[Senate Hearing 110-1147]
[From the U.S. Government Publishing Office]






                                                       S. Hrg. 110-1147

                            OVERSIGHT OF THE
                     DEPARTMENT OF TRANSPORTATION'S
                    FISCAL YEAR 2009 BUDGET PROPOSAL

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

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 28, 2008

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation











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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            GORDON H. SMITH, Oregon
BILL NELSON, Florida                 JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
FRANK R. LAUTENBERG, New Jersey      JIM DeMINT, South Carolina
MARK PRYOR, Arkansas                 DAVID VITTER, Louisiana
THOMAS R. CARPER, Delaware           JOHN THUNE, South Dakota
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel














                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 28, 2008................................     1
Statement of Senator Dorgan......................................     6
Statement of Senator Inouye......................................     1
Statement of Senator Klobuchar...................................    25
Statement of Senator Lautenberg..................................     5
Statement of Senator McCaskill...................................    23
Statement of Senator Rockefeller.................................     8
Statement of Senator Stevens.....................................     2
    Prepared statement...........................................     4
Statement of Senator Sununu......................................    28
Statement of Senator Thune.......................................    31

                               Witnesses

Peters, Hon. Mary E., Secretary, Department of Transportation; 
  accompanied by Hon. Robert A. Sturgell, Acting Administrator, 
  Federal Aviation Administration................................    11
    Prepared statement...........................................    13

                                Appendix

Response to written questions submitted to Hon. Mary E. Peters 
  by:
    Hon. Thomas R. Carper........................................    50
    Hon. Daniel K. Inouye........................................    37
    Hon. Frank R. Lautenberg.....................................    41
    Hon. Mark Pryor..............................................    44
Response to written question submitted by Hon. Roger F. Wicker to 
  Hon. Robert A. Sturgell........................................    51

 
                            OVERSIGHT OF THE
                     DEPARTMENT OF TRANSPORTATION'S
                    FISCAL YEAR 2009 BUDGET PROPOSAL

                              ----------                              


                      THURSDAY, FEBRUARY 28, 2008

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:03 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Daniel K. 
Inouye, Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. Transportation is an essential element of our 
Nation's prosperity. Our transportation infrastructure provides 
the means to efficiently move goods and people across our 
country, from New York to Hawaii, and around the globe.
    More than simply facilitating all aspects of our economy, 
our transportation resources provide a freedom of mobility that 
defines our national character. While the U.S. transportation 
system is world class in many respects, it is an aging system 
that has reached and, in some cases, clearly exceeded the 
limits of its capacity.
    The tragic collapse of the Minneapolis highway bridge last 
summer highlights our Nation's growing infrastructure problems. 
Much of America's transportation infrastructure--highways, 
bridges, railroads, and ports--were built at the beginning or 
middle of the last century and have outlived their safe and 
productive lives. Numerous airports in our National Airspace 
System are approaching or have reached full capacity. 
Congestion continues to grow on our highways and our railways, 
at our ports, and within our aviation system.
    The truth of the matter is that without strong action, we 
face a future of ever-expanding gridlock. Our Nation's 
transportation capacity must be expanded throughout all modes, 
or our economy, our citizens' mobility, and our ability to 
compete in today's global marketplace will suffer drastically.
    For more than 50 years, we have been reaping the benefits 
of bold transportation investments made by our predecessors in 
government and industry. The time has come for today's leaders 
to make a similar commitment to the future prosperity of our 
Nation. We must unite around expanding and improving our 
highway, aviation, rail, and port infrastructure. We must work 
together to improve the safety and satisfaction of the 
traveling public. Finally, we must manage each of these modes 
of transportation as part of a complete system that is 
dedicated to serving the needs of the Nation and not the 
desires of individual companies.
    I am confident that the Department of Transportation can 
meet these challenges, if given the proper resources and 
direction from the President. The United States has always been 
a world leader in transportation, but I must say that I have 
mixed feelings about our ability to aggressively address the 
Nation's transportation needs after reviewing the 
administration's Fiscal Year 2009 DOT budget proposal.
    On a positive note, the administration has proposed funding 
levels for the pipeline and motor carrier safety programs 
consistent with authorized levels, as well as a significant 
increase in funding to modernize the air traffic control 
system. On the other hand, the National Highway Traffic Safety 
Administration only received a small increase in its operations 
budget, which, unfortunately, does not take into account the 
resources necessary to implement the new Corporate Average Fuel 
Economy (CAFE) program.
    Even more troubling is the fact that the White House 
continues to propose deep cuts in funding for Amtrak and 
airport infrastructure programs that Congress has consistently 
funded at higher levels. Any DOT budget proposal that moves 
through this Congress must provide sufficient funding to 
rehabilitate existing infrastructure, expand the system to 
accommodate growing use, and maintain the highest level of 
safety possible.
    Madam Secretary, I assure you that the Commerce Committee 
will be tracking the DOT's performance closely in this final 
year of the administration, and I look forward to working with 
you to ensure that DOT policy continues to focus on meeting 
these goals.
    And may I now recognize the Vice Chairman, Senator Stevens?

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you very much, Mr. Chairman. I agree 
with your statement. It is nice to have you here, Madam 
Secretary, and I must remind everybody of the problems of my 
state.
    We are one-fifth of the size of the United States, as this 
Committee hears repeatedly, and more than twice the size of 
Texas. We have half the coastline of the United States, and our 
State is east to west as wide as the United States and north to 
south as deep as the United States. If you put a map of our 
State on top of the South 48, it touches from coast to coast 
and from Duluth to New Orleans.
    Past administrations have withdrawn an enormous amount of 
that land. We cannot build north-south or east-west highways or 
railroads in our state anymore because they are all blocked. 
All the passes literally are blocked by national parks and 
wildlife refugees.
    So we are totally relying upon air transportation to 
explore in our area and to provide the food and sustenance to 
the native people who live in 241 different villages, which 
have become tribes under the decisions of past administrations.
    What that means to us is that your bill is one of the most 
essential bills for our livelihood. I note, for instance, that 
in terms of Essential Air Service the request is $50 million, 
down from $110 million last year. That was established back 
here when we abolished the CAB in order to have Essential Air 
Service in order to have a way to continue three flights a 
week.
    Most of these villages get three flights a week because of 
that Essential Air Service, and those flights bring cargo and 
passengers. That is why we have what we call bypass mail. It 
worked with the Postal Service and your department in the past.
    I just feel that somehow the people in your department now 
have lost sight of history, why some of these programs exist. 
Almost 70 percent of our land is owned by the Federal 
Government, and pays us no taxes. As a matter of fact, it costs 
our state money to help maintain services within those lands, 
but we get no return from the Federal Government unless it 
comes from programs like essential air service or other items.
    I get back to the problem of earmarks now. I am not going 
to debate earmarks here, but as a practical matter, this budget 
this time really leaves me in doubt as to what the future is 
going to be as far as transportation in my state. We thought we 
were working together on a next generation for aviation and air 
control, et cetera. I don't see that.
    We have the highest number of pilots per capita, and we 
have the highest number of planes per capita. One person out of 
every 58 people in our state is a pilot, and there are 6 
airplanes for every 10 pilots. I mean, we really rely on 
planes, and this budget is cut all over the place.
    It affects our state more than any because there are 3 of 
us out of 535 people here, and we are now going to be told we 
can't earmark any money. But this budget has been slashed, just 
slashed. And I don't really understand it.
    If you knew the paradigm of no more earmarks, why did you 
cut these budgets expecting us to put the money back? That is 
what has happened now 2 or 3 years in a row. The budgets have 
been cut, and we have been forced to go and put the money back. 
But if I understand the current paradigm, that is not possible.
    Now you tell me. You are going to have to play God and tell 
me which villages get cut off and don't get three flights a 
week. And that means everything. That is milk and sugar and 
flour and everything. Everything comes in by air.
    I think that this budget gives those of us from small 
states in particular. I am a small population state, but it is 
an enormous area. It is the area that has the greatest hope of 
supplying resources we need as a Nation. And yet it seems to 
have been abandoned by this bill that is before us now. The 
Chairman and I have sent some letters to the Budget Committee. 
I hope they listen to them.
    But we also were able to raise the age, thank God--50 
percent of our pilots are over 55. As a matter of fact, by the 
time we got around to raising the age, 57 percent were over 55. 
We raised the age to 65, but we have to provide a replacement 
for half of our pilots within 7 years. There is no indication 
here at all about any increase in flying training for people 
nationwide and for engineers.
    And I will close by saying it looks like you are going to 
fold down the flight service stations. I would like to have you 
come along with me when we take off from a little field between 
two mountain ranges, and we are going to go over another 
mountain range. And we are going to land in a little field over 
there, and there is nobody there. And the FAA is going to ask 
that we rely on advice from Anchorage, which is about 500 miles 
away, and we are going 500 miles the other way.
    It is like telling Denver they are going to rely on 
Washington, D.C., for what is going on on the ground at Denver. 
Now it just won't work, and I am really astounded.
    Mr. Chairman, you are going to hear a lot from me, and I do 
thank you for continuing the flight safety program. The 
Medallion Program has reduced deaths in our state. Other people 
worry about highways. We worry about airways, and you are going 
to hear a lot from me this year because this is a bad budget 
for us.
    Thank you.
    [The prepared statement of Senator Stevens follows:]

    Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
    Thank you, Chairman Inouye, for holding this hearing, and thank 
you, Secretary Peters and Acting Administrator Sturgell, for joining us 
today.
    Alaska is more than twice the land area of Texas. East to west, 
Alaska crosses what would normally be four time zones. The State of 
Alaska faces transportation challenges that most states in the lower 48 
do not have to address.
    It is important the Department understands these challenges and 
makes a concerted effort to improve the state's transportation 
infrastructure.
    Alaskans rely on aviation more than any other state in the country. 
According to FAA's own data, Alaska has the highest per capita number 
of general aviation airplanes and pilots in the U.S. One person out of 
every 58 people is a pilot and there are six airplanes for every ten 
pilots.
    Aviation, and the network of FAA employees who serve it, is 
literally the life blood of many of our communities. It is important 
the Department and the FAA maintain a knowledgeable Alaska regional 
office and infrastructure staff. Over the last few years there have 
been increasing concerns in the state about the retention, 
consolidation, and attrition of employees in Alaska.
    As we move forward with the FY 2009 budget process the Committee 
requests that an effort be made to not only maintain the progress that 
has been made in Alaska, but work to improve it.
    Alaska's unique terrain and vast aviation community demand a 
knowing and accessible staff that can meet the needs of such a large 
state with so much aviation infrastructure to maintain.
    It is important that the employees maintaining and upgrading the 
system have a solid knowledge of our state and are readily available to 
address local challenges. Whether it is weather observers, engineers, 
flight service station employees, or air traffic controllers, an 
institutional knowledge must be maintained for the safety and progress 
of our aviation system.
    I invite the both of you to come to my State of Alaska and 
witness--first hand--the transportation challenges that Alaskans face. 
You could also view programs that have been responsible for reducing 
aircraft-related deaths and increasing aviation safety, such as the 
Five Star Medallion Program. I do hope you find time in your schedules 
to come to Alaska.
    Thank you Chairman Inouye, I look forward to the testimony.

    The Chairman. I will do my best to help you, Senator 
Stevens, in seeing that your voice is heard.
    Senator Stevens. Thank you.
    The Chairman. Senator Lautenberg?

            STATEMENT OF HON. FRANK R. LAUTENBERG, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Lautenberg. Thank you, Mr. Chairman. We listened 
carefully to what Senator Stevens had to say, and whether you 
are dependent on transportation for easing congestion or for 
the lifeline that Essential Air Service represents, we all have 
the same concerns, and we share those concerns.
    Mr. Chairman, in the State of the Union address, President 
Bush said--and I quote him here--that we have ``answered the 
call'' on the issues we face. This budget proposal does 
certainly not answer the call when it comes to our 
transportation infrastructure. And the failure to fund these 
needs here at home threatens our security, safety, the strength 
and the future of our economy.
    Last year, we saw a bridge collapse in Minnesota. But there 
are hundreds of thousands of other bridges and roads that are 
in disrepair, and it will cost billions to improve them. And 
the costs will not decrease as a result of neglect. Less than 1 
year after the collapse in Minneapolis, Minnesota, President 
Bush wants to cut funding for highway and bridge repair by 
almost $2 billion. And he proposes funding transit programs at 
$200 million below the level that Congress authorized.
    Now these cuts hurt states like New Jersey, which need 
transit funding the most, and millions of working families 
depend on this transportation. The Texas Transportation 
Institute says that these traffic jams on our roads costs our 
country nearly $80 billion a year, twice the Federal budget for 
highways. Our commuters are further punished when they sit in 
traffic with gas prices well over $3 and heading north, as they 
say, and our environment cannot withstand the greenhouse gas 
emissions that come from these idling cars.
    Airline travelers will fare worse under this budget. The 
Bush Administration's failures on aviation have led to one of 
the worst years ever for flight delays. More than one in four 
flights was late, and our air traffic control system remains 
dangerously understaffed and air traffic controllers are 
overworked and fatigued.
    There is a serious lack of interest in preventing runway 
incidents. One billion airline passengers will be flying each 
year by 2015. Would anyone suggest taking the fire trucks away 
from a fire that is still ablaze, but hasn't fully consumed the 
property? I don't think so. And to me, that is like cutting 
funding for our Nation's airports and runways by $765 million 
when we are choking on congestion.
    And last, President Bush once again proposes to bankrupt 
Amtrak, our Nation's passenger rail system. In a time of 
record-high gas prices and record airport delays, travelers are 
using Amtrak trains in record numbers. But the President's 
proposal would take away this popular, energy-efficient, and 
convenient travel option.
    Last October, the Senate passed legislation that I wrote 
with former Senator Trent Lott to provide $11.4 billion for 
Amtrak to expand passenger rail service in the United States, 
and I am working with House colleagues to get it taken up and 
passed into law this year. It is time that our country had a 
world-class passenger rail system.
    Mr. Chairman, if we want to support our economy, reduce our 
reliance on foreign oil, we have got to invest in our 
transportation infrastructure now. I look forward to working 
with my colleagues to understand our Nation's quarrel with 
adequate transportation investment, and I commend you, Mr. 
Chairman, for holding this hearing so that we can cut through 
the fog here to try to understand why we are cutting things now 
when the system is in overload mode right now.
    So I hope that we are going to have a thorough review here 
and look forward to hearing from the witnesses.
    The Chairman. I can assure you, sir.
    Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Mr. Chairman, thank you.
    I understand that Secretary Peters is here to support the 
President's budget. I suspect that in some areas she will have 
to publicly say that she enthusiastically supports it. But I 
would hope that in private she understands the comments made by 
my colleagues demonstrate that this is not a budget that 
invests in America's future.
    Twenty-two percent cut in the airport improvement funds, 40 
percent cut in Amtrak, 50 percent cut in Essential Air 
Services. That is not a serious attempt to evaluate how we 
invest in transportation and in our country's future.
    I have another hearing this morning, and I don't know how 
long I can be here. But I want to just mention in the opening 
statement this issue of Mexican trucks because I supported 
Secretary Peters's nomination. I was pleased to do so. Now I am 
regretting I did. And I wish I didn't say that, but let me 
described what has happened.
    We have Mexican long-haul trucks that have been triggered 
for approval into this country under a pilot project by 
Secretary Peters. On July 24, the House of Representatives last 
year voted to prohibit it. No funds may be used to establish 
it.
    On September 4, the Inspector General released a statement 
that said there is no central repository of accident records, 
drivers' records, or vehicle inspections in the country of 
Mexico. We don't have equivalent safety standards. On September 
11, the Senate voted 75 to 23 for an amendment prohibiting the 
use of funds to establish a pilot project, and it became a part 
of the Omnibus.
    The Secretary is taking the position that it doesn't matter 
what the law says, we are going to continue to use the funding 
this way. I am sending to the GAO a request for them to 
evaluate whether this violates the Sufficiency Act. But I think 
what is happening down at the Department of Transportation is 
arrogant, Madam Secretary. I am sorry you are doing it.
    You have attorneys that have told you to believe that the 
word ``establish'' by itself does not mean the same as 
establish and implement. The legislative counsel of the U.S. 
Senate says they drafted it this way to prevent this pilot 
project, and the way it is drafted does prevent it.
    I have letters from two distinguished law professors that 
say that the way this was drafted and passed by the U.S. 
Congress prevents you from proceeding with the pilot project 
for long-haul Mexican trucking. And you insist that it doesn't 
matter what that says, you've got a lawyer that says it is 
legal.
    Well, there are lawyers in this Administration that tell us 
that torture is legal. It doesn't make those lawyers right. And 
your lawyers, I think, are disserving you, Madam Secretary. I 
understand we are going to have a separate hearing on this 
subject, I believe, March 11, and you are intending to come to 
Capitol Hill.
    And I regret saying what I said this morning, but given 
what you have done, I wish that I had not supported your 
nomination. It is an arrogant thing to do, to deny the U.S. 
Congress. When they say you cannot fund money, you cannot fund 
this project, for you to say ``I have got lawyers that say it 
is just fine. I am going to continue. It doesn't matter what 
the Congress thinks or says,'' is arrogant.
    So you may respond to that. But I wanted to mention it in 
the opening statement because I may not be able to stay. We 
will have a full hearing on this subject. I hope between now 
and when we have that hearing, you might get some lawyers that 
will consult with the legislative counsel, with others in the 
U.S. Congress, or distinguished law professors, and they will 
tell you that what you are now doing is violating the law.
    Senator Stevens. Mr. Chairman, in view of the Senator 
having another conflict, I would yield my time to him now so he 
can ask his questions before he goes.
    Senator Dorgan. Well, we will have an opportunity for a 
full hearing, and the Secretary has agreed to come up on March 
11th. And this is a very important issue, and let me explain 
just briefly why.
    When an American pulls up to a four-way stop sign, and 
Mexican long-haul trucks are coming into this country, the 
issue is safety. If there were equivalent standards, you would 
not hear a peep from me. But the Administration is saying that 
NAFTA requires them to approve Mexican long-haul trucks in this 
pilot program. The U.S. House said we don't believe it is time 
or we don't believe that there is a capability to be ready for 
that.
    The U.S. Senate said it. We said it in law. We said it in 
the Omnibus. It has been signed into law. There is a 
prohibition on this pilot project going forward. And the fact 
is, the GAO has said and the Inspector General has said there 
is no central repository of vehicle records, driver standards, 
and so on, vehicle inspections, accident reports in the country 
of Mexico.
    So, again, I think that we compromise safety in this 
country. I know the Secretary will say, well, this is a 
carefully controlled pilot project. The fact is the Secretary 
and the Department do not have the legal authority to continue 
to spend money on this project.
    And I must say--I am on the Appropriations Committee--I 
think agencies that thumb their nose at the Congress and say we 
are going to do what we want to do, no matter what you pass in 
law, will pay a price for it. Secretary Peters will have an 
opportunity to respond later, but she can respond now if she 
wishes to explain how her attorneys have told us that the 
legislative counsel, the draft of the legislation here in the 
Congress, and the distinguished law professors are all wrong 
and her lawyer is all right.
    I think her lawyer is disserving her, and I wish she would 
have done what I have done when I have been in the Executive 
Branch of a government. Sometimes lawyers are wrong, and you 
say to lawyers, you know what? We have to respect the interests 
and the wishes of the Congress and the law the way it was 
written, not what the Administration wishes it could do.
    The Chairman. Do you want to respond?
    Senator Dorgan. You are welcome to respond, Madam 
Secretary, but I will have an opportunity March 11 at great 
length.
    Secretary Peters. Mr. Chairman, I will briefly respond, 
recognizing that the Senator may have to leave the hearing. And 
of course, we will have the opportunity on the 11th to explore 
this issue in much more detail.
    Senator Dorgan, as you said, I have asked our lawyers to 
carefully evaluate the language that passed this Congress, and 
it is our interpretation that the words ``establish'' mean to 
not start a new program, but do not prevent us from operating a 
program today. I am sorry the word is ``implement.''
    So we are not implementing a program. We are not 
establishing a program. We are continuing a program that was 
established prior.
    Senator Dorgan. Madam Secretary, that is a cute 
interpretation by your attorney. But the legislative counsel 
described what ``establish'' means in its letter to you, letter 
to me that I have given to you, number one. And number two, the 
Congressional intent was quite clear.
    Let me describe what Senator John McCain said on the Senate 
floor, who supports your position, by the way. He said if the 
Senate passes this legislation, unfortunately, the Senate has 
voted 74 to 24 to prevent the pilot project from going forward.
    Senator McCain said if this passes, it prevents you from 
going forward. Now he supports you, but he understood, everyone 
understood what the Congressional intent was, and I think it is 
an arrogant thing for the department to hang its clothes here 
on the interpretation of a lawyer that is not supported by the 
legislative counsel of the Senate that drafted it. And I hope 
that you will rethink that before March 11.
    The Chairman. Senator Rockefeller?

           STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Well, we have had some good speeches, 
and I don't want to let anybody down.
    [Laughter.]
    Senator Rockefeller. As has been said by each of the 
speakers, it is no secret that our Nation's transportation 
system is in chaos. It is collapsing. It is under strain. It is 
underfunded. That is all deliberate.
    Same old thing. You know, your testimony was vetted by OMB. 
You couldn't come up here and give testimony on your own. That 
doesn't necessarily represent your view. You have to represent 
what the administration says, and so they have to approve your 
testimony or else you can't give it. That is the way it works, 
and it is not a good system but it works under Democrats and 
Republicans. And it is not a good system.
    Motorists, rail passengers, airline passengers, as Senator 
Stevens was talking about, are facing increasing levels of 
gridlock that is going to increase exponentially. That is 
gridlock on our roads, on our rails, and at our airports. 
Watching Dulles Airport expand is just like watching the growth 
of Carthage. It is going to go on for 500 years, trying to 
accommodate all of the people coming through there.
    Study after study confirms that lack of investment by not 
just this Administration, but previous ones--but certainly this 
one--in our Nation's transportation infrastructure is hurting 
us economically. It is making it very hard for us to compete in 
the world, and it is going to get much worse very quickly.
    The one area where I believe we are most at risk of losing 
any sense of global leadership is in aviation. And I want to 
speak about something I have spoken about before that I care 
passionately about because I care passionately about aviation. 
Having virtually none to West Virginia, I care about it a lot.
    You know, to ride in a jet to West Virginia means you have 
to break the Senate ethics law because commercial airlines 
don't provide flights because it doesn't make them any money. 
So I am looking at the future of the air traffic control 
system, and that is what I want to talk about.
    I want my colleagues to understand, those few that are 
here, that our Nation's aviation system is literally at a 
broken point. No, we haven't had accidents. But that is like 
saying we haven't been attacked since 9/11. It doesn't mean 
anything. Accidents are about to happen. Attacks could be about 
to happen. It is a non-statement.
    We do not have the ability to handle the increased demand 
for air travel, and we will not. A passenger going through 
delays doesn't even know what the word ``delays'' mean, 
compared to what is going to be happening in the very near 
future.
    Last year, I, along with the leadership of this Committee, 
worked to craft an FAA bill that gave the agency the resources 
it needed to pay for the enormously expensive next-generation 
air traffic control system. That is our job. We are trying to 
help you.
    The development of a satellite-based, completely digital 
air traffic control system will cost tens of billions of 
dollars, and I know that the current financing system will 
raise totally inadequate revenues necessary for the agency to 
implement this program. And nothing is being done.
    I also strongly believe that the commercial airline 
passengers are paying far more than their share of the aviation 
system's cost, and I haven't heard that come out of either of 
you. I recommended that the general aviation community, which 
is the fastest-growing segment of the industry, pay more into 
the Aviation Trust Fund. This Committee authorized the creation 
of a $25--$24 plus $1--air traffic modernization surcharge to 
help bolster the FAA's modernization account by some $400 
million a year.
    So a Gulfstream V takes off from Houston and lands in Bonn, 
and it pays 25 bucks. That is the cost of a cracker on their 
food line in there. This amount the commercial airline 
industry, of this $400 million a year, the commercial airline 
industry would pay $370 million a year. That is what is going 
on, and the GA community would pay $30 million a year. OK?
    So I recommended that the Finance Committee, on which I 
serve, require the GA community to pay approximately $400 
million more into the Aviation Trust Fund. This represents 
approximately 5 percent more, in terms of total dollars than 
they are paying now. And I would notice that there has been no 
increase in GA rate of taxation in more than 15 years. None, 
not a dime.
    Every other country in Europe does it. Everybody does it. 
We don't. We are scared of them. We are scared of who owns 
them. I don't know what it is. Are you scared of them? But the 
point is they are not carrying their weight, and they are two-
thirds of all the airplanes in the sky at any given moment.
    The GA interest proclaimed my proposals to be the beginning 
of the end of the entire GA industry. That is what they say. I 
offered to modify the bill to eliminate all turboprops from the 
surcharge. King Airs would have been in that class.
    What I am still advocating is that the approximately 8,000 
high-end performance business jets that use air traffic control 
facilities actually pay the full cost of their use of that air 
traffic control system, whether it is the analog one now, and 
then as we are building the next one, that one. They have to 
pay their fair share. I thought that was the American way.
    I don't think that is unreasonable. Again, I was told this 
was a nonstarter. The GA community made it clear that they 
would never pay the surcharge or any amount that they agree to 
pay, whatever that means. They fought everything.
    I find it incredulous that the owners of these aircraft are 
unwilling to pay a $25 fee when their aircraft cost millions 
and millions to buy and thousands of dollars an hour to 
operate. Based upon the GA community's inability to compromise, 
I do not expect that there will be an FAA bill this year. I 
blame it on them because we can't work it out in the Finance 
Committee because they are making all kinds of phone calls and 
their owners have all kinds of money.
    However you want to look at it, there isn't going to be an 
FAA bill this year. That is my prediction. I think that is 
incredibly unfortunate in view of some of the things that 
Senator Stevens and others have said. But I do not believe that 
4 more years of the status quo on financing achieves anything 
for this public, and it has got to be changed. And you have got 
to be behind it. You have got to be behind it--and you, too, 
Mr. Sturgell.
    It achieves a huge victory for the owners of million-dollar 
aircraft, but that is hardly a reason to pass the bill. And the 
philosophy is that it is more important--and I am sorry, but I 
just come from a different line of thinking--that if the 
president of IBM wants to fly from Houston to Bonn, and he 
takes two people with him and he has this huge aircraft. And 
those aircraft are taking up enormous amounts of space, 
requiring exactly the same amount of air traffic control 
attention as commercial airlines loaded with 200, 300 people, 
some of whom may be going to California because their mother 
only has a week to live.
    But, no, America says that through our practice, it is more 
important that that person who runs IBM, his or her time is so 
important that they should be able to pay nothing, go scot-
free, use the system, and let the commercial airlines pay the 
freight and, therefore, the people who ride those airlines 
going to be with their mother or whatever. You understand my 
philosophy.
    So this isn't about the next 4 years or getting a bill 
done. It is a broader debate about how we meet this country's 
key infrastructure challenges over the next decade. This isn't 
about ideology or gripes, although I have them, because we have 
avoided all of these tough decisions. We have avoided them. Our 
aviation system cannot afford us to have this path of least 
resistance.
    And what is it? I am going to ask one of you, but I think 
the general aviation is paying 3 percent of the cost of the air 
traffic control system, and the commercial aviation is paying 
everything else. But general aviation is two-thirds of the 
airplanes in the skies. And they require exactly the same 
attention from an air traffic control person under an analog or 
a new system, and it is wrong.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Madam Secretary, it wasn't the type of introduction you 
would have wanted, but welcome to the Committee, ma'am.

          STATEMENT OF HON. MARY E. PETERS, SECRETARY,

          DEPARTMENT OF TRANSPORTATION; ACCOMPANIED BY

         HON. ROBERT A. STURGELL, ACTING ADMINISTRATOR,

                FEDERAL AVIATION ADMINISTRATION

    Secretary Peters. Mr. Chairman, thank you so much. Chairman 
Inouye, Vice Chairman Stevens, and Members of the Committee, 
thank you for the opportunity to appear before you today.
    The Chairman. Would you speak a little closer?
    Secretary Peters. Certainly. Thank you for the opportunity 
to appear before you today to discuss the Administration's 
Fiscal Year 2009 budget request for the U.S. Department of 
Transportation. With me today is Bobby Sturgell, who is the 
Acting Administrator at the Federal Aviation Administration and 
our nominee to become Administrator.
    I want to thank this Committee for considering that 
nomination, that and other recent department nominees. These 
individuals are very well qualified for the positions to which 
they have been nominated, and both the President and I do have 
full faith in them. And I would hope that the Senate's process 
will result in their speedy confirmation.
    President Bush is requesting $68.2 billion for America's 
transportation network in the next fiscal year, including 
funding for the department's mandatory programs. Our focus is 
on finding real transportation solutions, solutions that will 
make travel safer, improve the performance of our Nation's 
transportation systems, and apply advanced technologies and 
contemporary approaches to today's transportation challenges.
    Nearly 31 percent of the funds requested for Fiscal Year 
2009 support safety programs and activities. The budget allows 
us to build on the successes in delivering the safest 
transportation systems by focusing on problems like runway 
incursions, as well as motorcycle crashes and pedestrian 
injuries on the road and impaired driving. It is important that 
we continue a data-driven safety focus that allows us to target 
our resources more effectively.
    The President's budget includes $14.6 billion for the 
Federal Aviation Administration, and in addition to critical 
new technology, the budget includes sufficient resources to 
hire and train an additional 306 air traffic controllers, 
people who are key to keeping the system safe.
    The Fiscal Year 2009 budget once again provides a framework 
for the Next Generation Air Transportation System financing 
reformat, the Administration's proposal sent to Congress last 
year that will make flying more convenient for millions of 
travelers. To accommodate anticipated demand by 2025, our 
aviation system requires a more reliable, responsive source of 
revenue to fund the modern technology required to manage this 
expanded capacity.
    This investment in NextGen will allow the FAA not only the 
ability to handle two to three times more aircraft, but also to 
maintain and improve the high levels of safety that we enjoy 
today and to reduce flight delays as well as noise around 
airports. The proposal would move from the current system of 
excise taxes to a hybrid cost system of taxes and user fees. It 
is increasingly clear that such a fundamentally different 
approach is needed to finance and manage our air traffic 
control system, as well as our increasingly congested airports.
    And I certainly agree with Mr. Rockefeller's comments about 
the need for everyone to help pay their fair share in doing so 
and compliment this Committee on the bill that you have passed 
to date. As you know, the current financing system is just not 
designed to support the growing consumer demand for air travel. 
And again, your Committee has pursued a fair allocation of 
cost, represents innovative ideas and ideas that we hope to 
work with you to implement.
    Last year's record airport delays are symptomatic of the 
system that is broken today. Along with many in this room, I am 
gravely concerned about the passengers and how they are 
affected by the failure to move forward on a common sense 
reauthorization bill. While we wait, however, the Department of 
Transportation has taken several actions to address the growing 
congestion that is affecting too many travelers today.
    We have announced hourly flight caps for New York's John F. 
Kennedy Airport and will soon issue an order to implement 
similar hourly limits at Newark Liberty International Airport 
to alleviate delays in the New York region. Those limits, by 
spreading the flights through more hours of the day, will 
actually allow for more flights to operate at the airports, but 
will substantially reduce the delays that we have experienced.
    In addition, we have proposed changes to our rates and 
charges policy to allow airports to provide an incentive for 
airlines to spread out their operations during the course of 
the day and maximize the use of limited airport and airway 
infrastructure. We have also proposed rules that would provide 
additional protections for consumers when their travel plans 
are interrupted.
    And finally, I would be remiss if I didn't mention the 
President's budget for surface transportation program. This 
request fulfills our commitment to provide the 6-year $286.4 
billion investment that was authorized in the 2005 surface 
transportation law. Data indicates that the Highway Trust Fund 
will experience a shortfall in Fiscal Year 2009, and that is 
why the President's budget proposes temporary authority to have 
repayable advances between the highway and the mass transit 
accounts.
    While this solution will avoid a funding shortfall in 
Fiscal Year 2009, it also serves as a very clear signal that we 
must take a close look at how our surface transportation needs 
are financed. Here, as in the Nation's skies, our current 
policy approach just is not doing the job today and will not in 
the future.
    Mr. Chairman, Mr. Vice Chairman, Members of the Committee, 
thank you for the opportunity to testify before you today. My 
colleague and I would be pleased to answer any questions that 
you may have.
    [The prepared statement of Secretary Peters follows:]

         Prepared Statement of Hon. Mary E. Peters, Secretary, 
                      Department of Transportation
    Chairman Inouye, Vice Chairman Stevens and Members of the 
Committee, thank you for the opportunity to appear before you today to 
discuss the Administration's Fiscal Year 2009 budget request for the 
U.S. Department of Transportation. With me today is Bobby Sturgell, the 
Acting Administrator of the Federal Aviation Administration (FAA).
    President Bush is requesting $68.2 billion for America's 
transportation network in the next fiscal year, including funding for 
the Department's mandatory programs. We are working with the President 
to hold the line on spending, while giving travelers and taxpayers the 
best possible value for their transportation dollars by transforming 
the way our transportation system works and is funded. At the 
Department of Transportation, our focus is on finding real 
transportation solutions that make travel safer, improve the 
performance of our transportation systems so that they operate more 
efficiently and serve us better, and apply advanced technologies and 
contemporary approaches to today's transportation challenges.
    Consistent with these priorities, nearly 31 percent of the funds 
requested for FY 2009 support safety programs and activities. The 
budget allows us to build on our successes in delivering safer 
transportation systems by focusing on problem areas like runway 
incursions, as well as motorcycle crashes and pedestrian injuries on 
the road. It is important that we continue a data-driven safety focus 
that allows us to target resources more effectively.
    Just as the budget supports continued strong progress on the safety 
front, it also builds on our comprehensive efforts to identify new 
partners, new financing, and new approaches to reduce congestion. One 
example is the New York region where the Bush Administration has moved 
aggressively to alleviate congestion in the air and on the ground. The 
Administration recently announced short-term measures to bring 
passengers relief from chronic flight delays, and we have been 
supporting Mayor Bloomberg's efforts to reduce the crippling congestion 
on the streets of Manhattan. If last year's record traffic jams and 
flight delays taught us anything, it is that traditional financial 
approaches are not capable of producing the results we need to keep 
America's economy growing and America's families connected.
    The President's budget includes $14.6 billion for the Federal 
Aviation Administration (FAA). In addition to critical new technology, 
the budget includes sufficient resources to hire and train an 
additional 306 air traffic controllers--people who are key to keeping 
the aviation system safe. The FY 2009 budget request would more than 
triple investment in the Next Generation Air Transportation System 
(NextGen), providing $688 million to implement enhancements such as 
Automatic Dependent Surveillance-Broadcast (ADS-B) and provide funding 
for key research and technologies to enable the transformation from 
radar-based to satellite-based navigation systems.
    The FY 2009 budget once again provides the framework of the Next 
Generation Air Transportation System Financing Reform Act (S. 1076, 
H.R. 1356), the Administration's proposal sent to Congress last year 
that will make flying more convenient for millions of travelers. To 
accommodate anticipated demand by 2025, our aviation system requires a 
more reliable and responsive source of revenue to fund the modern 
technology required to manage this expanded capacity. The investment in 
NextGen will allow the FAA not only to handle 2 to 3 times more 
aircraft, but also to maintain and improve the already high level of 
safety, reduce flight delays, and reduce noise near airports.
    The budget request assumes Congressional passage of the President's 
reauthorization proposal for FAA programs and revenue streams. This 
proposal would move from the current system of excise taxes to a hybrid 
cost-based system of taxes and user fees. It is increasingly clear that 
such a fundamentally different approach is needed to finance and manage 
our air traffic control system, as well as our increasingly congested 
airports. The current financing system is not designed to support the 
growing consumer demand for air travel.
    The Administration's comprehensive proposal would modernize how we 
finance our Nation's air traffic control system. Many of the nations 
around the globe, including Canada, the U.K., Australia, and Germany, 
have implemented air traffic control systems in which the charges 
levied on users are tied to the actual costs of providing air traffic 
services. This rational approach accomplishes two major objectives 
simultaneously. First, what operators pay to use air traffic services 
will be closer to what it costs to provide those services. This will 
encourage each operator to use those air traffic services according to 
their perceived value. Because the existing system of taxes currently 
has no relationship to costs, in some cases operators are paying too 
much for the services they actually use, while in other cases they are 
using air traffic services for which they pay too little. This leads to 
inefficient provision and use of services and does not make economic 
sense.
    On the other hand, a cost-based system makes more economic sense. 
We will be able to provide services for which the operators are willing 
to pay, while user fee revenues could be dedicated to modernizing an 
aging and strained air traffic control system that would dramatically 
expand the capacity of the system and lower unit operating costs over 
time.
    Unfortunately, a divided user community has prevented this 
necessary proposal from moving forward, resulting in average American 
airline passengers paying higher prices and having fewer travel 
choices. In addition, our country's global aviation preeminence may not 
be sustainable as many countries have established air traffic control 
pricing models that will enable them to modernize as demand grows.
    Notwithstanding the lack of progress on modernizing the national 
air traffic financing system, the Department of Transportation has 
taken several actions to ease congestion throughout the Nation's 
airspace and allow market forces to allocate scarce airspace 
efficiently in the New York region. We have announced short-term caps 
for New York's John F. Kennedy International Airport and will soon 
issue an order to implement caps at Newark Liberty International 
Airport. Any additional capacity developed at these airports will be 
leased to the highest bidder.
    In addition, we have proposed changes in our rates and charges 
policy to allow airports to charge more to aircraft using the airport 
during peak periods, providing an incentive for airlines to spread out 
their operations during the course of the day and maximize the use of 
limited airport and airway infrastructure. Finally, we are developing 
policies that would allow the expanded use of pricing for the very few 
airports where demand has outstripped supply.
    Congestion triggered by over-scheduling can be addressed in one of 
three ways: (1) ignore it and eventually consumers will begin avoiding 
flights that rarely arrive on time; (2) impose a Federal cap on 
operations and essentially limit access of anyone not already operating 
at the airport; or (3) allow market forces to grant airport access to 
those operators able to make the best use of it. Option 1 is clearly 
unacceptable to the public, Congress, and this Administration. On the 
other hand, while market forces under option 3 are in some ways 
unpredictable, history has demonstrated that they are the best tool to 
use to allocate a scarce resource.
    FY 2009 is the final year of the current surface transportation 
authorization--the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The 
President's budget fulfills the President's commitment to provide the 
six-year, $286.4 billion investment authorized by SAFETEA-LU. For 2009, 
the Budget provides $51.7 billion for highways, highway safety, and 
public transportation.
    To honor that commitment, even with an anticipated shortfall in the 
Highway Account balance of the Highway Trust Fund, the President is 
requesting temporary authority to allow ``repayable advances'' between 
the Highway Account and the Mass Transit Account in the Highway Trust 
Fund. This flexibility will get us through the current authorization 
without any impact on transit funding in 2009; however, unreliable 
Trust Fund revenues are another sign that we need to more aggressively 
begin moving away from our reliance on fuel taxes by partnering with 
State and local governments willing to develop more effective means to 
finance our surface transportation infrastructure.
    Like aviation, technology must play an important role in relieving 
traffic on our Nation's highways. Through programs like our Urban 
Partnerships and Corridors of the Future initiatives, we have been 
aggressively pursuing effective new strategies to reverse the growing 
traffic congestion crisis. The interest around the country has proven 
quite strong--over 30 major U.S. cities responded to our call for 
innovative plans to actually reduce congestion, not simply to slow its 
growth.
    The FY 2009 budget would encourage new approaches in fighting 
gridlock by proposing to use $175 million in inactive earmarks and 75 
percent of certain discretionary highway and transit program funds to 
fight congestion, giving priority to projects that combine a mix of 
pricing, transit, and technology solutions. While State and local 
leaders across the country are aggressively moving forward, 
Congressional support and leadership is critical. These projects will 
help us find a new way forward as we approach reauthorization of our 
surface transportation programs.
    Accessible and cost-effective transit projects also help fight 
congestion, and the President's budget includes over $10 billion for 
transit programs. The President's budget includes $6.2 billion to help 
meet the capital replacement, rehabilitation, and refurbishment needs 
of existing transit systems. Also included is $1.4 billion for major 
New Starts projects, which will provide full funding for fifteen 
commuter rail projects that are currently under construction, as well 
as proposing new funding for two additional projects. Another $200 
million will be used to fund thirteen projects under the Small Starts 
program. All told, one of every seven dollars in the President's FY 
2009 transportation budget is proposed for transit.
    It is increasingly clear that America's transportation systems are 
at a crossroads. Even as we continue to make substantial investments in 
our Nation's transportation systems, we realize that a business-as-
usual approach to funding transportation programs will not work much 
longer. Long-term, we need serious reform of our approaches to both 
financing and managing our transportation network to win the battle 
against congestion.
    We also urge action on making needed reforms to the nation's 
intercity passenger rail system. The President's FY 2009 budget 
provides a total funding level of $900 million for intercity passenger 
rail. Included in this total is $100 million for a matching grant 
program that will enable state and local governments to direct capital 
investment toward their top rail priorities.
    Our ``safety first'' priority includes ensuring the safe and 
dependable transport of hazardous materials throughout the 
transportation network. The President's budget request would increase 
funding for pipeline safety programs to over $93 million by funding 
eight new inspectors to increase oversight of poor performing pipeline 
operators and increasing state pipeline safety grants by $11.3 million.
    We are also requesting $174 million to support a fleet of 60 
vessels in the Maritime Security Program to assure the viability of a 
U.S.-flag merchant marine capable of maintaining a role in 
international commercial shipping and of meeting the sealift needs of 
the Department of Defense.
    Finally, the President's budget includes $17.6 million to support 
the first year of a $165 million, 10-year asset renewal program for the 
Saint Lawrence Seaway Development Corporation. After 50 years of 
continuous U.S. Seaway operations, this federally-owned and operated 
infrastructure is approaching the end of its original ``design'' life. 
Coordinated large scale capital reinvestment is now required to assure 
continuous, safe and efficient flow of maritime commerce.
    The President's FY 2009 budget builds on the exciting things we are 
doing at the Department of Transportation to help America move forward 
on a new course--a course that delivers high levels of safety, takes 
advantage of modern technology and financing mechanisms, and mitigates 
congestion with efficient and reliable transportation systems.
    Thank you for the opportunity to appear before you today. I look 
forward to working with Congress and the transportation community to 
ensure that America continues to have the best transportation system in 
the world.

    The Chairman. I thank you very much, Madam Secretary. Would 
you care to introduce the Acting Administrator?
    Mr. Sturgell. Pleasure to be here, Mr. Chairman. I don't 
have any remarks, but I look forward to discussing the issues 
with the Committee.
    The Chairman. May I now call upon the Vice Chairman for 
questioning?
    Senator Stevens. Madam Secretary, following an incident in 
Juneau last year, I sent a letter to the department regarding 
my interest in crafting a consumer and parental information 
pamphlet directed at informing the public about airline 
unaccompanied minor and teenage travel policies.
    We had this young woman who booked a flight after having 
had a chat room conversation, ``on the Internet.'' And she 
decided to go meet the young man and went and took money from a 
parent, I think, or got money somehow and went down and bought 
a ticket and got on a plane, and it was discovered she was 
gone.
    She was a minor, an unaccompanied minor. And I have asked 
that something be done within the system so we won't have to 
legislate on that. It would be a difficult thing to legislate 
on, but it is possible. Has anything been done since this came 
to your attention?
    Secretary Peters. Senator, I agree with your concern. And 
as a mother and a grandmother, I also am very concerned about, 
especially today with the availability of the Internet, for 
young unaccompanied minors to travel perhaps without their 
parents' consent and knowledge. And I agree with you that we do 
need to get information out that would educate both airlines, 
travel agents, of course, as well as parents about the 
potential dangers of moving forward, of children being able to 
travel like this without their parental consent.
    And sir, we do not yet have a pamphlet, but I do agree with 
you that we need to get this information out, and we will work 
on that.
    Senator Stevens. Well, have you had any meetings with 
airlines? Are they doing anything about it?
    Secretary Peters. Sir, I personally haven't met with the 
airlines about it. I will ask our Acting Administrator if he 
has had any discussion.
    Senator Stevens. Administrator, has the FAA done anything 
about it?
    Mr. Sturgell. No, Senator. I have not had discussions with 
the airlines about this particular issue.
    Senator Stevens. Well, it seems the only alternative then 
is to legislate. You know, legislation is going to put you in a 
straitjacket. You know that, don't you? It just seems to me 
this is something that ought to be an FAA and industry policy 
with regard to unaccompanied minors. Somehow or other, someone 
has got to take responsibility for this.
    Secretary Peters. Senator, let me commit to you today that 
we will--we will move forward with your request and see what 
kind of documentation we can develop. We will work with you and 
your staff to determine the most appropriate path forward.
    Senator Stevens. I would appreciate it. I would think that 
other Members of the Committee would agree with me. I am a 
father and a grandfather, too. I just really think anyone that 
is concerned about their families would worry about this 
happening, and young people are very capable of going and 
buying a ticket and disappearing. I just don't think that ought 
to be possible. We ought to at least have a proof of age 
requirement to get on an airplane. Now if you don't do it, I am 
going to introduce a bill for that. I think it has to be done.
    I did comment about essential air service cuts from $110 
million to $50 million. We are not allowed to ask you what you 
asked them for, but we can ask you did you make that cut?
    Secretary Peters. Mr. Chairman, that cut is in the 
President's budget. That $50 million amount is in the 
President's budget. And I think what you said earlier is very 
important. When we think about our essential air service 
program, the budget that we proposed both revises the EAS 
program in order to administer the program more efficiently, 
but also to ensure those most isolated communities--the 
communities that you spoke about in Alaska and those small 
communities--do have access to the national air transportation 
system within the funding level.
    We do understand, sir, that the parameters that were put 
around this program after deregulation in 1978, and we are 
operating the program again to ensure that these most isolated 
communities do have access.
    Senator Stevens. We have one line that I think costs right 
around $1 million a year to connect Kotzebue, which is one of 
our northern communities on the west coast, all the way down to 
Seattle. If they don't get that $1 million, then they are going 
to get paid for flying--some of them flying north to come south 
and another one south to go north.
    The connections and commuter lines just aren't there. The 
commuter lines don't go from distances that we have got. That 
is just a small amount of the total amount of the money, but it 
puts together a flight that goes if you want to get on it, it 
is like a whistle stop, every single stop between Kotzebue and 
Seattle.
    Now, that now becomes one enormous amount out of $50 
million. I don't know. How would you suggest that I increase 
that money, Madam Secretary? I ask, did you reduce it? Did the 
department reduce it?
    Secretary Peters. The budget was reduced----
    Senator Stevens. I am not talking about that. I said did 
you send to the OMB a request for $50 million?
    Secretary Peters. Yes, sir.
    Senator Stevens. On what basis did you cut that back that 
much, more than 50 percent?
    Secretary Peters. Sir, the basis that we used was looking 
at--excuse me--where the most isolated communities are and 
ensuring that we had sufficient money to service those most 
isolated communities and those communities that are eligible 
based on the deregulation in 1978.
    Senator Stevens. It is counterproductive. We are doing our 
best with monies we have gotten from the Federal Government, 
from everywhere, to try and develop some economy, some basic 
job opportunities in those small places. The more we do that, 
the more commerce there is. The more commerce there is, the 
less money we have to pay in support for those people who live 
in places where there is 90 percent unemployment.
    Now to cut down the travel budget for them so they cannot 
travel as much is just like shooting them in the foot. It 
doesn't hurt the department, but it hurts those people. I don't 
understand how I can put that money back. We are not going to 
get that. It costs, I think, about $35 million of the $110 
million was for Alaska. Did you know that?
    Secretary Peters. Sir, I am aware that a good part of that 
was for Alaska, and again, sir, the communities----
    Senator Stevens. My colleagues here from other states are 
not going to let me get by with that. I don't think people 
downtown think about the problems they cause when they use an 
axe on a budget. Now that is an axe. I have got to tell you, 
the next time you go to the Cabinet, do me a favor, will you, 
and tell the President I am completely disturbed by this 
budget, and I am not so sure that I am going to be supporting 
the President as I have in the past.
    This budget is impossible with the concepts of no earmarks 
that they say. [inaudible] But unfortunately, it is.
    Secretary Peters. Senator, please know that our budget does 
support the communities that you have talked about in Alaska. 
We do support those most isolated communities. And that is how 
we would prioritize the use of the money that we have put in 
the President's budget.
    Senator Stevens. Well, you tell that to the people who have 
to use essential air service to fly into Montana and South 
Dakota and other places that are going to have $15 million 
where I am going to have $35.
    Senator Rockefeller. And I didn't understand what her 
answer meant.
    Senator Stevens. The answer is, is they are going to 
prioritize the use of the $35 million, as I understand it.
    Secretary Peters. Yes, Senator, to the most isolated 
communities.
    Senator Lautenberg. Mr. Chairman?
    The Chairman. Senator Lautenberg.
    Senator Lautenberg. Thank you. Senator Stevens, with his 
ordinary perspicacity, with his incisiveness, I think kind of 
hits more nails on the head than we should have to have here, 
the job was being done as it is, as it should be. And I suggest 
a change in name that might help us.
    Instead of calling it earmarks, we will call them air 
marks, and that then gives it the content or the context in 
which we talk about these. These are essential. They are 
critical issues. And to dismiss the seriousness of these 
requests by just simply putting them in the pot with earmarks, 
which sounds pretty trivial, I think we ought to change the 
name.
    That wasn't my question, and Mr. Chairman, I don't want to 
be penalized for that brilliant thought of mine.
    [Laughter.]
    Senator Lautenberg. I want to ask the Secretary, and I 
thank you, Secretary Peters, for being here. I think it must be 
fairly uncomfortable to have to deliver the message that you 
are compelled to deliver, knowing full well that you are not 
bringing the content required. I am not asking you the question 
because I think you are compelled to stay where you are, even 
though it is just not going to do the job.
    For instance, there was a newly designed departure route 
from Newark Liberty Airport when, within minutes of 
implementing these newly designed departure routes, air traffic 
controllers discovered that one route from Newark Liberty led 
directly into the approach route for LaGuardia Airport in New 
York. You know, one doesn't have to go into active description 
to understand what the consequences of something like that 
could be.
    After spending $50 million, much of which was on 
consultants and contractors, and over a decade of work to 
redesign the air routes over New Jersey, how did FAA miss this? 
Can you explain it?
    Secretary Peters. Senator, I am going to ask the Acting 
Administrator to answer the question, and I believe there is a 
logical explanation, yes.
    Senator Lautenberg. Mr. Sturgell?
    Mr. Sturgell. Senator, the previous departure corridor to 
the south out of Newark basically had a little jog in it, and 
you followed the river south. The arrivals to LaGuardia were 
located and are located to the east of the river. The new 
departure routes out of Newark are all farther west of the 
river. So they are no closer and, in fact, they are farther 
apart than the previous old route.
    There is an altitude issue, which goes to the fact that 
LaGuardia arrivals come in at 3,500 feet. The Newark 
departures, as they are going out, are required to maintain 
2,500 feet until they transfer from the tower to the New York 
TRACON and the New York TRACON controllers then clear them to a 
higher altitude.
    So this airspace redesign project, not only were there 
folks at headquarters and contractors, but 30 percent of the 
$53 million that Congress authorized for this program were 
spent on overtime and travel so that the controllers would be 
involved and would help prepare these new routes.
    Senator Lautenberg. Well, are you challenging their 
observation that these might be designs that would bring them 
into competition for the airspace they are flying in?
    Mr. Sturgell. Into competition, the whole----
    Senator Lautenberg. Well, I will put it more bluntly. Would 
that put them on the same path as airplanes coming out of 
Newark on the same pathway, the same instruction for takeoff 
and arrival as the planes coming out of LaGuardia at some 
point. Were they wrong?
    Mr. Sturgell. I think the routes are deconflicted. I think 
the issue which the controllers refer to has to do with the 
altitudes. And by requiring the aircraft to check in first with 
the TRACON and----
    Senator Lautenberg. Yes, it is disappointing----
    Mr. Sturgell.--receive clearance to go above 2,500, I think 
we have resolved their concern.
    Senator Lautenberg.--after $50 million went into this 
thing, and all that time, all that effort by so many left a 
glitch like that. So that, I assume, has been straightened out 
to assure the safety of the operation there?
    Mr. Sturgell. Yes, I am confident that these procedures are 
safe.
    Secretary Peters. Senator, if we may add, though, this 
procedure was not a faulty procedure. Perhaps there was a 
misunderstanding about the altitudes, but this was not an 
unsafe procedure that was defined.
    Senator Lautenberg. So the controllers are wrong who 
sounded the alarm on this?
    Mr. Sturgell. I have asked the chief operating officer of 
the air traffic organization to meet with the NATCA regional 
vice president for the eastern region to discuss his concerns. 
But we trained the controllers, we notified and discussed these 
departure procedures with the pilot community, and these 
procedures are not unlike anything that happens in systems 
today.
    I am a former commercial pilot. You get departure headings 
off of airports all the time. There are 15 other--at least 15 
other major airports the size of Newark and Philadelphia that 
use these types of departure procedures.
    Senator Lautenberg. Right. So you are dismissing any 
concern, any complaints by the controllers, or pilots in the 
area also, by the way?
    Mr. Sturgell. I do not dismiss complaints of the 
controllers. We have listened to them. I think what we have 
done is address those concerns.
    Senator Lautenberg. We would like to see the final proof of 
that, if you would furnish it to us, please?
    Mr. Sturgell. Be glad to do it.
    Senator Lautenberg. I am particularly concerned about the 
Bush Administration's response to safety concerns raised by 
pilots, air traffic controllers, and colleagues about new 
flight procedures in the New Jersey area. Last week, an FAA 
spokesman said, and I quote, ``If any controller at the 
Philadelphia Airport believes that these procedures are unsafe, 
they should look for work elsewhere. If they don't like working 
for FAA, they should reconsider their line of work.''
    So, to put it bluntly, an FAA spokesman told controllers to 
bug off, and if they don't like it, get out, when we are barely 
able to have enough hands there to take care of the work that 
we need. How does your agency dismiss safety concerns raised by 
the men and women who work daily to keep the two million fliers 
safe in the area?
    Secretary Peters. Senator, I would acknowledge the 
inappropriateness of those comments. However, I would also 
suggest that it probably reflects a little frustration after, 
as Acting Administrator Sturgell said, there have been numerous 
conversations and involvement in developing these procedures, 
and then to have someone indicate that they are not safe was 
perhaps a little bit frustrating.
    Senator Lautenberg. Well, so we should excuse the 
temperament, this childish outburst. The fact is that FAA is at 
its lowest staffing level of professionally certified 
controllers in 15 years. Just 11,077. Why should FAA suggest 
that experienced controllers ought to leave if they are not 
happy or any controllers ought to leave? Is that a way for 
management to respond?
    I was in business, and I can tell you if it was one of my 
key people--and controllers are the key people--I would never 
say go ahead and find something else if you don't like what you 
are doing.
    Secretary Peters. Well, Senator, I am going to ask the 
Acting Administrator to talk specifically about the staffing 
levels, but I--again, I acknowledge the inappropriateness of 
that comment.
    Mr. Sturgell. I would agree with the Secretary, Senator 
Lautenberg. It was unfortunate. But again, I think, as the 
Secretary said, there is a level of frustration here, given 
that the controllers were substantially involved in this 
project over about a decade-long period.
    You know, with respect to staffing, you know and we have 
talked about this, we are in the beginnings of what has been a 
long-expected retirement wave of the controllers simply because 
there is a mandatory retirement at age 56, and we had replaced 
a large portion of the workforce after the PATCO strike in the 
early 1980s.
    So we have put in place a number of things to try and 
retain our most experienced controllers. Among them are 
retention bonuses. We have a waiver process for the age 56, 
which has been congressionally approved, that is in play now. 
We are hiring as many new hires as we can put in the system and 
train effectively.
    Senator Lautenberg. How many would that be, Mr. Sturgell?
    Mr. Sturgell. We hired over 1,800 last year. We increased--
we had a net increase in the workforce of 256 last year. We are 
going to net increase the workforce this year by 256.
    Senator Lautenberg. How long does it take to get people to 
a full level of competency?
    Mr. Sturgell. Well, in the past, it has taken between 3 and 
5 years for an en route air traffic controller and between 2 
and 3 years for a tower controller. Now, due to streamlining 
some of the slack in the training process and due to some new 
simulators that have come along in the last several years and 
which Congress has helped us fund, our statistics for this 
fiscal year show that we have reduced the training time for the 
en route environment and for the terminal environment by almost 
a year in some cases. We are down to about 1.4 years for a 
tower controller.
    Senator Lautenberg. But for sufficient numbers to prepare 
for the forecast that within a 5-, 6-year period, in which 
delays will worsen by 60 percent. Have you heard that forecast?
    Mr. Sturgell. If we are not able to modernize the system 
and the traffic comes as we expect it, yes, by 2015, 2016, 
that's correct.
    Senator Lautenberg. Well, the question is, and we dance 
around this issue, how many fully trained air traffic control 
professionals do we have? I am concerned because we have seen a 
substantial increase in the number of retirees, and people who 
just left the job, not ready for retirement, but because of 
working conditions were not those that were sustainable.
    We will have a chance to talk. Excuse the excessive time, 
Mr. Chairman, but we will keep this record open because we have 
got lots of questions to go. Thank you.
    The Chairman. Thank you.
    Senator Rockefeller?
    Senator Rockefeller. Thank you, Mr. Chairman, and I will 
just ask two more questions that speak on the same subject, and 
then I am obviously not covering the whole catastrophe which is 
facing us in our transportation system, but I am just focusing 
on general aviation this morning.
    They often state that the air traffic control system, that 
is the GA folks, was built for the commercial aviation use and 
that general aviation users are only, as they say, marginal 
users. But at any given moment, as I indicated before, two-
thirds of the aircraft in the sky are general aviation 
aircraft.
    In addition, the FAA spends approximately $1 billion a year 
to support general aviation airport infrastructure, more than 
$500 million a year on providing weather services, flight 
services to general aviation pilots, and certifies general 
aviation aircraft, which is as you know, 13,000 to 25,000 to 
50,000 parts of an airplane, as well as a host of other 
appropriate safety activities.
    Can you give me a total dollar figure, Mr. Sturgell, of FAA 
services and programs that directly benefit general aviation, 
ballpark?
    Mr. Sturgell. Well, I think you just about covered it, a 
million or so--well, low-activity towers, a host of those; the 
flight service stations, which is about $500 million a year; 
and, of course, the certification activities. Our Office of 
Aviation Safety is run at about $1 billion a year, and that 
includes services, though, to both the commercial and the GA--
--
    Senator Rockefeller. Does the current contribution to the 
Aviation Trust Fund of the general aviation community come 
close to meeting the expenditures that you expend on them?
    Mr. Sturgell. No, it does not. And just to put the numbers 
up against this, when you look at commercial versus GA activity 
and cost drivers and you use the IRS regulations in terms of 
commercial taxes, defining commercial versus GA----
    Senator Rockefeller. I am going to get to that.
    Mr. Sturgell. Right. GA accounts for about 16 percent of 
our costs, and they contribute about 3 percent of the revenues 
into the fund. And in terms of what we cover that covers GA, we 
spend about $2.2 billion a year total on what I would consider 
GA-related activities.
    Senator Rockefeller. So would you then say that general 
aviation's view that they are only a marginal user is not 
accurate?
    Mr. Sturgell. System-wide, when you look at trust funds to 
revenues, when you look at cost drivers and revenues, no, they 
are not. They are substantial users at 16 percent of the 
system. And in some airports, they are a much bigger number. In 
some, they are less.
    Senator Rockefeller. And that doesn't include the wear and 
tear on the air traffic controllers, who are handling them as 
they go on? I mean, just the fatigue factor.
    Mr. Sturgell. Well----
    Senator Rockefeller. Question number two, DayJets, which I 
am not particularly familiar with, operates out of the 
southeastern United States, and they tell me that they plan to 
have three million air taxis flights. My people in West 
Virginia probably won't be using those, high-end payers will. 
They are going to have about three million flights annually. 
Flights, I didn't mean to say jets. Three million flights 
annually when their business matures, and they are only one of 
a series of people who are looking at this air taxi matter.
    Now these companies claim they will not impose any 
additional burden on the air traffic control system. Does the 
FAA believe that the additional millions of short-haul flights 
will not burden an increasingly strained air traffic control 
system?
    Mr. Sturgell. Well, it depends on where they fly and when, 
frankly. If they get up into the high-altitude structure, if 
they start flying into some of the major metropolitan airports, 
then, yes, there will be additional burdens. If, however, these 
are relatively short-haul flights, where they stay in the 
medium- to low-altitude structure, where they go into airports 
that would be small to mid-sized airports, then the impact will 
be less.
    But we do see it as a growing industry. I mean, we are 
estimating about 400 aircraft a year, I think, on this side of 
the industry. We are going to have to watch extremely closely 
how this industry develops and its impact on the system.
    Senator Rockefeller. Thank you, Mr. Chairman.
    The Chairman. Senator McCaskill?

              STATEMENT OF HON. CLAIRE McCASKILL, 
                   U.S. SENATOR FROM MISSOURI

    Senator McCaskill. Thank you, Mr. Chairman.
    I am assuming that both of you would come down in favor of 
the importance of a certification of an aviation repair 
station, that the FAA certification is meaningful, and I don't 
have a lot of time. So if, briefly, one of you would speak to 
why you think it is important for a repair station to be FAA 
certified?
    Secretary Peters. Ma'am, I am going to ask Acting 
Administrator Sturgell, Senator, to address the specifics of 
the inspections. But I will tell you that all air traffic 
repair facilities have to meet the same certification 
requirements. There is no difference in those facilities, 
regardless of where they are located.
    Senator McCaskill. OK. So that is what I am trying to 
figure out here. If there is no difference between one that is 
not certified and one that is certified, then why are we 
certifying?
    Secretary Peters. Ma'am, I am sorry. I misspoke. Every air 
repair facility that is certified has to meet the same 
standards.
    Senator McCaskill. OK. I am trying to get at what a good 
thing it is that we are having standards, OK? So that is what I 
am trying to get at is that we, of course, want repair stations 
to be certified, correct?
    Secretary Peters. That is correct.
    Senator McCaskill. And you would certainly acknowledge that 
there are requirements associated with certification that are 
something that every airline should want and desire and that it 
would be important to the flying public to have the knowledge 
and comfort that every airplane that is being flown 
commercially is being worked on in a certified facility?
    Secretary Peters. Ma'am, that is correct, and I will ask 
the Acting Administrator to deal specifically with commercial 
airlines and the requirements, but that is accurate.
    Mr. Sturgell. Senator, I think what is important to note 
here is that the individuals themselves also hold certificates 
issued by the FAA for mechanics and repairs.
    Senator McCaskill. Well, why are we going to the expense 
and the trouble of certifying a repair station if we can do it 
just as well by the other method? Why are we doing that? I 
mean, I am trying to figure out why we are allowing non-
certified repair stations in the first place unless the 
certification is pretty darned important.
    Mr. Sturgell. Well, a lot of it goes to the type of work 
that is being done, how often----
    Senator McCaskill. But Mr. Sturgell, isn't it true that the 
identical kind of work is being done in non-certified repair 
stations as in certified repair stations? There is absolutely 
no difference in the type of work that is being performed in 
these facilities. Isn't that correct?
    Mr. Sturgell. I think the work varies, depending on who the 
customers are and what is being required. I mean, it is not the 
same all the way across the board. It depends on what that 
repair station or what that individual is qualified, the type 
of work they are qualified to do.
    Senator McCaskill. We have heard testimony in this 
Committee and there is work that has been done by GAO and by 
IGs that certainly have said in very clear terms that we are 
now having work done in non-certified repair stations 
everywhere across the globe, where it is overhaul, it is major 
repair, it is minor repair.
    And, what I am really trying to get at is that we have non-
certified repair stations in countries that have been 
identified as being on the terrorist watch list by the State 
Department. And we have both certified stations in these 
countries and non-certified stations in these countries, and 
the problem is that your budget doesn't really reflect the 
needs of adequate inspections at these facilities. Isn't it 
true that there are many non-certified foreign repair stations 
that would like to get certified, and we don't have the 
personnel to even do that?
    Mr. Sturgell. Well, I don't know what the number of non-
certified repair stations internationally want to get 
certified. We have----
    Senator McCaskill. Wouldn't you know that at your agency? 
Wouldn't your agency know?
    Mr. Sturgell. Well, people request, and it changes all of 
the time as far as the numbers. Roughly 700 foreign repair 
stations that we have certified to perform work today.
    Senator McCaskill. Is there a waiting list for those that 
want to be certified that haven't been certified?
    Mr. Sturgell. I can get you that information. I know that 
number varies based upon the need that has been demonstrated by 
that repair station. And those repair stations are inspected 
annually, or annually they go through a certificate process, 
which includes an inspection process by us.
    Senator McCaskill. The certified ones?
    Mr. Sturgell. Yes.
    Senator McCaskill. But the non-certified ones that are 
wanting to be certified, I would hope that you would have a 
fairly finite number that you could give the Committee because 
we need to look at that in comparison to your budget request. I 
mean, if there are foreign repair stations right now that don't 
have the kind of security, perimeter security, background 
checks, drug testing, all of the things that we think are 
important in terms of this issue, if they are asking to be 
certified and we don't have the manpower to do it, I think that 
is something we need to get a handle on.
    Secretary Peters. Senator, let us get back to you in terms 
of if there is a waiting list, as you put it, of stations that 
are waiting to be certified and if there are any differences or 
backlogs in that. I do think it is important to note that in 
the President's budget this year we have requested a net 
increase of 146 inspectors, bringing our total inspection 
workforce to just over 4,000, at 4,100 approximately.
    [The information referred to follows:]

    The total number of part 145 applicants (April 2008) are:

        Domestic = 430 (277 have started the certification process and 
        153 are awaiting resources to start the process).

        Foreign = 97 (38 have started the certification process and 59 
        are awaiting resources to start the process).


    Senator McCaskill. Well, I appreciate that. But I think 
overall the need is significant--and we will get to you in 
writing, but the things I am interested in is how many foreign 
certified stations there are, the number of inspections that 
are going on there, who is bearing the cost of that. And I want 
to underline that because if, in fact, companies are 
outsourcing labor because it is cheaper, they have a right to 
do that. But if they are outsourcing labor and the taxpayers 
are picking up additional cost to do inspections and to certify 
because they are in a foreign country, that is flat wrong. 
There is no way the taxpayers of this country should ever be 
subsidizing the outsourcing of labor because it is cheaper for 
the company.
    And we would be subsidizing it if we are paying for those 
costs of inspectors going to Indonesia instead of those 
airlines paying those costs. And it is my understanding that 
the airlines are not paying the full cost of that inspection 
process. So that is what I would like to get a handle on as it 
relates to your budget request for the following year, and I 
thank you for you answering my questions, and I thank you, Mr. 
Chairman.
    The Chairman. Thank you.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Mr. Chairman. Thank 
you, Secretary Peters, Mr. Sturgell.
    Secretary Peters and I got to know each other quite well 
this past year with our tragic bridge collapse in Minnesota, 
and I want to thank you again for your support in the wake of 
that collapse and your personal visits as well as the way we 
were able to work with the agency for funding.
    And I think that everyone in this room would agree that 
this bridge collapse highlights the need to invest in our 
infrastructure, particularly our bridges. And that is why I 
know you personally are devoted to this, but I was disappointed 
that the President's budget reduced the Federal Highway 
Administration's budget by almost 5 percent. And additionally, 
according to the Federal Highway Administration, each $1 
billion invested in construction creates upwards of 47,000 new 
jobs and up to $6 billion in additional revenues.
    Given the fact that we clearly have a problem with 
crumbling infrastructure in this country, I see it not only in 
our bridge in the Twin Cities, but also in our rural roads and 
the fact that investing in our national infrastructure at a 
time when we are having so many economic difficulties would 
help to stimulate the economy and provide jobs, do you agree 
with this decision to reduce by 5 percent the Federal Highway 
Administration's budget?
    Secretary Peters. Senator, what the President's budget does 
is honor fully the commitment that was made to this Nation in 
the SAFETEA-LU legislation. This, of course, is the final year 
of that legislation, the 6-year piece of legislation. And it 
does--it does within the context of this year's budget, the 
President's, meets the full $286.4 billion commitment that was 
made.
    Senator Klobuchar. But do you think that that is enough, 
given what we are dealing with right now with infrastructure 
and what you saw in Minnesota?
    Secretary Peters. Senator, I think it tees up a very 
important problem, both the issue in Minnesota as well as the 
declining balance and the proposed deficit in the highway 
account of the Highway Trust Fund before the end of this 
authorization period, that we absolutely must come together and 
have discussions about how we close the gap in the future, how 
we fund those projects that need to be funded, and how we look 
at new sources of revenue because, as I have said in the past, 
I am convinced that we cannot depend on the gas tax into the 
future as we have in the past.
    Senator Klobuchar. And you and I have talked about that. 
But what are the other plans that we can do? I mean, we have 
talked about bonding. I personally have told you that I think 
we should roll back the tax cuts for some of the wealthiest and 
put that into infrastructure funding. But what is the 
President's plan?
    Secretary Peters. Senator, what we are doing right now in 
the near term is both developing an outline of proposals for 
the next surface transportation authorization, also working 
with each of the states who receive these programs to ensure 
that there isn't money not being used today productively that 
could be used. For example, on some earmarked projects, that 
money sits there for many years and it is not put into active 
use.
    So if there are projects that are ready to go today, we are 
working with the states who receive these grants to ensure that 
we can move projects forward if there is money available in 
other parts of the budget.
    Senator Klobuchar. And if you could just convey this idea 
to the President and the rest of the administration as we are 
looking at stimulating the economy again. We did the short-term 
rebate plan, but long after those checks are cashed, I think we 
are going to have to change direction in this country. And if 
we are going to move forward, as I saw in our rural areas, with 
ethanol and biodiesel on this energy independence, we can't 
have a transportation system that is stuck in the last century. 
And that is why I hope you will consider, the administration 
will consider this as part of the way to get our economy moving 
again, to allow our trucks to move again.
    Secretary Peters. Senator, we most certainly will.
    Senator Klobuchar. Thank you.
    Secretary Peters. And also, as I have talked about, there 
are substantial amounts of private sector money available to be 
invested today as well.
    Senator Klobuchar. The other thing I just wanted to touch 
on is the potential airline merger in Minnesota with Delta and 
Northwest Airlines. And just as a general matter, since there 
hasn't been any merger announced as of this moment, and as you 
know, we are very concerned in Minnesota. We have a thriving 
hub, something like 12,000 to 13,000 employees from Northwest 
Airlines. There were agreements made between the state and the 
airline, when the state basically bailed Northwest Airlines out 
when they were having some financial difficulties years ago. 
And we also see this as a consumer issue for our state.
    And one of the criticisms of the airline merger review 
process is that the two Federal agencies in charge, DOT and 
DOJ, review each merger in an individual context, without 
regard for how one proposed merger affects the entire system. 
And so, DOT and DOJ may find that a merger passes antitrust 
scrutiny and safety scrutinies that you would look at, but 
critics say these agencies are not really thinking ahead to see 
whether one proposed merger will lead to a wave of mergers or 
how one merger will affect the overall capacity or how one 
merger will affect the overall quality and potentially the 
safety throughout the system. And how do you respond to that 
criticism?
    Secretary Peters. Senator, certainly safety is something 
that we hold very close to us, and DOT will advise on issues 
that relate to safety. We don't yet have, as you mentioned, a 
specific proposal before us. But the process is that DOJ will 
examine competition issues. They will examine market access 
issues, while DOT advises DOJ, who is ultimately the 
decisionmaker, on input such as consumer-related issues and 
safety issues.
    But I will carry back your concerns that these issues be 
examined in the context that you put forward.
    Senator Klobuchar. And many airline industry consultants 
and analysts think that the airline industry will consolidate 
over the next few years. Some think from six large legacy 
carriers to three, and do you agree and are you concerned about 
the effects of this consolidation in terms of service and 
quality?
    Secretary Peters. Well, Senator, as I mentioned, those are 
issues that we will be examining. Again, DOT advises. DOJ makes 
decisions. I do think we need to keep an open mind. There are a 
number of factors affecting the industry today, not the least 
of which are very high fuel prices. But I do agree with you 
that we need to examine all of these issues as we go forward, 
and again, we will talk with DOJ, who is the ultimate 
decisionmaker.
    Senator Klobuchar. Mr. Chairman, if I could, just one more 
question? My concern about this is when you look at some of 
these other airline mergers fleet size will decrease like the 
combined fleet size of America West and US Air which is down 1 
percent since these two carriers merged, and the combined fleet 
size of TWA and American which has decreased by 24 percent 
since these carriers merged.
    And I am looking at areas like Duluth and Moorhead and some 
of the service that they need as we are growing the energy 
economy in our state. And I hope that when DOT looks at this 
merger, and I know that you have a limited role to play in 
this, that you consider overall the effect of quality and the 
service to the consumers.
    Secretary Peters. Will do.
    Senator Klobuchar. OK. Thank you.
    The Chairman. Thank you very much.
    Senator Sununu?

               STATEMENT OF HON. JOHN E. SUNUNU, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Sununu. Thank you, Chairman Inouye.
    Mr. Sturgell, I want to talk a little bit about the FAA 
reauthorization and the issue of funding and strengthening the 
aviation system, control system we have and the modernization 
program that is before. I am sorry Senator Rockefeller isn't 
here, but I think I will quote him reasonably accurately. And 
this is nothing he and I haven't shared in person before, 
regardless.
    He indicated that general aviation killed the bill, 
effectively, for the year, and I think that is a bit of an 
unfair statement, and I want to explore the reasons for his 
assertion. First, I think in his questions to you and your 
responses, you suggested that general aviation was 16 percent 
of the cost associated with the system, but they were only 
paying, I think, 3 percent, providing 3 percent of the revenues 
to support that system. Is that what you indicated earlier?
    Mr. Sturgell. Senator, I did, and that is based on using 
the IRS definitions reflecting the fact that certain parts of 
the industry pay commercial taxes, certain are defined in other 
ways. If you include on-demand air taxis and fractionals, which 
are typically at times included in the GA community, then that 
drives that number up to 22 percent in terms of the air traffic 
costs, and they are paying about 8.5 percent of the revenues.
    Senator Sununu. OK. I appreciate that.
    Mr. Sturgell. So there is the distinction.
    Senator Sununu. It is an important distinction, but I think 
those numbers are important to have in the record as well 
because even in the current situation, it reflects a much more 
proportionate share of the costs. And I think you will find 
people on the Committee here agreeing, and perhaps people in 
the general aviation community agreeing, there needs to be an 
even more equal and equitable sharing of the cost. And despite 
the assertion that general aviation killed the bill, there have 
been proposals submitted and even approved from the Finance 
Committee and other places that bring us to a much more 
equitable and proportionate share of the costs, and so that is 
what I want to address now.
    For those reasons, I think it is not quite a fair 
representation. I think everyone--I hope everyone is committed 
to a more equitable allocation of share and revenue. The issue 
that has stalled this bill, delayed this bill is the question 
of how to raise those revenues and the proposal to create a new 
revenue source, a $25 per segment fee. And I oppose that fee. 
Others on this Committee oppose that fee because it is new. It 
would have additional administrative costs. I think it would be 
difficult to oversee, and because we have a system in place for 
collecting revenues to support this modernization, and that is 
in aviation fuel taxes.
    And the proposals that were put in place--the Finance 
Committee proposal, for example--significantly increased 
aviation fuel taxes on general aviation. So my question in this 
regard is that Committee proposal I think increased aviation 
fuel taxes for general aviation by 60, 80 percent, maybe 100 
percent. What proportional share did that provide for the 
general aviation community, and did that Finance Committee 
proposal, in your opinion, provide adequate funding for the 
modernization initiative?
    Mr. Sturgell. Senator, I would just go back to the 
principles behind our proposal because you can reach those 
principles in different ways. And obviously, both the 
commercial and the GA side of the industry are important 
economic drivers for the country as a whole.
    So what we were trying to do with our proposal is to 
implement, number one, a cost-based financing structure, not 
just for the fairness reasons, which would level things out, I 
think, more than they are today because we believe they need to 
be, but also when you go down the path of a cost-based 
proposal, then you are making the operators become more 
efficient in their use of the airspace, which they do not do 
today under just a straight tax system.
    And I think that is extremely important as we talk about 
congestion, especially in major metropolitan areas. You do want 
the users using the system efficiently, and that is what a 
cost-based system will do. So cost-based, fair, and the last 
thing was dedicated funding for modernization.
    Right now, we are part of the discretionary budget, and we 
have recognized the need to transform this system. It is simply 
not scalable to handle the two to three times traffic levels 
that we are seeing out to 2020, 2025. And I am particularly 
worried about the mid term, 2015, 2016. So that is where we 
are.
    Senator Sununu. Thank you. I appreciate that very much. And 
it was--and I appreciate the thought that went into the 
proposal, but that was an only marginal response to the 
questions that I asked, which is, one, is the proposal to 
increase aviation fuel taxes, aviation fuel taxes on GA by 80 
percent or so, did that generate sufficient revenues to fund 
this very important modernization? And the answer to that 
question is a simple yes, based on the GAO evaluations of what 
is needed, the projections that you and others in the 
department have made, the funds that would have raised are 
adequate to support the modernization initiative?
    Two, would that get us to a much more proportional share of 
the costs associated with the system? You indicated that by one 
accounting, they were 16 percent of the costs, only 3 percent 
of the revenues. By another, 22 and 8.5 percent, and we want to 
get that to be more equitable. And the answer to that question 
is, yes, raising aviation fuel taxes on general aviation does 
get us to a much more equitable assessment of the cost.
    The point you made, which is a fair point to make, is that 
you believe that creating a new tax system, a new user fee 
system, a $25 per segment system, would also address or solve 
the issue of maximizing the efficiency within the system and 
drive users to use the system much more efficiently. I think 
that is an interesting assertion. I think there may be some 
improvements or some incentives created along those lines with 
a user fee, but there are other downsides to creating such a 
new system, downsides that many others on this Committee I 
think have registered in our debate, in our discussion when it 
came up.
    So I think these are important issues. We want to 
modernize. But I don't think it is quite fair to say that 
simply because this one user fee wasn't included in the final 
package that we can't possibly do an FAA reauthorization bill 
because the package certainly was still in a position to meet 
the very important goals of providing the revenues to modernize 
the system and creating a very--a much more proportional share.
    Thank you, Mr. Chairman.
    The Chairman. Senator Stevens?
    Senator Stevens. Madam Secretary, we have all read these 
stories about mergers among major commercial carriers. I think 
Senator Inouye and I probably are frequent fliers as much as 
anyone in the country. I wonder how you evaluate mergers when 
they come to you? Do you have a special group that would 
evaluate the impact on consumers? These mergers could well 
reduce the frequency of flights or the size of the airplanes or 
the conditions under which they will fly.
    Do you have a consumer group that will analyze merger 
proposals before you?
    Secretary Peters. Senator Stevens, we do have a group that 
analyzes these proposals. They are part of our aviation office 
that reports to the Office of the Secretary, and so they do 
examine these proposals when they come forward. We do look at 
issues like safety and like consumer issues, but we are an 
advisory role to the Department of Justice.
    The Department of Justice ultimately, of course, is the 
party that makes these decisions. And they look at issues like 
competition. They look at issues like market access. So we 
certainly do have input to the Department of Justice when these 
proposals are made.
    Senator Stevens. Well, I would hope that you would really 
consider forming a consumer group to look at them because these 
mergers are now going to eliminate major carriers, it looks to 
me like. And that will mean hubs will change. The conditions of 
interlining will change, and availability of flights is going 
to change.
    I do think that we are getting on to a point now that with 
the limited number of major carriers, particularly 
transcontinental carriers, that we ought to be very careful 
about approving mergers unless we are sure that consumer rights 
are protected. Because clearly this commerce--this air commerce 
has a great deal to do with our economy, and if we approve 
mergers which slow down this economy at this time, I think it 
would be very wrong.
    Thank you.
    Secretary Peters. Senator, and also I wanted to get back to 
you, I apologize that I misspoke a while ago. This is 
concerning the minors traveling unaccompanied. Actually, the 
aviation office, as part of the Office of the Secretary, has 
had ongoing discussions with the airlines on this issue. And 
again, that office would also be involved in the potential 
merger as would the consumer section in our Office of Counsel.
    Senator Stevens. Thank you.
    The Chairman. Senator Thune?

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman and Senator Stevens. 
I appreciate the Committee holding today's hearing regarding 
the Fiscal Year 2009 budget request for DOT, and I am pleased 
that Secretary Peters and Administrator Sturgell are here to 
underscore the Department's priorities for the coming fiscal 
year.
    And I would echo what the Senator from Alaska said with 
regard to concerns that I know constituents of mine have 
regarding potential mergers and what that might do in terms of 
its effect on availability of service and options and prices 
and all those sorts of things. And that is certainly something 
that we are going to be watching very, very carefully because 
many of these proposals would significantly impact service into 
the area of the country that I represent.
    And I know a lot of my colleagues agree that there is 
certainly no shortage of demand when it comes to all the 
various modes of transportation that DOT is responsible for. 
The one--a couple of observations and questions, if I might?
    The latest FAA extension that the President is expected to 
sign into law this week includes an important extension for EAS 
and eligibility, and I wanted to let you know that I appreciate 
the Department's help in working to ensure that we get a 
carrier selected as soon as possible to ensure that EAS service 
can be restored in Brookings, South Dakota.
    As Senator Stevens and others have referenced this morning, 
I also have some strong concerns about the administration's 
significant cuts to the EAS program. Fifty million dollars is, 
by no means, a sufficient amount to ensure that eligible 
communities across the country are connected to our Nation's 
aviation system. And so, I guess I would just like to--I know 
you probably exhausted this subject already, but if you could 
react to our concerns about that amount and what it might mean 
to EAS communities and service into those underserved areas of 
the country?
    Secretary Peters. Senator, I would be happy to respond, and 
I think it is important to note again, as we talked with 
Senator Stevens, we do believe that we can continue to support 
the most isolated communities. These would be communities in 
Alaska. These would be communities in South Dakota, in Montana, 
in North Dakota, and other of the more isolated places.
    Where we believe we have the opportunity to work within the 
budget amount that the President's budget proposes is to look 
at the fact that we don't believe the government should be 
funding communities that are within a reasonable driving 
distance from a major airport, as we are today. Some of those 
locations today, for example--and I am sure that someone 
represents these areas as well--but Hagerstown, Maryland, just 
a short distance here from the Nation's capital. Lancaster, 
Pennsylvania. Or in my home State, the City of Prescott, 
Arizona, which is not a considerable distance outside of the 
metropolitan Phoenix area.
    But again, it would be our intent to continue to focus and 
to fund those most isolated communities in many of the States 
that I just mentioned.
    Senator Thune. Secretary Peters, I know you have got a 
great deal of expertise when it comes to the Nation's 
infrastructure needs, and I know that the EPW Committee also 
has primary jurisdiction over our Nation's surface 
transportation systems, when it comes to highways and bridges 
and what not. But I also have major concerns that we are not 
doing enough when it comes to the Federal Government's role in 
ensuring that our Nation's transportation system is keeping up 
with the demands that it faces, and this applies both in terms 
of surface as well as other modes of transportation.
    And while I would acknowledge that the President's budget 
for Fiscal Year 2009 is a starting point, as Congress works to 
craft our annual appropriation bills, I do have concerns that 
we have looming problems out there that, if left unaddressed, 
are going to significantly impact the movement of goods and 
services in this country.
    And I want to reference a New York Times article that 
appeared earlier this week in which you noted that the Federal 
role in transportation should be more limited than it is today. 
And I guess my question is how do we reconcile the fact that 
the construction costs associated with all forms of 
transportation have risen significantly while the funding 
sources that we rely upon to fund and pay for these 
infrastructure improvements are lagging behind?
    And I raise that question because I do see a major problem 
on the horizon both in terms of surface transportation as well 
as aviation.
    Secretary Peters. Senator, I would be happy to answer that 
question, and thank you for the opportunity. Certainly, our 
Nation does have needs that are not being met today in terms of 
both surface transportation, aviation, rail, within our ports 
as well. Part of the problem that we have today is both the 
source of funding that we are collecting. The gas tax, as I 
mentioned earlier, is not going to be sufficient in the future. 
In fact, it is not responsive even yet today. So we need to 
look to diversify or find more funding sources to become 
available.
    But I think the very basic question that we have to ask 
ourselves first, those of us who are privileged to serve in the 
Federal branch of government, is should the Federal Government 
be involved in as many of the issues in transportation that we 
are involved today? And I am talking about the surface system 
mainly.
    Today, we have, between highway and transit, 108 different 
programs with which the money is divided up, once it is 
remitted, into these various programs and then sent back out in 
varying demands, along with formula allocations to states. I 
think that we could do a better job if we were to refocus the 
Federal priorities and the Federal responsibility on those 
thing that are truly in the national interest, things like the 
interstate highway system, things like projects of regional and 
national significance, safety programs.
    But then not be involved, the Federal level of government 
not be involved in determining where many of the decisions are 
made that I think are much more in keeping with local or State 
governments making those decisions. And so, I think if we 
refocus where we are with the Federal Government, redefine what 
our primary responsibilities and priorities should be, and then 
work with our partners on State and local levels to determine 
where they should be making decisions and where the 
responsibility and prioritization is more accurately at that 
level.
    This does not mean, as some of the folks who have construed 
my remarks to mean, that we want to dump the programs on the 
State. Absolutely not. I have been a State official. I 
understand how it works from that end as well. But I do think 
that 108 different surface transportation programs is not in 
keeping with what the Federal Government should be focusing and 
prioritizing on.
    That said, we have got to, in the next surface 
transportation authorization, look at how to bring more money 
overall to this system, how we can make sure that we are 
appropriately funding transportation where we should be. And I 
think there are ways to both diversify and supplement revenues 
that we are collecting today, and one of those is to bring in 
private sector participation.
    There are today conservatively $400 billion available for 
infrastructure investment if we create the right opportunity 
and the right environment to make access to those revenues.
    Senator Thune. And to that point, I would hope that you 
would also continue to take a look at the proposal that Senator 
Wyden and I have on the Build America bonds, which I think gets 
at the very point that you are talking about with regard to 
involving the private sector in helping, coming up with new and 
innovative ways of financing infrastructure.
    But I just, again, appreciate your answer but would 
reiterate my original point about if you start talking about 
those states like ours that are rural and don't have population 
bases and don't have, therefore, the funding, the ability to 
raise the revenues that are necessary to have a truly national 
highway system that is connected, or that connects the economy 
from one end of the country to the other, it is just not 
practical to suggest, I think, that somehow the States would 
become the--and I think that States and local governments would 
probably welcome the opportunity to have more control in 
decisionmaking and that sort of thing.
    But I can tell you that a national transportation system 
isn't going to work absent those highways, Federal highways and 
interstate systems that go across sparsely populated areas of 
the country. And that, I believe, is a national and Federal 
responsibility and role to make sure that we have a national 
highway system that makes us competitive in the global 
marketplace.
    And so, on that comment, I appreciate your clarification of 
it because it certainly raised some eyebrows for those of us 
who represent small or rural States.
    Secretary Peters. Senator, that is precisely why I 
mentioned the interstate highway system and other systems that 
do support our Nation as a whole. It is very important that we 
continue to maintain and operate and improve that system as 
well.
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Dorgan?
    Senator Dorgan. Mr. Chairman, thank you.
    You know, on the interstate highway system, I doubt 
whether, with the current mindset, we would build the 
interstate highway system today if it were not now built. But 
fortunately, under President Eisenhower and the leadership in 
the 1950s, we did bring this country together through the 
interstate highway system.
    I was looking the other day at the Special Inspector 
General for Iraq's reports about what we are spending there. We 
have water projects, over 900 water projects in Iraq we are 
building. Roads, health clinics, and pipelines--we are 
investing a lot in infrastructure in Iraq. We are cutting back 
on infrastructure investment in this country.
    I agree with Senator Thune. I think infrastructure 
investment is very important. I believe we ought to have some 
sort of infrastructure investment bank. There are a couple of 
proposals out here that I think are important. I came back 
because I wanted to talk about Amtrak just for a moment.
    We have 110,000 North Dakotans that boarded Amtrak rail 
service in North Dakota. And the 40 percent proposed cut, this 
has been replicated over and over before, Secretary Peters, you 
became Secretary. We have had the same recommendations from 
this President, and the Congress has essentially said to this 
President you are wrong. We are going to provide funding. We 
believe long-distance train service is important.
    In our part of the country, the Empire Builder goes from 
Chicago to Seattle. It is an enormously successful train, but 
most of the experts suggest that a 40 percent cut in Amtrak 
means that most long-distance train service will disappear. Is 
that the intent of the President's recommendations, that long-
distance train service disappear?
    Secretary Peters. Senator Dorgan, no, it is not. In fact, 
the administration does value and recognize that intercity 
passenger rail is an important part of our overall 
transportation system in the United States, and we certainly do 
depend on that system as well.
    The fact is that Amtrak generates about $2 billion in 
revenue annually, and what we have proposed in the President's 
budget, $900 million in funding, plus funding that the States 
can provide, especially with the State grant program which is 
part of what the administration has put forward, we do believe 
that Amtrak management needs to continue with reforms and make 
some good business decisions, business decisions that will 
eventually allow us to phaseout operating subsidies. But this 
does not mean that we don't support intercity passenger rail.
    Senator Dorgan. Every country in the world, I believe, that 
has rail passenger service has some form of subsidy for it, and 
we subsidize virtually every form of transportation. We 
subsidize the airlines. I mean, not in a direct-dollar subsidy 
to the carriers, but there are many ways in which we subsidize 
air travel.
    My feeling is that retaining long-distance train service in 
this country is important, and a lot of experts have looked at 
the President's proposal--this is similar to the proposals that 
we have seen in the past, as I said, before you became 
Secretary--and most have said that it is a proposal that will 
mean that long-distance train service will disappear. And we 
will have train service, passenger service from Boston to 
Florida, to be sure, because that eastern corridor is where all 
the folks live.
    But I think and hope that this Committee strongly supports 
Amtrak, including long-distance train service, because we 
believe it enriches our transportation system. Just in my 
state, which is sparsely populated, to have 110,000 people use 
Amtrak in a year, describes what an important adjunct to our 
transportation system Amtrak is, and so I hope that we will 
restore the funding.
    I do want to comment as well on the issue of airline 
mergers. We have gone through a spate of mergers. We are on the 
threshold, I believe, of a new wave of mergers. There will not 
be a merger that happens in isolation. It will not be a case of 
some day waking up and seeing a news report that Northwest has 
decided that it is going to merge with Delta or Delta with 
Northwest. There will be a group of mergers because when one 
merger is announced of two carriers among the top five or six, 
other carriers will begin and probably have already begun plans 
to merge and to combine.
    And so, my own view is I don't think it is in the public 
interest to have further consolidation in the airline industry. 
Frankly, I don't think it is going to solve what is wrong with 
the airline industry to get bigger. I mean, there are a lot of 
things wrong there. We understand that many of them have been 
in and out of bankruptcy.
    But all three of us come from sparsely populated states, 
with the exception of Senator Inouye, that have a population 
center with a lot of jet travel and a lot of big airplanes 
coming in. But we all understand what happens with respect to 
the position after deregulation, where the pricing system for 
airlines is if you want to fly twice as far you get to pay half 
as much. Fly half as far you get to pay twice as much.
    I mean, if you fly from South Dakota to Los Angeles, I will 
guarantee--you go check the fares, get the best fare you can--
and I will guarantee you that I can find a fare flying from 
Washington, D.C. to Los Angeles that is half the price, flying 
twice as far. Well, that is why some of us in rural States have 
some real concerns about these issues.
    And the more concentrated economic power you have, the more 
difficult it is for us. So we have a hub and spoke system. 
There is a lot of work for us to do to try to figure out how we 
make this work for the airlines themselves because they have 
gotten hit very hard by fuel costs and other things, and I want 
them to do well.
    But I am very concerned about airline mergers. I would 
second the notion by Senator Stevens that I think you should 
put together a task force that focuses on what would be the 
impact on consumers of further consolidation, combination, and 
mergers.
    Secretary Peters. Senator, we certainly will have input, as 
I mentioned earlier, and the things that we will be looking at, 
of course, are consumer issues and are safety issues. That is 
very important, and that is as our responsibilities are 
detailed and then sharing that information, of course, with the 
Department of Justice, who is the ultimate decisionmaker. And 
they do look at various issues like market impacts. They look 
at competition issues.
    And I absolutely hear what you are saying to us today in 
terms of perhaps looking a little broader than that. I don't 
want to infer that we are moving into a DOT, into an area that 
by statute is DOJ's responsibility, but I do hear what you are 
saying in terms of the type of input that we could provide from 
DOT.
    Senator Dorgan. I understand it is DOJ's responsibility. I 
have long threatened to put the photographs of antitrust 
lawyers at DOJ on the side of milk cartons. You know those 
things, where are they now? We have got a lot--we are paying a 
lot of them. But, boy, in the antitrust field, they sure seem 
to be missing.
    But that is a subject for another hearing and another day. 
Mr. Chairman, I wanted to come back and mention the Amtrak and 
the merger issues that I think are really important substantive 
policy questions that confront our Committee and confront our 
country, and I appreciate the opportunity to do that.
    The Chairman. Thank you very much.
    Madam Secretary, this has been a long day. So I will be 
submitting questions, and it should be noted that the questions 
and answers will be part of the public record. So it will be 
available to all interested parties.
    Senator Thune. Mr. Chairman?
    The Chairman. Yes?
    Senator Thune. Could I just make one point? And I have been 
to several of these hearings now where we have had 
Administrator Sturgell here as Acting Administrator. It seems 
to me at least that we ought to get him through here and on the 
floor and try and get him confirmed.
    He has had a long and distinguished career in service to 
our country as a military pilot, and as a commercial pilot, he 
knows that business pretty well. And I think it would be good 
to get him installed and make him the Administrator as opposed 
to the Acting Administrator.
    Thank you, Mr. Chairman.
    Secretary Peters. Thank you, Mr. Chairman.
    The Chairman. Thank you. With that, adjourned.
    [Whereupon, at 11:49 a.m., the hearing was adjourned.]
                            A P P E N D I X

  Response to Written Questions Submitted by Hon. Daniel K. Inouye to 
                          Hon. Mary E. Peters
    Question 1. How does the Department propose to spend less money on 
Essential Air Service and provide the same or improved level of service 
to these small communities?
    Answer. The proposed budget and revisions to the EAS program are 
needed in order to administer the program more efficiently and to 
ensure the most-isolated small communities maintain access to the 
national air transportation system within the proposed funding level.
    Communities' eligibility for inclusion in the EAS program has never 
been based on their individual needs; rather, it is based only on 
whether the community was receiving scheduled air service at the time 
of airline deregulation in 1978. The EAS program has remained 
fundamentally unchanged since its inception while the aviation 
landscape has changed dramatically with the spread of the hub-and-spoke 
system, regional jets, and low-fare carriers.
    Under the budget proposal, eligibility for subsidy in the future 
would be limited to communities: (1) that are currently being 
subsidized under EAS; (2) that are more than 70 driving miles from the 
nearest large- or medium-hub airport; and (3) at which the subsidy per 
passenger does not exceed $200 if the community is less than 210 
driving miles from the nearest large- or medium-hub airport. As $50 
million would not be sufficient to support all currently subsidized 
services, all communities would be ranked on the basis of isolation 
(i.e., driving distance to a medium- or large-hub airport) and the most 
isolated would receive subsidized air service to the extent allowable 
by the available funds.

    Question 2a. What efforts is the DOT currently pursuing to improve 
airline passenger service?
    Answer.

   The Department has initiated three rulemakings to help 
        ensure full disclosure of essential information and fair 
        treatment of passengers.

     An OST NPRM proposing to double the denied boarding 
            compensation paid to passengers who are involuntarily 
            bumped and to cover flights operated with aircraft having 
            30 to 60 seats. The Department is currently considering the 
            comments received and expects to take final action on the 
            proposal by June.

     A DOT NPRM proposing to require enhanced delay data 
            reporting by carriers to more fully capture tarmac delays 
            on flights prior to takeoff and after landing. Again, we 
            currently plan to take final action in June.

     An OST ANPRM proposing to enhance airline passenger 
            protections by: (1) requiring carrier contingency plans for 
            lengthy tarmac delays; (2) requiring carriers to respond to 
            consumer problems, including making information available 
            for filing a complaint with the carrier; (3) deeming 
            scheduling a chronically delayed flight to be unfair; (4) 
            requiring publication of delay data; (5) requiring carriers 
            to publish complaint data; (6) requiring on-time 
            performance reporting for international flights; and (7) 
            requiring carriers to self-audit their customer service 
            plan. The Department is currently considering the comments 
            received. The next step would be issuance of a Notice of 
            Proposed Rulemaking seeking comments on any proposals the 
            Department decides to advance.

   The Department has formed a ``Tarmac Delay Task Force'' to 
        study past delays, review existing and other promising 
        practices, and develop model contingency plans that airlines 
        and airports can tailor to their unique operating environments 
        to mitigate the impact of lengthy ground delays on consumers.

   The Department's Aviation Enforcement Office has pursued 
        enforcement action against carriers for failure to provide 
        consumers, upon request, the on-time arrival percentage of a 
        flight as required by existing rules. Cease and desist orders 
        assessing civil penalties have been issued against four 
        different carriers.

   The Department's Aviation Enforcement Office is continuing 
        its investigation of unrealistic scheduling by the large 
        airlines, targeting chronically delayed flights. During the 
        fourth quarter of 2007, the number of such flights was 
        dramatically reduced, and in 2008 the Aviation Enforcement 
        Office will be applying a somewhat more rigorous set of 
        criteria during its review.

   The Department's Aviation Enforcement Office has plans to 
        conduct on-site enforcement investigations of five large 
        airlines this Fiscal Year to evaluate their compliance with 
        consumer protection requirements.

   The Department will hold three aviation Consumer Protection 
        Forums across the country to educate consumers regarding their 
        rights as air travelers and to hear first-hand their concerns 
        about air travel. The first was held in Miami on April 17, 
        2008. The second will be in Chicago on June 24, 2008. The third 
        will be in San Francisco in late September 2008.

   The Department has taken steps to improve its airline 
        complaint filing system and will be taking further steps to 
        ensure that its websites with airline consumer information are 
        easy to use and provide useful information.

    Question 2b. What are the DOT's views regarding the potential pre-
emption of state laws through the issuance of Federal regulations on 
airline service standards?
    Answer. We support the Second Circuit's decision striking down New 
York's ``Passengers Bill of Rights,'' as a well reasoned interpretation 
of long-standing preemption in this area, as recently echoed in a 
comparable Supreme Court decision on interstate trucking (** Rowe v. 
N.H. Motor Transportation Association, 552 U.S.__, 128 S. Ct. 989 
(2008)).

   The Department is very active in this area because we 
        recognize the serious problems caused by congestion in the 
        system.

   There is increased emphasis on gathering data on chronically 
        delayed flights, and pressing carriers to adopt realistic 
        schedules. We think this is paying off too.

   Also, the Department has recently issued three aviation 
        consumer rulemakings, one of which goes directly to the 
        readiness of the airlines to put in place contingency plans, 
        worked out with the airport in advance, when lengthy delays 
        occur.

   In addition, the Secretary convened a ``Tarmac Delay Task 
        Force'' in January to evaluate past delays, review existing and 
        other promising practices, and develop model contingency plans 
        that airlines and airports can tailor to their unique operating 
        environments to mitigate the impact of lengthy ground delays on 
        consumers.

   The first meeting of the task force was held February 26, 
        and the second meeting was on April 29. I believe it is working 
        well and will be productive.

   Ultimately, more fundamental changes such as the NextGen 
        technology and congestion pricing where appropriate will pay 
        the biggest dividend in squeezing out delays.

    Question 3. The United States Merchant Marine Academy is expected 
to have a funding shortfall of $2.8 million during FY 2008. However, 
the President's FY 2009 budget request for the academy was $8.6 million 
less than FY 2008 enacted levels. How will the proposed cut in funds 
affect the ability for the Academy to improve its financial management? 
What additional steps are being taken to ensure that the Academy does 
not have another shortfall?
    Answer. The President's Budget does not highlight a funding 
shortfall of $2.8 million for the U.S. Merchant Marine Academy. The 
overall funding level requested for 2009 is only $1.4 million below 
funding enacted for 2008. This change from 2008 includes an increase of 
$4.6 million for the USMMA's pay and other operating expenses. The 
overall change from 2008 to 2009 also includes a reduction of $6 
million in funding requested for the Capital Improvement Program (CIP). 
This lower level for CIP is proposed while the Department reviews the 
program and ensures that an appropriate plan and funding is in place to 
address the capital needs of the Academy.
    As for the overall financial management of the USMMA, the 
Department and Maritime Administration are currently conducting a top-
to-bottom review of the financial practices at the Academy. Part of 
this process is the placing of a new fiscal control officer from the 
Maritime Administration at USMMA for 1 year. In the near future 
Administrator Connaughton will provide the Committee more information 
on this process.

    Question 4. The Safe, Accountable, Flexible, Efficient, 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) is set to 
expire at the end of the next fiscal year. Do you plan to submit a 
SAFETEA-LU reauthorization proposal for the Congress's consideration 
this year? Are there certain priorities that you believe must be 
addresses in the next reauthorization of our surface transportation 
programs?
    Answer. We have not yet decided the exact form that it will take, 
but we do intend to submit a reauthorization proposal for the 
Congress's consideration in the coming months. Our proposal will 
reflect the following key themes and priorities: (1) a clearer and more 
focused Federal role; (2) a focus on heavily congested metropolitan 
areas; (3) more rational and accountable investment decisions; (4) a 
data driven approach to reducing surface transportation related 
fatalities; and (5) encouragement of more efficient pricing and 
operational performance of the existing system and leveraging of 
Federal resources.

    Question 5. You disagreed with the general conclusions of the 
National Surface Transportation Policy and Revenue Study Commission 
that we, as a Nation, need to significantly expand our investment in 
our transportation infrastructure. If the Federal Government is not to 
make this investment, who will? Do you truly believe that private 
companies, often owned by foreign interests, or individual states can 
be trusted to make the best investment decisions for our national 
transportation system?
    Answer. We agree about the importance of the transportation system 
and the need for a sustainable investment strategy. We agree that our 
transportation system will need to be substantially recapitalized even 
as we seek to add capacity to the most congested parts of the system. 
We believe, however, that the recommended policy framework and the 
magnitude of the investment necessary to achieve these objectives are 
not appropriately addressed in the report of the National Surface 
Transportation Policy and Revenue Study Commission.
    In particular, we believe that the problem is not simply how to 
raise a certain level of revenue, but rather how to develop a policy 
framework that will unleash efficient capital investments, empower 
consumers, reduce congestion, stimulate technological improvements, 
improve America's quality of life and support the increased 
productivity of American business.
    We do not believe that it is appropriate for the Federal Government 
to be responsible for all expanded transportation infrastructure 
investments. This would result in an unnecessarily expanded Federal 
role, one that would be likely to stifle creativity by State and local 
governments and the private sector. In fact, under the current 
framework, an expanded Federal role would do little to reduce the 
growth in travel days and unreliability and could simply act to crowd 
out non-Federal investments. Rather, the Federal role in transportation 
policy should be determined by that which is essential to the national 
interest.
    Innovative financing and public-private partnerships (PPPs) are 
increasingly being used to finance transportation infrastructure 
projects. DOT believes that such mechanisms, which generally involve 
direct charging for highway use, provide a very attractive financing 
approach for State and local governments to leverage traditional 
transportation revenue sources. We believe that if Congress was 
receptive to these concepts, there is a tremendous potential to unleash 
a wave of capital investments in the transportation sector, just as we 
are seeing in other parts of the world.
    We also believe that the widespread use of congestion pricing could 
reduce future capital needs significantly. The 2006 Conditions and 
Performance Report found that applying congestion pricing to all of the 
congested roads in the system could reduce the cost to maintain the 
system by $21.6 billion per year, or 27.5 percent, leaving it at $57.2 
billion, which is well below the current level of capital spending. In 
addition, pricing of all congested highways would raise significant 
revenues, on the order of $34 billion over the analysis period 2005 to 
2024.
    Finally, we believe that the National Surface Transportation Policy 
and Revenue Commission used an inappropriate definition of ``need,'' 
one which exaggerates needs significantly by, for example, assuming 
that any project whose benefits outweigh its costs, even by a dollar, 
should be built.

    Question 6. The DOT has never issued the report regarding motor 
carrier employee protection provisions required by the Transportation 
Equity Act of 21st Century. In the Implementing Recommendations of the 
9/11 Commission Act, Congress strengthened whistleblower protections 
for motor carrier employees. When can we expect an assessment of how 
well these protections are working for employees?
    Answer. The Department has prepared a draft whistleblower report 
that reflects consultations with over 60 stakeholders, including motor 
vehicle operators and carriers, safety advocates, researchers, 
academicians, and officials at the U.S. Department of Labor. We also 
recognize that section 1536 of the Implementing Recommendations of the 
9/11 Commission Act of 2007, Pub. L. 110-53, provides the Secretary of 
Labor expanded authority to investigate, adjudicate, and take 
enforcement action with regard to employee protection complaints. The 
draft report is undergoing internal review within the Department.

    Question 7a. What progress has the Department made in establishing 
the Office of Climate Change and Environment, as required under the 
Energy Independence and Security Act of 2007?
    Answer. The Department of Transportation established the Center for 
Climate Change and Environmental Forecasting in 1999 to address issues 
associated with climate change and variability. Since the Energy 
Independence Security Act (EISA) did not provide funding for the 
establishment of this office, we expect that this existing virtual 
center will function as the Office of Climate Change and Environment. 
This virtual center is made up of 8 modal agencies and co-chaired by 
the Office of the Secretary and the Research and Innovative Technology 
Administration. The Center is the focal point in the DOT of technical 
expertise on transportation and climate change. Through strategic 
research, policy analysis, partnerships and outreach, the Center 
creates comprehensive and multi-modal approaches to reduce 
transportation-related greenhouse gases and to mitigate the effects of 
global climate change on the transportation network.

    Question 7b. How will the new Office of Climate Change and 
Environment contribute and participate in the Committee on Earth and 
Environmental Sciences functions relative to global change?
    Answer. The Center already contributes to the Committee on 
Environmental and Natural Resources (CENR), as DOT sits on the Council. 
Additionally, DOT is a principal member of the Climate Change Science 
Program (CCSP). The Center recently completed one of the 21 Synthesis 
and Assessment Products that fulfills the Global Change Research Act of 
1990: ``The Impacts of Climate Change on Transportation Systems and 
Infrastructure: Gulf Coast Study.'' The Center also reviews the 
research of other agencies through CCSP and CENR. One recent 
development has been the establishment of a research collaboration 
between the Federal Aviation Administration and the National 
Aeronautics and Space Administration on the climate change impacts of 
aviation emissions.

    Question 7c. What key changes to the transportation system would 
you recommend the new office implement in order to reduce global 
climate change and contribute to the interagency effort?
    Answer. There are opportunities for the transportation sector to 
contribute to the national effort to reduce Greenhouse Gas (GHG) 
emissions and many of the solutions also improve air quality generally. 
Managing congestion to reduce wasted fuel, improving fuel economy, and 
other operational improvements are already underway. However, if the 
goal is to achieve the most cost-effective emissions reductions, these 
are not easily found in the transportation sector.

    Question 8. How will the study mandated in the Energy Independence 
and Security Act of 2007 (EISA) on the ``Transportation System's Impact 
on Climate Change and Fuel Efficiency'' help address concerns, 
expressed by the National Research Council, among others, that Federal 
efforts to understand climate change impacts and develop adaptation and 
mitigation strategies remain immature? How will the study support 
decisionmaking and risk analyses, address regional impacts, and 
communicate with a wider group of stakeholders?
    Answer. When EISA was passed, the DOT Center for Climate Change 
immediately began discussions of how to implement this provision. We 
are currently in the process of scoping the study and identifying 
funding sources. Work on the transportation and climate change 
clearinghouse, also mandated in the bill, has already begun.
    Section 1101(c) does not require or suggest that the Department 
study climate change's impact on the transportation system, which would 
be the basis for developing adaptation studies, supporting risk 
analysis and addressing regional impacts. Therefore, such activities 
are outside the authorizing language for this particular study, even 
though such activities are expressly mentioned in 1102(a)(2). The study 
may be helpful in developing ``mitigation strategies,'' to the extent 
that mitigation is defined as methods of reducing emissions of 
greenhouse gases.
    While we agree that this field is currently under-explored, it is 
important to note that there have recently been two important 
contributions to national efforts to understand the impacts of climate 
change on the transportation system. The DOT, as a major financier of 
long-lived national infrastructure, has a significant interest in 
adaptation studies and has supported work at the Transportation 
Research Board of the National Academies of Science to produce 
``Potential Impacts of Climate Change on Transportation'' Report 290. 
The DOT Center for Climate Change has also pooled resources to fund an 
in depth study of the effects of climate change and variability on a 
region identified as particularly vulnerable. ``The Impacts of Climate 
Change and Variability on Transportation Systems and Infrastructure: A 
Gulf Coast Study, Phase I'' is a part of the U.S. Climate Change 
Science Program's 21 Synthesis and Assessment Products that aims to 
provide decision support to policymakers. Authors of these studies have 
recently visited the Hill to brief members and their staffs on the 
information contained in the study. In our efforts to improve our 
understanding of this area, DOT plans to complete two additional phases 
of the Gulf Coast study, which will require significant resources.
    Adaptation studies are complex, expensive, and time-consuming, in 
part because of the multi-disciplinary nature of such studies, the 
range of possible effects, and the diversity of potentially affected 
stakeholders. In addition, the inherent uncertainty of predicting 
future climate change effects is multiplied when attempting to predict 
local and regional scale impacts. Additional adaptation studies would 
be useful to national, regional, and local transportation planners, and 
may be applicable to current, specific decisions such as the size and 
height of bridges and roadways, or the diameter of culverts. We agree 
that this field is in its infancy and it will take dedicated resources 
over many years to fully address the challenges posed.

    Question 9. DOT employees have several complaints about the new 
Headquarters building in Southeast Washington including that that 
building does not have enough space for all of DOT employees; that it 
is noisy and does not have enough private offices for employees to 
conduct confidential business; and that the communications services are 
too unreliable to efficiently conduct their daily job activities. How 
do you explain how all of these problems exist with a brand new 
building that has been in the works for 10 years, especially after 
Congress appropriated millions of dollars for the project? How do you 
plan to resolve these issues in a timely manner?
    Answer. With DOT's move into our new headquarters facility, we have 
accommodated, as planned, all of our employees, with the exception of 
the FAA, into a state-of-the-art office building. With the 
implementation of an open space plan, we ensured privacy matters were 
addressed by incorporating in the design of the building, numerous 
private offices, as well as conference rooms and team rooms that are 
available to all headquarters staff. Communication services within the 
facility for the initial 3 months of our occupancy were inconsistent 
for wireless cellular services. However, with the implementation of our 
internal distributed antenna system, communication services within the 
facility are consistent and working as designed.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                          Hon. Mary E. Peters
    Question 1. Do you feel that it was necessary to change procedures 
for aircraft departures out of Philadelphia and Newark Airports without 
first publishing the new departure dispersal headings?
    Answer. The assignment of initial departure headings is a tool air 
traffic controllers used at Newark Liberty International (Newark) and 
Philadelphia International (Philadelphia) Airports, even before the 
implementation of these dispersal headings. As a matter of fact, 
departure headings are issued in conjunction with the takeoff clearance 
in many airports across the country. Although the Federal Aviation 
Administration (FAA) did not formally publish the new departure 
dispersal headings, the FAA, in addition to training controllers, 
notified controllers and pilots of these headings by issuing a Notice 
to Airmen for Newark and Philadelphia.

    Question 2. You mentioned that a quote from an FAA spokesman who 
told Philadelphia air traffic controllers that if they didn't like 
working for FAA they should reconsider their line of work was 
``regrettable.'' If that statement did not accurately reflect the 
policy positions of the Bush Administration, what actions have you 
taken to ensure no such statements will be made in the future?
    Answer. We have counseled the employee who made the statement and 
we have made it clear to other employees who speak to the press or the 
public that this was an inappropriate comment.

    Question 3. Do you feel the low staffing level of certified 
professional controllers has an impact on safety? Do you believe 
certified professional controllers add a margin of safety to flight 
operations?
    Answer. The FAA is safely staffing its air traffic facilities, and 
has not found any relationship between staffing levels and aviation 
accidents, runway incursions or mistakes by controllers.
    The FAA has planned for a 70 percent turnover in its workforce over 
the next 10 years by hiring and training several thousand new air 
traffic controllers each year, as veteran controllers hired in the 
early 1980s reach retirement age. We expected this to be a transition 
period and we are managing through it.
    Last year, less than one error occurred for every 10,000 hours of 
``developmental'' controller position time. On average, fully certified 
controllers are working operational positions 85 percent of the time, 
compared to 15 percent operated by developmental controllers.
    Most facilities will be in a period of transition over the next few 
years and will be staffing with a combination of Certified Professional 
Controllers (CPC), CPC-In Training (CPCIT) and a large number of 
developmental controllers (Developmentals) who are proficient, or 
checked out in specific sectors or positions. Developmentals have 
always handled live traffic, and in fact, this is a requirement to 
maintain proficiency as they progress toward CPC status.

    Question 4. Amtrak said they need more than twice the $800 million 
President Bush asked for in order to operate safely and reliably next 
year. By law, you--or your designee--are granted a seat on the Amtrak 
Board, along with up to six more of President Bush's appointees. Have 
you made the President aware of the railroad's actual funding needs?
    Answer. The Administration has consistently stated its support for 
intercity passenger rail where it can make a cost-effective 
contribution to passenger mobility. Significantly less subsidy would be 
required to fund the operations of a reformed Amtrak that is focused on 
being efficient at what it does, providing only those services for 
which there are significant demand, and appropriately pricing those 
services.

    Question 5. As a member of the Amtrak Board, do you believe you are 
acting in the Corporation's best interests by proposing only half the 
level of funding Amtrak has said it needs? What was your role in 
approving Amtrak's funding request?
    Answer. I believe that it is an appropriate role for a member of 
the Board to challenge management to drive a more efficient operation 
particularly in light of the difficult budgetary times we currently 
face. Our funding request is intended to send that message--providing a 
call to management that it is unrealistic to expect significantly 
increased levels of funding and that the Corporation's attention must 
be focused on implementing significant, sustainable improvements in the 
way Amtrak does business. My designee on the Board voted against 
transmission of the grant request as written, in part, to send this 
message.

    Question 6. With expanded Amtrak security measures in place this 
year, including random security checks, why did President Bush fail to 
request funding specifically for Amtrak security?
    Answer. Passenger rail security, both for Amtrak and commuter 
railroads, is primarily the responsibility of the Department of 
Homeland Security (DHS). Thus it would not be appropriate to make a 
security-specific request in the Department of Transportation's budget 
request. Funds provided by this Department, however, have funded the 
basic infrastructure (e.g., the Amtrak Office of Security, and the 
Amtrak Police Department) to permit Amtrak to work in a complementary 
fashion with DHS.

    Question 7. Can you tell me how many of the thousands of complaints 
received each year by the Department from air travelers are actually 
investigated?
    Answer.

   An analyst in the Department's Aviation Consumer Protection 
        Division (ACPD) reviews each complaint that the Department 
        receives (approximately 13,000 complaints in 2007) and 
        determines whether the issue in the complaint is a regulated 
        area.

   Every complaint is forwarded to an airline for their review 
        and handling. ACPD requires carriers to respond directly to the 
        passenger if the passenger raises an issue about a regulated 
        area (e.g., refunds). ACPD also requires that a copy of the 
        response be provided to it so that staff can review the 
        response and determine whether corrective action is necessary.

   A more in-depth investigation is conducted of each civil 
        rights complaint that the Department receives (approximately 
        600 complaints in 2007). The Wendell H. Ford Aviation 
        Investment and Reform Act for the 21st Century (AIR-21) directs 
        the Department to investigate each disability-related complaint 
        that it receives. In response to this legislative mandate, the 
        Department's Aviation Enforcement Office and its ACPD 
        established a process whereby each disability complaint is 
        investigated, a determination is made whether a violation of 
        the Air Carrier Access Act occurred, and a closing letter is 
        sent to the complainant explaining the office's decision. The 
        mandate to investigate each disability complaint has also led 
        the office to adopt a similar process for complaints alleging 
        discrimination on the basis of race, color, national origin, 
        ethnicity, religion or sex.

   In addition, all complaints forwarded by Congressional 
        offices (approximately 500 complaints in 2007) are investigated 
        and ACPD requires carriers respond to such complaints.

   It is worth noting that the vast majority of complaints are 
        not violations as the complaints may not involve a regulated 
        area and also because airlines generally comply with DOT 
        regulations. If it is determined that an airline has violated a 
        regulation, this is noted in ACPD's consumer compliant 
        application database and further action is taken as 
        appropriate. Further action may include issuing a warning to 
        the carrier. Patterns and practices on these issues could also 
        form the basis for more formal enforcement action.

    Question 8. The 9/11 Commission Recommendations law passed last 
year authorized specific funding to improve the safety and evacuation 
needs of rail tunnels on Amtrak's Northeast Corridor, including those 
under the Hudson River linking New Jersey and New York. Why did 
President Bush not request any funds specifically for these critical 
safety and security improvements?
    Answer. The President's request includes $525 million for Amtrak's 
capital subsidy. The Department believes the highest priority for the 
use of these funds should be addressing safety and security needs. In 
response to a requirement included in the Department's 2007 grant 
agreement with Amtrak, the Corporation is undertaking development of a 
capital investment plan for the Northeast Corridor (NEC) in 
consultation with the Northeast Corridor states and the railroads that 
operate over the NEC main line which includes the Hudson River tunnels. 
This plan will identify and prioritize investment needs. With regard to 
the life safety and evacuation needs of the tunnels under the Hudson 
River, significant progress has been made since 2002 in bringing these 
tunnels up to contemporary standards which will be reflected in the 
prioritization of additional investment needs for these specific 
assets.

    Question 9. Presidential Emergency Board #242 recommended that 
Amtrak employees be paid back-wages for up to 8 years in which they 
worked without a new contract. Amtrak and its employees have reached 
agreements on new contracts that include this back pay. Does the 
President's budget proposal account for this funding? Does the 
President support these agreements?
    Answer. The Department supports the PEB recommendations and Amtrak 
entering into contracts with its employees to implement them. The 
Administration believes that funding to implement these agreements can 
and should be found from within Amtrak's existing fiscal resources 
including revenue growth and expense reduction driven by improving the 
way Amtrak does business.

    Question 10. The recent report by the National Surface 
Transportation Policy and Revenue Study Commission, which you chaired, 
estimated conservatively that transit ridership grows two and a half 
percent each year. But according to a recent report by the Research and 
Innovation Technology Administration, the Bush Administration is only 
planning for 2 percent minimum annual growth in transit ridership--a 
difference of about 43 million riders each year. What accounts for this 
difference and did you concur with the Commission's assessment on 
expected transit ridership demand?
    Answer. The National Surface Transportation Policy and Revenue 
Study Commission report discussed a range of estimated growth rates for 
transit ridership from 1.61 percent per year to 4.22 percent per year. 
The Research and Innovative Technology Administration (RITA) report, 
Transportation Vision for 2030, states that, ``To reduce congestion, 
efforts are underway to increase transit ridership by 2 percent or more 
each year.''
    The different estimates of future transit ridership in the two 
reports depend upon the degree of investment by all levels of 
government and the private sector, and the amount and quality of 
service provided by the Nation's transit systems. As we have emphasized 
in our Urban Partnerships Program, the success of transit also depends 
critically on the extent to which congestion pricing offers drivers an 
incentive to use transit. The forecasts also depend upon policies 
related to transit fares as well as other economic, environmental, and 
social factors. Another factor affecting these forecasts is development 
and rate of diffusion of new technologies, such as Intelligent 
Transportation Systems, into the Nation's transit systems.
    The Department of Transportation has continued to recognize the 
important role that transit plays particularly in our major urban 
areas. We required that expansion of transit capacity be a key element 
in our Urban Partnership Agreements with five cities. We believe that 
transit, along with congestion pricing, new technology, and 
telecommuting, are key elements in our plans to reduce congestion in 
major American cities.

    Question 11a. Under Federal Aviation Administration's (FAA's) new 
audit requirements for all recipients of Class One Aircraft Situation 
Display to Industry and National Airspace System Status Information 
(ASDI/NASSI) data, audits will be required for recipients of partial 
ASDI data which was previously considered ``Class Two data with no time 
delay.'' Why did FAA make this change?
    Answer. Aircraft Situation Display to Industry (ASDI) data are 
delivered in two types, Class I data, which are undelayed, and Class II 
data, which are delayed by 5 minutes. There is no other type delivered 
by the ASDI system that is ``partial ASDI data.'' Some vendors, which 
receive Class I data, change the data and redistribute them. A vendor 
might consider this to be ``partial,'' but from the FAA delivery point 
perspective, there is no difference between these Class I users. 
Therefore, as Class I users, they would all receive the same audit 
requirements. The Class I audit is intended to ensure adequate 
protection measures are in place when dealing with real-time data and 
data delivery to the user. Class II data do not require an audit as the 
FAA accepts that the five-minute delay of the data is adequate 
protection. Class I and Class II data contain the exact same 
information, simply with a five-minute delay imposed on Class II.

    Question 11b. Does FAA have any concerns regarding the current 
operations of recipients of this partial ASDI data considered ``Class 
Two data with no time delay"?
    Answer. The Federal Aviation Administration does not provide a 
different real-time dataset to industry users other than the Class I 
feed. As indicated in the discussion in answer 11a, the FAA considers 
all real-time data of concern.

    Question 11c. Are you aware of the impact of the new FAA audit 
requirements on these recipients of ``partial ASDI data''? Are you 
aware that certain Federal agencies (Customs and Border Protection and 
the Transportation Security Administration) rely on proprietary 
information/data which incorporates ``partial Class One data,'' and 
that these agencies would be subject to annual audits under FAA's new 
requirements if they are to continue to receive such real-time data?
    Answer. As indicated in the discussion above regarding question 
11a, the Federal Aviation Administration considers all real-time data 
of concern, and, therefore, the FAA uses the audit to ensure the 
security of the data.
    The Aircraft Situation Display to Industry (ASDI) feed was 
developed as a feed to industry users (i.e., nongovernmental users). As 
such, precautions are taken with this feed to remove sensitive aircraft 
data including military data, some international data depending on 
international agreements, and any aircraft that an aircraft operator 
does not want in this feed. Because of these limitations, a separate 
feed was created called the TFM Data to Government (TFMDG) that is 
specifically targeted at government users. This feed contains the 
larger dataset and is intended for government users with a need for 
this data. Separate, internal agreements govern the use of this feed. 
This feed follows the ASDI feed both in format and technology.

    Question 12. When will Pipeline and Hazardous Materials Safety 
Administration comply with Section 60109(e) of Title 49 and issue 
minimum standards requiring all newly constructed single family homes 
to be installed with excess flow valves?
    Answer. PHMSA expects to publish its proposed distribution 
integrity management rule within the next several months. As mandated 
by 49 U.S.C.  60109(e), the proposed rule would require distribution 
operators to install excess flow valves (EFVs) on residential service 
lines meeting technical criteria specified in  60109(e)(3). PHMSA also 
is working with its State partners, who oversee the vast share of the 
distribution pipeline network, to remind distribution operators of the 
Congressional direction to begin installing EFVs by June 1, 2008. PHMSA 
believes that most distribution pipeline operators have already begun 
installing EFVs in accordance with the statutory criteria.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Mark Pryor to 
                          Hon. Mary E. Peters
    Question 1. Please explain the Department's budget plan for moving 
forward with the fuel economy regulations mandated in Pub. L. 110-140, 
the Energy Independence and Security Act. I am particularly interested 
in staffing and funding requested by DOT for implementing Title I. Do 
you believe that the Administration's funding proposal for 
implementation of this new rulemaking is adequate to meet the 
requirements laid out in the law? Will this new fuel economy mandate 
detract from other NHTSA programs such as regulation enforcement, 
research, or ongoing rulemakings? As you may know, Congress may provide 
additional funding to the NHTSA to meet its statutory obligations. Do 
you have any recommendations for the level of additional funding and 
staff needed for NHTSA to meet all of their obligations?
    Answer. On April 22, 2008, NHTSA issued a notice of rulemaking 
proposing standards for Model Years 2011 through 2015 passenger cars 
and light trucks. The agency has increased its budget request for CAFE 
rulemaking to $3.88 million for FY 2009 from $1.88 million in FY 2008.

    Question 2. Could you please update the Committee on the status of 
the cross-border pilot project between the United States and Mexico? I 
am interested to know more about the foreign and domestic companies 
currently participating in the program and the current inspection 
regime for ensuring compliance with domestic regulations. Also, please 
provide the Committee with the rationale for Administration's decision 
to move forward with the project despite the language included in 
section 136 of Division K of Pub. L. 110-161.
    Answer. The table below shows cross-border demonstration project 
data as of April 1, 2008.

------------------------------------------------------------------------
                                  Mexico-domiciled      U.S.-domiciled
                                   Motor Carriers       Motor Carriers
------------------------------------------------------------------------
Authorized Motor Carriers                       18                    6
Power Units                                     62                   46
Total Border Crossings                       4,993                  943
Beyond Commercial Zone Border                  490                  943
 Crossings
------------------------------------------------------------------------

    Additionally, 47 Mexico-domiciled motor carriers are eligible to 
participate in the demonstration project subject to them filing the 
proper financial responsibility documents with the Federal Motor 
Carrier Safety Administration (FMCSA). Additional information on the 
Mexico-domiciled motor carriers eligible to participate in the 
demonstration project was published in the Federal Register on March 
24, 2008.
    All Mexico-domiciled motor carriers participating in the 
demonstration project must comply with the same U.S. Federal and State 
regulations as U.S. and Canada-domiciled motor carriers. These included 
environmental, tax, immigrations, cabotage (point-to-point 
transportation of cargo within the U.S.), drug and alcohol testing, 
insurance, registration, driver licensing, and safety regulations. The 
transportation of hazardous materials and passengers is prohibited 
under the demonstration project.
    In addition to meeting the same requirements for U.S. and Canada-
domiciled motor carriers, additional requirements are imposed on 
Mexico-domiciled motor carriers participating in the demonstration 
project. Every Mexico-domiciled carrier that wants to participate in 
the demonstration project must satisfactorily complete an FMCSA-
administered pre-authorization safety audit (PASA) before FMCSA will 
grant provisional operating authority to operate in the United States. 
The safety audit is FMCSA's review of the carrier's written procedures 
and records to validate the accuracy of information and certifications 
provided in the application and to determine whether the carrier has 
established or exercises the basic safety management controls necessary 
to ensure safe operations. Each vehicle the motor carrier intends to 
operate in the U.S. undergoes a North American Standard vehicle 
inspection during the audit. This inspection is an in-depth 37-point 
inspection. Vehicles that do not pass the inspection are not allowed to 
operate in the U.S. until they pass the inspection and receive a 
Commercial Vehicle Safety Alliance (CVSA) decal as proof. Each vehicle 
operating in the U.S. must have a valid CVSA decal affixed to it at all 
times while operating in the U.S. The decal is valid for 90 days. In 
effect, the vehicle must pass a North American Standard inspection 
every 90 days. Vehicles with no decal or an expired decal will be 
placed out-of-service until they pass the inspection and are issued a 
decal.
    The Secretary has committed to the goal of checking every Mexico-
domiciled motor vehicle participating in the demonstration project 
every time it enters the U.S. from Mexico. The check will include 
verification that the vehicle has a currently valid CVSA decal, a check 
of the driver's license, and an assessment to ensure the driver can 
speak English. If the vehicle does not have a currently valid CVSA 
decal, it must pass a North American Standard vehicle inspection and be 
issued a CVSA decal before it will be allowed to proceed. If the 
driver's license in not valid, suspended revoked or restricted to 
Mexico, or the driver is unable to speak English, the driver will be 
placed out-of-service and not be allowed to operate in the U.S.
    All vehicles participating in the demonstration project are being 
equipped with a satellite-based vehicle tracking system. This system 
will enable the FMCSA to monitor the motor carrier's compliance with 
hours-of-service regulations, identify potential cabotage violations, 
and determine when a vehicle enters and exits the U.S.
    FMCSA has developed and implemented a safety monitoring system for 
Mexico-domiciled motor carriers. It is an oversight program to monitor 
the motor carrier's compliance with applicable Federal Motor Carrier 
Safety Regulations and includes provisions for suspending and revoking 
the motor carrier's provisional operating authority.
    Enforcement of the regulatory requirements is done through safety 
audits or compliance reviews conducted on the motor carrier's operation 
and through roadside inspections by State or Federal inspectors. 
Currently there are over 500 State and Federal inspectors based at or 
near the U.S.-Mexico border.
    With regard to the decision to move forward with the demonstration 
project, the Administration has looked very closely at the 2008 DOT 
appropriations act and section 136 in particular. By prohibiting the 
use of funds ``to establish'' a cross-border motor carrier 
demonstration program, section 136 does not prohibit spending to 
continue to implement the ongoing cross border demonstration project, 
which was established in September 2007--well before enactment of the 
current Appropriations Act. Consistent with the Appropriations Act 
prohibition, FMCSA will not establish any new cross-border 
demonstration programs with Mexico.
    The Appropriation bill passed by the House of Representatives (H.R. 
3074, 110 Cong.  410 (2007)) would have barred spending ``to establish 
or implement'' a cross-border demonstration project. However, the 
enacted version of the bill is more narrowly drafted and prohibits only 
use of funds ``to establish'' such a project.

    Question 3. As you may know, on January 23, 2008, Mesa Air notified 
DOT and 4 Essential Air Service communities in Arkansas (Hot Springs, 
El Dorado, Harrison, and Jonesboro) that they intend on discontinuing 
air service. It is my understanding that DOT will require Mesa to 
continue serving these communities until a new service provider is 
designated by DOT. Could you provide me with an update on any new bids 
for these Arkansas communities? Also, I was interested to hear your 
opinion of why we are continuing to see fewer and fewer rural air 
service providers and more and more cancellations of rural routes by 
such providers. This trend concerns me and other Committee members 
greatly for a number of reasons. At what level should Congress increase 
funding for the Essential Air Service program to ensure that rural, 
isolated communities continue to have access to air travel?
    Answer. I am fully aware that Mesa Air Group, a holding company 
that owns Air Midwest and other airlines, filed notice of Air Midwest's 
intent to suspend service at the four Arkansas communities, as well as 
at three in Missouri and two in Nebraska. The Department will require 
Air Midwest to continue to provide uninterrupted service while we 
process a carrier-replacement case. In fact, we have already issued an 
order prohibiting Air Midwest from suspending service and requesting 
proposals from carriers to replacement service.
    Regarding your point that we have fewer and fewer carriers 
participating in the EAS program, indeed we do have fewer carriers and 
this is a serious concern. Until the last few years, most of the EAS 
providers were carriers that operated 19-seat aircraft profitably as a 
business model, and provided some EAS as an adjunct to their core 
business. More recently, for a number of reasons, ranging from 
increased security requirements to the high price of fuel, carriers are 
no longer able to operate 19-seat aircraft profitably. As a result, 
almost all carriers are turning back their 19-seaters. One of the 
impediments to attracting new EAS providers is the requirement for EAS 
aircraft to have two engines, two pilots, and generally have 15 or more 
seats.
    Regarding funding, we continue to believe that a funding level of 
$50 million would be sufficient to maintain service at the truly 
isolated communities.

    Question 4. As you well know, I am very supportive of the 
completion of both I-49 and I-69; especially those unfinished portions 
that run through Arkansas. Could you please describe where these 
important Interstates were in priority for the DOT and FHWA, and what 
type of financial and technical assistance will be dedicated to these 
projects under the Administration's FY09 Budget? I appreciate your 
designation of I-69 as a Corridor of the Future, and I hope financial 
and technical resources will continue to go to this Interstate in FY09 
and years to come until the project is complete. Do you know how DOT 
intends on distributing the $25 million dedicated for the Corridor of 
the Future program in the Administration's budget?
    Answer. The President's budget for Fiscal Year (FY) 2009 would 
provide $75 million for the Corridors of the Future Program. In FY 
2008, six major routes represented by seven coalitions were identified 
for participation as Corridors of the Future. Although I-69 was 
identified as a participant, I-49 was not. The Department is currently 
in negotiations with the various coalitions to develop a vision for the 
corridors, a prioritization framework, an initial list of actions and 
projects, and an organizational structure for multi-state coordination. 
The distribution of funds requested in the FY 2009 budget for Corridors 
of the Future will be based on the results of this process. Currently 
no decisions have been made for the distribution.
    While there are no dedicated funds identified for use for I-49 and 
I-69, beyond the results of the Corridors of the Future program 
negotiations specific to I-69, the States' normal Federal-aid 
allocations can be used for both the I-49 and I-69 corridors. The 
FHWA's headquarters and State field offices will also continue to 
provide technical assistance to the State DOTs on I-49 and I-69 issues. 
As you know, in Fiscal Year 2007 a grant of $800,000 of Transportation 
and Community and System Preservation Program funding was awarded for 
the study of innovative financing for I-69.

    Question 5. I notice in your testimony that you cite shortfalls in 
the Highway Account balance of the Highway Trust Fund to support your 
call for moving away from a reliance on fuel taxes and partnering with 
State and local governments willing to develop more effective means to 
finance our transportation infrastructure. Could you please elaborate a 
little on some of these alternative financing means and how they may be 
structured? I was wondering how you saw some of these potential 
alternatives working in rural states with lower traffic density like 
Arkansas and other states represented by members of this Committee.
    Answer. Many different financing strategies can be used in lieu of 
raising fuel taxes to finance transportation improvements. The Federal 
Government provides several innovative finance mechanisms to assist in 
project finance. Not all strategies will be applicable to all projects 
in a given State or to different States across the Nation. States must 
decide on a case-by-case basis which strategy is best for a particular 
project.
    An important potential source of revenues for States is tolling. 
Tolling is the purest form of user charge because there is a direct 
link between the use of a facility and the fees paid by the user. With 
the ability to collect tolls comes the ability to leverage additional 
sources of revenue that would not be available if tolls were not 
collected. The development of electronic tolling technologies allows 
motorists to pay tolls without having to stop at toll booths. This 
makes tolling more readily accepted by users and reduces congestion, 
noise, emissions, and excess fuel consumption associated with having to 
stop to pay a toll. Electronic tolling has also substantially reduced 
the administrative cost of collecting tolls which was a deterrent to 
traditional tolling.
    One form of tolling is congestion pricing where toll rates vary 
according to levels of congestion. While this mechanism may not be 
widely applicable in more rural States, it can be an important revenue 
source in congested urban areas. Not only does congestion pricing raise 
revenues that may be used for highway and transit improvements, but it 
also improves traffic flow and reduces the need for improvements in 
congested areas where adding capacity might be prohibitively expensive.
    Currently there is wide variation among the States in the extent to 
which they levy highway and bridge tolls. Some States use tolling 
extensively, others have just one or two toll facilities, and other 
States have no toll roads or bridges. Surveys have shown that most 
motorists prefer tolls to general fuel tax increases and State plans 
suggest that tolling activity could double in the decade from levels 
over the last 10 years. Seven States (California, Florida, Illinois, 
New Jersey, New York, Pennsylvania, and Texas) each raised over one-
half billion dollars in tolls in 2006 to support transportation 
improvement programs. Over the last decade between 30 and 40 percent of 
new limited access highway mileage was financed using tolls. These fee-
for-service tolls are generally considered more equitable and 
economically efficient than other roadway improvement funding options 
which cause non-users to help pay for improvements.
    Tolling can be done either through the public sector or through 
public-private partnerships (PPPs). The use of PPPs can have several 
advantages that more and more States are beginning to recognize. First, 
the long-term costs of designing, constructing, operating, and 
maintaining a facility are often minimized when done through a PPP than 
when done using conventional methods. This can be attributed to several 
factors including future operational and maintenance requirements are 
given greater consideration in facility design and construction; 
private sector firms often have greater expertise than public sector 
firms; and private sector firms often have greater incentives to 
innovate than the public sector. A second advantage of PPPs is that 
there may be greater flexibility to structure financing to meet the 
unique characteristics of a project than if the project were financed 
by the public sector. Third, the private sector can assume some of the 
project and traffic risk (that is, the risk that demand for use of a 
highway facility will be lower than forecasted by modelers, with the 
consequence that toll revenues will be lower, and the equity investor 
will therefore not get an adequate return on the investment), rather 
than have the public sector assume all the risk.
    The Federal Government has two financing mechanisms that are 
particularly applicable to PPPs--the Transportation Infrastructure 
Finance and Innovation Act (TIFIA) program and private activity bonds. 
The TIFIA program was established in 1998 to leverage Federal funds by 
attracting substantial private and other non-Federal investment in 
critical improvements to the Nation's surface transportation system. 
The U.S. Department of Transportation (DOT) may provide three forms of 
credit assistance--secured (direct) loans, loan guarantees, and standby 
lines of credit. Eligible applicants include state departments of 
transportation, transit operators, special authorities, local 
governments, and private entities. Private activity bonds are tax-
exempt securities that may be issued for certain types of privately 
developed and operated facilities including highway and freight 
transfer facilities. Providing private developers and operators with 
access to the type of tax-exempt financing available under municipal 
bonds lowers the cost of capital significantly, enhancing private 
sector investment opportunities.
    Not all PPPs involve the private sector collecting tolls on a 
project. In some cases the private sector can be paid by the public 
sector for its services using ``availability payments'' or ``shadow 
tolls.'' Availability payments are based on the private sector 
achieving some specified level of service on the facility, but do not 
vary according to the amount of traffic that uses the facility. Shadow 
tolls, on the other hand, typically are based on the traffic volumes 
using the facility. These two mechanisms are relatively new to the U.S. 
but have been more widely used in other countries. They allow States to 
realize the benefits of private sector involvement in projects that may 
not be amenable to toll financing, in projects the State does not wish 
to toll, or in projects the State wishes to toll, but wants to pay the 
private sector from some source other than the toll revenues.
    The use of availability payments may be particularly appropriate 
for rural States that do not have the traffic volumes to support 
projects from toll revenues. One good example of this is the Missouri 
Safe and Sound bridge program. Through this program a group of private 
firms will replace or rehabilitate 802 bridges in Missouri over the 
next 5 years. The Missouri DOT will pay for the program over 25 years 
using a portion of its Federal bridge replacement funds. During this 
period the private firms are responsible for maintaining the bridges in 
good condition. Several other States also have long-term contracts with 
private firms to maintain portions of their highway systems.
    Bonding generally can be a cost-effective way for States to finance 
long-lived projects if the interest cost and other expenses associated 
with issuing the debt are less than the potential costs associated with 
completing construction on a pay-as-you-go basis. In addition to 
minimizing the impact of construction cost inflation by freeing project 
phasing from current revenue constraints, debt financing also 
accelerates the realization of non-monetary benefits. These include 
such benefits as travel-time savings due to congestion relief, and 
enhanced state/local taxes as a result of expedited economic 
development. We do not believe a Federal bonding program would be an 
appropriate mechanism to finance surface transportation programs, 
because of the Federal tax expenditures involved.
    State Infrastructure Banks (SIBS) are loan revolving funds 
initially funded at least in part with Federal-aid highway funds. Loans 
from the SIB can be used to finance transportation improvements. When 
loans are repaid, those funds can be loaned again to fund additional 
projects. A major attraction of SIBs is that they allow States to get 
more ``mileage'' out of their annual apportionments. Every loaned 
dollar that is repaid with interest can be recycled into further 
investment in the transportation system. From a borrower's perspective, 
SIBs can offer loans on more favorable terms than conventional 
borrowing. The interest rate can be as low as zero percent, and the 
covenants (loan-to-value ratio, debt service coverage, subordination, 
maturity, etc.) may give the borrower greater flexibility than is 
available through commercial lenders or the capital markets.
    All States are authorized to establish SIBs that may be capitalized 
with up to 10 percent of Federal-aid highway funds in several major 
program categories. Currently, there are 32 States with a Federal SIB 
plus Puerto Rico. In total these States have advanced nearly 600 
projects, totaling $6.2 billion, with SIB assistance.
    The Grant Anticipation Revenue Vehicle (GARVEE) borrowing tool was 
authorized in 1995 as part of the National Highway System Designation 
(NHS) Act. GARVEE bonds are debt obligations issued by a state or local 
entity, the principal and interest on which is repaid primarily with 
Federal-aid funds. Nineteen States plus Puerto Rico and the Virgin 
Islands have issued GARVEE bonds for approved Federal-aid projects 
totaling over $8 billion. The States include Alabama, Alaska, Arizona, 
Arkansas, California, Colorado, Georgia, Idaho, Kentucky, Maine, 
Maryland, Montana, New Mexico, North Carolina, North Dakota, Ohio, 
Oklahoma, Rhode Island, and West Virginia. A number of these States are 
generally considered rural in character.
    Thus there are a number of alternative financing mechanisms that 
States can use to help finance surface transportation improvement. Both 
rural and urban States have successfully used these mechanisms in the 
past, and are projected to use them more frequently in the future. 
While using these mechanisms may represent a somewhat different way of 
doing business than the traditional financing from fuel tax revenues 
that served us so well during the 20th century, we believe the full 
range of financing tools will be needed to meet the requirements of 
21st century transportation programs.

    Question 6. As you well know, the FAA Reauthorization bill is 
currently pending in the Senate, and we are currently operating the FAA 
under a short-term extension that is set to expire at the end of June 
of this year. Like you, I see the urgency to move forward with the 
reauthorization bill as it will in itself help stimulate the economy 
and modernize an antiquated system to meet the needs of today and 
tomorrow's demand. One of the major issues currently holding this 
legislation up is the new user-fee proposal for general aviation. I 
believe if we can overcome this hurdle in our negotiations in Congress 
that we can more quickly move this bill through Congress and eventually 
to the President for his signature. Could you please discuss the 
Administration's position on user-fees for general aviation and inform 
the Committee of any alternative approaches or proposals that the 
Administration has considered since submitting their initial 
recommendations to Congress?
    Answer. I agree a lot hinges on reauthorizing the FAA and that is 
why we believe Congress should act quickly to pass a bill that includes 
meaningful reform in a number of areas, not just funding reform. At the 
heart of meaningful reform is one of our key principles: a financing 
structure that is far more fair and cost-based than the current system.
    Accordingly, the Administration has never proposed broad air 
traffic user fees for general aviation. Under our plan, general 
aviation (GA) flights would only be subject to a user fee if they 
landed at or departed from one of the thirty busiest airports in the 
country, such as O'Hare. The vast majority of GA flights would instead 
only pay a fuel tax, just as they do now.
    We considered numerous options to achieve a fairer funding system 
during the development of our reauthorization proposal. Based on our 
analysis and feedback from the GA community, we concluded the best way 
for GA to pay its fair share of costs is through a cost-based fuel tax. 
A fuel tax mechanism is the same one promoted by the general GA 
community and which Congress has tended to favor. However, I believe 
the fuel tax must be set at a rate which will cover a significantly 
fairer share of the air traffic costs GA drives.
    The Administration has never said our proposal was the perfect 
solution to the problems we now face and the Administration has 
considered alternative approaches. These other plans include those from 
Congress and our stakeholders, which were released after our proposal. 
Here, in sum, is our view of each:

   The nominal tax changes in both the House and Senate Finance 
        Committee bills (H.R. 2881 and S. 2345) do little to fix the 
        inequities found in the current FAA finance structure.

   We support the Commerce Committee's $25 per flight surcharge 
        (S. 1300), as a potentially positive piece of a larger package. 
        This provision is attractive because it would provide dedicated 
        NextGen funding.

   Finally, the Administration likes many of the elements of 
        the Air Transport Association's proposal for distance and 
        departure-based passenger taxes. This plan is significantly 
        more cost-based than the current system. However, because it 
        applies only to the airline community it is less than 
        comprehensive and provides no suggestions about how to deal 
        with GA.

    We have also considered replacing the current tax system with a 
universal fuel tax, where the same rate would be applied to both 
commercial carriers and GA operators. While this approach would be more 
equitable than the present system, it does not directly link costs to 
taxes and creates issues with international flight taxes.
                                 ______
                                 
  Response to Written Questions Submitted by Hon. Thomas R. Carper to 
                          Hon. Mary E. Peters
    Question 1. As you know, Amtrak recently reached agreements with 
nine labor unions--anticipated to be ratified this spring--to end an 
eight-year labor dispute. In addition to being insufficient overall, 
the Administration's FY09 request also ignores the need for increased 
funding to cover increased wage costs associated with these new labor 
contracts. Without funding above the level of the President's request, 
Amtrak would likely be faced with either bankruptcy or elimination of 
services. Considering the President's own Emergency Board recommended 
the higher wages and Amtrak worker back pay, how can the Administration 
justify its insufficient budgetary requests?
    Answer. The Administration believes that funding to implement these 
agreements can and should be found from within Amtrak's existing fiscal 
resources including revenue growth and expense reduction driven by 
improving the way Amtrak does business.

    Question 2. The FY09 budget proposes to fund New Starts at $180 
million below its authorized level. The demand for reducing traffic and 
getting people off the roads has increased exponentially, and the 
transportation sector's share of greenhouse gas emissions is growing. 
In addition to being an environmental and economic concern, it's a 
quality of life concern--people are spending far too long in their cars 
commuting to work and sitting in traffic. In light of all this, how can 
the Administration continue to make cuts to this program?
    Answer. The President's FY 2009 Budget recommends $1.62 billion for 
New Starts, an increase of $52 million or more than 3 percent over the 
FY 2008 appropriation. This budget fully funds the annual cost of New 
Starts projects ready to use such funds. The proposed funding level 
would enable 15 existing New Starts projects with Full Funding Grant 
Agreements to continue or complete their scheduled construction during 
FY 2009. Funding is also budgeted for two additional New Starts 
projects likely to receive Full Funding Grant Agreements before the end 
of FY 2008. New Starts funds are also budgeted for final design costs 
to assist projects that may advance into that stage of project 
development during FY 2009.
    The President's FY 2009 Budget also includes $200 million in Small 
Starts funding consistent with the SAFETEA-LU authorized amount.

    Question 3. I am concerned about the Small Starts program. 
Specifically, what transit project has this Administration initiated, 
taken up, and seen to construction? I would like the Department of 
Transportation to provide the Committee with a list of such projects, 
if in fact there are any. This Administration has long expressed 
concerns about the slow pace of highway projects. Why, then, aren't 
transit projects likewise getting the support they need for timely 
completion? What is being done to expedite the planning and execution 
of new transit projects?
    Answer. In the fall of 2006 FTA received applications for 12 
proposed projects for the Small Starts program. Of these, four were 
ready for advancement into Project Development and were included in the 
President's FY 2008 Budget. In the fall of 2007, FTA received 15 more 
projects for the Small Starts program and 13 projects were included in 
the FY 2009 Budget.
    FTA has already approved a grant for the Troost Corridor Bus Rapid 
Transit project, and is working to award grants for the Los Angeles Gap 
Closure Project and the Pacific Highway Bus Rapid Transit Project. FTA 
plans to execute the first Small Starts Project Construction Grant 
Agreement (PCGA) for the Pioneer Parkway EmX Bus Rapid Transit in 
Springfield, Oregon, in the summer of 2008. PCGAs or grants are 
expected to be executed for eight other Small Starts projects through 
FY 2008.
    Congress authorized the Small Starts program to begin in Fiscal 
Year 2007 or at least 1 year later than most other provisions of 
SAFETEA-LU became effective. FTA has made considerable efforts to 
implement the Small Starts program swiftly. FTA published interim 
guidance on Small Starts and Very Small Starts in June 2006. Fifteen 
projects are included in the FY 2009 Budget only 2 years after 
implementation of the program.
    SAFETEA-LU also requires that FTA undertake a rulemaking for the 
development of the Small Starts program. Rulemaking is a lengthy 
process that requires FTA to develop proposals, obtain industry input, 
respond to comments, and draft a final rule. This process has not been 
completed, in part, because Congress included language in the FY 2008 
Consolidated Appropriations Act that prohibits FTA from expending 
resources to complete the rulemaking process during Fiscal Year 2008.
    Some projects are delayed because of limited local funding 
commitments, lack of consensus for a locally preferred alternative, and 
incomplete project planning. FTA has conducted extensive outreach to 
notify transit agencies of the Small Starts program, including upcoming 
Small Starts Workshops scheduled for Pittsburgh (April 22) and Phoenix 
(May 12) and expects to receive more applications during 2008. FTA has 
been working with a variety of project sponsors on proposed Small 
Starts and Very Small Starts projects, including cities such as Ft. 
Lauderdale, FL and Tucson, AZ and expects to receive many more 
application in the fall of 2008.
                                 ______
                                 
   Response to Written Question Submitted by Hon. Roger F. Wicker to 
                        Hon. Robert A. Sturgell
    Question. In my state of Mississippi, we are proud to host Naval 
Air Station Meridian, home to half of the Navy's advanced undergraduate 
jet training. It is my understanding the Meridian Naval Air Station has 
presented a proposal for expanding the military operations area (MOA). 
What is the exact certification process for the expansion of a MOA? 
Specifically, could you please outline the procedural steps and typical 
timeline for such a process, including the amount of dates needed for a 
period of public comment? Additionally, the expansion proposal of the 
MOA for the Meridian Naval Air Station currently is somewhere in the 
FAA approval process. I would greatly appreciate your providing me with 
an update on the status of this proposal.
    Answer. The process for reviewing requests for special use airspace 
(SUA) such as the one you describe for military operations involves a 
number of steps and requires substantial coordination and review. We 
outline the steps in detail below, but in general, it begins with an 
informal discussion and vetting of a proposal and then moves on to a 
more formal, detailed review (including an environmental review), that 
includes publicizing the proposal in the aviation community, affording 
an opportunity for public comment, and then resolving any issues that 
may arise. FAA approval of a proposed SUA also involves several of our 
offices but the final approval is made by FAA's headquarters staff. The 
timeline for such a process generally depends on the complexity of the 
type of SUA involved, but can range from one to 3 years.
    With regard the proposal for Meridian Naval Air Station, the Navy 
submitted its airspace proposal to our agency's Air Traffic 
Organization Eastern Service Center (ESC) on January 10, 2007. However, 
our staff returned the original package to the Navy because the 
required coordination with the local air traffic facility, the FAA's 
Memphis Air Route Traffic Control Center, had not been accomplished. 
Such coordination began in March 2007, and the FAA's Memphis Center 
completed an aeronautical study in April based on the Navy's proposal. 
FAA staff also met several times with Meridian Air Station staff to 
recommend changes to the proposal that would mitigate any adverse 
aeronautical impacts.
    The Naval Station's MOA proposal package is currently with our 
Memphis Air Route Traffic Control Center for their final review on the 
MOA boundary locations. We expect our Memphis Center's decision in 
April and, if there are any changes required, our Eastern Service 
Center will coordinate those with the Navy. Once any required changes 
are agreed upon, the Navy would modify the legal descriptions as 
necessary and submit their final proposal. The FAA's System Operations 
Airspace & Rules Group in FAA Headquarters will then conduct the final 
review. With the Aeronautical Study completed and the impacts 
adequately mitigated, it would be likely that a non-rulemaking circular 
could be issued shortly thereafter, and that would be subject to public 
comment.
Processing of Military Operations Area (MOA) Proposals
    MOAs are nonrulemaking special use airspace (SUA) actions. The 
procedures and policies for requesting and processing SUA requests are 
contained in FAA Order 7400.2, ``Procedures for Handling Airspace 
Matters.'' The following summarizes the process:

   Military unit identifies a need for MOA airspace.

   Before submitting a formal airspace proposal to the FAA, the 
        military meets informally with the air traffic control (ATC) 
        facility that has jurisdiction over the affected airspace. The 
        purpose of meeting is to discuss the MOA requirements and 
        determine if there are any factors that would preclude locating 
        the MOA in the requested area (e.g., adverse aeronautical 
        impact on ATC and/or National Airspace System operations).

   Military unit prepares a formal airspace proposal package 
        consisting of the information required by FAA Order 7400.2, 
        Chapter 21.

   Military unit submits the proposal package to the 
        appropriate FAA Service Center office. In addition, the 
        military submits the appropriate NEPA environmental analysis of 
        the proposed airspace.

   The Service Center office initiates an aeronautical study to 
        determine what, if any, impacts the proposed MOA would have on 
        the safe and efficient use of the navigable airspace by other 
        users. The Service Center may task the affected ATC facility to 
        conduct the aeronautical study.

   The Service Center office prepares a Nonrulemaking Circular 
        to inform the public of the proposal and request the public to 
        submit comments to the FAA regarding the impact the proposed 
        airspace would have on aeronautical operations.

   The Nonrulemaking Circular is distributed by mail to a wide 
        range of aviation oriented persons, organizations and 
        government agencies in the affected area. The Circular 
        establishes a 45-day public comment period. Public comments are 
        submitted to the Service Center office.

   The Service Center office reviews all public comments 
        received and the results of the Aeronautical Study and 
        determines if further negotiations are required with the 
        military unit to resolve identified adverse aeronautical impact 
        or other issues.

   The Service Center environmental specialist reviews the 
        military's environmental documents and determines if they are 
        suitable for adoption by the FAA or if additional analysis is 
        required.

   The Service Center office determines whether to recommend 
        approval of the MOA or disapprove the request. FAA Headquarters 
        (Airspace & Rules Group) is the final approval authority for 
        all SUA proposals.

   The Service Center office submits the entire proposal 
        package (military proposal, Aeronautical Study, copy of public 
        comments, response to comments, environmental documents) along 
        with the Service Center's recommendation to FAA Headquarters 
        for final processing.

   FAA Headquarters Environmental Programs Group reviews the 
        military and Service Center environmental documentation for 
        NEPA compliance.

   FAA Headquarters, Airspace & Rules Group, reviews the 
        complete package and makes a final airspace approval/
        disapproval determination.

   Approved MOAs are forwarded to the FAA National Flight Data 
        Center for publication on aeronautical charts and entry into 
        the National Airspace System Database.
Processing Timeline
    Due to many variables, it is difficult to commit to a specific, 
firm timeline for processing MOA proposals. A simple, non-controversial 
action, with no environmental complications, could be completed in 
approximately 12 months. However, those proposals that are complex, 
controversial, involve significant adverse aeronautical impact on the 
National Airspace System or have NEPA compliance issues could take an 
additional 24 months or more to complete.

                                  
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