community.
    But airports don't just want funding. It is easy to come 
here and ask for a lot of funding. And we do need it. There is 
$50 billion worth of AIP-eligible projects which are in the 
pipeline. Many of those are ready to go. But we rely upon 
revenues as a source of--for capital development, but the 
biggest revenue source that we have for funds comes from the 
sale of airport revenue bonds.
    The subprime mortgage meltdown and the credit crisis really 
has caused serious problems for airports. The bond market has 
basically collapsed. It has forced airports to defer bond-
funded projects, and it has also created a situation where 
there are higher interest rates.
    And, unfortunately, the Federal tax law unfairly classifies 
the vast majority of airport bonds as private activity bonds. 
As you know, interest payments on bonds from private activity 
bonds are subject to the alternative minimum tax. And basically 
we are asking you to consider recommending eliminating the AMT 
on private activity bonds, because that could help airports 
around the country save a lot of resources. It actually would 
have a much bigger impact on our ability to raise money with 
the revenues that we have and allow us to move forward with 
projects that we have postponed because of that.
    Also, as a result of current market conditions, airports 
are facing a significant spike in debt service. They have 
limited refunding ability on that debt service and 
restructuring opportunities. We are also asking you to consider 
that, to mitigate the increase in financing costs, airports are 
urging you to include provisions in the next economic stimulus 
package that would give airports temporary flexibility on how 
they can use PFCs and AIP entitlements for debt service.
    Now, being from the New York region, I also need to mention 
another potential challenge to airport investment which not 
only affects us as well as at least 25 smaller cities. And that 
really is the administration's highly disruptive proposal to 
auction off slots at airports controlled by the Port Authority. 
Not only do they not achieve the objectives that have been 
alleged by the administration of reducing congestion delays, 
but they really threaten investments carriers have already 
made, because they are going to lose slots, and how do they use 
the investment.
    And we are very thankful to you, Chairman Oberstar and 
other Members of the Committee, for previous expressions of 
support. Our big fear is that flying to New York becomes move 
expensive, it is less money available for travel, it is also 
less revenue coming into airports, and therefore an inability 
to invest. And withdrawal of the final slot rules is the only 
way to really help to meet the infrastructure goals of this 
hearing.
    I regret the need to mention that. Instead, we really 
should be focused on expanding capacity of the system. That, 
obviously, is best done by investments. And another big 
investment we need to highlight is investment in the modernized 
air traffic control system.
    I want to thank the Members of the Committee for passing a 
multiyear FA reauthorization bill that increases the PFC cap, 
increases AIP funding, and that would also help expedite next-
gen improvements. We need to deploy next-gen technologies as 
quickly as possible, because an expanding aviation system that 
generates high-paying jobs underpins future economic growth and 
reduces congestion flight delays that has plagued the New York 
region is really part of that road to recovery.
    Again, Chairman Oberstar, Ranking Member Mica, Members of 
the House Transportation and Infrastructure Committee, I want 
to thank you for allowing me to participate and represent 
airports. I can assure you that, with Federal support, we will 
maintain our commitment to our travelers, the communities we 
serve, that we will provide infrastructure to maintain regional 
economic prosperity and to meet current and future demand that 
will keep us on that road.
    Mr. Oberstar. Thank you very much, Mr. DeCota. That was 
splendid testimony.
    I just want to assure you that, while the Senate did not 
act on the aviation bill that we passed in September of 2007, 
it will be one of the first items of business of the new 
Congress. We will move it before the next administration gets 
its feet in the stirrups and can mess things up, whichever 
administration that happens to be.
    Mr. Crosbie?
    Mr. Crosbie. Good afternoon. My name is William Crosbie. I 
am the chief operating officer for Amtrak. It is a position I 
have held since 2003. I am responsible for daily operations and 
for the engineering and maintenance work necessary to keep the 
fleet of more than 300 trains a day on track and on time.
    As the first Amtrak officer to appear before this body 
since the President signed H.R. 2095, the Rail Safety 
Improvement Act, into law, on behalf of our president, Alex 
Kummant, and the 18,800 other employees of Amtrak, I would like 
to thank those Members of this Committee who played such 
pivotal roles in getting it passed. To Chairman Oberstar, Mr. 
Mica, Ms. Brown, Mr. Shuster, I would extend our heartfelt 
appreciation for all your efforts. We are confident that this 
act will do much to strengthen Amtrak and encourage more 
effective intercity passenger rail service in the years to 
come.
    You heard a lot about growing ridership on the transit side 
in earlier testimony. We have a similar experience. You have 
heard a great amount of information in terms of infrastructure 
needs. You will hear in my testimony a lot about our needs.
    And I heard earlier, too, a fact that there is this issue 
of timing of projects and getting the work done with the 
funding. Last year, for example, in Amtrak, in our engineering 
department, we spent 100 percent of our general capital, and we 
ended up deferring some projects because we did not have 
adequate funding.
    I want to start by mentioning the growth in ridership we 
have experienced. Fiscal year 2007 was a record year for Amtrak 
ridership, and we broke that record in fiscal year 2008. Our 
total ridership grew more than 11 percent this year. And while 
some of that growth was on our traditional well-patronized 
Northeast Corridor, we have seen growth on corridors in the 
Midwest, California and elsewhere.
    As the economy has softened, we have seen some drop in 
ridership on the NEC, and we are keeping a close eye on our 
other corridors. We are a little concerned about the near term, 
but we recognize that this is a moment to plan and invest for 
the future. These are long-term capital investments.
    Rising gas prices have contributed significantly to our 
ridership growth. Railroads enjoy some inherent mechanical 
advantages, and those translate into economic advantages, 
particularly in a time of rising fuel prices. We do have some 
increased costs, but economies of scale allow us to move large 
numbers of riders without a corresponding increase in cost. And 
our Northeast Corridor services are electrified. 
Electrification allows us to run faster. That is not dependent 
on imported oil.
    But the infrastructure is aging and capital-intensive and 
requires a program of continuing investment to keep lines and 
equipment in operation.
    Amtrak needs five kinds of investment: investment in the 
Northeast, where we own the railroad and parts of the 
electrical infrastructure; investment improvements on existing 
routes; investment in our existing fleet; investment in new 
equipment. And if we are to fulfill the vision that is embodied 
in the recent Amtrak reauthorization bill, we are going to need 
money to expand our range of corridor offerings. That is the 
fifth category.
    Our immediate capital needs fall into two categories: 
infrastructure and rolling stock. We have already budgeted for 
the return of 12 Amfleet cars to service in fiscal year 2009. 
And we would like to get all 81 Amfleet cars that are currently 
out of service back into service. This will help us deal with 
growing needs.
    The infrastructure needs of the Northeast Corridor are also 
pressing. Currently, our engineering staff estimates that we 
could get to work relatively quickly on $70 million of projects 
previously submitted to the Committee staff; for example, 
station and facility projects requiring no special scheduling 
to avoid disruption to trains. And some of the work could be 
done by contracting with construction firms.
    In addition to these projects, we have identified $87 
million worth that could be undertaken if the money was 
forthcoming. Approximately $11 million of the $160 million 
total will be directed toward projects that could improve 
Amtrak's compliance with the Americans with Disabilities Act.
    One area where we would invest is in our aged and aging 
mechanical facilities, particularly the Wilmington and Beech 
Grove shops, which are over a century old. Our mechanical 
facilities are in great need of improvement and rehabilitation, 
and targeted investment would improve working conditions and 
shop efficiency for a relatively small cost.
    Our electrical traction system is one of our great 
advantages. It allows us to move trains up to 150 miles per 
hour. But much of this infrastructure dates from the 1930s. The 
frequency converters shown here on our Harrisburg line were 
installed in 1938. Failures in the electrical system can bring 
the entire railroad to a halt until we can substitute diesels 
or make repairs.
    As part of the process of returning the Northeast Corridor 
to a state of good repair, we have begun reconstruction of the 
ventilation and access systems, and firefighting equipment for 
the tunnels that allow trains to reach Manhattan from north and 
south. We do not currently have enough money to fund the 
program at the desired level. But with the addition of around 
$11 million, it would allow us to continue the work of 
improving those systems that have not yet reached the end of 
their lifecycle and replace those that have.
    Here is an example of one of the large station projects we 
can undertake. 30th Street station is the third-busiest station 
in our system. It is a registered historic landmark, but it 
requires significant exterior work. We estimate that the entire 
project of replacing and sustaining the facade will cost $32 
million. The first phase is approximately $5 million, which 
would fix the facades that are separating from the exterior.
    We are also preparing plans and specs for the next 
generation of equipment, the AEM-7 electric locomotives are the 
backbone of our Northeast Corridor service. The first one 
entered service in 1979, and they are approaching the end of 
their useful life. And our Heritage fleet of diners and baggage 
cars is far older; many of them date to the 1940s. We need to 
get 15 new sleepers for our single-level fleet, which generally 
operates on Chicago and Florida trains that terminate in New 
York City. The total cost for this will be around $540 million.
    As you are no doubt aware, H.R. 2095 requires us to work 
with the FRA to implement Positive Train Control, or PTC, 
systems on main lines. I am pleased to be able to say that 
Amtrak is in the forefront of the industry in the introduction 
and use of PTC. And we have two active systems, the Advanced 
Civil Speed Enforcement System, which is used in the Northeast, 
and the Integrated Train Control System, employed on parts of 
our Michigan line. The cost of extending these systems to fully 
equip Amtrak-owned rolling stock and rail lines will be in the 
vicinity of $120 million.
    However, we are concerned that the Federal Railroad 
Administration does not have resources to handle nationwide 
PTC, as required under H.R. 2095. As they are under a 
continuing resolution that keeps them at the 2008 level of 
funding, they won't have the opportunity to add resources until 
they get a budget. This could potentially harm our ability to 
move swiftly on Positive Train Control implementation.
    I would like to close with one example that I would like to 
enter into the record, which comes from our partners in 
California, Capitol Corridors. They have a situation where they 
can put in some additional crossovers and upgrade the San Jose 
terminal, San Jose station, which helps with ADA compliance. 
And they have matching funds. And for a $10 million investment, 
you can turn it into a $60 million investment. So I would like 
to enter that into the record, as well.
    I would like to close with Amtrak's needs in terms of the 
Americans with Disabilities Act. The total cost we estimate 
under the current guidelines is between $250 million to $500 
million. If the DOT implements their proposed ruling, that will 
grow to $1.2 billion to $1.6 billion. If the money could be 
provided, we could probably get a fairly quick start on some of 
these projects, since much of the work would be done with 
outside contractors.
    In closing, I would like to express my appreciation for the 
opportunity to testify. Our capital needs are significant. I 
think Amtrak has shown the ability to get work done on the 
Northeast and throughout the Nation.
    Many of the projects I have discussed would quickly confer 
a range of benefits on the company, the Nation and the 
traveling public, reliability and safety foremost among them. I 
would urge you to consider them as you deliberate in the coming 
days.
    This concludes my statement. I would be happy to answer any 
questions you might have.
    Mr. Oberstar. Thank you, Mr. Crosbie. You have submitted a 
compelling case for Amtrak. And I would just like to supplement 
what I said earlier in the hearing, that, without Mr. Mica, we 
wouldn't have had this Amtrak bill.
    And now, Mr. Herrmann.
    Mr. Herrmann. Thank you. Good afternoon, Mr. Chairman and 
Members of the Committee. My name is Andrew Herrmann. I am a 
senior manager at Hardesty & Hanover, which is a transportation 
consulting engineering firm headquartered in New York City. I 
am a registered professional engineer in 26 States and a member 
of the board of the American Society of Civil Engineers. I am 
pleased to appear before you today to testify on behalf of ASCE 
on the issue of infrastructure investment and economic recovery 
for the Nation.
    This Nation faces a severe economic slump in the coming 
months. Many economists believe we are already in recession. 
Last week the chairman of the Federal Reserve Board told the 
House Budget Committee that further economic recovery 
legislation probably is required. Any economic recovery 
legislation should contain significant new funding for many of 
the Nation's aging infrastructure systems, which are the 
indispensable lifelines of our economy.
    Such investments are desperately needed. Three years ago, 
ASCE's "2005 Report Card for America's Infrastructure" gave an 
overall grade of D to 15 critical infrastructure systems. We 
then said it would take an estimated $1.6 trillion to upgrade 
the existing infrastructure.
    The state of the Nation's economy and its aging 
infrastructure have been well-documented from the Committee 
Members and the speakers today and in our written statement. I 
would like to spend the rest of my time discussing our 
recommendations to restore our infrastructure and get the 
economy moving again.
    ASCE recommends $38.5 billion in immediate new 
infrastructure spending as part of economic recovery 
legislation. As part of that immediate investment proposals in 
surface transportation, recovery legislation should provide $18 
billion for necessary reconstruction projects for the Nation's 
highway systems. There are more than 3,000 highway projects 
that could be implemented 30 to 90 days after enactment of your 
bill.
    Wastewater treatment systems: Congress should authorize 
$6.5 billion for the repair and construction of publicly owned 
sewage treatment works. Any new funds should be distributed 
primarily in the form of grants or negative interest loans for 
ready-to-go projects based on the local communities' economic 
situation.
    Waterways infrastructure: The Corps of Engineers has an 
enormous amount of infrastructure work that is pending. It 
requires approximately $7 billion in new funding.
    Public transit: There are $4.6 billion worth of transit 
projects ready to begin construction today, according to the 
American Public Transit Association. Congress has also 
authorized another $800 million in projects to avoid immediate 
service cuts throughout the country. We recommend that Congress 
provide $5.4 billion for transit projects as part of the 
economic recovery legislation.
    Aviation: There are $600 million worth of capital 
improvement projects ready to begin construction almost 
immediately, according to the Federal Aviation Administration.
    Drinking water: We recommend that Congress provide $1 
billion in new financial investment to the Nation's drinking 
water treatment systems to begin critically needed upgrades.
    Dams: We recommend that an economic recovery package 
contain $50 million for the dams in greatest need of repair.
    In conclusion, Mr. Chairman, our national infrastructure is 
in desperate need of repair and modernization. Our Nation's 
economy is approaching its steepest decline in 70 years. This 
Committee must reverse years of neglect of our basic public 
works systems and begin the economic recovery we need by 
approving major new investments in our infrastructure. Not only 
will these proposals begin the economic recovery, but they will 
provide investments that will pay economic dividends for many 
years. Time is short, and the time to act is now.
    Mr. Chairman, that completes my statement. I would be 
pleased to answer any questions.
    Mr. Oberstar. Thank you for a splendid, well-detailed 
presentation. I greatly appreciate it. I read that with great 
interest last night.
    Mr. Kiernan?
    Mr. Kiernan. Thank you very much, Chairman Oberstar, 
Ranking Member Mica, Members of the Committee. Thank you for 
inviting me. I am Tom Kiernan, president of the National Parks 
Conservation Association.
    Since 1919, NPCA has been the leading voice of the American 
public in regard to their national parks. And on behalf of our 
340,000 members throughout the country, we would urge the 
Committee to include national park transportation 
infrastructure improvement projects within your economic 
recovery plan.
    Our national parks are home to our most iconic and sacred 
landscapes, monuments and historic sites. Some have referred to 
our national parks as "the soul of America." With over 270 
million visitors to our national parks, they are the number-one 
tourist destination for all of our international visitors.
    To be succinct this afternoon, I would like to raise three 
points with the Committee.
    First, the National Park Service has 18 transportation 
projects ready to go now. All they are awaiting is the $270 
million dollars necessary to fund these projects. These 18 
projects have completed all of their environmental processing 
and regulations, and the funding could be obligated in less 
than 180 days.
    This would be continuing a great partnership between the 
Park Service and Federal Highway Administration, where they 
have a first-year obligation rate of 98 percent, which is 
extraordinary relative to the average Federal obligation rate 
of 25 percent. These 18 projects would create 7,000 jobs, but 
perhaps even more importantly, they would dramatically enhance 
and improve the visitor experience in the national park for 
both domestic and international travelers to our national 
parks, thus, over the long run, enhancing the tourist economy 
of our great country.
    I will also mention that these $270 million worth of 
projects are ready to go now but are within a broader set of 
needs on the road and bridge projects for national parks of 
approximately $825 million a year over the next 5 years, very 
much needed by the parks. But these $270 million worth of 
projects are ready to go now.
    The second point I would like to make, there have been two 
other times in the history of this country where this Congress 
has invested significantly in our national parks. And, Chairman 
Oberstar, you mentioned earlier FDR in 1933. In the first 100 
days of his administration, he launched the Civilian 
Conservation Corps and WPA that had lasting impact on our 
nation. Skyline Drive out at Shenandoah National Park was built 
under that program, as was Glacier's Going to the Sun Road.
    The second time that this country invested in a significant 
way in our national parks was Mission 66, a 10-year effort 
leading up to 1966 and the 50th anniversary of our national 
parks, where we invested $7 billion, current dollars, but $7 
billion of new funding in our national parks to enhance the 
transportation system.
    The third and final point I would like to make is that the 
roads, transportation systems in our national parks are in very 
poor, perhaps embarrassing condition. We have $5 billion of 
backlog that the Park Service has identified for transportation 
projects. And, not surprisingly, 53 percent of the park roads 
are in poor condition.
    Two quick examples. First is the Going to the Sun Road, 
built back under FDR. It is one of the 10 most scenic drives in 
this country. It attracts 1.5 million visitors each year and is 
an economic anchor to that region. But, unfortunately, the 75 
years since it was built have been tough on it, with the 
avalanches, rock slides, heavy use.
    In 2007, the Park Service began a repair effort, but 
unfortunately that effort has been slowed for lack of funding. 
There is $20 million of work ready to do on the Going to the 
Sun Road just waiting for Congress's additional funding.
    The other example I would cite, Chairman Oberstar, is the 
trip that you were able to make a couple of years ago to 
Yosemite National Park, a spectacular park. But that had, back 
in 2005, $500 million of backlogged infrastructure projects in 
that park.
    So, in summary, Chairman Oberstar, Ranking Member Mica, 
Members of the Committee, we believe you have a tremendous 
opportunity before you. Americans love their national parks. 
But, unfortunately, the park roads and transportation systems 
are in very poor shape.
    The Park Service has $270 million worth of projects to go 
now that can jump-start our rural economies throughout the 
country immediately but that can also, over the long term, 
catalyze the much stronger and enhanced tourist economy in this 
country. Investing in our national parks is an investment in 
today and in our future.
    Thank you very much. And that concludes my comments. I look 
forward to any questions.
    Mr. Oberstar. I appreciate your splendid testimony. And I 
am impressed that you remember that trip a few years ago in 
Yosemite. I will return and invite Members of the Committee to 
come with me, but only if they agree to climb on bicycle from 
Ahwahnee Lodge to Glacier Point, 3,000 feet in three miles, I 
think it is.
    Mr. Kiernan. That is about right. Impressive, Mr. Chairman.
    Mr. Oberstar. We have Mr. DeFazio on for that one. Yeah, it 
almost killed me. We were in the Oregon mountains, yeah. Well, 
it is not going to work. I have a 45-year hip now and new 
infrastructure internally.
    Mr. Crosbie, if we are successful with this initiative, how 
would Amtrak prioritize the funding that already passed the 
House, the funding that we designated for Amtrak? What would be 
your first, second, third, fourth, fifth, whatever, priorities?
    Mr. Crosbie. In terms of the priorities, it would be, very 
clearly, obviously, our rolling stock, in the areas where we 
need more availability of that rolling stock; and then our 
infrastructure. And within infrastructure, bridges are a good 
example, our movable bridges on the Northeast Corridor; as well 
as our electrical traction system; and then compliance with the 
ADA requirements as well.
    And that is kind of a broad landscape. We have a very 
detailed 5-year capital program that is prioritized by project. 
We have over 600 projects annually, and they are rank-ordered.
    And then with the latest one, the last one I would add is, 
of course, completing Positive Train Control throughout our 
system.
    Mr. Oberstar. I had an experience with Positive Train 
Control in New Jersey on the Hudson line. The train goes around 
just a little bit of a curve and then picks up speed, does it 
regularly. That PTC slowed that train right down, instantly. It 
was an astonishing experience.
    Mr. Crosbie. The technology that we have on the Northeast 
works very well, very well.
    Mr. Oberstar. I withhold at this point and invite Mr. Mica 
to----
    Mr. Mica. I won't take too long. Thank you, Mr. Chairman.
    I am going to ask you all the same question to start out 
with. Give me the total number of dollars that you are ready to 
go with the projects. I want to know first--I will call off 
your locality. But right now Congress is ready to move forward 
and assist you.
    Ready-to-go projects, Maryland, how much?
    Mr. Porcari. $94 million ready to go within the next 120 
days.
    Mr. Mica. Okay.
    Atlanta?
    Ms. Scott. MARTA, we would be ready to go with $16 million 
just in MARTA and another $10 million that would be in the 
broader Atlanta region.
    Mr. Mica. Okay.
    We have the Department of Environment for New York.
    Ms. Enck. This is just for wastewater treatment plants. New 
York has lots of other needs. But we have 412 projects ready to 
go. If we were to receive $715 million, which is consistent 
with $6.5 billion in Clean Water SRF in a stimulus package, we 
would receive $715 million, create 30,000 prevailing-wage jobs, 
and then a spinoff economic benefit of $1.2 billion.
    Mr. Mica. Bill DeCota?
    That is a--I am sorry; I know him very well.
    The New York/New Jersey Port Authority?
    Mr. DeCota. Yes. Well, I am speaking really on behalf of 
the airport.
    Mr. Mica. Aviation.
    Mr. DeCota. Yeah. And what I have seen is that the FAA 
says, they have given $600 million, which is where that number 
came from in the economic stimulus bill, as what they believe 
is ready. From what the airport associations AAAE/ACI and the 
airports believe, there is at least a billion dollars, which is 
why we are urging that, if you could, to increase that to a 
billion dollars.
    Mr. Mica. No red bunnies in that bill either?
    Ms. DeCota. No. Actually, the good news is that red bunnies 
are prohibited under the AIP eligibility. You can't do artwork, 
and that is artwork.
    Mr. Mica. Very good.
    Okay, Amtrak?
    Mr. Crosbie. $410 million, split $130 million for rolling 
stock, $164 million for infrastructure, and the Positive Train 
Control at $120 million.
    Mr. Mica. Okay. Mr. Crosbie, thank you.
    And we have, let's see, American Society of Civil 
Engineers?
    Mr. Herrmann. As we have documented in our written 
statement, we have broken down our immediate investment 
proposals to aid the recovery. And the total was $38.5 billion. 
And that is immediate.
    Mr. Mica. $38.5 billion would do--well, is that ready to 
go?
    Mr. Herrmann. Yes.
    Mr. Mica. Okay.
    All right. Then, finally, we have the Park Service. And 
what was your total figure?
    Mr. Kiernan. Our understanding from the Park Service, $270 
million ready to go, could be obligated in less than 180 days.
    Mr. Mica. Good. You have a visitors' center in St. 
Augustine. We haven't talked about--you talk about ready to go. 
In fact, I think that is the only piece of legislation in 16 
years that I actually have my name on. But I have to get that 
one done, and I have been working on it for 6 years. They do 
take a while.
    Back to Amtrak. I understand that there is--that doesn't 
include money for State projects. There is $93 million needed; 
is that correct?
    Mr. Crosbie. For our State program? That is included.
    Mr. Mica. It is included.
    Mr. Crosbie. It is included.
    Mr. Mica. Is that the $93 million?
    Mr. Crosbie. That is in the $410 million, as I understand 
it, yes.
    Mr. Mica. Okay. Just clarifying. All right.
    And then, finally, Mr. Chairman, I just signed a letter 
with you to go to the Treasury to try to again free up some of 
the financing for transit projects that has been caught up in 
this financial meltdown. And I agree with you that we should go 
to the Treasury, who has that authority, I believe now. I do 
have a letter to--I hope we will follow up, if we need to, to 
put in law what we are trying to get this administration to do 
under the supposed authority they have to free up, again, 
financing and back financing.
    Hell, we are financing everybody else. We are buying bank 
stocks. If we can't move transit projects forward and they are 
now being denied financing and moving forward with projects, we 
have a problem.
    So with that, I appreciate your leadership on moving that 
with the administration. And this letter will request that we 
get it into law if we have to.
    Thank you.
    Mr. Oberstar. Thank you for your participation. We greatly 
appreciate your partnership in all of these matters.
    I am going to now use an ancient rule of the Committee that 
hasn't been used in a long time. And after the first round of 
questioning, to the second round, we start with more junior 
members. So we will start with Ms. Edwards.
    Ms. Edwards. Well, I like ancient rules. Thank you, Mr. 
Chairman.
    First, to Secretary Porcari--and thank you all for your 
testimony--I am curious as to whether the number you gave--I 
know that was a Maryland amount, for the Ranking Member. Can 
you clarify AASHTO's recommendation for ready-to-go projects 
and what that would amount to?
    Mr. Porcari. Thank you. The AASHTO number is $17.9 billion 
of projects ready to go.
    Ms. Edwards. And that is across 47 or so States?
    Mr. Porcari. It is across all the States, and it is across 
modal lines as well.
    Ms. Edwards. Great. Thank you very much.
    And I am curious from you, as a Marylander, what happens 
with projects that also have some Federal support, like the 
rail purple line idea, when you have to cut $1.1 billion of 
transportation projects given the current economic crisis? What 
happens to those longer-term projects that actually could 
improve a lot of our competitiveness in the region?
    Mr. Porcari. Congresswoman, it is a great point, and you 
had mentioned this earlier. We are all having to make very 
difficult choices. And that has meant cancelling the 
advertisement schedules for a number of construction projects.
    At the same time, we have tried to keep balance in our 
transportation program and keep some of the longer-term 
projects moving ahead. For our three transit new start 
projects, for example--the red line, the purple line, and the 
Corridor City Transitway--we have fully funded the design 
activities, at the cost of other projects, quite frankly, 
knowing that, given the lead time of these projects, we need to 
keep them going. We believe that the next generation of those 
kind of projects need to get through the approval process now 
so we are ready. We will continue to do that.
    My colleagues in other States are making similar decisions. 
I would point out, it is a little bit easier in Maryland 
because everything is under one roof--transit, port, airport, 
highway--and we can make those kinds of relative decisions a 
little bit easier.
    Ms. Edwards. Thank you very much.
    And, Dr. Scott, when you raised the question about the 
default situation, especially with respect to metropolitan 
transit systems, Majority Leader Hoyer and I and Congresswoman 
Norton and all of us in the region joined in a letter to 
Secretary Paulson and Chairman Bernanke, really trying to get 
some relief and response from the administration on this 
problem. It would do us no good to make major investments in 
transit while our systems are defaulting on payments that are 
really just a technical glitch.
    And so I am curious as to what else we might do here in 
Congress in the short term. I mean, I understand that WMATA is 
potentially having to face paying out $43 million by Friday. 
And I know that this is a circumstance that impacts transit 
systems across the country. And I want to know what more can be 
done and how else we might prevail on the administration to 
resolve this situation.
    Ms. Scott. Congresswoman and all of the Members of the 
Committee, thank you very much for your real focus on this.
    We believe that Treasury actually has the tool that it 
needs under TARP to, in fact, wind up moving forward to provide 
the backstop. Nobody is losing any money. We are making the 
payments. It is just a matter of pure greed, at this point.
    And so we would ask for the focus, the laser focus that you 
are putting on the issue right now, and then very much invite 
that if your actions at this point do not, that you would in 
fact pursue a specific legislative remedy if, in fact, the 
Treasury does not take action.
    Ms. Edwards. Thank you. And I would appreciate you and 
others among the associations keeping us informed about what is 
going on with the systems. Because this is something that, in 
this current economy, we absolutely can't afford.
    And then, lastly, you know, I am a biker, so I am going to 
take the Chairman up on going out and biking in Yosemite, and 
we will get some others to join. And I really strongly support 
investments in our national park systems and the roadways 
leading into them, but also expanding hiking, biking, walking 
opportunities throughout all of our park systems to relieve 
them of congestion. And, again, those are job-creation 
activities.
    So thank you very much for your testimony.
    Mr. Kiernan. If I may comment, we look forward to that. And 
there is the Grand Teton National Park, a new pathway system 
going in now, and many other parks where some could be 
installed with the funding from this Congress.
    Ms. Edwards. Great.
    No further questions. Thank you.
    Mr. DeFazio. [Presiding.] Thank you.
    Mr. Cummings?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Crosbie, let me ask you this. We recently enacted rail 
legislation that authorized $60 million for the study of a new 
alignment on the Northeast Corridor through Baltimore to 
replace or bypass tunnel infrastructure that is now more than 
100 years old. Can you comment on the importance of developing 
this new alignment to improving the service and safety on the 
corridor?
    And I heard you when you talked about your priorities, I 
think you talked about rolling stock, then you said 
infrastructure. I didn't hear you say tunnel. So I just want to 
just see where we are on that.
    Mr. Crosbie. Sure. Within infrastructure you would include 
tunnels as well.
    Mr. Cummings. All right, but I wanted to hear the word. All 
right.
    Mr. Crosbie. There we go, "tunnels."
    It would dramatically--when you ride the service and you 
experience the trip through those tunnels, which are over 100 
years old, and you ride all the way to New York, you get a 
sense very quickly that if you are going to make an impact on 
capacity trip time, they have to be dealt with.
    We have invested in the tunnels in the past, with new 
lighting and new track. But if you straighten the alignment of 
the track so it is not winding its way through, and you can get 
the speed up so the approach to Baltimore station is no 
different to, say, the approach to one of our other stations 
along the Northeast, like BWI or something like that, you can 
make a significant impact. It is probably one of the largest 
impacts you could make, in terms of the capacity and trip time.
    Mr. Cummings. So where do we fall in the priority? You were 
answering the question a little bit earlier. I see Mr. Porcari 
is looking at you very--I mean, he is interested in this, too. 
Where do we fall in the priority?
    Mr. Crosbie. It is certainly on the list, but we have--you 
know, to be completely forthright, we have so many items that 
we have deferred, state of good repair, that have an impact in 
other areas. Our electrical traction is a good example I talked 
about earlier.
    I think we need to get the study done, find out what it is 
going to be required to fix those tunnels. We can be doing that 
simultaneously to our other backlog of state of good repair. In 
fiscal year 2008, we estimated $5.2 billion in deferred capital 
maintenance in our system.
    So, in terms of a priority, it is important for capacity, 
it is important for trip time, but I have to tell you there are 
some other things that we do need to get done. But we can get 
that study done in the interim.
    Mr. Cummings. You know, as I listen to you all's testimony 
with regard to a question asked by the Chairman and you were 
talking about the projects that are ready to go, I said to 
myself, even if we cut them in half--and you have only a few, 
you just represent a few jurisdictions. Obviously, in our 
country, we could have done better. It sounds like we are 
behind and we have a lot of work to do on this infrastructure.
    Secretary Porcari, you know, also looking ahead to the next 
authorization, can you comment on the types of revenue or 
innovative financing mechanisms you would like to see 
authorized to supplement the gas tax revenues coming into the 
Federal trust fund, particularly if the prevailing economic 
conditions continue to be difficult in 2009?
    I think this is the big question, and I was just wondering 
what your perspective might be.
    Mr. Porcari. First, Congressman, at the State level, a year 
ago our legislature made some very tough decisions and 
significantly raised transportation revenues and broadened the 
base beyond normal transportation revenues, to include a 
portion of our sales tax, a larger portion of our corporate 
income tax and other nontraditional sources.
    I would point out that, unfortunately, the economic 
downturn has erased most of that. But the point at the State 
level is what we all know we need to do at the Federal level, 
which is to diversify the sources.
    Some kind of vehicle miles of travel, VMT, based revenue 
source is one part of the puzzle, I believe. AASHTO has done a 
very thorough job of identifying the long-term needs. There is, 
I think, a very good understanding that the traditional 
reliance on the gas tax and ever-increasing vehicle miles of 
travel is not a model that will carry us into the future. So a 
VMT-based one is probably part of the solution.
    I would also point out that since transportation 
infrastructure investments serve the larger economy and are the 
enabler of economic development and in that sense a means to an 
end, it should not be out of the question that any general fund 
revenue source should be at least part of the discussion for 
transportation revenues. We are clearly going to have to 
diversify those sources pretty substantially to carry us into 
the future.
    Mr. Cummings. I see my time is up. And thank you, Mr. 
Porcari, for doing a great job for our State.
    Mr. Oberstar. [Presiding.] Ms. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman.
    And listening with great interest to Mr. Crosbie, when you 
were indicating that the cars that you needed to replace would 
be costing us a fair amount of money. But are they made in the 
U.S.? This is "buy American."
    Mr. Crosbie. You are referring to the ones that are in 
storage or new equipment?
    Mrs. Napolitano. New equipment.
    Mr. Crosbie. Well, with new equipment, we would comply with 
all laws, Buy America laws, in the procurement of that 
equipment. We would absolutely do that.
    Mrs. Napolitano. That should help spur some of the 
manufacturing jobs in the U.S., which are so sorely, 
desperately needed.
    And have you considered using any of the photovoltaic solar 
applications for creating some of the electricity that you 
would utilize? I am talking about green.
    Mr. Crosbie. In terms of looking at generating electricity, 
many, many years ago Amtrak did that; its predecessor did that. 
We have not considered it yet, but it is certainly something 
that has recently been on our radar screen, a rethinking and 
relooking at of generating our own electricity and then, 
indeed, selling that along the--it would be along the Northeast 
Corridor. But in terms of recent study, there hasn't been 
anything done. And I think it would be an area that would be 
worthwhile to look at.
    Mrs. Napolitano. Well, Mr. Chair, I hope this puts more 
emphasis on looking at photovoltaic, Mr. Chair, simply because 
that is other jobs that could be created right alongside with 
infusing that capital.
    Deputy Secretary Enck, you and I and everybody else knows 
that, for the past 8 years, we have been slowly cutting the 
budget at every single Federal agency. And the request for the 
Clean Water State Revolving Fund has been the lowest in 22 
years. I can tell you for Title 16 water recycled projects, $7 
million for almost $400 million backlog. And I am telling you 
because I am Chair on that Subcommittee, so I have great 
disappointment in investing in our infrastructure.
    But I would like to ask if you feel that the Federal 
crosscutting rules which require EPA to consult with the U.S. 
Fish and Wildlife and/or the National Marine Fisheries before 
funding Clean Water SRF projects are overburdensome and 
significantly delay projects? And shouldn't we and Congress 
consider allowing States to notify Federal agencies, giving 
them a time limit to comment on the clean water packages, or 
else move forward automatically?
    Ms. Enck. Well, I think getting that kind of input is 
generally good, because these are huge expenditures of tax 
dollars. I think having a time limit makes sense.
    Our biggest problem is not process. It is just the sheer 
lack of resources for these investments. And we believe, if the 
money is not increased, we are going to see a marked decline in 
water quality.
    Mrs. Napolitano. But if you had those resources, do you 
believe that they would be able to move expeditiously?
    Ms. Enck. Yes, absolutely. And, you know, the 
responsibility for many of these projects rests with local 
governments. They have signed legally binding consent orders to 
be in compliance with the Clean Water Act. Many are not. So if 
money was available, I think it would move very, very rapidly.
    Mrs. Napolitano. Well, there has been a suggestion that the 
two agencies are so chronically understaffed that it can be 
problematic to get their concurrence on a timely basis. And 
that is why I am asking that.
    Ms. Enck. That has not been a problem in New York, but it 
certainly may be in other areas.
    Mrs. Napolitano. Well, if we are going to be increasing 
funding, do you think they will be able to handle the workload?
    Ms. Enck. I can't speak to that, I am afraid.
    Mrs. Napolitano. Any guesstimate?
    Ms. Enck. We just don't have that much experience with that 
problem in New York, so I don't want to guess. I am sorry.
    Mrs. Napolitano. Is it difficult for many small, 
disadvantaged community governments to secure enough of a fee 
increase from the electric to pay the SRF loan?
    Ms. Enck. Absolutely.
    Mrs. Napolitano. Should we consider making funds available 
through grant programs to small, disadvantaged sewerage 
treatment plants?
    Ms. Enck. Yes, we would support that.
    Mrs. Napolitano. Anybody else want to answer? No? Any 
comment?
    Well, one of the things that I am very concerned about is 
the economic impact that quagga mussels is having on a lot of 
our ports and water plants, et cetera. Has anybody taken into 
consideration the cost of dealing with that issue and whether 
or not we should spend a little more money on the research at 
this time to be able to cut that cost, so then those funds 
could be utilized where they are supposed to go?
    Ms. Enck. On invasive species, I think we definitely do 
need more research. And we also have opportunities to deal with 
ballast water and other strategies to reduce the introduction 
of invasive species that clog water treatment plants, power 
plants, not only affecting water quality but also economic 
growth.
    Mrs. Napolitano. But is there enough personnel to be able 
to do the examination of the boats coming into the harbor or 
the boats being used in the recreational lakes?
    Ms. Enck. I would say I can't speak to the Federal level 
but, at the State level, there is clearly not enough money to 
do this, and invasive species is an issue of great concern. We 
would like to get to the source of the problem of how to keep 
these invasives out of our waterways.
    Mrs. Napolitano. Mr. Chair, I thank you for the time. And I 
think that there are some real technical things that involve 
further dialogue and maybe a little more concentration to save 
some of that money for the real projects.
    Mr. Oberstar. I thank the gentlewoman for those thoughts. 
There is a lot we have here to consider, as we evaluate and go 
on further to drafting the language for this stimulus.
    Ms. Norton?
    Ms. Norton. Thank you very much, Mr. Chairman.
    Mr. Crosbie, I am really excited about the high-speed rail, 
because it first is going to go from New York to D.C. and back. 
But we have neglected your infrastructure for so long, you have 
a lot of work to do before we get to high-speed rail.
    So let me go on to Dr. Scott, following up on the question 
from Representative Edwards, with whom I have been working on 
the WMATA matter, and then a short question for Mr. Kiernan.
    These technical defaults--let me just put it this way. We 
are your proxy. There are 31 transit systems. And everybody 
better understand this. These are all metropolitan areas. This 
would shut down the United States of America virtually, because 
these are all big-city transit systems which connect into 
metropolitan areas.
    Now, you were doing these--and I don't blame you at all. 
You were getting back some money from the banks for the way in 
which they did these particular transactions. But the IRS has 
essentially moved to shut down this type of transaction.
    Now, WMATA--Ms. Pelosi's staff went to the Treasury 
yesterday, and I don't like the kind of questions the Treasury 
was asking, frankly, you know, like, "What does this have to do 
with the Federal Government?", when, of course the Federal 
Government's backing of AIG ought to make it clear what this 
has to do. And if we are interested in bailing out more than 
the AIGs of this world and in the stability of this region, 
Treasury better educate itself very quickly.
    In our case, this Belgian bank, which was, in fact, like 
all the banks so far as I know, receiving its payment--is that 
not true? Were not all the banks receiving payments as of now?
    Ms. Scott. Yes, yes, they have, in fact. And I want to 
really commend John Catoe publicly, because there have been a 
number of us that have been working, really----
    Ms. Norton. This is the head of our own WMATA, yes.
    Ms. Scott. --hitting WMATA, that have been working just 
very closely together on this. Because literally, as we sit and 
speak, various systems--I am one of them--are receiving letters 
from some of the investors, from some of the banks that are 
demanding--we have called it tantamount to ransom notes.
    Ms. Norton. Well, they are. They are saying, oh, the 
Federal Government is there, you know, give us our money. And 
of course I don't blame the Treasury for saying, just a moment, 
this is a stick-up.
    On the other hand, the consequences if Treasury does not 
act is what I want to get into, because the reports back from 
the meeting yesterday were disquieting. Again, this is 
reporting, so I can't vouch for this, but from trustworthy 
sources, that Treasury showed no great urgency, even asked 
whether it had the authority. And these are people who found 
the authority to actually invest in banks when I don't think 
anybody here contemplated that at the time of the bailout. You 
know, they found authority to invest in all manner of corporate 
bailouts. So they are not sure they have the authority.
    And if they need some authority, one of the first things I 
will do, and I am sure my colleagues will join me, is to ask in 
this package that they be given the authority. I have no doubt 
in my mind that they have the authority.
    But I would like you to lay on the record, so we know what 
will happen to WMATA. You are getting your letters--WMATA's was 
postponed simply because WMATA threatened the TRO. They were 
going to go to court, and so they said, okay, let us count the 
days and make sure when this really runs out. So they think it 
is October the 31st.
    Now, suppose Treasury continues to hang back. All you are 
asking Treasury to do is take AIG's place as the guarantor. 
AIG, AAA-rated AIG, was the guarantor. So they say, instead of 
being, as I understand it, the guarantor for AIG, you, the 
Treasury of the United States, is the guarantor.
    You are not asking for any money from the Treasury, is that 
right?
    Ms. Scott. No, we are not asking for money from the 
Treasury. In fact, the majority of these are backed up by 
securities.
    Ms. Norton. So, suppose Treasury doesn't find its way by 
the 31st, D.C. will be the first one to go down, and you all 
will cascade right after it. What will be the effect while we 
are trying to get something through the Congress?
    Ms. Scott. I can't speak directly for WMATA, but I could 
tell you that, with the hundreds of millions--and I am not 
trying to make this be harum-scarum, but it is so real--there 
are hundreds of millions of dollars. One transaction could wind 
up being the difference of having to make an immediate payout 
of $100 million, couple hundred million----
    Ms. Norton. Do you all have $100 million in capital----
    Ms. Scott. There is no way that we could wind up----
    Ms. Norton. Because the capital markets are frozen. Nobody 
can get any money.
    Ms. Scott. The capital markets are frozen. And the 
technical defect is that, at the point in time that these 
guarantees were being made, most of them require--in our case, 
it is a AA-minus credit rating. Some of them were triple. And 
so clearly AIG, they don't have it. And you can't hardly--I 
don't even know if we can even find any other guarantor that, 
in fact, would have that kind of credit rating with the kind of 
meltdown that we have had.
    Ms. Norton. Even though, of course, you are paying--this is 
why one wonders why Treasury didn't get it immediately.
    Mr. Kiernan, I searched your testimony for the words 
"National Mall," because this has been a very high-profile 
issue throughout the country. Twenty million people come here 
every year. It is not just my folks who go down there and 
Representative Edwards's folks. In fact, we are a tiny 
minority. It is everyone who comes to see their Member of 
Congress. It is everybody who wants to see our monuments.
    Interior had$100 million in its appropriation, and its 
appropriation never got up because of dig, dig, dig. I mean, 
they were insisting that for them to get out, Congress had to 
approve this digging stuff.
    Now, the reason I ask you about the National Mall and was 
surprised to find it not in your testimony is, in the case of 
the National Mall, which is our front yard for the Nation, it 
has a private sector--one of our developers, he has already 
raised a million dollars; he just got started a few months ago. 
It is a centennial challenge project. So here you have some 
money coming in, the need for the private sector ready for 
matching funds.
    Don't you think the National Mall would be--I know for a 
fact, just happen to know for a fact, that they have many 
ready-to-go projects. Don't you think that the National Mall, 
of all places, would be a worthy place to put Federal funds in 
this package at a time when Americans will be looking for some 
evidence that this package accomplished something? Would the 
rundown National Mall, not worthy of the name any longer, be a 
suitable place for some of these national park funds to go?
    Mr. Kiernan. I absolutely agree with your point. The Mall 
has very significant, profound needs. It is within the $5 
billion of total backlog needs in the national parks. The 
projects, the needs there may be ready to go. In putting 
together our testimony for this hearing, we didn't see it on 
that list, but it may be ready to go, or might very soon be 
ready to go.
    But I absolutely agree, the Mall is one of many places in 
our national park system that we as a country should be 
investing in. Has economic benefits but, more importantly, 
benefits for the United States as a society and as a culture.
    Ms. Norton. Well, Mr. Kiernan, thank you. I will check on 
that, but I can tell you, the place is so decrepit that the 
Park Service is kept from doing the necessary things, like 
keeping the benches and the rest up, simply because it doesn't 
have the funds to do it. But I will check on that.
    Thank you very much for this testimony.
    Mr. Oberstar. I thank the gentlelady for raising that 
issue. It is a very important one, not only for the District 
but for all of America who come here.
    Mr. Boswell?
    Mr. Boswell. Thank you, Mr. Chairman.
    Mr. DeCota, I am curious, you made a comment about the 
global financial crisis had an impact on the airport industry 
to raise capital to fund projects. Would you elaborate on that 
a little bit?
    Mr. DeCota. Yeah. As in almost any industry, even though 
airports are financially secure, well-run enterprises, it 
starts with the weakness in the airline industry and the 
decline in traffic. And so, many of the major bond-rating 
agencies have come out and said that airport financial health 
has been threatened. And you start there.
    And then you start with the fact that it has been very 
difficult for airports to get in the market for what are called 
private activity bonds. Private activity bonds were bonds that 
were intended, you know, to be sold for infrastructure that is 
used by private companies. In our case, private activity bonds 
were things like runways and taxiways that are clearly public 
common infrastructure.
    And if they are marketable--and it is very difficult to 
market them. For instance, Metropolitan Washington Airports 
Authorityhas $250 million of them, that they are sitting on a 
shelf, they would like to issue to sell in order to be able to 
do investment of the kind that would create economic recovery, 
and they really can't get to market. And if they do get to 
market, it is probably 150 basis points, 1.5 percent more than 
what they were just a short time ago.
    Which is why we were calling for this limited fix, which 
was to reclassify these from private activity bonds subject to 
the alternative minimum tax and call them, really, public 
activity bonds, which they are. And the House did agree to 
that; there was a housing stimulus bill that was passed which 
allowed that to be done for housing.
    Mr. Boswell. Thank you.
    Also, in your airport operation, would you comment on the 
impact of not having a multiyear FAA reauthorization? We worked 
very hard on that in the House, but we haven't gotten if 
through the whole system yet. And I assume that has some impact 
on how you can make your plans.
    Mr. DeCota. It has an enormous impact. And we do want to 
thank the House, because the House not only passed it, the 
House passed the $7 PFC increase. That represents $100 million 
a month that is not coming into airports right now for airport 
infrastructure. Almost $1.2 billion a year if that had 
happened. It also included far higher levels of PFC funding. I 
believe it was $3.8 billion in 2008, $3.9 billion in 2009. If 
you look at what the interim appropriations have been, they are 
below that level. Basically, we have lost another billion 
dollars.
    So when you have airports with capital needs that are 
demonstrated, just ones that would be Airport Improvement 
Program-eligible, of $50 billion, and then you take the total 
capital needs of airports, you know, that little bit that I 
talked about that would be ready to be funded out of the AIP 
just pales by comparison of the size.
    And all airports really want to do is be able to get into 
the bond markets, use local user fees in order to be able to 
fund capital investment, and then supplement that with some 
Federal funding under the AIP program, similar to the kinds of 
numbers that were approved by the House in the last economic 
stimulus bill.
    Mr. Boswell. We will hope we get that done this coming 
session.
    And lastly--I have a little bit of time. I make no apology 
that I advocate for general aviation. I am curious, with what 
you have told us about your operation, what impact has that had 
on your customers. Have you been able to grow, or have you been 
able to keep? What is your situation?
    Mr. DeCota. Well, New York, in our case, you know, we 
handled 110 million passengers last year. We thought we would 
handle 111.5 million this year. Plus, there is a lot of----
    Mr. Boswell. I wanted you to address more toward the 
general aviation.
    Mr. DeCota. Okay. Well, in the case of general aviation, we 
have about 200,000 aircraft movements every year out of 1.4 
million plane movements all within 25 miles of the Statute of 
Liberty.
    I am being told by the local fixed-base operators who 
handle that activity that that activity is down severely. I was 
told by one yesterday at Teterboro Airport that the activity 
September versus September----
    Mr. Boswell. Well, if that is down, that has economic 
impact on you too.
    Mr. DeCota. Huge economic impact. The business and private 
leisure aircraft--we have done some economic analysis studies, 
and it has enormous impact in terms of not only the jobs it 
creates, but also the businesses that were using that kind of 
activity and their ability to conduct travel in order to be 
able to conduct that business.
    Mr. Boswell. Thank you. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Oberstar. Thank you.
    Before proceeding with Mr. DeFazio, I just wanted to ask 
him if he has any specific question for Ms. Enck, who has a 
travel commitment and has to make it to the airport. If you do, 
you could ask that first, and then we can excuse her.
    I only have an observation, Ms. Enck, that your stout 
defense of State Revolving Loan Fund and your advocacy of what 
is needed in New York and elsewhere around the country--we 
passed that legislation in the House; it did not pass the 
Senate. We had to cut that back $6 billion because of a 
requirement by the Office of Management and Budget that we 
offset the increase in investment for projects that would be 
subject to some supposititious future loss of revenue to the 
Treasury, because there would be tax-exempt bonds issued by 
municipalities. You know, that is similar to the issue with Mr. 
DeCota and the airport AMT minimum tax on private activity 
bonds.
    But this administration has really let us down. The 
President opposed the State Revolving Loan Fund. The 
Republicans in the Senate refused to act on it. They held it up 
so it could not come forward. And that is why we are in the fix 
that we are with the needs.
    Ms. Enck. We very much are, and we appreciate the House's 
leadership, your leadership. We just absolutely have to get 
back to this next session or the end of this year. The State of 
New York and, I am sure, other States are willing to roll up 
our sleeves and help in any way we can.
    Mr. Oberstar. Thank you. We hold you excused.
    Ms. Enck. Thank you.
    Mr. Oberstar. And now, Mr. DeFazio, such time as you may 
consume.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Dr. Scott, well, first, I think we have pretty well 
explored the issue of these lender predators attempting to take 
advantage of our transit districts. I only hope that we can 
begin to, sort of, publicly either solve this problem very 
quickly or hold them up to public ridicule and perhaps expose 
them to hordes of angry commuters being deprived of their 
transit because these people think they have a right to claim a 
technical default. I think a lot of people don't know how 
serious this is, potentially, particularly the Bush 
administration.
    Somehow we own AIG, and AIG was the guarantor, but AIG 
doesn't have good enough credit to just pass through the money, 
and there is a technical default. It doesn't seem to me that 
Henry Paulson, Hank, as some people around here like to call 
him, would have to do too much to resolve this issue, like 
maybe pick up the phone.
    But, in any case, hopefully we can get their attention. If 
you are listening, Hank.
    So, on the other issue that you said is kind of 
counterintuitive, and I just want--again, this is not fully 
understood, I believe, by many. Transit usage is up pretty 
dramatically, in good part because of high gas prices and 
people's personal circumstances. It is a desirable thing. And, 
unfortunately, that has led to a decrease in service.
    Now, could you explain? I mean, this seems like very 
counterintuitive to most people; ``Wait a minute, if more 
people are riding it, why do they have to cut service?''
    Ms. Scott. Well, I have often, after 30 years in this 
industry, I often smile and say very few people really 
understand that the better we do, it means that there is going 
to wind end up being a payment. But for the most part--in fact, 
there isn't any system totally any place in North America where 
the users are paying for all of the service. So there is 
always----
    Mr. DeFazio. I don't even think in Europe. I don't know of 
any transit system anywhere.
    Ms. Scott. Just limited. I mean, just a limited something 
here or there. But there is always investment that is required.
    So whether or not we call it farebox recovery, cost 
recovery, there is no right or wrong around it. But you can 
look somewhere about 30 percent, on average, is what the cost 
recovery is for a typical trip by the individuals who are 
actually using the trip.
    So true, to the extent that a transit system does not put 
any additional service out and is only utilizing its existing 
capacity, surely having additional ridership is bringing in 
additional revenue. But the problem is always that that is not 
fully paying for itself. Plus, we have people that are 
literally coming out of the doors and a need to add 
significantly increased service. And that increased service 
comes at a cost.
    Mr. DeFazio. Thank you. The Chairman and I and others made 
that point on the floor when we passed an authorization to 
increase funding on an emergency basis for transit. I had hoped 
to fund that by moving forward some money in the Transit 
account of one trust fund, which is in better shape than the 
Highway account. We weren't able to do that.
    But hopefully now we will be able to do it in a stimulus 
package to see that we don't get this perverse effect that 
people are hurting, therefore they want to use transit, save 
money, and that is causing the transit agencies to have to cut 
back on routes. It just doesn't make sense.
    Ms. Scott. I tell you, it is the biggest oxymoron for us to 
be in at the very time when people are really--and what we are 
finding with some of the market research that we are doing is 
that there is no question that there are many, many people who 
are making the rush to transit because of the fuel prices.
    But there are almost just as many who are making the rush 
to transit and have been because people are really connecting 
these dots in terms of environmental sustainability, changes in 
terms of personal travel behavior. And more and more what we 
are finding is that more people would, but they say one of 
their biggest issues is the lack of availability of reasonable 
convenient travel options.
    Mr. DeFazio. Great. Thank you.
    Thank you, Mr. Chairman.
    Mr. Oberstar. Thank you.
    Ms. Richardson?
    Ms. Richardson. Yes, thank you, Mr. Chairman.
    I was looking at your testimony, Mr. DeCota, and as I was 
looking at the investment that you were asking, from an 
aviation perspective, what would you describe would be the most 
critical projects that would need to be done of airports across 
the country?
    And I saw your reference to, for example, modernizing the 
air traffic control system. But I am looking for specific 
infrastructure benefits that you would say would help this 
country?
    Mr. DeCota. There are two major needs that I foresee in 
this country. One is aeronautical improvements. There simply 
isn't enough runway pavement. Runways are in states where they 
need to be rehabilitated at a regular pace. At our own 
airports, we have one runway rehabilitation project.
    And safety and security projects continue to loom large at 
every airport in the country since September 11th. The level of 
expenditure on safety and security projects has become 
enormous, to respond to things like putting bollards on the 
frontage of airport terminals, to put sophisticated perimeter-
intrusion-detection devices around terminals, baggage screening 
improvements at airports to make sure they have the latest 
state-of-the-art equipment.
    I mean, the list of airport infrastructure improvements 
goes beyond just the traditional capacity ones that you think 
of, in getting people and cargo out of land vehicles and into 
air vehicles, like the runways. And it goes to much more 
sophisticated things like that.
    But the list is fairly enormous, as I said. The FAA 
estimates there is about $50 billion between the years 2009 and 
2013 that are just projects that are eligible for Federal aid. 
And there is a huge category of projects that are not eligible 
for Federal aid that have to be improved: cargo buildings, 
parking lots, terminal buildings that are exclusive-use 
facilities and things like that.
    Ms. Richardson. I recently flew from Washington, D.C., to 
LaGuardia. And once they got everyone on the plane, we kind of 
pulled out and they told us--they kind of pulled us off to the 
side, and we sat there for probably at least an hour and a 
half. And what I was surprised at is that most of the people 
who were flying there said that that is a regular occurrence.
    Mr. DeCota. Yeah, the problem in New York is airspace. It 
is the failure of the FAA to keep pace with the air traffic 
control improvements. It is the failure to implement the 
acronyms, things like RNAV, RNP, ADSB, et cetera, the 
technologies that evolve you from land-based radar to 
satellite-based communication.
    And, unfortunately, this administration has followed this 
wrong-headed view in New York that the way that you solve the 
problem is you reduce your flight choice. So you either have a 
choice now to put up with the inefficiency of the air traffic 
control system or you have a choice they are going to take away 
slots in New York and auction them off.
    And one of the points we made in our testimony was that the 
economic stimulus package really is the last opportunity for 
Congress to make it very clear that auctions of flights are 
illegal and that what we should be doing is expanding capacity, 
because you should not be suffering and enduring that.
    I, unfortunately, have the three most delayed airports in 
the country, and it all traces back to the FAA's inability to 
handle the air traffic.
    Ms. Richardson. Mr. Chairman, much of the discussion and 
the information we received talked a lot about funding for 
ready-to-go projects. But this particular example, I am hoping, 
as we roll out whatever conditions are going to be included in 
the stimulus, that there also is some sort of check-off that 
needs to be that these projects, in addition to being ready to 
go, they also should meet a need of our constituency as well.
    Meaning, there are more projects than we could ever imagine 
that we would want to do at this point, and we are not going to 
be able to do. So if we are going to fund, for example, funding 
for airports, we need to make sure that, if they get funding, 
it is something that is going to translate back to the end 
users and how they will benefit, and not just another project 
that needs to get done.
    So I don't know if we are going to have various factors or 
a certain amount of points for each area, but I would hope that 
there would be some indicators to really push that the results 
will benefit the end users.
    Mr. Oberstar. If the Senate had acted on our aviation bill 
that was passed a year ago, the airports of this country would 
be a good deal further along than they are today in responding 
to the air-side infrastructure needs, the hard side, as I call 
it, of aviation.
    Secondly, the air traffic control modernization really 
would not fit into this economic recovery proposal that we are 
discussing today and that we will be submitting to the House in 
November. The modernization program is covered, I think quite 
substantially, in our aviation authorization bill.
    But there are air-side improvements, such as the 
realignment of runways at O'Hare, the first of which is to be 
completed within a month, I think it is. And they will have a 
dedication ceremony. And when the other two are completed, 
O'Hare will have the capacity for 1.4 million, maybe 1.5 
million operations a year. That is substantially above their 
900,000-plus operations a year today.
    As Mr. DeCota said, in the New York airspace, that, along 
with the Southern California TRACON, are the two busiest 
facilities in the world. They handle more operations than all 
of Europe combined. And yet, as Mr. DeCota said, the 
administration proposes to deal with the problem by congestion 
pricing, by making it more expensive to use the existing 
limited airspace, use the existing undercapacity air traffic 
control system.
    That defies any kind of sense of understanding of what 
aviation is all about and how it works. I am exasperated with 
them. I can't wait for them to leave town.
    [Laughter.]
    So we will deal with this in due course.
    Ms. Richardson. Thank you, sir. I yield back.
    Mr. Oberstar. Let's see, I think I have a few questions, 
very few, briefly.
    Ms. Scott, where will the clean fuel buses be built for 
Clayton County that you referenced?
    Ms. Scott. The clean fuel buses would be New Flyer--likely 
would be New Flyer vehicles.
    Mr. Oberstar. In America?
    Ms. Scott. Yes.
    Mr. Oberstar. In Minnesota?
    Ms. Scott. Yes, in Minnesota.
    Mr. Oberstar. Where will the express coaches be built for 
the Georgia Regional Transportation Authority?
    Ms. Scott. I am not sure of which piggyback they have. They 
will either be New Flyer or NABI out of Alabama.
    Mr. Oberstar. Alabama. And in Eugene, Oregon, the hybrid 
electric bus?
    Ms. Scott. I think that is the Gillig, and that is 
California. That is Hayward, California.
    Mr. Oberstar. Gillig. So there we are. When we invest in 
one part of the country, another part of the country benefits.
    Ms. Scott. Absolutely. Absolutely.
    Mr. Oberstar. That is the----
    Ms. Scott. And the other thing that happens with buses, 
because, you know, folks will say, well, my goodness, you have 
buses and you have all the other smaller transit vehicles and 
all that can come off of a production line within 4 to 6 
months. But it is a supply chain. And so we have subsystems and 
components and HVAC systems and seating systems and aluminum, 
steel. So there is all of this that is taking place that is the 
supply chain that ultimately results in that big vehicle, if 
you will, that winds up coming off final assembly from 
someplace.
    Mr. Oberstar. And, on average, transit busses are about 14 
years of age. They are well over their use of life. They are 
running over a million and a half miles apiece. And they need 
to be replaced, don't they?
    Ms. Scott. Absolutely. And if we don't replace them on 
time, then that leads to unreliability and certainly safety. 
And no one will run something that is unsafe. But it certainly 
leads to a degradation, in terms of reliability of service.
    Mr. Oberstar. And, Secretary Porcari, you referenced 
several dozen Maryland projects that could start now. You also 
referenced the deferral of investment due to a condition in the 
bond market.
    How does the bond market affect the ability of State 
departments of transportation to use GARVEE bonds or other 
instruments? And what is the adverse effect, and how does that 
tie in to what we are proposing here?
    Mr. Porcari. It is a very good question, Mr. Chairman, 
because all States, to varying extent, use debt as part of 
their capital program. Using Maryland as an example, it is only 
7 percent of our total capital program, so we are primarily on 
a PAYGO basis. But that 7 percent is a very important part of 
our program.
    The inability to take either our consolidated 
transportation bonds or, this specific example, one proposed 
debt issuance of $425 million in GARVEE bonds to the market has 
a direct impact on specific projects.
    The GARVEE bond issuance is for a single largest highway 
project that we have under way in the State right now. It will 
be a toll facility that is congestion priced by time of day. So 
revenue bonds are a part of the financing strategy. We simply 
couldn't build these projects without them.
    The inability to go to the bond market for these projects 
has exacerbated the downturn in revenues that we have for the 
PAYGO part of the program and for other States as well. That is 
why we all have so many projects on the shelf. That is why the 
January 2008 number, which undoubtedly is higher now 
nationwide, for AASHTO is 3,071 projects at almost $18 billion.
    Mr. Oberstar. State Departments of Transportation are 
victims in a way, also, of the financial meltdown in the 
marketplace that Congress attempted to address, is that.
    Mr. Porcari. Yes, we very clearly are. We hope to be back 
in that market when it stabilizes. We don't know when that will 
be.
    Mr. Oberstar. Which is why it is important for us to have 
100 percent Federal funding in a rescue recovery proposal here 
for these highway and transit projects.
    Mr. Porcari. That is right, Mr. Chairman. Many States 
simply don't have the ability to make the 20 percent match in 
the short term. What we are promising in return is, if it turns 
out to be that the projects have to be obligated within the 120 
days, for example, we will live within that or we will turn the 
funds back.
    Mr. Oberstar. Mr. DeCota, the Airports Council 
International has produced an issue paper on the alternative 
minimum tax on airport bonds saying that the majority of bonds 
are classified as private activity bonds, interest payments on 
which are subject to the AMT. And that means investors are 
asking for an interest rate premium to compensate for the 
additional tax liability. But then the paper goes on to say, 
well, we don't have an estimated budget cost, it will be 
minimal. If we were to attempt to address this, and I don't 
think we can do it in this legislation, but we could next year 
when we take up the already passed aviation bill, you would 
have to get your associates at the Airports Council 
International to sharpen their pencil and give us some very 
specific numbers about the loss of revenue that you have 
already heard me describe Office of Management and Budget, that 
they will come up with. And those gnomes over there will find a 
way to make that number very high. So if you want us to help 
you, you have to help us by sharpening your pencil and give us 
specific dollar amounts of interest on bonds subject to 
taxation on bond holders.
    Mr. Porcari. We will absolutely do that. Obviously, the 
cost is differential. And when this was originally an issue 
before the credit crisis, the differential for AMT versus non-
AMT, so maybe 10 to 30 basis points, it was very small. So if 
you eliminated it, it would save airports money, it wouldn't 
have cost the Treasury much. With the differential now so high, 
we are talking about over a $500 million bond over the life of 
a bond, you are talking about an interest rate savings that 
could be $125 million. That, again, would be $125 million 
invested back into an airport and create the kind of stimulus 
you talked about. But we would absolutely, because we would 
appreciate all the support we can get.
    Mr. Oberstar. And remember, even if Treasury is not getting 
that revenue now, the Office of Management and Budget will say, 
oh, but they would lose this if we had it in effect. But take 
that seriously.
    Mr. Kiernan, in the current SAFETEA legislation, over the 5 
years we authorized $1,050,000,000 for national parks roads and 
$930,600,000 for forest roads, U.S. Forest Service roads. I 
wanted to substantially increase that, and I ran into 
opposition in the course of that legislation. But I know, from 
having traveled several park facilities and our forests, 
national forests, that those roads are in terrible shape. If we 
expect our fellow citizens to come enjoy the national parks of 
this country, then we need to upgrade those facilities.
    Do you have a list from the National Park Service of what 
they would be able to put under construction within 120 days?
    Mr. Kiernan. We do have the list that they would be able to 
put under construction within 180 days, and that was the $270 
million worth of projects. But they do also have an assessment 
released in December of 2007 that lays out the full needs for 
the parks for road building; it is a total of $644 million each 
year for each of the next 5 years. So you have both what is the 
large ongoing need and what could be obligated right quick, the 
$270 million.
    Mr. Oberstar. And the National Park Service could 
prioritize that list for funding should we get this package 
enacted?
    Mr. Kiernan. I believe so. And we can provide to you and 
the Committee, for the record, that list right quick.
    Mr. Oberstar. That would be very beneficial, very useful.
    Mr. Herrmann, thank you, as always, for the Society for 
Civil Engineers, for your work on the major construction needs 
of this country and your report cards that have been issued 
from time to time, and for specifically your reference to the 
inland waterways of this country. Again, I said it earlier, but 
I was dismayed not only that the President vetoed the bill that 
Mr. Mica and I had agreed upon, that was a total bipartisan 
bill that was 6 years delayed, that after he overrode the veto, 
didn't put a single one of those projects in his budget for the 
current fiscal year. It is appalling to me. And the needs are 
there, and those projects are already, 6 years in some cases, 
designed, engineered and ready to go to construction. We should 
fund those, and I appreciate your reference.
    Ms. Napolitano.
    Mrs. Napolitano. Mr. Chairman, just one last question that 
I know is of great interest to you. And I believe it was Mr. 
Crosbie that brought up the issue of possitive train control, 
big issue since we had that derailment that caused the loss of 
25 lives in southern California.
    And I know that I have been talking to some of the SAFETEA 
people in California, Public Utility--the PUC, and also some of 
the train people, and to me there is a foot dragging because 
the system is already available, and yet we are going to wait 
until 2012? And I just don't understand, Mr. Chair, what is it 
that is going to have to happen for not only the railroads, are 
they waiting for a bailout from the Federal Government to give 
them the money to implement it?
    I am concerned because this is not just California, but 
anywhere where you have a lot of train traffic. In my area, as 
you well know, I have just in one area 40 trains a day, and to 
increase tenfold within a few years because of the increase in 
goods trafficked from both ports. So I have a grave concern, 
and I just want to bring it up. If anybody has any idea of any 
answers to this issue.
    Mr. Oberstar. The answer is that we passed the Amtrak bill 
in the context of and in partnership with the Rail Safety bill 
that our Committee also reported--and you helped us move that 
legislation along, and Ms. Norton did. The Amtrak bill passed 
the House 311-104. And then eventually the conference report we 
passed by voice vote. But we wrapped around it, in concert with 
the Senate, the Rail Safety bill that our Committee did. And it 
is the Rail Safety bill that mandates the implementation of 
positive train control in the most critical corridors where 
there is passenger rail service.
    And funding under this economic recovery plan could also be 
used to install PTC in those critical corridors. That is 
something we can follow up on, once we get this enacted, we can 
follow up on.
    Mrs. Napolitano. Well, I understand Mr. Crosbie is 
concerned that the administration doesn't have the resources to 
handle the implementation as required by our bill.
    Mr. Oberstar. Thank you.
    Again, I thank this panel for your contributions, patience, 
being here for a very long time. And it is always good to see 
many friends of long standing here.
    Our next panel consists of Mr. Terrence O'Sullivan, 
Laborers' International Union of North America. Doug Black, 
Chief Executive Officer of Oldcastle Materials. Dr. William 
Buechner, Vice President of Economics and Research at the 
ARTBA. Mr. Brian Burgett, President and CEO of Kokosing 
Construction Company, Fredericktown, Ohio, or AGC. Mr. Terry 
Dillon, President of National Utility Contractors Association. 
Peter Drakos, President of Coastal Connect, Stanford, 
Connecticut. Thomas Leyden, managing director SunPower 
Corporation Systems for the Solar Energy Industries 
Association. A very distinguished panel indeed, and we're 
grateful to have you here.

TESTIMONY OF TERRENCE O'SULLIVAN, GENERAL PRESIDENT, LABORERS' 
    INTERNATIONAL UNION OF NORTH AMERICA; DOUG BLACK, CHIEF 
 EXECUTIVE OFFICER, OLDCASTLE MATERIALS; DR. WILLIAM BUECHNER, 
 VICE PRESIDENT OF ECONOMICS AND RESEARCH AT THE AMERICAN ROAD 
    AND TRANSPORTATION BUILDERS ASSOCIATION; BRIAN BURGETT, 
PRESIDENT AND CEO, KOKOSING CONSTRUCTION COMPANY, ON BEHALF OF 
 THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA; TERRY DILLON, 
  PRESIDENT, NATIONAL UTILITY CONTRACTORS ASSOCIATION, CHIEF 
   OPERATIONS OFFICER, ATLAS EXCAVATING, INC.; PETER DRAKOS, 
 PRESIDENT, COASTAL CONNECT, STANFORD, CONNECTICUT; AND THOMAS 
  LEYDEN, MANAGING DIRECTOR, SUNPOWER CORPORATION SYSTEMS ON 
       BEHALF OF THE SOLAR ENERGY INDUSTRIES ASSOCIATION

    Mr. Oberstar. Mr. O'Sullivan, thank you for being here. 
Thank you for your contribution, for your union's constant 
presence on the Hill with the very distinguished legislative 
representative who sits right behind you, and for helping us at 
every stage of the way. For ISTEA, for TEA-21, for SAFETEA, you 
have been there strident, straightforward, helping us get the 
votes in the House and the Senate to pass those bills, and you 
are here again to help us pass this one. Thank you.
    Mr. O'Sullivan. Thank you, Mr. Chairman. And thank you for 
all that you do for working men and women in this country and 
for all Americans.
    Thank you, Chairman Oberstar, Ranking Member Mica, and 
distinguished Members of the Committee. On behalf of the 
Laborers' Union of North America and the proud men and women 
who dedicate their lives to building America, I want to express 
out gratitude for the opportunity to be here today.
    As I speak to you today, the construction industry is in 
the midst of the worst, most sustained downturn in 40 years. 
Unemployment for construction workers has nearly doubled since 
last year to 9.9 percent. We are just shy of one million 
construction workers out of work, the highest level in recent 
memory. This industry, a key driver of our economy, is in 
crisis.
    This year, our Nation has put in place two economic 
stimulus plans to get the economy moving again. Each of those 
plans spend hundreds of billions of dollars as a shot in the 
arm for consumers or for Wall Street in the hopes of a needed 
kickstart. But these efforts were like using a can of Red Bull 
and a candy bar to fix this problem. They provided no lasting 
impact, left no sustainable jobs behind, and did not provide 
tangible assets to taxpayers. These measures alone fail to 
recognize that America's most important asset, with all due 
respect, is not Wall Street, it is Main Street and working 
people. From the bailout of Wall Street to tax rebate checks, 
each emphasized consumer spending or credit availability, not 
stimulus based on creating jobs or sparking sustainable 
economic growth.
    Building our economy by building America, the basics we all 
depend on every day, offers an historic opportunity to address 
urgent economic issues, to take care of America for a change, 
and invest in lasting stimulus. I congratulate this Committee 
on its continual bipartisan focus on this issue, and in 
particular, for moving forward at this point in time.
    Mr. Chairman, it is time to put some meat on the bones of 
economic stimulus by increasing income security, not just 
credit availability, and leaving behind real and lasting 
capital assets for our Nation and the future generations who 
will pay for fixing our economy. More than ever, workers need 
paychecks, not stimulus checks.
    Just this year, nearly half of our 684,000 net job loss has 
been in the construction industry. In September of 2007, the 
unemployment rate for construction workers was at 5.8 percent; 
in September of this year it was 9.9 percent. Joblessness for 
construction workers is now higher than in any other industry 
sector.
    Construction jobs are too good to keep losing. They keep 
provide family supporting pay, averaging more than $40,000 a 
year, a third more than average earnings. They benefit working 
class people, who are the hardest hit by the current economic 
crisis, those struggling with job losses, with foreclosures, 
with devastated retirement savings, and with the very ability 
to simply make ends meet.
    The work these men and women could be doing is critical to 
our country, making our transportation systems, our energy 
systems, and education systems more productive and more 
competitive in the global economy. There are numerous Build 
America projects which are ready to go today and could create 
good jobs right now. For example, in the public sector alone, 
we can start tomorrow with the green initiative, retrofitting 
public buildings to increase energy efficiency, providing a 
shield against future oil costs and supply instabilities, and 
in so doing, would put 800,000 construction workers back to 
work.
    In States coast to coast, ready-to-go transportation 
projects ranging from routine maintenance to badly needed 
capacity upgrades have been put on hold due to a lack of 
resources. In fact, there are ready-to-go transportation 
projects in every State in America which we estimate, based on 
available data, would support hundreds of thousands of good 
jobs within 90 days. Getting these projects going will do more 
than address immediate pain. It will help to build America so 
America works again in every sense of the word.
    Today, 26 percent of our Nation's bridges are in need of 
repair or replacement. Roadways in poor conditions or 
overcapacity cost a typical motorist $1,000 a year in wasted 
gas, not to mention our dependence on foreign oil. And across 
America, our children are crowded into 220 temporary classrooms 
while modernization and upgrades of permanent structures could 
quickly begin.
    There are ready-to-go water resource projects under the 
jurisdiction of the U.S. Army Corps of Engineers, ranging from 
flood control to water supply projects, which would create 
thousands of jobs and begin to address the 3,650 dams and 
levees that, 3 years after Hurricane Katrina, remain unsafe.
    Mr. Chairman, Members of the Committee, America's workforce 
wants to build America now more than ever. We must help them to 
do it. LiUNA members and millions of working Americans alike 
are asking, if we can spend trillions to bail out Wall Street 
and give tax breaks to the wealthy, can we seize this moment 
and finally tackle these enormous issues and take care of 
America and its Main Streets for a change? This is a no-
brainer. We can help rescue our economy, rescue working 
America, and leave behind real assets that will benefit our 
entire Nation for decades to come.
    As a first step, we urge Congress to enact stimulus with 
significant investment in building America in the area of $100 
billion, or a third of the $300 billion total effort. With the 
leadership this Committee is demonstrating, we can turn lemons 
into lemonade, and from this wrenching economic crisis, create 
jobs and a lasting legacy that benefits every American every 
day.
    Mr. Chairman, and Members of this Committee, thank you for 
the opportunity to offer this testimony. We are eager to 
continue to work with you in the future to build America so 
America works again.
    Mr. Oberstar. That is music to my ears. Thank you.
    And I see Mr. Kaniewski smiling, so you obviously delivered 
the testimony according to his approval.
    Mr. Black, thank you for being here with us, and for your 
splendid work and your company and your association. And I also 
want to say that your representative on the Hill, John Hay, 
does a splendid job representing the industry.
    Mr. Black. Thank you very much.
    Chairman Oberstar, Congressman Mica, and Members of the 
Committee, thank you for holding this important hearing to 
address investing in our Nation's infrastructure as a way of 
stimulating our economy.
    My name is Doug Black, and I am Chief Executive Officer of 
Oldcastle Materials, Inc. Oldcastle is the leading, vertically 
integrated supplier of asphalt, aggregates, ready-mix concrete 
and paving services in the United States. We are the largest 
asphalt provider, we are the third largest aggregate producer, 
and we are the fifth largest ready-mix concrete producer in 
this country. Our federation of companies across the country 
employs 20,000 people in 1,300 locations, and we do business in 
44 States.
    As the Committee knows well, Americans rely overwhelmingly 
on the Nation's roadways for mobility in the movement of goods 
and services. Despite their importance, however, our roads and 
highways are deteriorating at an alarming rate, and have been 
doing so for several years. The system is aging, and large 
portions of it are in poor condition.
    Against this backdrop, we face three significant challenges 
in the near term that cause significant continued decline in 
road construction and highway maintenance. First, the 
uncertainty of our Federal funding availability is causing many 
of our State and local government customers, as you have heard 
today, to suspend, postpone or cancel construction or 
maintenance projects.
    Second, the highway revenue streams at State, local and 
Federal level that are based on largely fixed user fees simply 
cannot support the growing need for highway construction and 
maintenance in the country.
    And third, over the past 5 years particularly, the cost of 
highway construction and materials has gone up at over twice 
the rate of growth of the funding that support this.
    Simply put, the funding program that paved one mile 2 years 
ago will only pave three-quarters of a mile today.
    All three of these factors have combined and have led to a 
consistent and dangerous decline in highway paving and 
maintenance. The tonnage of hot mix asphalt produced in the 
United States has declined from a high in 2004 of 550 million 
tons to 470 million tons in 2007. That decline has continued in 
2008, and under the current programs will decline further in 
2009.
    Let me give you a specific example of what is happening in 
the field. One of our companies in Pennsylvania was recently 
awarded a $1.2 million highway resurfacing project. PennDOT 
subsequently cancelled the project this past June, stating, 
"The termination of this contract is based on future funding 
projections indicating that sufficient funds will not be 
available to complete this contract." We have seen many jobs 
such as these being postponed or canceled right across the 
country.
    During 2007, we employed 22,500 employees. This year, our 
employment is down 10 percent to 20,000 employees. In 2007, our 
asphalt production declined by 13 percent, our aggregate 
production declined by 7 percent, and our ready-mix concrete 
production declined by 13 percent. These declines in both 
production and employment continue in 2008, and we project them 
to continue into 2009.
    We have seen an increase of over $500 million in our liquid 
asphalt, fuel, and energy related costs; this is a 40 percent 
increase over 2007. Subsequently, we have been forced to raise 
prices, and this has resulted in our State and local government 
customers doing less work against their relatively fixed 
budgets.
    As the customers complete fewer and fewer jobs, we are 
forced to lay off our employees, sell our equipment, cancel or 
defer our investments in new plant and equipment, and close our 
production facilities. In essence, critical road maintenance is 
put off until the next year, our employees lose their jobs, and 
we cut back our spending significantly in the local economies 
in which we do business. The bottom line is that our industry 
is shrinking at a time when our Nation's infrastructure needs 
are growing.
    I can't think of a better, more robust way to add jobs, 
good, high-paying American jobs, than to invest in 
infrastructure, particularly in road and highway construction 
and maintenance. The most effective investment would be 100 
percent Federal funds without requiring a State match. Many of 
the States where we operate today have significant budget 
issues, as we have heard today, and this could make it very 
difficult for them to match funds.
    Now, some have suggested that investment in infrastructure 
cannot be used as a short-term stimulus because it takes too 
long to get started and to complete jobs. I strongly and 
respectfully disagree with this assessment. Let me give you an 
example. Last year, our company in Utah completed a highway 
resurfacing project. This was a $3.5 million job, which 
included milling the old pavement, recycling this pavement, and 
putting down a new paved roadway on 4.4 miles of roadway in 
Utah. This job was completed, from the advertising of the job 
to the completion, in 75 days. Ironically, this was less time 
than it took to mail out the economic stimulus tax rebate 
checks and get them in people's mailboxes. And as a result, we 
now have 4.4 miles of highway in Utah that has a smooth, 
durable, and safer surface. These aren't long-term projects, 
these are short-term projects that produce long-term, real 
value in our economy.
    Oldcastle Materials is prepared to put people to work and 
help generate economic activity in those places where the money 
is spent. We have significant capacity available for more work. 
Our work supports American jobs, the people we employ are 
local, they live and do their work locally. The companies that 
we do business with--our customers, vendors, suppliers and 
service providers--are local businesses hired by our local 
companies. The economic impact of infrastructure investment is 
significant, it is local, and it can be achieved short term.
    In summary, our surface transportation system is in dire 
need of significant investment. The decline in road and highway 
investment has created, as you have heard, an $18 billion 
backlog of work, much of which is already identified and can be 
completed very quickly, efficiently and effectively. Oldcastle 
Materials and our industry peers have significant capacity, and 
we can gear up and get this work done very quickly.
    Infrastructure investment will support local jobs, good-
paying American local jobs, and stimulate local economies while 
preserving our infrastructure and strengthening our country for 
the long term.
    Thank you for allowing me to present Oldcastle Materials' 
view on the importance of investment in transportation 
infrastructure, and I welcome any questions that you might 
have.
    Mr. Oberstar. Thank you very much for your testimony, for 
the substantial detail which accompanies it.
     Dr. Buechner, acknowledge your long service on the Joint 
Economic Committee.
    Mr. Buechner. I will mention that, but thank you very much.
    Mr. Chairman, and Members of the Committee, thank you very 
much on behalf of ARTBA, the American Road and Transportation 
Builders Association, for inviting us to testify.
    I am ARTBA's chief economist. I have a Ph.D in economics 
like Dr. Irons this morning. I hope I learned how not to be a 
pointy-head economist from my 21 years of service on the 
Congressional Joint Economic Committee's core economic staff, 
and certainly during my 12 years at ARTBA, where, as you know, 
Mr. Chairman, we have our feet firmly planted in the ground.
    We have submitted a prepared statement, but what I want to 
do now is summarize some of the major reasons why 
transportation infrastructure investment should be included in 
any economic recovery and job creation legislation being 
considered by Congress.
    As Mr. O'Sullivan testified, the U.S. construction industry 
and construction workers are the Main Street sector of the U.S. 
economy that have so far borne the worst impact of the current 
economic crisis. The unemployment rate among construction 
workers is 9.9 percent. There are almost one million unemployed 
construction workers.
    For our branch of the industry, transportation 
construction, ARTBA conducts a survey of transportation 
construction contractors every quarter. In the survey we just 
completed for the third quarter, we found that 60 percent of 
our members reported they had fewer employees on their payrolls 
than they did in the same quarter of 2007; only 12 percent 
reported higher employment. And that is the largest gap for 
this measure in the history of our industry condition survey. 
In September, which is the peak construction month for highway 
projects, there were 30,000 fewer workers on highway contractor 
payrolls this year than there were 3 years ago.
    Our industry has the capacity to take on additional work 
immediately, as Mr. Black testified. Our market conditions 
survey found that only 3 percent of our contractors are 
operating at full capacity, while 36 percent are operating at 
75 percent of capacity or less. This is up from 27 percent in 
the second quarter, and is the highest in the history of our 
survey.
    Thousands of appropriate transportation construction 
projects are ready to go. Our industry calls them "no plan 
projects." They include highway projects like milling, 
resurfacing, and overlays, safety striping, guard rail 
installation, sound wall installation, it goes on and on.
    Bridge investments can play a big role. The backlog of 
needed work is enormous. Bridge deck repairs, sealing, 
resurfacing, preservation work can all be put into motion 
quickly. So could accelerated bridge inspection and scraping 
and painting projects.
    AASHTO has identified 3,000 projects ready to go--the other 
witnesses have testified about a lot more. We just came back 
from our annual convention in Chicago where our local county 
engineers said that they also have lots of projects that they 
could get underway. So there are thousands of projects out 
there; I mean, it is quite doable.
    The U.S. Department of Transportation calculates that every 
billion dollars of Federal investment in highways generates 
almost 35,000 new jobs. The good news is that many of these 
jobs come online even before onsite construction starts. There 
are two triggers. One is when you pass the legislation, and at 
that point, material and equipment suppliers start building 
inventory and hiring workers to meet the demand. Then, when the 
contracts are awarded, weeks before construction begins 
contractors begin staffing up, conducting training, purchasing 
and leasing equipment, reactivating and expanding quarries and 
asphalt and cement plants. And all of these activities create 
up-front jobs.
    To get the maximum quick-start job creation, H.R. 7110 does 
a couple of things that are helpful, including 100 percent 
Federal funding and a time certain for using the money. We 
recommend that there also be some kind of maintenance of effort 
provision so that there is no substitution of Federal funds for 
local funds. We think investment should be allowed on off-
system projects. Also, there should be some requirement that 
the funds be used on new projects, on actual new construction, 
not to pay off Garvey bonds or accelerated construction, which 
does not create new jobs.
    And finally, it is also critically important that Congress 
enact long-term legislation reauthorizing the Federal Surface 
Transportation and Airport programs as soon as possible next 
year.
    The economic recovery legislation can create jobs in 2009, 
but without increasing the revenue stream to the Highway Trust 
Fund after 2009, the maximum highway funding for 2010 would be 
about $22.7 billion, which would be a disastrous 45 percent 
year-on-year cut in Federal highway funding. That would 
threaten some 700,000 jobs supported by highway construction 
activity in 2010.
    So in conclusion, Mr. Chairman, we urge Congress to include 
significant transportation investment in the economic recovery 
and job creation legislation. Similarly, we urge Congress to 
enact new multi-year surface transportation authorization 
legislation in a timely manner next year to prevent a 
disastrous downturn in transportation construction employment 
in 2010.
    Thank you very much.
    Mr. Oberstar. Thank you very much, Dr. Buechner. That and 
the other documentation in your written testimony is very, very 
compelling and informative.
    Now, on behalf of AGC, Association of General Contractors, 
Brian Burgett, thank you very much.
    Mr. Burgett. Thank you, Mr. Chairman, Ranking Member Mica, 
and distinguished Committee Members for holding today's 
important hearing.
    My name is Brian Burgett. I am President and CEO of 
Kokosing Construction Company located in Fredericktown, Ohio. 
And I am here today representing the Associated General 
Contractors of America, AGC.
    While Kokosing Construction Company and AGC's 33,000 
members are engaged in all aspects of public infrastructure 
construction, I will focus my remarks on the economic 
opportunities derived from water resources investment. I 
encourage the Committee, however, to give all due consideration 
to including the broad-based infrastructure component in an 
economic recovery package.
    My company has already seen a significant downturn in the 
various construction markets in which we operate. The sharpest 
decline has been in the commercial and retail sector, where 
five major projects valued at over $50 million were recently 
canceled. There has also been a major decline in highway 
construction, utility and sewer line work, as well as water 
treatment plants. Our aggregates business has declined by 30 
percent over the past year.
    Kokosing's experience appears to reflect what economists 
are telling us about construction markets in general. AGC's 
chief economist is projecting a decline of as much as 9 percent 
in nonresidential construction activity in 2009, which is in 
line with the 10 percent decline projected by McGraw-Hill 
Construction economists.
    Kokosing employs approximately 3,000 workers, and the 
consequence of this construction decline is an anticipated 
reduction of our workforce by 15 to 20 percent in the coming 
year. Again, my company's experience reflects what AGC is 
seeing in the overall market. Heavy and civil engineering 
construction employment peaked in June 2007, and has steadily 
decreased over the past 16 months. There was more than a 5 
percent decrease in employment over that period. This decline 
has also forced our company to shelve plans for expansion at 
two of our aggregate facilities.
    Kokosing is also reducing our annual investment in 
equipment. Each year, we typically replace 10 percent of our 
equipment fleet, and in a growing market, we would also be 
purchasing additional equipment. The cost of this investment 
over the past few years has averaged $35 million per year. We 
have already canceled some planned purchases for next year and 
are putting many others on hold until we see what funding is 
going to be available for new work. I have no doubt that other 
contractors are making similar decisions.
    Both the U.S. Army Corps of Engineers and Bureau of 
Reclamation have construction backlogs for which additional 
funding would create immediate construction employment 
opportunities. Our company has worked extensively on Corps of 
Engineers civil works projects in the Great Lakes and Ohio 
River division. We understand that there are several projects 
in this division ready to go to bid within 30 days if funding 
were provided. Other larger projects would be ready to go to 
construction within 6 to 8 months.
    Overall, the Corps tells us that there is a backlog of 360 
multiple-purpose flood control, hydropower, recreation, water 
supply and navigation projects ready to go. These include high-
risk dam safety projects, upgrading and rehabilitating 
hydroelectric plants, inland waterway system improvements, 
dredging the Nation's deep draft commercial ports, and 
upgrading critical coastal protection projects. Additional 
funds to accelerate project execution under continuing 
contracts should also be considered.
    Contractors are already mobilized and performing work on 
these projects, but the amount of money is limited to allow 
these to go at the pace that they could. With additional 
funding, contractors could hire more workers immediately and 
complete these projects more quickly.
    AGC estimates that $5 billion invested in water resource 
projects will create over 140,000 new jobs. Of this total, 
almost 40,000 would be new construction jobs, and over 100,000 
additional new jobs in industry supplying construction 
materials as well as goods and services needed by construction 
workers and their families.
    Additional public infrastructure projects will allow our 
industry to maintain our workforce and necessitate hiring more 
workers. It will allow us to purchase equipment and preserve 
manufacturing jobs. If manufacturing is going well, this 
stimulates more construction in the industrial sector, and the 
ripple through the economic goes on.
    Other economic benefits will come from this investment as 
well. The Nation's Marine Transportation System contributes to 
30 percent of the Nation's gross domestic product. Failure to 
maintain channels creates a drag on the economy and may slow 
economic growth. The stimulus funds would be used to improve 
our coastal ports and our inland waterways, helping them to 
operate more efficiently.
    Mr. Chairman, construction has always been an engine of 
economic stimulus and can play that role once again. Increases 
in infrastructure investment can be quickly put to work and 
will have a direct, immediate and dramatic impact on the 
economy. In addition, the projects that are being built will 
have a long-term economic benefit.
    Thank you for this opportunity to comment. And I look 
forward to your questions.
    Mr. Oberstar. And I thank you for your wide-ranging 
observations and comments. The one that strikes me is the next 
to last item of inland waterway channel and harbor dredging. It 
does have a direct effect on the cost of materials and the cost 
of projects in the Great Lakes. The lower lake harbors have 
been down as much as 48 inches in Cleveland, 44 inches in 
Ashtabula, 46 inches at Burns Harbor, and that means that the 
iron ore carrying vessels that leave from northeastern 
Minnesota and upper peninsula of Michigan are going out 7,500 
tons light.
    Instead of 60,000 tons that they could be carrying, they 
are carrying in the range of 50,000 or 47,000 tons. That means 
they're making three extra voyages per shipping season per 
vessel. That raises the transportation cost of delivering 
pellets to Lower Lakes steelman's rails, that raises the cost 
of steel, raises the cost of aggregates for the same purpose, 
raises the cost of coal from Powder River Basin by rail to the 
lake head in Duluth, Superior, and to lower lake power plants. 
That means that we are working extra vessels every season, 
extra transportation costs. It has a direct relationship.
    Corps of Engineers for 15 years hasn't dredged the channels 
on the Great Lakes. We move the water resources bill, the 
emergency dredging provision in there that I included, and that 
would mean the Laborers Union would be working, it means that 
the Dredging Contractors Association would be working, it means 
that materials come at lower cost to lower lake ports. And the 
administration said I don't think so; we are not going to fund 
any one of those.
    Mr. Burgett. You hit a good point there. The Sault Ste. 
Marie locks, which is directly impacted by the area you are 
talking about, they have got work ready to go, cofferdam work. 
They need a new lock there, and that directly impacts those 
shipping costs you are talking about. They are ready to go, 
they just need money.
    Mr. Oberstar. Well, we have it in the appropriation bill. 
We have got $19 million to start construction on that second 
lock at Sault Ste. Marie, which I have advocated for 20 years. 
And one after another, the administration came along and said, 
oh, no, all you States on the Great Lakes, you pay for it. Now, 
wait a minute, we built the Tennessee Tom-Bigby Waterway, a 
billion dollars, no cost sharing; 1,200 miles Gulf Intercoastal 
Waterway, no cost sharing, from Texas, Louisiana, Mississippi, 
Alabama, Florida. We are not a third world country on the Great 
Lakes. We are not going to have--that was a way to kill it, and 
it did for 20 years.
    From now on, I'm Chairman, we are not going to do that.
    Mr. Dillon--excuse me for the obiter dictum here, but I 
couldn't resist.
    Mr. Dillon. Maybe you should run for President. That's what 
I think.
    Chairman Oberstar, all Members of the Committee, my name is 
Terry Dillon. I am the owner of Atlas Excavating in West 
Lafayette, Indiana. We have 150 employees who work on sewer and 
water construction projects throughout the region.
    I appreciate the opportunity to participate in this hearing 
on behalf of the National Utility Contractors Association, 
NUCA. NUCA commends your past efforts to make infrastructure 
part of economic stimulus legislation, and we encourage you to 
include $10 billion for environmental infrastructure projects 
as part of the Committee's economic recovery proposal.
    We have heard a lot today about transportation needs, but 
let's not forget about what is under ground and out of sight. 
Underground contractors across America are drastically reducing 
the size of their companies, selling off heavy equipment, 
assets, and laying off a great workforce. Contractors in 
Florida have cut 50 to 70 percent of their employees. Last 
year's NUCA President, James King of Atlanta, who testified 
before this very Committee, had 120 employees this time last 
year, and he is now down to 40. A contractor friend of mine in 
Las Vegas had 500 employees last year and is now down to 160. 
And my own company has gone from 320 employees down to 150. It 
is bad out there, and it is very real.
    Fewer contracts are going out for bid, which only increases 
the number of bidders competing for limited projects. Consider 
the following example in your own State of Minnesota. Just 
recently, a publicly financed project drew over 50 contractors 
to bid on a project that was worth approximately $150,000. In 
the end, it went for approximately $80,000. That's not even 
enough money to cover the hard construction costs. The bottom 
line is is that right now contractors are virtually bidding on 
any job in any State in any amount just to stay alive. In 
Indiana, what was once an average of three to 10 bidders per 
job has grown to 15 to 25, with many new bidders coming from 
out of State.
    Investing in water infrastructure as part of the economic 
recovery legislation would assist this struggling market, put 
people to work almost immediately, and enhance local economies 
all at the same time. And here's why: Clean water 
infrastructure projects create quality, high-paying jobs in 
both the short and long term. And remember, these are jobs that 
are provided right here in America. These are not jobs that can 
be shipped overseas.
    So what kind of jobs are we talking about? Well, when a bid 
on a project is awarded, people are hired, materials and 
equipment are bought. We buy pipe, pumps and supplies from 
Michigan, Ohio, Texas, California, they are shipped by truck or 
rail to our projects. They run powerlines and telephone lines 
to pump stations. We buy automobiles, trucks, engines, and 
other equipment are manufactured and purchased for our work.
    Water infrastructure projects provide employment 
opportunities for contractors, subcontractors, engineers, 
suppliers and manufacturers, as well as countless construction 
laborers. But the economic benefits that come from these 
projects don't stop with the construction industry, especially 
in times of economic difficulty. Increased economic activity 
ripples through local communities in housing, dining, 
entertainment, clothes, food for the kids, they all benefit at 
the local level.
    Whenever legislation intended to stimulate the economy is 
debated, it is regularly said that the infrastructure projects 
included must be targeted, timely, and temporary. Although the 
average infrastructure project takes years to complete, 
currently, there are scores of water infrastructure projects 
that are ready to go. Surveys conducted by the National 
Association of Clean Water Agencies, Council of Infrastructure 
Financing Authorities and the Association of State and 
Interstate Water Pollution Control Administrators have 
indicated there are billions of dollars in clean water projects 
around this country that can put shovels to dirt within a few 
months. Details of these surveys are included in my written 
statement, Mr. Oberstar.
    My State of Indiana alone has close to $1 billion of ready-
to-go projects. In Indianapolis, they have an $800 million 
septic tank elimination program going on, $100 million in the 
city of Columbus, $15 million in Fort Wayne, $15 million in 
South Bend, $20 million in Evansville, and $30 million in my 
own city of Lafayette. These are ready-to-go projects.
    And let's look again in your State, Mr. Chairman. The 
Minnesota Utility Contractors Association indicates that the 
State of Minnesota alone has $406 million in clean water 
projects that, if funded, could move to construction within 4 
months.
    Clearly, investing in our underground infrastructure can 
provide a sharp economic kick start. We can put people to work 
right now and begin the road to recovery if Congress steps up 
to the plate.
    Tax incentives have their place in the road to economic 
recovery, but they are no silver bullet. NUCA and our friends 
at the Associated Equipment Distributors recently conducted a 
survey to gauge whether capital investment provisions in 
earlier stimulus legislation were persuading utility 
contractors to buy new equipment. Overwhelmingly, responses 
indicated that contractors are not buying new equipment because 
the lack of work could not justify new purchases. However, a 
large majority, 70 plus percent, indicated that they would be 
more likely to hire additional employees, add positions and buy 
new equipment if Congress enacted legislation that would 
increase Federal investment in water infrastructure. For your 
reference, Mr. Chairman, a copy of the full survey report is 
attached to my written statement.
    The message here is simple, it is one that NUCA has 
advocated for years: Tax incentives only work when there is 
enough work out there to provide an incentive to buy. A truly 
effective economic recovery proposal must couple significant 
investment in infrastructure with tax incentives to encourage 
equipment purchases needed to do the work.
    In conclusion, Mr. Chairman, a $10 billion clean water 
infrastructure provision would go a long way to put people to 
work in the short term while investing in the infrastructure 
that will enhance economic recovery efforts and address what is 
becoming an environmental crisis all at the same time.
    Mr. Chairman, I truly believe that we are the gatekeepers 
of our Nation's greatest asset, and that is its infrastructure. 
It is what sets our country apart from all of the other 
countries in the world. We need to maintain it, we need to 
repair it, and we need to replace it. It is our duty. And the 
stimulus package would certainly begin the road to recovery.
    Mr. Oberstar. Thank you very much, Mr. Dillon. And I 
certainly concur with those concluding remarks, although I must 
observe that we are no longer the leader in the world in 
infrastructure investment. I have spoken many times about 
China, about India, about Japan, and now the European Union. I 
have participated in the meeting of the 27 transportation 
ministers; I actually delivered the keynote address for their 
meeting in May. They have a $1.3 trillion infrastructure 
investment program to build the high-speed railways, 14,000 
miles in addition to what they already have to deepen their 
harbors, and to build a canal all the way across Europe to link 
the north Atlantic to the Black Sea. It is a third completed 
already. They're not waiting for us; we have to catch up with 
them.
    Mr. Drakos.
    Mr. Drakos. Thank you, Mr. Chairman, Ranking Member Mica, 
Subcommittee Chair Cummings, and Members of the Committee.
    I am Peter Drakos, President of Coastal Connect, a company 
which I will mention in a moment.
    I am pleased to be here to offer a domestic maritime 
perspective on behalf of the Coastwise Coalition. In my formal 
statement, I address more fully the following key points:
    First, the Coalition's strong support for prompt enactment 
of an exemption from the Harbor Maintenance Tax that we hope 
will be included in the next recovery or stimulus legislation.
    Second, the importance of a strong and steadily funded 
Title XI program.
    And third, the value of integrating some domestic maritime 
transportation activities with surface transportation policy 
and funding.
    America's marine highway is an area of infrastructure 
investment that can stimulate economic activity and job 
creation. It can help develop energy efficient, environmentally 
friendly, and sustainable new capacity for the national 
transportation system and the economy it supports.
    We are grateful for the strong support that Chairman 
Oberstar, Ranking Member Mica, and Subcommittee Chair Cummings 
have shown in short sea shipping.
    The Coalition is in the process of reviewing various policy 
ideas. In advance of concluding on an agenda, I have been asked 
to mention a few of those. We hope to return next year with 
detailed recommendations.
    Today, container vessels, as well as trailer, truck and 
ferry rail services, are operating on noncontiguous 
andcontiguous trade routes. Given all growth projections, those 
companies, and new ones like Coastal Connect, will be called 
upon to carry more freight and serve new markets in the coming 
years. Here are a few examples of new services that are 
planned.
    My company, Coastal Connect, will carry domestic trailers 
between New Jersey and Rhode Island. We will mitigate the 
chronic congestion on the I-95 corridor, and thereby hopefully 
improve the safety conditions of our highways.
    The ships will be the first of its kind to be built in the 
United States to run on compressed natural gas. By year end, we 
will solicit bids to construct four ships, with an option to 
build four more. If we can obtain the financing, our contract 
will mean hundreds of shipyard and related jobs, and with 
delivery of our ships, we will expand opportunities for U.S. 
seafarers and portside workers.
    In California, the Eco Transport Company plans an 
environmentally beneficial tug and barge service between 
Oakland, Stockton and Sacramento. At full operation, they will 
remove over one million truck trips from the road annually. If 
they can obtain the financing, the company next year will spend 
nearly $50 million on vessel and port infrastructure and 
equipment to develop its service.
    On the Great Lakes, three new freight ferry services are 
under development to link Cleveland, Erie and Oswego to ports 
in Ontario. The Federal Government can stimulate and help 
sustain new marine surface transportation services and jobs by 
encouraging investment in vessel and terminal construction and 
eliminating disincentives.
    First, if there is one thing that Congress can do, it is to 
exempt not-bulk domestic and Great Lakes cargo from the Harbor 
Maintenance Tax. U.S. Flag operator, Horizon Lines, has 
testified to this Committee that the tax is a major obstacle to 
the success of new, short sea services such as they are 
planning.
    We appreciate that you, Ranking Member Mica and 
Subcommittee Chair Cummings, have sponsored legislation and 
will urge the Ways and Means Committee to act on an exemption, 
and strongly support the exemption as shown by the opening 
comments this morning of Ranking Member Mica and Subcommittee 
Chair Cummings.
    My full statement describes how the HMT is a disincentive. 
Said simply, when you are trying to provide customers with a 
solution to an existing problem, it doesn't help to have a tax 
and other requirements burden the new approach.
    Second, Congress can stimulate investments in vessels and 
port facilities that are the infrastructure for marine 
highways. It is important that Title XI funding be provided on 
a regular and substantial basis to enable carriers and 
shipyards to make effective plans. Each Federal dollar 
appropriated for the Loan Guarantee Program supports 20 times 
as much in construction. Sixty million dollars leverages $1.2 
million. A recent order for 13 new tugboats was expected to 
stimulate over 200 jobs in the Seattle area.
    Consider this if you will: Since World War II, 41 of the 43 
container ships and 29 of the 33 Ro-Ro vessels built in U.S. 
shipyards for private sector purchasers relied on the Title XI 
program in order to obtain financing. The importance of a 
Federal loan guarantee program cannot be overstated.
    In addition to the HMT relief and Title XI funding, and 
increased funding for the maintenance and improvement of the 
Federal navigation system, the Committee could consider a range 
of approaches; those could include incentives for users of 
marine highways because of the environmental and energy 
benefits and adjustments to surface transportation policy that 
enables greater integration of the modes.
    To conclude, surface transportation development would 
create new jobs and enable the maritime sector to develop new 
capabilities that will serve this country well.
    I thank you for the opportunity to be here today.
    Mr. Oberstar. Thank you very much. I was delighted with 
your testimony about short sea shipping, not only because Mr. 
Cummings and I authored it and created it, crafted it and put 
it into the energy conservation bill, but because it is a very 
good commonsense answer to our congestion problems.
    Now, Mr. Leyden.
    Mr. Leyden. Thank you, Mr. Chairman. I know you saved the 
best for last, right?
    Mr. Oberstar. There is no last here.
    Mr. Leyden. And I have mostly good news, so this should be 
fun.
    I am Tom Leyden. I am the managing director of SunPower 
Corporation. SunPower is a manufacturer of high-efficiency 
products and systems. We are the leading company in the U.S. in 
all four sectors of the solar industry. And I have a power 
point that I would like to share with you.
    SunPower was incorporated in 1985. And I don't know if you 
remember, Mr. Chairman, but I testified before you about 6 
years ago. At that point, we had about 35 employees and $30 
million in sales. Well, today, this year, we expect to have 
$1.4 billion in sales, and over 4,000 employees.
    Mr. Oberstar. That is impressive. My heavens.
    Mr. Leyden. We have a global footprint. I run the east 
coast office out of New Jersey.
    These are the four sectors of the photovoltaic industry 
that we are involved in, as are other companies in the 
business. But I wanted to start the slide slow with this graph, 
which very dramatically shows what is happening in the solar 
industry. And it is really all about price. So that blue line 
is the declining price of photovoltaic module over time. And 
the yellow line is the growth of the solar industry.
    So you see, as prices decline, the markets got bigger and 
bigger, and around 2000 the industry took off. And that is 
because at that price point, we started competing with grid-
connected power.
    And, frankly, we aren't quite there yet. What happened was 
there are governments around the world that have provided 
incentives that bridge the gap between our cost and what 
utility power was. But there were enough programs around--
Japan, Germany and the U.S.--that the industry took off and is 
growing still at a rate of about 35, 45 percent per year.
    And this illustrates exactly that point, which is prices of 
electricity continue to go up through conventional fuels, and 
the prices of solar continue to come down. And at some point 
the lines are going to meet, and that is what we call grid 
parity. That is within sight, at this point.
    And so what has happened is that incentive programs have 
been put in place to bridge that gap, and so we actually sell 
energy for less than the utility does. That is how we build our 
business.
    And I just wanted to throw this slide in. There is kind of 
a new paradigm developing, which is solar at today's price and 
solar at projected cost of production over the next 15, 20 
years can build new capacity cheaper than building new power 
plants through conventional means. And that is nuclear, coal, 
gas, any means of creating electricity. And Lazard has done a 
study to kind of identify that.
    So the good news of late is the investment tax credit that 
we struggled to get extended for so many times was extended in 
the bailout bill. That was an incredible event for the solar 
industry. It provides an 8-year extension of the ITC. That 8 
years will basically get us to grid parity. And that 8 years of 
building capacity will create about 440,000 new jobs in the 
U.S. and investment of about $168 billion.
    Mr. Oberstar. And that picture is of the DOE headquarters 
roof, isn't it?
    Mr. Leyden. It is. I know you worked on that for a couple 
of years, and there it is.
    Mr. Oberstar. Thirty years.
    Mr. Leyden. Okay, 30 years.
    Mr. Oberstar. We got it passed--well, before there was a 
Department of Energy building, that is, and got the legislation 
enacted to convert Federal civilian office space to solar roof, 
signed by President Carter, funded by President Carter, de-
funded by President Reagan. Thirty years later, I am Chairman. 
We are going to do this.
    Mr. Leyden. Thank you for your perseverance. We installed 
that. My company installed that last summer. Hopefully future 
projects will not take that much time.
    So I am going to run through a series of slides that just 
illustrates the kind of projects that we have done on Federal 
facilities, Postal Service facilities in Sacramento and 
Oakland. And these are roof-top-mounted, these are ground-
mounted systems, they are parking lot systems. There are a lot 
of ways to deploy solar.
    Just keep flipping through these slides, just so you have 
an idea: a Marine base; a GSA in Boston; Coast Guard in Boston; 
Postal Service in San Francisco; GSA in Los Angeles; Fort Dix 
in New Jersey; Navy base in Coronado; and a postal facility in 
San Francisco; and then, finally, a very dramatic photo of the 
14-megawatt project we built at Nellis Air Force Base last 
year.
    Now, we built this system, which is the largest in U.S.--it 
was largest in the world at one point--in 6 months from 
contract time. So it just shows you how quickly you can deliver 
solar power once we have a contract.
    So what can the Federal Government do? Generally speaking, 
we have lots of assets in the Federal Government that we can 
put to use creating clean energy. Roof tops--there are 170 
million square feet of Federal building roof tops that we have 
identified that we could put solar on. And if you did, that is 
about 1,000 megawatts of power, which is about enough power for 
250,000 homes, just to give you some sense of how much power 
that is.
    BLM lands, just taking 1 percent of the land that is 
available could build 70,000 megawatts of solar power. It is 
huge. Brownfields and greenfields, roadways and train 
stations--there are lots of Federal facilities that could be 
generating solar power.
    And what does solar do for the Government? It creates jobs, 
green-collar jobs. Everyone has been talking about that of 
late. Again, the ITC created 440,000 jobs on its own. An 
aggressive Federal action can create many thousands more. It is 
the kind of jobs that help Main Street. It puts plumbers to 
work, electricians, roofers, steelworkers, engineers, 
architects, and so forth back to work. It revitalizes the 
manufacturing and high-tech sectors.
    And it saves taxpayer money. These investments actually 
will save the Government money and pay for themselves over 
time. The Government spends $5.8 billion annually on 
electricity costs. And what I am going to propose is that we 
unleash the private sector to save billions of dollars of 
energy for the Government.
    It also has the benefit of creating security. It displaces 
natural gas electricity production. We need to conserve the gas 
that we have in the U.S. It is a hedge against future price 
spikes. That is a very powerful factor in developing these 
systems.
    Carbon displacement--obviously climate crisis is the 
largest threat facing our Nation and the world. Solar can play 
a big role in reducing that. It is a carbon-free source.
    So what can the Federal Government do? The first thing, the 
easiest thing is give Federal agencies the authority to enter 
into 25-year power purchase agreements. Right now they are 
limited to 10 years. And by doing that, we could bring in 
private capital that would contract with those agencies to 
provide solar electricity for less than they are paying now for 
their energy. That is big.
    Direct appropriations, of course you could also use 
building projects on brownfields in Federal buildings, 
installing on roadways and so forth. And then create what is 
called--you are familiar with the energy saving performance 
contracts. I would suggest you set a specific type of mechanism 
called solar savings performance contracts, similar to the PPA 
but a little bit different.
    What are other things? You could work with State and local 
agencies to create solar jobs and solar installation programs; 
loan guarantees for local government, you know, for libraries, 
ports and other civic buildings. And then there is a fund, 
Green Schools Program. Apparently, it has been authorized but 
not appropriated. It is about a $3 billion program.
    So those are the easy things. I think we have made a lot of 
progress in the industry. I think we could do a lot in the 
Federal sector, given some support. And the industry is open to 
some very creative ideas on how to do that the best way we can.
    So thank you, Mr. Chairman and Members of the Committee.
    Mr. Oberstar. Thank you very much.
    And thanks to all of the members of the panel.
    Now we will revert to seniority questioning, and we will 
start with Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    All of you I think have been entirely convincing that this 
is the time to do desperately needed work. Unfortunately I 
can't question all of you. I have questions for Mr. O'Sullivan 
on Mr. Leyden, in particular.
    Mr. O'Sullivan, in this region, I have worked very closely 
with the laborers. Indeed, in this region, we put points in the 
requests for proposals--this was long before this crisis--for 
certified apprenticeship programs, so that you not only have to 
tell us how many projects you have done, da da da da, but, as 
you know, apprenticeship programs, certified programs. And, 
increasingly, the programs that we are finding are important, 
the pre-apprenticeship programs, save employers or contractors 
money, because they are people who know how to do the work.
    To hear the testimony of all of you is to wonder how 
anything gets built today, given the sustained losses you have 
received.
    I would like to ask--one of you talked about how 
contractors take just any work they can get now. I would like 
to ask you about people to do the work.
    Now, we know that this work is not as attractive as it was, 
say, a generation ago and certainly in the heyday, post-World 
War II, let's say, when we were rebuilding America. Because a 
lot of these young guys would go off into some dot-com 
something, so they are not with their fathers were. And this is 
still very high-paying work.
    In fact, we have seen in this region--and I really commend 
the laborers, in particular, because the laborers have been 
instrumental in helping to train people who really are 
desperate for work like ex-offenders who wouldn't have been 
trained, let's say, a generation ago. But this is heavy work. 
This is work that has people getting up in the morning early 
and being out there in the cold, much colder than it is today 
in Washington.
    The last stimulus, which is the way we have been doing them 
since 1990, was not my favorite, and I hope we don't do it in 
this one, you know, this give people some money. That doesn't 
make any jobs for anybody. In fact, the Saudis are spending 
that last stimulus as I speak, because the gas prices were 
going up and people put it right there or they paid down their 
credit cards. That is why we didn't get anything from it.
    But I want to talk about shortages of personnel in 
construction. Is the industry ready, if there is a stimulus of 
some kind that affects the industry that all of you have 
testified about, willing and able to train people sufficiently 
so that we can get we could get workers in this country who 
would do the work, laborers and others?
    I would like to hear your discussion of the construction 
personnel shortage in the United States and how we were dealing 
with that even in the heyday that has passed us by now.
    Mr. O'Sullivan. Well, representative, from the laborers' 
perspective, when we have almost a million construction workers 
out of work, I think we all in the industry face--we are facing 
workforce shortages. Now there is a shortage of work, with 
construction workers across this country looking for 
opportunities.
    With the residential market being decimated, and it has 
been reported here the commercial and light commercial sector 
being affected, and now even the heavy and highway sector being 
affected because of the lack of funding at the State level, 
there is right now in our organization more workers than there 
is work. So I am confident that we could----
    Ms. Norton. And you think this is in the other trades, as 
well?
    Mr. O'Sullivan. I believe--I don't speak for them--I 
believe they are experiencing the same thing. Because the 
industry as a whole--again, 2 years ago, 3 years ago, we were 
looking for more members, more workers. And now our members are 
come back looking for job opportunities that unfortunately 
aren't there today.
    On the subject of training, I know in the building trades 
and within our organization, we have training facilities across 
this country. We pride ourselves on providing a skilled and 
capable and safe workforce. And I think we have work, the 
laborers have worked unbelievably with you, Representative 
Norton, and appreciate your efforts on our apprenticeship 
programs and our apprenticeship efforts in creating job 
opportunities with local projects, with the local workforce.
    So I think the challenges are there. The challenges for us 
today are putting people to work. And, as I said, we have more 
members and more workers than we have work opportunities. And 
this economic stimulus bill with infrastructure spending is a 
jobs bill, as you said.
    I know the people that I represent and I believe 
construction workers throughout this country aren't looking for 
a stimulus check; they are looking for a paycheck. And that is 
what this Committee stands for, and that is what this economic 
stimulus bill needs to make sure that it happens, that we put 
people to work, that we take the million that are out of work 
today and put them back to work tomorrow.
    Ms. Norton. I saw some heads bobbing. Does that mean all of 
you believe you can meet the labor force demands of a stimulus 
package of maybe close to $100 million with workers in this 
country?
    Mr. Dillon. Sure. I mean, I think at this time you need to 
be a lot more worried about the jobs we are losing. There are a 
lot of people out of work. And the construction industry, 
everything is tailing off across the Nation. And I will bet, 
when we get through this winter, you are going to go to see 
some devastating numbers in unemployment if you don't do 
anything.
    However, I will say that the construction industry has 
begun to enhance its image in the educated world. So, 
particularly in the State of Indiana, between Purdue 
University, Indiana State, IUPUI, we are starting to attract 
highly educated managers out of school who actually want to put 
shovels to dirt. They don't want to be office guys. They want 
to actually build things. And I think that is encouraging, as 
an owner of a company, to see that we have had a mindset 
change. And part of that is that they have found out that we 
pay very well.
    Ms. Norton. Yeah, I got news, people.
    Mr. Leyden, I have a question for you about the workforce, 
whether the workforce would use the same workforce that we have 
been using in other highway and construction. But I am a big 
solar proponent right here in sunny, windy D.C. I recognize we 
use solar throughout the United States and that the technology 
allows that. I even want solar in my hybrid. The sooner you can 
get to that, the better.
    But I was heartened to hear your testimony, because, 
frankly, I have been disheartened by the comparison between the 
almost self-starting innovation that occurred in technology--
where these guys funded themselves, and, whoops, you know, they 
finally had a bubble--and alternative energy, which is even 
more desperately needed, in my view, seemed to start up with 
the venture capitalists, for example, much more slowly. And 
today we read that the venture capitalists are looking for safe 
bets. You know, whatever happened to their entrepreneurial 
spirit?
    I was heartened about what you said had been the growth in 
the last few years. But I am wondering whether this industry--
solar, wind and the like--need a big actor like the Federal 
Government in order to really take off. Is that what it would 
take to make wind and solar, which a lot of people pooh-pooh 
now because they don't see it coming online fast enough, really 
viable as an industry, a big industry in our country? Does the 
Federal Government need to get in there big-time and then 
others will follow in reduction of costs, et cetera?
    I wish you would talk about that, because I am very 
concerned about what seems to me to be a fairly slow start, 
especially if you compare it to places like Europe.
    Mr. Leyden. It is a slow start. We have grown in the U.S. 
through the leadership of just a few States, California being 
the primary State; New Jersey, believe it or not, the second 
largest market in the country. A few other States have had 
programs. It has really been on the State level that we have 
had leadership. We have had virtually no leadership on the 
Federal level.
    We produce less than 1 percent of the electricity in the 
U.S., so we have a long, long way to go. And it is really 
exciting to a lot of people right now that we are getting close 
to grid parity, at which point the industry takes off.
    So my viewpoint is, why are we going to wait that 5, 7, 8 
years? Why not be supporting that now and gaining the momentum 
and being a leader in the world in this technology?
    Ms. Norton. Will the Federal Government in this stimulus 
package help bring down the cost?
    Mr. Leyden. Absolutely. Through Federal leadership, we can 
reduce costs, we can build infrastructure. I am talking about 
industry infrastructure--sales jobs, installation jobs, service 
jobs, manufacturing jobs.
    Ms. Norton. Would you use the same workforce that your 
colleagues on the panel speak of using in their own work?
    Mr. Leyden. Yeah. We typically have people that are roofer 
types and electrician types.
    Ms. Norton. How much training does it need to convert from 
that to solar, for example?
    Mr. Leyden. Training that we can handle. I mean, our belief 
is, if the markets are there, we will create the workforce and 
train the workforce.
    Mr. Oberstar. I have to interrupt at this point. Mrs. 
Napolitano has a flight to catch. And Mr. Cummings has 
graciously conceded his time for Mrs. Napolitano to question. 
And we will come back to the gentlewoman from the District in a 
moment.
    Mrs. Napolitano. It is very much appreciated, and thank you 
for allowing me to jump in.
    A couple of things.
    And, Mr. Leyden, I am very, very, very, very interested in 
greening, because IBEW and NEC, national electric contractors, 
are starting to green business. That is jobs. That is good-
paying labor jobs.
    Mr. Leyden. Yes.
    Mrs. Napolitano. And I would suggest, Mr. Chair, that maybe 
we need to start looking at promoting and assisting business or 
hospitals, schools, all those entities that pay a lot in 
electricity, to be able to cut that and help them establish, 
whether through a zero interest loan program or something, to 
be able to help them address their current costs, which are 
high.
    But given that we have drought, global warming, less 
precipitation, climate change, there is not enough water in the 
rivers and dams to create the electricity. So it behooves us to 
start looking at being able to promote that, to then move on 
and be able to help business and nonprofits, I would say.
    Mr. Leyden. That is a very good point. All public service 
entities could use mechanisms in order to adopt this 
technology, which ultimately saves them. We have schools in New 
Jersey that are saving over $500,000 a year in their energy 
costs because they put solar in. And that money goes right back 
into the school system. So, you know, why ship it out? Use it 
internally.
    Mrs. Napolitano. I am very interested in your 25- versus 
10-year purchase agreement. That is something that possibly we 
may be able to tweak a little bit and see how that would work 
out.
    And I really thank you. I would love to have your card, 
because I would love to continue picking your brain.
    There is a physicist that has managed to put a Prius 
hybrid, his wife's, to produce 125 miles per gallon. Now, at 
the Denver Research Center, they already have it at 100. He has 
gone to 125. And he is also with NEC and IBEW.
    Mr. Leyden. Great.
    Mrs. Napolitano. So I am very, very happy.
    And I am very happy to see NUCA here, one of my 
contractors, Chaze Haba. Joe Valverde, out in our area, is a 
long-time NUCA person that has done a lot of work in 
construction for our highways.
    So we want to continue producing jobs that are going to put 
people back to work.
    But, Mr. O'Sullivan, I realize that laborers--and I would 
be remiss if I didn't mention my neighbor, that has always 
talked to me about international labor. And I understand you do 
have a clip. And with your indulgence, Mr. Chair, it is a very 
short clip. And if we could turn the lights down, would you 
mind telling us about buy/build America?
    Mr. O'Sullivan. Sure, Representative.
    "Build America So America Works," I like to think of it as 
an extension of the Chairman's great work and this Committee's 
great work on priorities and the necessity for transportation 
infrastructure. We are doing television ads, ads in newspapers, 
bus wraps, billboards all around the country in an effort to 
raise the profile and the need for transportation 
infrastructure spending in this country.
    We are trying to get a million signatures, we are well on 
our way to that, a petition to build America that we want to 
certainly deliver to this Committee--this is preaching to the 
choir--but to the next President and the next Congress about, 
as we prioritize the needs of this country, transportation 
infrastructure needs to be near the top. And the Chairman and 
this Committee are doing just that, so it is an extension of 
the great work that this Committee is doing.
    You know, right now, transportation infrastructure gets 
notoriety when a bridge collapses, unfortunately. And people 
complain about sitting in traffic every day, and crumbling 
roads and potholes and the rest. We need to heighten that and 
make sure that the general public and elected officials at the 
local, State and at the national level understand the 
priorities and the needs for transportation infrastructure in 
this country and the fact that the money that we spend will put 
people to work, so we get a double bang for our buck. We 
upgrade and improve our infrastructure and we put people to 
work in good-paying jobs in the construction industry.
    Mrs. Napolitano. We have a clip. Thank you.
    [Video shown.]
    Mrs. Napolitano. Thank you so very much. That was great. 
And I have to tell you, I was on city council in 1986, and I 
passed a resolution to "buy America." So, with that, I thank 
you.
    And thank you for your indulgence, Mr. Cummings and Mr. 
Chair.
    Mr. Oberstar. Thank you.
    Now the Chair will recognize Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Gentlemen, first of all, I want to thank you for your 
testimony. Our Chairman is always looking for practical 
solutions that make sense. And you all have come up with some 
good solutions to the problems that we face, not only in our 
economy but in dealing with the problems that we have here in 
our country with regard to structure and infrastructure.
    But on the sun power, Mr. Leyden, I was very impressed with 
what you had to say. Are there a lot of other companies doing 
the same thing that you are doing?
    Mr. Leyden. There are, yes. The industry has been growing 
very rapidly. We are a leader, but there are others, yes.
    Mr. Cummings. And did you say that you had, how many 
employees 6 years ago?
    Mr. Leyden. Thirty-five.
    Mr. Cummings. And you have how many today?
    Mr. Leyden. Four thousand.
    Mr. Cummings. That is amazing. That is amazing.
    Mr. Leyden. And we are growing.
    Mr. Cummings. And as I listened to Ms. Norton's questions, 
I couldn't help but think about--I was telling my staff that I 
really would love to see some folks from companies like yours 
to visit some of our historically black colleges and 
universities----
    Mr. Leyden. Would love to.
    Mr. Cummings. --that have engineering schools. Because what 
happens so often is that historically black colleges and 
universities are behind the curve sometimes. And I want to be 
in front of the curve. And green is very, very important today. 
And then when I hear those kind of statistics, Mr. Chairman, 
that is just very encouraging, when you can go from 35 
employees to 4,000 in 6 years. I don't know how many folks can 
say that.
    And I guess my question goes to, with the economy being 
what it is right now, how do you see that affecting you? Do you 
see it as your company being able to sustain itself? And I am 
not trying to get you to talk against yourself, but are you in 
a better, do you think, in a better position to sustain 
yourself because of what you do with regard to green? Or do you 
think you still have problems up the way?
    Mr. Leyden. We have high demand for our product, but this 
crisis has definitely created problems for us. I mean, we 
finance our projects, so where our investors would need 7 
percent return before, they now need 8.5, 9 percent return in 
order to justify their investment under these conditions. So 
that makes it very hard for us to produce low-cost electricity 
if we are paying more for the financing component.
    So we will face that. I mean, my company is a publicly 
traded company, and we have a large cash reserve, so that is 
going to help us. We may have to do some creative things to, 
kind of, get us through this financial crisis until the markets 
loosen up a little bit.
    Mr. Cummings. Now, Mr. Drakos, I want to thank you. I had 
an opportunity to read your testimony, excellent testimony. I 
really appreciate it.
    Mr. Drakos. Thank you.
    Mr. Cummings. And I also appreciate what you all have done 
in the area of short sea shipping.
    And I thank the Chairman for your leadership.
    I am trying to figure out, I mean, this thing seems so 
practical and it makes so much sense, and I don't know of 
anybody who has seems to be against it. I don't know of 
anybody. Am I missing something?
    Mr. Drakos. I don't believe so. And thank you for that 
comment, Mr. Cummings. We have run into no opposition 
concerning short sea shipping.
    One hurdle that has to be overcome is we need to build 
ships to handle and get this industry further off the ground 
than it is. So, you know, we do, as I mentioned in my 
testimony, we did need Title XI financing, because it is a 
rather high barrier to get in. So to build the ships and to get 
the industry moving, Title XI is a very important component.
    But to answer your question in the short run, no, I am not 
aware of anybody that is opposing it. As someone used the 
comment earlier, it is a no-brainer. So what we need to do--it 
adds capacity to our transportation system. Bottom line, that 
is what it does. And I think when it is fully integrated with 
rail and truck, we will have an effective national 
transportation system.
    Mr. Cummings. Let me ask you this. I know you can't 
necessarily do a crystal ball act, but if we were to pass this, 
say, within the next month or 2, what do you see happening 
over, say, the next 2 or 3 years?
    Mr. Drakos. On the specific items that I put in my paper, 
and that is the exemption from HMT and additional Title XI 
financing, I think what you will see is more of the freight 
user, of the people who are looking to move freight, they will 
understand and be drawn to the option of a short sea shipping 
venture. At the moment, it is not there. The HMT is a 
disincentive. And as of right now, we need to get the industry 
fully integrated into the transportation system.
    So, in terms of a crystal ball, I think what you are going 
to see is cargo moving toward it, and I also think that you 
will see more operators, such as Coastal Connect, that are 
going out and going to build ships or reposition existing 
tonnage into a short sea shipping service. So, in 2 or 3 years, 
Mr. Cummings, I believe hopefully by then we will have seen the 
mental shift to America's marine highway as a viable option.
    Mr. Cummings. Mr. Chairman, again, I thank you for this 
hearing. I see my time is up.
    Thank you all very much.
    Mr. Oberstar. I appreciate your questions and your support, 
which culminated in our legislation as part of the energy bill, 
Chairman Cummings, on short sea shipping, something I have been 
working on for a good many years.
    But a further answer to the very pointed question you 
raised, who is in opposition? No one is in opposition. There 
has just been no willingness to provide the financing over the 
last 12 years.
    Previous 12 years to this Congress, the Title XI loan 
guarantee program was allowed to deteriorate. The Title XI 
construction differential subsidy program was allowed to 
deteriorate to a point of zero availability of funds. And, to 
be sure, these two initiatives, the Title XI loan guaranty, 
construction differential subsidy, and operating differential 
subsidies, were for another era of maritime shipping in America 
when we had 5,500 U.S. flag vessels at the end of World War II. 
By the time I came to Congress in 1975, we were down to 800 
such vessels. Today we have 37. Because other countries have 
subsidized their shipbuilding, the operation, the maintenance 
of their maritime fleet, and this country abandoned it, the 
U.S. flag fleet.
    The short sea shipping initiative is an opportunity for us 
to regain an American flag presence in our territorial waters, 
in the Great Lakes international waters, and in the Gulf of 
Mexico. And, certainly, the port of Baltimore would be a great 
beneficiary from this initiative, not only for RORO, for truck, 
trailer roll-on/roll-off, but also vessel. A vessel has already 
been built to accommodate 110 rail cars, freight rail cars. 
They have three levels in the vessel of track where the train 
just pushes the rolling stock on to the vessel in three layers, 
in three decks. And then the ship leaves from the Yucatan 
Peninsula and goes to Mobile, Alabama.
    Now, we can do that in the Great Lakes. We can do that port 
to port in the United States, in the coast waters trade, and 
avoid the congestion on land that rail and truck traffic 
encounters. That is the great promise.
    But we need to invest money through the Title XI Loan 
Guarantee Program. What will that do? You remember very well, 
Mr. Chairman, the great Baltimore shipyard construction that 
had 25,000 workers at its peak, along with the Bethlehem Steel 
Plant. There isn't a single ship construction worker operating 
now. But that industry could come back if we reinvest through 
the Title XI Loan Guarantee Program.
    And so you have steel for shipbuilding, shipyard workers, a 
service to transportation in this country, reducing air 
pollution, reducing energy inputs, and creating enormous 
economic productivity. That is how our infrastructure 
intermodally works. So we are going to move ahead about this.
    Ms. Norton?
    Ms. Norton. Mr. Chairman, I have one more question; it is 
really for the entire panel. I am looking to make sure, just as 
I did in my earlier question about the workforce, I am looking 
to make sure that there are not obstacles that somebody is 
going to jump up and cite as we move forward.
    So this is for any and all of you. And it is really based 
on what I have seen in my own work with GSA and economic 
development. And I must say, I saw a reference to it in Dr. 
Buechner's testimony about the really enormous rise in 
construction costs over the last 4 or 5 or so years, with what 
I believe is material price escalation that we see in this 
town, in the transportation budgets, for example, in 
particular.
    Now, if we do a package, a substantial package, will the 
cost go down in the same way that you speak of people looking 
for jobs in construction industry? Will the costs that we have 
seen over the last 4 or 5 years stand in the way of quickly 
getting the materials to, in fact, go in the ground?
    What is your view of the escalation in material price costs 
on an economic rescue package for the real economy?
    Mr. Buechner. Since 2003, cost of highway construction has 
gone up by almost 65 to 70 percent. So the dollar just does not 
buy as much construction today as it did. But the need for the 
money is there.
    Ms. Norton. Would a lot of it be eaten up in these costs, 
rather than in labor, you know, and putting people to work?
    Well, somebody else may want to answer that that would have 
to deal with it.
    Mr. Burgett. I think a significant portion of the cost 
inflation that we have seen has been due to the cost of crude 
oil. Everything gets moved with diesel fuel and trucks and 
stuff like this. Fuel is used in our asphalt plants. Every ton 
of asphalt takes two gallons of fuel. Our prices of asphalt 
have gone up.
    All those things, in the last few months, we have seen 
drastic decreases. Prices of liquid AC bought in bulk have 
dropped from $700 to $425 a ton. Of course, diesel fuel has 
dropped out on the highway from a little over $4.50 to almost 
$3. And the prices of steel have dropped at least 15 percent. 
So we are seeing drastic drops. I mean, they affect PVC pipes 
and sewer projects. That is all made with your petroleum.
    So, basically, I think the biggest culprit that we have 
seen in the inflation costs have been the cost of oil. And we 
all know--I don't know what it did today, but last I looked it 
was about $64 a barrel. That is a huge drop from that $144. 
That has, right now, been the dog wagging the tail.
    So those are down. If you can tell us what the price of oil 
is going to do, we can give you a good indicator of what your 
buying power will be.
    Mr. Dillon. In the sewer industry, I would agree with what 
Mr. Burgett has said. I mean, a lot of the product is shipped 
over the road. It is all based off of fuel. Pipe is made from 
oil. And that is pretty much what the cost for our industry--it 
is coming down also.
    But I will say one thing to the Chairman's little off-
point, is that a lot of this stuff is pretty sexy, all these 
things you are talking about, between wind and solar and all 
that stuff. You still have to drink clean water, and it is 
really nice to use a bathroom and take a shower in the morning. 
So let's not forget about the underground.
    Ms. Norton. Well, we want those to run on solar too.
    Mr. Black. I would concur with Mr. Burgett and Mr. Dillon. 
You know, we are seeing dramatic drops in fuel and energy. And 
that will make the dollar go further next year, in terms of 
construction cost.
    You also have to remember that our plants on average are 
running at about 50 percent of capacity. So we have immense 
capacity to do more work. But as you ramp that up, that also 
lowers cost.
    So, the stimulus package I think would do us very well from 
a lot of standpoints. And I think the dollars are well-timed, 
actually, with the drop in energy, to buy a lot more paving 
next year and in the next 6 months or 3 months than it did in 
the last 6 months.
    Mr. Dillon. I would like to put on the table how 
devastating that fuel is. My company this winter was doing a 
large sewer project out through the middle of farm fields where 
we had to run generators to keep the job dewatered. And by the 
time I got the job completed, my fuel to run the generators ran 
$600,000 over-budget. And that comes right off my bottom line. 
That is a lot of money.
    Mr. Leyden. The solar industry has suffered from a shortage 
of solar modules over the last few years because the demand has 
been so great. So demand is great; that is good. And the 
industry now is catching up to that with more production. And 
so we feel we can absorb--any stimulus that you create can be 
absorbed by the industry.
    We are affected by copper, steel and glass prices, as well, 
but it is a less important component of our costs.
    Ms. Norton. Well, I hate to see that we had to get into a 
recession in order to reduce the cost of oil. But I think I can 
say with some confidence, given the testimony we have heard 
from economists and those before you, that we haven't even 
begun to hit bottom yet.
    And as a result of what we have seen, Mr. Chairman, with 
the crowding of Amtrak, buses and trains, maybe the American 
people have learned their lesson and won't quickly go back to 
raise the cost of oil by hopping back into their SUVs any 
longer.
    In any case, thank you very much for, really, a very 
important hearing, Mr. Chairman, which I think sends a message 
in and of itself: Whatever we do, that we are looking at the 
real economy where the average American spends money, is out of 
a job, and now perhaps sees that we were as concerned with them 
as we were with the top of the economy. It is one economy; you 
either rescue it all, or it doesn't get rescued.
    Thank you again, Mr. Chairman.
    Mr. Oberstar. Well, thank you, Ms. Norton, for your 
contributions and for your engagement, as always, your 
intensity to the subject matter at hand in true professorial 
fashion. We are grateful for your Chairmanship of the very 
important Economic Development, Public Buildings and FEMA 
Subcommittee. You do a superb job.
    Mr. Dillon, we haven't forgotten about underground utility 
contractors, by no means. My predecessor in this Committee and 
in my district, John Blatnik, who was Chair for 4 years of the 
then-Public Works Committee, humorously one time suggested that 
we require all sewer and water pipes to be built two feet above 
ground so people would bump into them and notice them.
    Mr. Dillon. I agree, I concur.
    Mr. Oberstar. Because he said, when we get these projects 
built, they are buried in the ground and people forget about 
them, and they come and say, well, John, what have you done for 
us lately? They don't remember the water and sewer and the 
other things that are below the ground.
    Well, that was tongue-in-cheek, of course, on his part, but 
our water and sewer and sewage treatment facilities are aging. 
We have water systems in the Northeast and New England that are 
100, 150 years old. Some are still wooden water pipes that are 
deteriorating.
    In the District of Columbia, in Ms. Norton's district, 
almost every week there is a report of a water main burst 
someplace that stops traffic and causes delays. And that is 
because cities don't have the money to go in and repair and 
replace, as they need to do, as they know they must do.
    When we do the I&I, the in-sewer review by television 
cameras of the quality of the piping, cities know where they 
have to replace, where they have to fix, where they have to 
build new, completely take it out and totally replace it, but 
they don't have the money to do it.
    And for 12 years, the State Revolving Loan fund has been 
expired. And it has been funded year to year by an ever-
decreasing appropriation. That means fewer laborer jobs. That 
means less aggregate. That means less construction, less pipe, 
less steel. Everything is hurt when there is a failure to 
invest.
    And we moved that bill, as I said at the outset, we moved 
it $14 billion. But we started with $20 billion. But we had to 
scale it back because of the objections from the Office of 
Management and Budget. Well, the Senate hasn't acted on it. The 
bill passed this Committee, it passed the House overwhelmingly; 
the Senate hasn't acted.
    Next year we are going to come back, we are going to come 
back with a bigger bill. We will have a new Office of 
Management and Budget, or at least a new director. I don't care 
about the minions over there; we will just roll over them. 
Whatever we have to do, we are going to pass something big. We 
need to do it. The country is desperate.
    President O'Sullivan, I like your "paychecks, not stimulus 
checks." I remember in 1975 when President Ford proposed a tax 
credit to stimulate the economy. And the day after he made the 
proposal, I got a call from--it was a $50 tax credit--from a 
gentleman who lives in my hometown, not far from our house 
actually. He said, Jim, I went down to Lampert Lumber Yard to 
ask what I could get for 50 bucks, and they said, well, we 
could sell you a screen window. He said, I don't need a screen 
window. Why don't you take that money and put it into roads? 
Well, that is not what they wanted to do at that time, and the 
money went out in those little $50 checks.
    A few years passed, and we had the Carter administration. 
They, too, wanted to do a stimulus package with a tax credit. 
And that was $100. Same fellow called. He said, Jim, Lampert 
Lumber Yard is gone because you didn't buy anything from them, 
so now it is down to only one lumber yard in Chisholm, it is 
King Lumber. And I asked them, what could I do with 100 bucks? 
And they said, well, it could buy you a little screen door or 
maybe some two-by-fours. He said, I don't need the two-by-fours 
and I don't need the screen door. Why don't you go and fix 
those potholes in our road?
    Well, we are at the same place. And I don't know what has 
happened to those stimulus checks. Maybe they paid down some 
credit card debt. Maybe they did some other good in some way. 
Only three or four people that I know of have come to me and 
said, gee, that was nice, I put it in the bank, but you should 
have invested in our roadways, you should have invested in our 
bridges, you should have helped us build water and sewer lines.
    And your members are on the bench now. After TEA-21 we had 
3 million new construction jobs in 2 years. And we had funding 
in that legislation for training, Mr. Kaniefski will well 
recall, for training of construction workers. And Mr. Mica and 
I were talking, just before he had to leave and go back to 
Florida, about providing similar language in the upcoming 
transportation bill to train perhaps new workers. Although 
right now, with 850,000, nearly 900,000 out of work, we don't 
have to do an immediate training program. But we might if we 
are going to expand that workforce.
    Mr. Black, I have heard from your representative in 
Washington, Mr. Hay, about members of your association closing 
and those who are on the edge. How many sand and gravel 
aggregate producers have closed in this last, say, 6 months, 
and how many are on the bubble right now?
    Mr. Black. Mr. Chairman, I don't have any specific data on 
that. Perhaps Dr. Buechner has some data on this specifically. 
But I can tell you, our own plants, I can tell you we have 
closed about 10 percent of our plants. And we are pretty 
representative of the industry, and so I would say that is 
probably the amount that has closed across the industry. And so 
that adds up to quite a few small, single-plant players.
    Mr. Oberstar. Is the existing capacity capable of 
responding to a stimulus initiative of the kind we are talking 
about here?
    Mr. Black. Absolutely, sir. The capacity of our plants--
again, we have closed 10 percent, but the remaining plants are 
running at a fraction of their capability. So, I think industry 
wide, the industry is probably at 60, 70 percent capacity. We 
are at 50 percent capacity. And like Mr. O'Sullivan said, there 
are plenty of workers to hire.
    Mr. Oberstar. And if you ramp up, will you hire new people, 
or will you produce with existing workforce?
    Mr. Black. No, we would ramp up. We lost 2,500 employees 
this year. We will probably lose another 2,500 next year. These 
are all employees we would love to hire back. And we will call 
them back, and we will put them to work, and hire new ones.
    Mr. Oberstar. Dr. Buechner, I remember so well my 
predecessor telling me about the early days of the Federal 
Highway Trust Fund and the interstate highway program and how 
five men, some of whose portraits are in the next room, sat 
around the table to plot this out.
    And they rejected the proposal by Eisenhower's Secretary of 
Treasury to finance the interstate highway system with a 
bonding proposal. They said that we would not only have to pay 
back the capital, the principal of the bonds, we have to pay 
interest on the bonds, and we have to pay fees to bond traders. 
And instead, they proposed the highway trust fund, the three 
cents.
    And I had asked our Committee staff to get for me the price 
of gasoline in 1956. You had already researched it. That three 
cents represented 10 percent of the cost of fuel. But they 
didn't turn around and say, "Oh, my God, we can't tax 
anything." Like Russell Long said, "Don't tax you, don't tax 
me, tax that fellow behind the tree." They didn't run. They 
said, "This is an investment in America. This is an investment 
in the future of this country. It is for the good of all of our 
fellow citizens, for our economy."
    And they found, by February the following year--Eisenhower 
signed the bill in June of 1956, construction started on the 
interstate in September. By February of 1957, they needed 
another penny. That additional cent passed the House on a voice 
vote. You can't pass the prayer on a voice vote today. But 
there was a consensus then, and we need that spirit today, of 
looking over the horizon and seeing what is good for America.
    And I am going to travel this country. We are going to 
drive that issue home. We are going to need all the help of all 
of you at this table and all of the others who have testified 
today to drive that message home to America, that we have to 
reinvest in this country. As the commission said, the 
Transportation Policy Study Commission, there is no free lunch. 
The last time manna came down from heaven was 3,500 years ago, 
and God isn't doing it anymore. We have to provide the funding.
    And our gross domestic product in 1956 was $345 billion. 
Today it is $13 trillion. We had one car per household in 1956. 
Today we have a little over two cars per household. Per 
household income was $4,800. It is $48,000 today. We drive two 
to three times farther in our vehicles today than we did in 
1956. We will have to move to a vehicle-mile-traveled-plus-
weight formula to finance the future in addition to the Highway 
Trust Fund gas tax user fee system.
    We will find the revenues for it. I am going to move us in 
that direction. This Committee will move together. We will do 
these things. But we have to start right now. And you have laid 
out the ideas for it.
    Now, AGC has suggested a maintenance of effort, which in 
principle I like the idea. The Senate, in their version of the 
rescue plan or job stimulus program, did have a supplement-not-
supplant provision. But that raised some questions legally as 
to what DOT would do and what States would do. And then 
operationally it raised some questions that, in fact, we are 
already finding that U.S. DOT is telling States, "Look, if this 
issue resurfaces, then we are going to have to pull back on 
funding. You may not be able to finance projects out of your 
TIP," your transportation investment plan.
    And while we want, in fact, the concept of supplement, not 
replace, State funding, we are going to have to word that in 
such a way that the DOT can't mess it up and use it as a drag 
on the economy or drag on the program rather than a stimulus to 
the program. So if your staff have some ideas about how we can 
fashion that language, we would welcome your input.
    And I have already talked about the underground utilities. 
In fact, my predecessor, John Blatnik, spoke at the very first 
meeting of your organization in 1972 in New Jersey.
    Mr. Dillon. That is great. He liked drinking water too, 
especially clean.
    Mr. Oberstar. And you have already very aptly cited the 
deterioration of the Nation's waters. Mr. Drakos already talked 
about loan guarantees for short sea shipping.
    Mr. Leyden, we have under the jurisdiction of this 
Committee 367 million square feet of Federal civilian office 
space. The electricity bill is $500 million a year. We could 
cut that 40, 50 percent, maybe more, with photovoltaics alone. 
We have directed, in the energy bill legislation from this 
Committee, the GSA to survey every Federal civilian office 
building in this country for its photovoltaic capacity, whether 
roof or wall or in other fashion, compact fluorescent 
substitute for incandescent lights, and other energy-saving 
initiatives that we spelled out, and I will not go into detail, 
in that legislation. And those surveys are under way.
    Mr. Leyden. Good.
    Mr. Oberstar. But in 1977, I was my second term. I had, 
just quite by accident, an opportunity to chair a hearing of 
the Public Building Subcommittee on a study by the sheet metal 
workers' union and a group of economists to convert Federal 
civilian office space to a photovoltaic uses and source of 
energy. And the price of electricity from photovoltaics was 
$1.25 per kilowatt hour and seven cents on the investor-owns. 
They estimated that with a $175-million-a-year investment over 
3 years, convert the buildings, you create a market for the 
private sector to produce, Government to consume, and it would 
create 130,000 sheet metal worker laborer and electrical worker 
jobs.
    I thought it was a good idea, so I had the staff draft the 
bill, and I testified at our own Committee hearings on behalf 
of it. Senator Humphrey picked it up over there, he got it 
passed. Carter signed it, put the $175 million in his last 
budget, lost the election, and Reagan abolished the alternative 
energy program. It set us back 30 years.
    Mr. Leyden. That is when I started my solar business.
    Mr. Oberstar. But then, in the private sector, you and 
others continue to produce quality--look, if it is good enough 
for the space program, it is good enough for us on Earth. If it 
is good enough for the Forest Service to use in remote sensing 
stations, or the Park Service, it ought to be good enough for 
our Federal office buildings.
    And we can do these things, and we are going to make a 
difference in America. We started with the Department of 
Energy, and we are going to continue and save taxpayer dollars 
and save adverse inputs into the environment.
    Well, thank you for your patience in listening to my 
soliloquy. But I love what you are doing. You have made a great 
contribution to our hearings.
    We are going to now fashion these recommendations into a 
larger legislative initiative. We will have it ready for the 
House to consider on November 17, when we reconvene after the 
election.
    Now, call your Members of Congress, Senators, tell them to 
support us. I know we will have good bipartisan support for 
this legislation.
    Thank you very much. Thanks to all of our witnesses today.
    The Committee is adjourned.
    [Whereupon, at 4:25 p.m., the Committee was adjourned.]

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