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



 
 TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        THURSDAY, MARCH 6, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Patty Murray (chairman) presiding.
    Present: Senators Murray, Lautenberg, Bond, Specter, and 
Stevens.

                      DEPARTMENT OF TRANSPORTATION

STATEMENT OF HON. MARY E. PETERS, SECRETARY


               opening statement of senator patty murray


    Senator Murray. This subcommittee will come to order. Good 
morning. Today, the subcommittee holds its first hearing of the 
year and we're very pleased to welcome Transportation Secretary 
Mary Peters back before the body, and I also want to welcome 
Phyllis Scheinberg, who's the Department's Assistant Secretary 
for Budget and Programs and Chief Financial Officer.
    You know, much earlier in my career, I was the first woman 
ever appointed to the Transportation Committee in my State 
senate and at the time some of my senate colleagues there in 
Olympia made it very clear to me that they didn't think it was 
a role for women doing transportation policy. So, I'm only 
sorry that they can't be here this morning to see this. It 
takes, as my friend Senator Mikulski says, a lot of women and a 
few good men to get anything done. So, Mr. Bond, I welcome you 
here as well.
    Last year, the White House and the Democratic Congress went 
to battle over budget priorities. The majority in Congress 
believed we could not ignore our needs here at home, including 
transportation and housing, two areas where we have very grave 
needs. In the end, we were able to provide over $1 billion more 
for the Department of Transportation than the President 
requested. That was $2.3 billion more than the 2007 level.
    I certainly hope we can do better this year, but we're 
starting off at a huge disadvantage. Last year, President Bush 
wanted to increase the level of spending for the Transportation 
Department. We just disagreed on how much transportation 
spending should grow.
    This year, however, President Bush wants to take us 
backward and cut transportation funding by more than $2.1 
billion. In fact, the President wants us to take back the $1 
billion we added to his budget request last year and cut an 
additional $1.1 billion below that level.
    The administration's deepest cuts would be to investments 
in highways and airports along with his usual request to slash 
Amtrak and throw the railroad into bankruptcy. These cuts would 
be devastating and his proposal is unacceptable.
    In the last 15 months before the President unveiled his 
2009 budget, the U.S. economy lost 284,000 construction jobs. 
Just this week, the Commerce Department reported that 
construction spending in January, which includes spending on 
highways and other municipal projects, took its biggest single 
month's drop in 14 years, but the President's response to the 
dismal economy and rising unemployment has been to send us a 
transportation budget that makes a bad situation worse.
    By cutting highway and airport investments by a combined 
$2.6 billion, his budget would eliminate an additional 120,000 
jobs. Each one of these jobs represents the difference between 
a family with some economic stability and a family staying up 
at night worrying about where they're going to find next 
month's rent and it would put off for yet another year the 
repairs and improvements our roads and airports already need 
very badly.
    The President claims that his proposals would return the 
budget to surplus by the year 2012, but when you dig into the 
details, you find that the President has to rely on a series of 
unrealistic and irresponsible gimmicks to get there. One of 
those proposals should frighten every member of this 
subcommittee. He wants to cut federally-funded transportation 
services by 25 percent by 2012. His budget would have the 
Federal Government just give up its responsibility for funding 
our highways, airports and maintaining critical safety 
programs. I guess he expects a quarter of the Department of 
Transportation to simply disappear in the next 4 years.
    Thankfully, five floors above us right now, the Senate 
Budget Committee is marking up a budget with realistic and 
responsible priorities for our Nation. I am a long-time member 
of that committee and I can assure you the budget we will 
report this evening puts Transportation on a very different 
path than the one proposed by President Bush.
    Under our budget, Transportation would grow by almost $4 
billion above the levels requested by the President for next 
year and Transportation funding will continue to grow above the 
level of inflation into the future.
    The President's budget would effectively slash 
transportation funding by about $45 million over the next 5 
years. The administration has defended its proposals to cut 
highway funding by $1.8 billion next year because the Highway 
Trust Fund is rapidly running out of money.
    I've been warning Congress and the administration for years 
about the problem we face with the Trust Fund. We discussed 
that problem at last year's hearing. This year, I've worked 
with the Finance Committee to ensure that at least for 2009, we 
won't have to cut highway funding next year. That bill is 
awaiting action on the Senate Floor.
    The Bush administration has offered an alternative: cut 
highway funding by $1.18 billion and steal from the Transit 
Account of the Trust Fund to bail out the Highway Account, and 
while the DOT maintains this loan from the Transit Account 
would be paid back once the Highway Account has sufficient 
resources, there's absolutely nothing in the administration 
budget projections to indicate whether repaying that loan would 
actually be possible.
    By stealing from Transit to pay for highways, all we do is 
speed up the time it will take for the Transit Account to be as 
bankrupt as the Highway Account and that is just not a 
solution.
    So, as we face looming shortfalls in highway funds, the 
only other idea being proposed by the administration is a sea 
of new tolls to be paid by the driving public. Secretary Peters 
recently advocated this new system of road pricing in a speech 
to the National Governors Association and her testimony 
addresses this today.
    Road pricing basically requires drivers to pay steep new 
tolls and these new tolls are not just for traveling over 
brand-new highways and bridges, they'd be levied on the network 
of roads that have already been built with taxpayer funds. So, 
the administration is advocating now that working families who 
are already paying almost $4 a gallon for gas and who are 
barely making ends meet should pay brand-new tolls on highways 
they already paid for.
    Now I believe new tolls have a place, especially for 
expensive projects, new projects, like a brand-new bridge, but 
the administration's plan is simply unrealistic for most 
Americans. Our families struggle enough to keep their cars on 
the roads so they can travel between their jobs, their kids' 
schools, their childcare centers and their homes.
    I also believe the Federal Government should be cautious 
about the idea of leasing major transportation assets, 
including toll roads, to private investment banks. This idea is 
popular among mayors and governors. Here's how it works. Banks 
pay a huge amount of cash upfront, allowing cities and States 
to spend it immediately, but when the money's gone, their 
successors in office watch the toll revenues roll directly to 
the investment bank for as long as 99 years. If the money's 
used on transportation, this could be a good idea, but I think 
we have to be very careful if we're talking about leveraging 
transportation assets to get quick cash to pay down debt or to 
spend on other things.
    So, as we discuss this today, I look forward to hearing the 
Secretary's views on whether governors and mayors, when they 
lease out transportation assets, should be required to invest 
their windfalls on transportation needs, and I also want to 
hear whether she believes this toll revenue is really a 
substitute for the Federal Aid Highway Program that has served 
to unify our communities and our country for the last half 
century.
    Senator Bond?


            OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND


    Senator Bond. Thank you very much, Senator Murray. I thank 
you for being such a good working partner, look forward to 
working with you on this year's THUD bill and we welcome 
Secretary Peters for appearing before us today to testify on 
the Department's budget submission for 2009.
    Not that I need to add anything to encourage your gambit 
about woman power but 35 years ago when I started appointing 
the first women as heads of departments in the State of 
Missouri Government, one of them very humbly told me, you know, 
with the trouble that women face today, to take on a job she 
has to be twice as good, twice as effective and twice as 
efficient as a man. Fortunately, that's not at all hard, but 
that is not my quote. That's from a department head woman who 
is a great friend of mine.
    Madam Secretary, this will potentially be the last time 
that you appear before us. We have appreciated your service in 
the Department as Administrator of the Federal Highway 
Administration and now as Secretary overseeing all of DOT, and 
I look forward to your comments on the overall dismal budget 
picture for all of the modes of transportation within the 
Department.
    As the chair has noted, the 2009 budget proposes $68.2 
billion in gross budgetary resources which is a decrease of 
$2.13 billion from the level enacted in our recent omnibus 
appropriations package. That level of reduction in spending for 
transportation is a non-starter.
    Madam Secretary, during this final year of SAFETEA, I would 
have hoped that the administration would have remained 
committed to meeting the guaranteed funding levels for highways 
and transit as authorized. I understand from your testimony you 
believe you've lived up to the terms of SAFETEA by providing 
$286.4 billion over the life of the bill, thereby fulfilling 
your commitment to the spending agreement made with Congress 
when the president signed SAFETEA.
    I have to disagree respectfully with that assessment and I 
believe that the chair and I will continue to try to honor our 
commitment to highways and transit.
    Last year on the Senate Floor, I did not support the 
additional $1 billion for bridges that was included in the 
final omnibus appropriations bill. As you know, a majority of 
my colleagues felt that in light of the Minnesota bridge 
collapse, additional funding for bridges was necessary not only 
for Minnesota but for all 50 States. For this reason, an 
additional $1 billion was provided in obligation limitations 
for bridges in the final omnibus which I call ominous because 
they always turn out bad things for those of us who work on the 
individual appropriations bill.
    That negotiation was separate and apart from the deal that 
was agreed to by the administration when SAFETEA funding levels 
were agreed to and the guarantees under SAFETEA should be met.
    SAFETEA guaranteed the States $41.2 billion for highways. 
However, this budget only provides $39.4 billion. This 
reduction comes in part from a projected negative revenue 
aligned budget authority of $1 billion, plus another $800 
million in reductions.
    Similarly, this budget proposes to fund the Federal Transit 
Programs at a level which is $200 million below the SAFETEA 
authorized levels for new starts. These funds allowed an 
increased investment in key highway and transportation projects 
which will compliment and assist the continued growth of the 
U.S. economy.
    I stated before and I'll go on record again that these 
large rescissions of contract authority on the States cannot 
continue. For the last several appropriations cycles, we have 
increasingly used the practice of rescinding unobligated 
highway contract authority to make the overall size of 
transportation funding in our bill appear smaller.
    The Department's budget submission regrettably joins us 
once again in using this budget gimmick to mask overall 
spending. Last year, regrettably, we included a rescission of 
over $4 billion in contract authority which was much higher 
than I was able to comfortably accept. Your budget submission 
now includes a rescission of almost $3.9 billion in contract 
authority and also does not reflect the $8.5 billion rescission 
in contract authority which will take place on September 30, 
2009, the final day of SAFETEA, making the total rescission 
proposed for 2009 $12.39 billion.
    There are real world consequences to these rescissions that 
are beginning to materialize from our actions. According to the 
individuals who run State departments of transportation, 
rescinding contract authority can limit our State departments 
of transportation ability to fund the priorities and operate 
their programs as efficiently as possible.
    Our States need the flexibility to identify the Federal Aid 
Program categories to which these rescissions should apply, 
assuming we should continue to rescind these large amounts of 
contract authority. Last year, in exchange for agreeing to this 
high rescission in the THUD bill, I was able to convince my 
colleagues that rescission decisions should be made and remain 
in the hands of the States who know best where they should be 
made.
    However, the Energy Bill passed and mandated in statute 
that proportional rescissions out of all the core funding 
categories are required, thereby severely limiting the ability 
of our States to set our spending priorities.
    For example, if these high rescissions continue to be made 
and Missouri is forced to apply the categorical rescission, 
Missouri will be forced to cancel projects on their State 
implementation plan. Missouri has some categories with zero 
unobligated balances and would be forced to cancel projects 
currently on the STIP in interstate maintenance, national 
highway system, and Surface Transportation Program categories.
    I've been told by our colleagues from Nevada that they have 
no remaining balances and our rescission decisions are starting 
to impact actual capital programming. The same is becoming true 
in Tennessee and Alaska and maybe many other States. 
Proportional rescissions of contract authority will hamper 
Missouri's program as well as many other States.
    Madam Chair, this is an area where I think we need to work 
together to correct. I hope we can find a way to reduce the 
level of rescissions and, if necessary, at least give them the 
flexibility so that they don't incur the cost, the expense and 
the waste of canceling contracts already underway.
    I also hope we can work with the Senate Finance Committee 
to fix the current shortfall in the Highway Trust Fund to get 
us through 2009 and beyond. It appears to me that no one can 
really get a handle on the Highway Trust Fund shortfall that we 
will face this year.
    Last August, Madam Secretary, our staffs were briefed on 
the midyear projection of revenue into the Highway Trust Fund 
and we were told that a $4.3 billion gap would occur at the 
beginning of 2009. Lower than anticipated tax receipts, which 
fund the Highway Trust Fund, were due in part to a sharp 
downturn in vehicle miles traveled, VMT, and truck sales being 
down 20 percent.
    It would appear then that high gas prices were having a 
major impact on the traveling public and their willingness to 
drive long distances. I expect these issues to continue to 
limit the availability of funds for the Highway Trust Fund.
    The budget you have before us today re-estimates that 
shortfall in the Highway Trust Fund to $3.3 billion, based upon 
slower than expected outlays on earmarks and projected negative 
RABA. To make up for this shortfall, your budget calls for 
another budget gimmick, allowing the HTF to borrow up to $3.3 
billion from the Mass Transit Account to cover the shortfall in 
the Highway Account. This is what I would call at best a 
bandage for a bleeding wound, but it's taking a bandage off of 
another area that will be bleeding just as badly.
    What we really need is a solution from the Senate Finance 
Committee to get us through 2009 and into 2010 until a 
comprehensive reauthorization proposal can be passed and signed 
into law.
    Madam Secretary, in this year's budget, you've proposed 
once again a Congestion Reduction Initiative redirecting a $175 
million in debt earmarks from ISTEA. Given the fact that $848 
million was awarded or is conditionally awarded for five 
communities using 2007 funds and only one of the five has met 
all of the terms of its urban partnership agreement, one might 
ask why do you feel you need more money?
    I understand that Minnesota, at $133 million, is close, but 
New York with $345 million and San Francisco with almost $159 
million are not going to know from the State legislatures until 
March 31, of this year and Seattle is not to be decided until 
September 2009. No one at this point really knows if any of the 
three undecided urban partners will meet their deadlines or if 
their proposals will have any real effectiveness in reducing 
congestion.
    Once again, on another subject, we have a non-starter for 
Amtrak. Last year, we gave Amtrak $1.3 + billion, $850 million 
for capital and debt service, $475 million in operations. The 
budget we have before us proposes to reduce this level by 40 
percent.
    Beyond the issue of what's the right number for Amtrak lays 
the recent Presidential Emergency labor board settlement which 
is not included whatsoever in the budget that we have before 
us.
    As for aviation and, of course, the bad news keeps getting 
worse, the administration again attempts to slash funding from 
the Airport Improvement Program by $765 million. This is the 
third year in a row that the administration has attempted to 
reduce substantially this critical account beyond acceptable 
levels.
    I look forward to working with the chair and fellow members 
of this committee to restore these cuts and to ensure that the 
Nation's airport infrastructure receives the appropriate 
Federal investment.
    Nevertheless, Madam Secretary, you know the importance of 
airport infrastructure in regards to solving our aviation 
congestion problems. We applaud you for acknowledging that many 
of our Nation's major congestion choke points need to develop 
and improve secondary airports to handle traffic.
    I talked last night with several pilots who said that they 
were very much concerned because we've got a lot more resources 
up in the air than we have places to land them and it's not 
just air traffic control, its actual facilities.
    Madam Secretary, you deserve credit for seeking to change 
the landing fee structure to incentivize moving operations to 
off-peak hours and secondary airports in congested areas and to 
change the way airport projects are financed both at major hubs 
and at secondaries. We need to ensure proper investment in 
these secondaries if we're truly serious about battling 
congestion and properly funding the AIP Program goes a long way 
towards that goal.
    In closing, I would only say that healthy investment in 
highway, transit and aviation programs, including safety, 
improves America's quality of life and is the lifeblood of our 
Nation's economic growth.
    Thank you, Madam Chair.
    Senator Murray. Senator Lautenberg.


                STATEMENT OF SENATOR FRANK R. LAUTENBERG


    Senator Lautenberg. Thank you, Madam Chair, and Secretary 
Peters, we wish you well in your next endeavors and I know how 
hard you worked to put things together. Unfortunately, they did 
not come together, whether it was the President's choice or 
whether we didn't bite hard enough to make him aware of the 
fact that the Nation's suffering terribly as a result of 
insufficient investment.
    If we want to strengthen and grow our economy, the one 
thing we must do is invest in our transportation infrastructure 
now. The President isn't willing to make these critical 
investments. That's kind of obvious. He wants to cut funding 
for bridges, highways, repairs by almost $2 billion. He also 
wants to fund transit programs at $200 million below the level 
that Congress authorized.
    Now these cuts hurt States like mine, like New Jersey and 
its working families that need transit options the most, and 
airline passengers will fare no better under this budget. The 
delays will continue. As a matter of fact, the projections are 
that they'll get substantially worse in the years ahead.
    President Bush wants to raise airline taxes, cut funding 
for our Nation's airports and runways by $765 million. Our air 
traffic control system is already dangerously understaffed and 
the FAA has done far too little to prevent runway incidents.
    President Bush once again is trying to bankrupt Amtrak and 
it's really shocking when we see that whether it's out of 
desperation or choice that Amtrak ridership is substantially 
higher than it's been. In the year 2006, we had 24,300,000 
passengers. In the year 2007, we had 25,800,000 passengers, and 
the revenues also have showed substantial increases, whether or 
not the choice was made out of, as I said earlier, desperation 
or convenience, but the revenues were up almost $200 million in 
those 2 years.
    So, when we look at reductions in funding for Amtrak, it 
really makes one wonder why. At a time of record high gas 
prices, record airport delays, we should not be taking away 
this popular energy efficient and convenient travel option 
which people are using in record numbers, as I just described.
    Our economy depends on our transportation infrastructure. 
It demands a greater investment and commitment from the Federal 
Government and I look forward to working with my colleagues on 
this subcommittee to provide the leadership that we need for us 
to provide the critical factors to enable our Nation to 
function more efficiently, creating less toxic emissions, and 
to be able to search for new technologies and innovations, 
remembering that population growth in America in 1970, we had 
200 million people, 37 years later, we have 300 million, and 
the transportation system was certainly not built for that kind 
of growth and we have to make adjustments and make them rapidly 
because it doesn't look like we're leveling off in population 
growth.
    Thank you, Madam Secretary.
    Senator Murray. Thank you. Secretary Specter.
    Senator Specter. Madam Chairman, Senator Stevens has asked 
for 30 seconds.
    Senator Murray. Senator Stevens.


                    STATEMENT OF SENATOR TED STEVENS


    Senator Stevens. Madam Chairman, I greet the Secretary, but 
I ask unanimous consent to make my statement appear in the 
record and the questions submitted for me. I have to go on the 
Floor.
    Senator Murray. Without objection.
    Senator Stevens. Thank you very much.
    [The statement follows:]

               Prepared Statement of Senator Ted Stevens

    Madam Secretary, I understand the challenges that the Department 
faces to provide funding for our Nation's aging transportation systems, 
with growing congestion and the continued need to continue to 
prioritize safety.
    It is important that, as we work with the Department of 
Transportation to address these challenges, we must continue our 
commitment to increase aviation safety and rural community access.
    The FAA has made great strides in aviation modernization and 
safety. As we move forward, it is important that we understand the 
challenges faced in Alaska. We're a State that's one-fifth of the 
United States in size, as you know. We have very few roads. Our taxis, 
our buses, and our ambulances are almost all aircraft. Seventy percent 
of our communities are not connected to the outside world or to each 
other by roads. They are accessible only by air and in some instances 
by water.
    Because of our reliance on air travel, the hazardous weather 
conditions, and diverse terrain, (AK has 17 of the 20 highest peaks in 
the United States), Alaska has served a critical role in the 
development and implementation of aviation safety technology, which 
will be implemented nationwide as the ADS-B system. (Known as capstone 
in AK).
    In last weeks Commerce Committee hearing, we discussed some of the 
shortfalls of this years proposed budget, specifically cuts to the 
essential air service program which provides a lifeline for isolated 
communities in my State and across the Nation.
    Despite the many shortfalls of this years proposed budget, I look 
forward to working together to address the needs of our Nations' 
transportation systems, as well as the needs of Alaska.
    I appreciate the funding provided in the proposed budget for Alaska 
Flight Service Modernization ($14.6 million). As the FAA considers the 
final investment analysis of how to modernize the Alaska Flight Service 
Stations, I want the Department to understand that the flight stations 
in Alaska provide services beyond the functions provided by stations in 
the rest of the Nation, as many facilities do not have towers. I hope 
that the Department recognizes that reality, and continues to make 
safety as primary concern as we move forward.

                   STATEMENT OF SENATOR ARLEN SPECTER

    Senator Specter. Thank you, Madam Chairwoman. I will be 
brief. I left the Judiciary Committee where I'm ranking and I'm 
needed there for a quorum.
    I wanted to raise some issues which are very, very serious 
to Pennsylvania. Secretary Peters, I know you're aware of them, 
but I've not had any responses from the Department. So, I 
repeat them here.
    There had been a commitment that the flight routing over 
Delaware County in Pennsylvania would not be done between 9 
a.m. and 11 a.m., and 2 p.m. to 7 p.m., unless there is a 
significant backlog, and that commitment was made by a 
representative from your Department named Steve Kelley and the 
planes are being routed over Delaware County when there is no 
backlog at all, which has created an enormous and justifiable 
local furor and other approaches are not being used, such as a 
river approach, and we would like to know the details.
    I've been trying very hard to get Mr. Sturgell to come for 
a hearing so we could deal with these issues and I would 
appreciate your assistance on that.
    On another matter, the scheduling of flights at the 
Philadelphia International Airport is intolerable. You don't 
have to look at the schedules to know it. I can give you lots 
of personal experience on the subject, and I had written to you 
back on November 8, of last year and December 18, of last year 
and I would very much appreciate responses to those letters, 
and I've asked to have a meeting convened among the carriers, 
similar to the one which you held in New York. That meeting 
impacted on Pennsylvania and the Philadelphia International 
Airport because there are analogous routes. So these are 
matters of enormous importance to my State and to me 
personally.
    There has been an application pending in your Department 
regarding MAGLEV, a high-speed line which we're trying to move 
ahead in Pennsylvania, and it has been pending for more than a 
year and I personally called the key official and got 
assurances that something would be done and a long time has 
passed since then.
    So again I would appreciate it if you would give that your 
personal attention.
    In conclusion, let me associate myself with the remarks of 
Senator Lautenberg about Amtrak. It's enormously vital in this 
country and Congress has had to intervene consistently and I 
think that a more realistic approach needs to be taken by the 
administration on the subject.
    Thank you, Madam Chairwomen.

              PREPARED STATEMENT OF SENATOR ROBERT C. BYRD

    Senator Murray. Thank you. The subcommittee has received a 
statement from Senator Byrd which we will insert into the 
record.
    [The statement follows:]

              Prepared Statement of Senator Robert C. Byrd

    Madame Chairman, In May 1829, President Andrew Jackson vetoed the 
Maysville Road bill. The measure would have funded a section of the 
national highway running through Maysville, Kentucky, across the Ohio 
River, into Cincinnati. Failing to comprehend or acknowledge the 
benefits to the national economy, the Jackson administration derided 
the funding for the Maysville Road as local, pork-barrel spending. But 
U.S. Senator Daniel Webster, who understood that local projects often 
have national implications, especially investments in transportation 
infrastructure, opposed the President's veto. He remarked, ``There is 
no road leaving everywhere, except the road to ruin. And that's an 
administration road.''
    I often think about that quote--the administration's ``road to 
ruin.'' President Bush's budget included lots of bombast against State 
and local infrastructure projects, derisively dismissing them as 
special interest earmarks. Once again, a presidential administration is 
failing to recognize that inadequate infrastructure in one State 
affects the economies of other States. It affects the Nation as a 
whole. Therefore, it is the Federal Government's unquestionable role to 
do something about it.
    Let's consider the statistics. According to the American Society of 
Civil Engineers, our Nation has 590,000 bridges, and one out of every 
four is structurally deficient or functionally obsolete. One of those 
bridges was the I-35 bridge that collapsed in Minnesota last year. 
Because of congested roads, Americans sit in traffic for 3.5 billion 
hours annually, at a cost of $63 billion to the economy. Our airways 
are not much better. Airports are struggling to accommodate an 
increasing number of airplanes and jumbo jets, and passengers are 
forced to wait interminably on runways. Rail capacity is limited. 
Intercity passenger rail service is routinely attacked by this 
administration, leaving it in a precarious state of near-bankruptcy. 
Commuter rail and transit infrastructure is aging, and budgets are 
shrinking, as fares increase and services are reduced.
    Our Nation's deteriorating infrastructure expands well beyond the 
Transportation Department. There are 3,500 deficient and unsafe dams 
posing a direct risk to human life if they should fail. Of the 257 
locks on the more than 12,000 miles of inland waterways operated by the 
U.S. Army Corps of Engineers, nearly half of them are functionally 
obsolete. For every barge that is affected, it is the equivalent of 
disrupting 58 semi-trucks carrying cargo across the country.
    Aging water facilities fail to comply with safe drinking water 
regulations. Outdated wastewater management systems discharge billions 
of gallons of untreated sewage into surface waters each year. Existing 
transmission facilities within the national power grid are overwhelmed 
by bottlenecks, which elevates the risk of regional blackouts. Our 
public parks, beaches, and recreational harbors need attention because 
they are falling into disrepair. These facilities are anchors for 
tourism and economic development in many States.
    Congested roads and long commutes, crowded airlines and delayed 
flights, vulnerable bridges, energy blackouts, failing dams, dirty 
water and waste mismanagement--these are the festering signs of a 
Nation's infrastructure which is slowly starving. And it's happening on 
this administration's watch. It's happening because the Bush 
administration refuses to fund our country's basic infrastructure--the 
bones on which the muscles of a sound economy depend.
    This is Mr. Bush's ``road to ruin.''
    An editorial in The Washington Post in 2005 described the situation 
this way: ``[We] have let the Nation's plumbing rust, its wiring fray, 
its floor joists warp and its walkways crumble . . . Sooner or later, 
though, we're going to have to pony up . . . If you continue to ignore 
that drip, drip, drip in the upstairs bedroom, pretty soon you're going 
to be pricing a new roof.''
    This editorial appeared only weeks before Hurricane Katrina. The 
investments we delayed and postponed in New Orleans cost lives. The 
investments we delay in transportation infrastructure cost lives, and 
undermine our economic prosperity. When it comes time to pay, it costs 
tens of billions of dollars in repairs and new building, much more than 
would have been necessary had we not ignored the problem. These are 
painful lessons that this administration is stubbornly refusing to 
acknowledge. Our constituents expect us to have the vision to look down 
the road and put policies in place that ensure productivity and 
prosperity. But instead, some have chosen the rocky road to ruination. 
One thing is certain. If we allow the drip, drip, drip to continue, we 
will one day suffer the crushing costs that come when the roof falls 
in.

    Senator Murray. Secretary Peters, we will now turn to you 
for your testimony.

                    STATEMENT OF HON. MARY E. PETERS

    Secretary Peters. Madam Chairman, thank you very much. I 
know that Senator Specter has to leave. My apologies that we 
have not been responsive; we will ensure that we respond right 
away, sir. I am aware that there is a hearing scheduled in 
Philadelphia for April 7, on the Philadelphia air routings.
    Chairman Murray, 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.
    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.
    Our focus is on 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 technologies and contemporary approaches to 
today's transportation challenges.
    For the first time since the creation of the interstate 
highway system, we have an incredible opportunity to come 
together and completely reassess our approach to financing and 
managing the surface transportation systems. Because gas and 
diesel taxes are levied regardless of when, where or how 
someone drives, a misperception has been created that the 
highways are free.
    As with any scarce resource that is perceived to be free, 
demand will chronically exceed supply. In the case of highways, 
the peak demand is serious and it's growing worse in every 
medium or large city in the United States today.
    While highway spending at all levels of government has 
increased by 100 percent in real dollar terms since 1980, the 
hours of delay during peak travel periods experienced by 
drivers has increased by over 200 percent during the same 
period of time. Nationwide, congestion imposes delay and wasted 
fuel costs on the economy of at least $78 billion a year.
    The true costs of congestion, however, are much higher. 
Consider the significant costs of unreliability to drivers and 
businesses, the environmental impacts of idle-related auto 
emissions, increased gasoline prices and the immobility of 
labor markets that result from congestion. All of these costs 
substantially affect interstate commerce and our ability as a 
Nation to compete in a global economy.
    The President's budget includes $14.6 billion for the 
Federal Aviation Administration (FAA). The budget request 
assumes passage of the President's reauthorization proposal for 
FAA programs and revenue streams associated with that reform 
package.
    With the more efficient revenue structure, we will be able 
to build on our exemplary safety record in aviation while 
expanding the number of aircraft that the Nation's airspace can 
safely handle at any given time.
    The key to achieving higher levels of safety and efficiency 
is to move to 21st century technologies to guide air traffic. 
The fiscal year 2009 budget request would more than double the 
investment in these NextGen technologies, providing $688 
billion for key research and technologies, including the 
transformation from radar-based to satellite-based navigation 
systems.
    Without these reforms to help finance increased air traffic 
control capacity and modernization, we can all expect, 
unfortunately, to spend more time waiting in airports or 
strapped in an airplane seat sitting at the end of a runway.
    Nearly 31 percent of the funds requested for fiscal year 
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, such as 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 our resources more effectively to save 
lives. Last week, the Department announced a new national 
strategy that will bring new focus, including resources and new 
technology, to reducing deaths on the Nation's rural roadways. 
Our Rural Safety Initiative will help States and communities 
develop ways to eliminate the risks drivers face on America's 
rural roads and highlight the available solutions and 
resources.
    The President's fiscal year 2009 budget builds on the 
exciting things that we're doing at the Department of 
Transportation, things that will help move America 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.
    Madam Chairman, as I mentioned, I believe that we are at an 
important crossroads in terms of our Nation's transportation 
system. I have put some ideas out there, but I am anxious to 
work with you and to hear your ideas, and those of this 
committee, as we move forward to meet these challenges.

                           PREPARED STATEMENT

    Thank you for the opportunity to appear before you today. I 
look forward to working with Congress and with the 
transportation community so that together we can ensure that 
America continues to have the best transportation system in the 
world.
    Thank you.
    [The statement follows:]

               Prepared Statement of Hon. Mary E. Peters

    Chairman Murray and members of the subcommittee, 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.
    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 fiscal year 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.
    Fiscal year 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 6-year, $286.4 billion investment authorized by SAFETEA-LU. For 
2009, the budget provides $51.7 billion in 2009 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.
    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 is no longer 
effective. We need serious reform of our approaches to both financing 
and managing our transportation networks.
    For the first time since the creation of the Interstate Highway 
System, we have an amazing opportunity to come together and completely 
re-assess our approach to financing and managing surface transportation 
systems. For too long, we have tolerated exploding highway congestion, 
unsustainable revenue mechanisms and spending decisions based on 
political influence as opposed to merit.
    Now, thanks to technological breakthroughs, changing public opinion 
and highly successful real-world demonstrations around the world, it is 
clear that a new path is imminently achievable if we have the political 
will to forge it. That path must start with an honest assessment of how 
we pay for transportation. In fact, our continued transportation 
financing challenges are in many ways a symptom of these underlying 
policy failures, not the cause.
    Because gas and diesel taxes are levied regardless of when, where 
or how someone drives, a misperception has been created that highways 
are ``free.'' As with any scarce resource that is perceived to be free, 
demand will chronically exceed supply. In the case of highways, this 
peak demand problem is serious and growing worse in every medium or 
large city in the United States. While highway spending at all levels 
of government has increased 100 percent in real dollar terms since 
1980, the hours of delay during peak travel periods has increased 
almost 200 percent over the same time period.
    Traffic congestion affects people in nearly every aspect of their 
daily lives--where they live, where they work, where they shop, and how 
much they pay for goods and services. According to 2005 figures, in 
certain metropolitan areas the average rush hour driver loses as many 
as 60 hours per year to travel delay--the equivalent of one and a half 
full work weeks, amounting annually to a ``congestion tax'' of 
approximately $1,200 per rush hour traveler in wasted time and fuel.
    Nationwide, congestion imposes delay and wasted fuel costs on the 
economy of at least $78 billion per year. The true costs of congestion 
are much higher, however, after taking into account the significant 
cost of unreliability to drivers and businesses, the environmental 
impacts of idle-related auto emissions, increased gasoline prices and 
the immobility of labor markets that result from congestion, all of 
which substantially affect interstate commerce.
    Traffic congestion also has an increasingly negative impact upon 
the quality of life of many American families. In a 2005 survey, for 
example, 52 percent of Northern Virginia commuters reported that their 
travel times to work had increased in the past year, leading 70 percent 
of working parents to report having insufficient time to spend with 
their children and 63 percent of respondents to report having 
insufficient time to spend with their spouses.
    Nationally, in a 2005 survey conducted by the National League of 
Cities, 35 percent of U.S. citizens reported traffic congestion as the 
most deteriorated living condition in their cities over the past 5 
years; 85 percent responded that traffic congestion was as bad as, or 
worse than, it was in the previous year. Similarly, in a 2001 survey 
conducted by the U.S. Conference of Mayors, 79 percent of Americans 
from 10 metropolitan areas reported that congestion had worsened in the 
prior 5 years; 50 percent believe it has become ``much worse.''
    Around the country, a growing number of public opinion polls 
reflect the unpopularity of gas and diesel taxes, particularly when 
compared to open road electronic tolling. Most recently, in a King 
County, Washington survey conducted in December 2007, respondents 
preferred financing the reconstruction of a major bridge with 
electronic tolling instead of gas taxes by a margin of 77 to 17 
percent. In addition, the concept of variable tolling using new 
technologies in which prices vary regularly based on demand levels 
received support from 76 percent of respondents and opposition from 
only 22 percent.
    A survey of public opinion surveys conducted in November 2007 for 
the Transportation Research Board by the research firm NuStats found 
that ``in many parts of the United States, a wide gap exists between 
elected officials' perceptions of what the public thinks about tolling 
and road pricing and what public opinion actually is.'' Summarizing 
their findings, the report said, ``in the aggregate there is clear 
majority support for tolling and road pricing. Among all surveys, 56 
percent showed support for tolling or road pricing concepts. Opposition 
was encountered in 31 percent of the surveys. Mixed results (i.e., no 
majority support or opposition) occurred in 13 percent of them.''
    In the 2007 edition of their Annual Survey of U.S. Attitudes on Tax 
and Wealth, the Tax Foundation wrote, ``the one surprise this year was 
at the State and local level, where gas taxes were viewed as the least 
fair tax. That's the first time any State-local tax has edged famously-
disliked local property taxes out for the honor of most unfair tax.''
    Virtually every economist who has studied transportation says that 
direct pricing of road use, similar to how people pay for other 
utilities, holds far more promise in addressing congestion and 
generating sustainable revenues for re-investment than do traditional 
gas taxes. And thanks to new technologies that have eliminated the need 
for toll booths, the concept of road pricing is spreading rapidly 
around the world. The brilliance of road pricing is that it achieves 
three major policy objectives simultaneously.
    First, it will immediately reduce congestion and deliver 
substantial economic benefits. Drivers have proven in a growing array 
of road pricing examples in the United States and around the world that 
prices can work to significantly increase highway speed and 
reliability, encourage efficient spreading of traffic across all 
periods of the day, encourage shifts to public transportation and 
encourage the combining of trips. In fact, the National Household 
Travel Survey shows on an average workday, 56 percent of trips during 
the morning peak travel period and 69 percent of trips during the 
evening peak travel period are non-work related, and 23 percent of peak 
travelers are retired.
    Second, it will generate revenues for re-investment precisely in 
the locations that need investment the most. Recent estimates in a 
forthcoming paper, ``Toward a Comprehensive Assessment of Road Pricing 
Accounting for Land Use'' by economists Clifford Winston and Ashley 
Langer at the Brookings Institute conclude that utilizing congestion 
pricing in ONLY the largest 98 metropolitan areas would generate 
approximately $120 billion a year in revenues while simultaneously 
solving the recurring congestion problem in those areas. Implementation 
of a broader road pricing strategy tied to wear and tear and 
reconstruction costs would obviously produce even higher revenue. In 
2006, as a Nation, we spent approximately $150 billion on all of our 
highways. State and local officials would even gain additional 
flexibility to reduce the wide array of taxes currently going into 
transportation that have nothing to do with use of the system.
    Third, direct pricing will reduce carbon emissions and the 
emissions of traditional pollutants. According to Environmental 
Defense, a nonprofit environmental organization, congestion pricing in 
the city of London reduced emissions of particulate matter and nitrogen 
oxides by 12 percent and fossil fuel consumption and CO2 
emissions by 20 percent; a comprehensive electronic road pricing system 
in Singapore has prevented the emission of an estimated 175,000 lbs of 
CO2; and Stockholm's congestion pricing system has led to a 
10-14 percent drop in CO2 emissions.
    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 fiscal year 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.
    Through the Urban Partnership initiative, communities submitted 
innovative transportation plans that would not just slow the growth of 
congestion, but would reduce it. The Department promised to allocate 
the Federal contribution in a lump sum, not in bits and pieces over 
several years. This initiative is part of a national dialogue about how 
transportation should be funded in the future. Congestion pricing is 
being talked about in major newspapers and cutting-edge traffic-
fighting packages are combining technology and tolling, using the 
revenues to expand highway and transit capacity.
    In August 2007, the Department awarded $850 million in Federal 
grants to five cities--Miami, Minneapolis, San Francisco, Seattle, and 
New York--to support their bold and innovative strategies to reduce 
gridlock and raise new funds for transportation. The Department's 
discretionary grant awards under the Congestion Initiative in fiscal 
year 2007 were awarded in accordance with the statutory criteria of the 
applicable Federal-aid programs and Federal appropriations law.
    Local leaders in Minneapolis, for example, are tackling congestion 
there by converting HOV lanes to HOT lanes, congestion pricing new 
capacity on the shoulders of I-35 West, and deploying high-end bus 
rapid transit service and intelligent transportation technologies.
    San Francisco, meanwhile, plans to charge variable tolls on its 
most congested roadway into the city, implement a comprehensive smart 
parking system and institute traffic signal coordination at 500 key 
intersections throughout the city.
    And, New York City Mayor Bloomberg--together with key members of 
the New York State legislature, environmental leaders, and city 
business leaders--is advancing the most comprehensive congestion 
solution yet seen in the United States: ``cordon pricing'' of Manhattan 
south of 86th Street, supported by new bus rapid transit service to the 
city center.
    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 15 commuter 
rail projects that are currently under construction, as well as 
proposing new funding for 2 additional projects. Another $200 million 
will be used to fund 13 projects under the Small Starts program.
    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 system safe.
    The budget request assumes Congressional passage of the President's 
reauthorization proposal for FAA programs and revenue streams. With a 
more efficient revenue structure, we will be able to build on our 
exemplary aviation safety record while expanding the number of aircraft 
that the Nation's airspace can safely handle at any given time. Also, 
our proposal would modernize how we pay for airport infrastructure 
projects and allow us to overhaul the Nation's air traffic control 
system.
    Key to achieving higher levels of safety and efficiency is the move 
to 21st century technologies to guide air traffic. For the flying 
public, this investment is critical if we are to deploy the state-of-
the-art technology that can safely handle dramatic increases in the 
number and type of aircraft using our skies, without being overwhelmed 
by congestion. The fiscal year 2009 budget request would more than 
double investment in these Next Generation Air Transportation System 
(NextGen) technologies, providing $688 million for key research and 
technologies including the transformation from radar-based to 
satellite-based navigation systems.
    The fiscal year 2009 budget once again provides the framework of 
the Next Generation Air Transportation System Financing Reform Act, a 
new proposal that will make flying more convenient for millions of 
travelers. As air traffic is expected to nearly triple 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 to not only 
handle more aircraft, but also to maintain high levels of safety, 
reduce flight delays, and reduce noise near airports.
    From a finance perspective, our proposal replaces the decades-old 
system of collecting ticket taxes with a stable, cost-based funding 
program. Based on a combination of user-fees, taxes and general funds, 
it creates a stronger correlation between what users pay to what it 
costs the FAA to provide them with air traffic control and other 
services. The incentives our plan puts in place will make the system 
more efficient and more responsive to the needs of the aviation 
community.
    Without reforms to help finance increased air traffic control 
capacity and modernization, we can all expect to spend more time 
waiting in airports or strapped in an airplane seat, sitting at the end 
of a runway. There has already been a vigorous debate about the 
structure of the system, and we ask Congress to support our substantial 
aviation reform.
    We also urge action on making needed reforms to the Nation's 
Intercity Passenger Rail system. The President's fiscal year 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 towards 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.
    Last week, the Department announced a new national strategy that 
will bring new focus, including resources and new technology, to 
reducing deaths on the Nation's rural roads. The Department's Rural 
Safety Initiative will help States and communities develop ways to 
eliminate the risks drivers face on America's rural roads and highlight 
available solutions and resources. The new endeavor addresses five key 
goals: safer drivers, better roads, smarter roads, better-trained 
emergency responders, and improved outreach and partnerships.
    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 sea lift 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 fiscal year 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 the Congress and the transportation community 
to ensure that America continues to have the best transportation system 
in the world.

                 FUNDING FOR INFRASTRUCTURE INVESTMENTS

    Senator Murray. Thank you very much, Secretary Peters. As I 
mentioned in my opening statement, few areas of our economy 
have deteriorated as badly as employment in the construction 
sector. By far and away, the two biggest cuts in the 
transportation budget are your proposals to slash highway 
funding by almost $2 billion and airport funding by more than 
$750 million.
    Together, those cuts represent a potential loss of about a 
120,000 well-paying jobs.
    Given the state of the economy, why does the President 
right now feel that it's the right time to cut back on 
infrastructure investments and really worsen the job losses in 
our construction sector?
    Secretary Peters. Madam Chairman, we understand that 
there's some disagreement with this body in terms of what the 
President has proposed in those areas.
    As I have mentioned, the President asked us to use great 
care in spending our taxpayers' dollars and to tighten our 
budget wherever we could.
    In terms of highway, highway safety, and public 
transportation programs, we are meeting the commitment of the 
Safe, Accountable, Flexible, Efficient Transportation Equity 
Act: A Legacy for Users (SAFETEA-LU) legislation in terms of 
the full $286.4 billion authorized. We are reducing the request 
for the Federal Highway Administration based on the $1 billion 
of Revenue Aligned Budget Authority (RABA) that would take 
place this year, $800 million in highways, and $200 million in 
transit for a total of $2 billion.
    Madam Chairman, we understand that these reductions are 
going to cause some concern with State leaders, but we believe 
that we can help them bring new resources to bear that will 
help them meet their needs, and as you mentioned, create the 
jobs that are associated with them.
    In terms of the Airport Improvement Program, our proposal 
funds all important safety projects. We also included in the 
administration's FAA reauthorization proposal other new 
mechanisms that would allow airports to bring more money to 
bear to meet infrastructure at our airports.
    I think Senator Bond made a very good point. The challenge 
that we have in aviation is not just in the sky, but it's also 
on the ground. Improving the efficiency of the capacity that we 
have today, and expanding that capacity in the future, is going 
to be crucial if we're able to meet the growing demand for 
aviation.

                   AIRPORT INFRASTRUCTURE INVESTMENT

    Senator Murray. Well, I've heard you justify highway cuts 
in the past by talking about the precarious situation of the 
Highway Trust Fund, but in terms of the huge cuts to the 
Airport Program, there is still a lot of money in the Aviation 
Trust Fund to maintain the current level of spending.
    Your proposed cut in airport investment might cause the 
loss of more than 30,000 construction jobs.
    Can you tell this committee why you're proposing to cut 
airport infrastructure when we know that airport congestion is 
worsening and there are adequate funds in the Trust Fund today 
to cover that?
    Secretary Peters. Certainly, Madam Chairman. The balance, 
as you indicated, in the Aviation account is about $1.5 
billion. Unfortunately, it's only approximately 2 months worth 
of operations, down substantially from what it has been in the 
past.
    But back to your question about why we are not proposing 
more for the Airport Improvement Program. Madam Chairman, we 
included $2.75 billion, which would cover all essential safety 
projects and those projects that are on deck and ready to go 
right now.
    Last year when we sent the administration's aviation 
reauthorization proposal to Congress, we proposed new 
mechanisms that would allow airports to use new ways to bring 
money to bear for these important capital improvement projects.
    Senator Murray. And you're waiting for Congress on that?
    Secretary Peters. We have been, Madam Chairman. We 
understand that there may be some difficulty in reaching that 
goal.

                            HIGHWAY TOLLING

    Senator Murray. Well, let me go back to the highways. You 
know the condition of the Highway Trust Fund and the Revenue 
Study Commission that you chaired issued a report and put a lot 
of options on the table as far as fuel taxes, user fees, 
public-private partnerships, freight fees, streamlined funding 
categories, a number of things.
    You dissented from that report and instead you are here in 
front of this committee today advocating a $1.8 billion funding 
cut which is by using a raid on the Mass Transit Trust Fund of 
expanded tolling.
    Can you talk to us about how you see tolling to be a near-
term solution to the crisis that we're facing?
    Secretary Peters. Madam Chairman, I would be pleased to do 
that. I think the goal that we together have is to move the 
solutions to transportation challenges that our Nation faces 
into 21st century solutions.
    We, as a Nation, have depended on fossil-based fuel taxes 
for most of our surface transportation funding on a Federal 
level since the mid-1950s when the interstate highway system 
was first authorized. That mechanism served us well to deal 
with the challenges that we had at the time in terms of 
connecting major cities in the United States. But because it 
bears no direct relationship to the use of the system, and 
because those revenues, as you said, are dropping off 
substantially at this point in time, it no longer is adequate, 
responsive, or sustainable. In fact, it's not a popular taxing 
mechanism with the public as well.
    The Energy Independence and Security Act, and other 
important reforms that this Congress passed and the President 
signed, will move us into more fuel efficient vehicles, which 
is very good and very important. It will help our environment. 
We'll also move away from burning fossil-based fuels and use 
more alternative and renewable fuels.
    All of those things point to the way that we need to do 
something different in the future, Madam Chairman, and that is 
why I dissented from the committee majority recommendation to 
increase by some 40 cents a gallon fuel taxes----
    Senator Murray. In favor of tolls, but tell us how, if you 
think the cities and States are ready to collect an additional 
$1.8 billion by this coming October to fill the hole in this.
    Secretary Peters. Madam Chairman, I will do that. There is 
conservatively right now about $400 billion available in 
private sector investment funds that could be brought to bear 
not only to meet that $1.8 billion, but to meet substantially 
more than that if we create the proper environment. Many States 
have done so already, where these funds can be used.
    In fact, Madam Chairman, I think you mentioned earlier a 
new SR520 bridge in your home State.
    Senator Murray. For a new bridge?
    Secretary Peters. For a new bridge. Yes, ma'am. A new 
bridge for SR520 has enjoyed popular support in Seattle and in 
Washington State, and I think Governor Gregoire has properly 
targeted use of private sector funds for an important and, you 
said, new project like that.
    Senator Murray. But your proposal is on existing highways. 
You're asking taxpayers to pay tolling on roads that are 
already paid for, and I know in your testimony, you talked 
about New York and London as innovative approaches to financing 
our highway system.
    Most of America doesn't look like London or New York and I 
know this committee has become well aware of public concern 
about tolling. Last year, the Texas delegation on a broad 
bipartisan basis insisted on a provision in our bill to 
prohibit Governor Perry from implementing a toll plan.
    So, based on that Texas experience, do you really think 
America is ready for widespread tolling?
    Secretary Peters. Madam Chairman, if I may correct, I am 
not advocating tolling on existing highways. Some of the local 
and State governments did for five urban partnership proposals, 
but it is not something that we're driving.
    I wouldn't necessarily take it off the table, but I would 
say it has to be up to State and local elected officials to 
make a decision about where and how they would provide tolling 
and bring these new revenue sources to bear.
    Again, I believe, Madam Chairman, that we have an 
opportunity to bring substantial new revenues into the system. 
That is my goal. My goal is to make more money available to us 
on a Federal level, and on a State and local level without 
imposing new taxes on our citizens, which several of you have 
mentioned with the high fuel prices today places a very great 
burden on those of limited income.
    Senator Murray. Well, tolling is a burden on those with 
limited income, too, and you mentioned King County in my State. 
I just want you to know that a survey was conducted by the 
Washington State DOT and it found that 57 percent of those in 
King County oppose tolls on our major freeways. So that's not 
an easy route to this decision either.
    Senator Bond?

                         SAFETEA-LU RESCISSIONS

    Senator Bond. Thank you very much, Madam Chair, and let me 
go back to the questions on rescissions, if you don't mind, 
Secretary.
    SAFETEA-LU requires an $8.5 billion rescission. How much 
contract authority would be available for future rescissions if 
we were to include the $3.89 billion that is in your budget, 
along with the $8.5 billion rescission for SAFETEA-LU? I've 
heard it's only about $4.5 billion, is that correct?
    Secretary Peters. Senator Bond, I'm going to refer to our 
Assistant Secretary for Budget and Programs, so I hopefully can 
give you the correct and right answer on that.
    Ms. Scheinberg. Senator, I don't have the exact number that 
would be left, but as you know, SAFETEA-LU itself authorized 
the rescission of the $8.5 billion.
    Senator Bond. I know.
    Ms. Scheinberg. So that was----
    Senator Bond. How much is left if you take another $3.89 
billion out?
    Ms. Scheinberg. I don't have that number.
    Senator Bond. I'm going to guess its $4.5 billion. So, let 
me know if I'm wrong.
    Ms. Scheinberg. Okay.
    [The information follows:]

    The Federal-aid highway program currently has $16.8 billion in 
excess contract authority. Under the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), 
$8.6 billion in contract authority will be rescinded in fiscal year 
2009. If Congress were to also enact the $3.2 billion in rescissions 
proposed in the fiscal year 2009 President's budget request, 
approximately $5 billion in excess contract authority would remain at 
the end of the current authorization.

                      AVAILABLE CONTRACT AUTHORITY

    Senator Bond. But in any event, the point is we're scraping 
the bottom of the barrel.
    And my second question, Madam Secretary, would be what 
would be the practical effect on State DOTs of having to 
utilize their annual Federal highway funds without excess 
contract authority?
    Secretary Peters. Senator Bond, the effect would be that 
they would not be able to let certain contracts if they hit up 
against the limit of their contract authority. It's a little 
like requiring a minimum balance be kept in an account. Even 
though funds are there, they would not be able to spend it 
absent sufficient contract authority.
    Senator Bond. So, this would be another major roadblock, to 
mix a metaphor, in construction, is that correct?
    Secretary Peters. Senator, it certainly could be limiting 
and I think it's indicative of what we're facing right now. The 
system has supported our surface transportation needs for over 
50 years, but will not be able to do so in the future.

                           URBAN PARTNERSHIPS

    Senator Bond. Well, that's my major worry. Madam Secretary, 
you come from State government. I was in State government. One 
of the things that I really didn't appreciate in State 
government, when the Federal Government told us that we could 
get some money or they'd take some money away, when we made 
decisions that normally are appropriate for the people in the 
State through their elected officials to make in the State 
government.
    Now it looks to me that this urban partners effort which 
gobbled up $844 million in 2007 is designed to provide, pick 
one of them, you can call it an incentive or you can call it a 
bribe to State legislatures to pass bills authorizing tolling 
and it may or may not work, but now you come back and you 
proposed 75 percent of the funds for discretionary programs be 
made available for critical congestion relief projects.
    Well, just as you did today, I suffer from congestion 
problems as well, but when you look across the country, we kill 
people in areas outside of--when traffic is going very slowly, 
you don't kill so many people.
    Now I'm one who got hit by a car in the congestion, so I 
know that's bad, but I survived it, but in many of our States, 
the real need is to keep people safe on the highways and I 
really question the judgments going into this urban partnership 
and, No. 2, I'd like to know if the States involved, King 
County, Washington, New York, California, Minnesota, don't go 
along with the incentive or bribe, what's going to happen to 
all that money?
    Why is it necessary to have $175 million more for 
congestion pricing when there's still potentially huge 2007 
dollars that have not been awarded and we are facing drastic 
shortfalls elsewhere?
    Secretary Peters. Senator Bond, I'm to start with my 
apologies for being a little bit late this morning. I would 
have happily paid a toll to get on an express lane and be here 
on time this morning, but I didn't have that option.
    That said,----
    Senator Bond. Maybe when enough people see congestion, they 
can make up their own minds in their areas whether they want to 
use tolls while we use some of the other money, some of the 
money to keep people off of crowded highways and rural efforts.
    Anyhow, excuse me. Pardon the interruption.

                         RURAL AREA ROAD SAFETY

    Secretary Peters. Senator, let me first speak to the rural 
areas. You are correct. We're very concerned about rural area 
road safety. That is precisely why we designed a program to 
bring resources available from all across the Department to 
complement and supplement those revenues already available in 
safety programs.
    It is a huge concern of mine and one that I've been 
devoting personal resources to and have asked, in fact, our 
Deputy Secretary to stay on top of as well.
    Let me go back to the cities that you asked about, the 
urban partner cities.
    Senator Bond. Thank you.

                           URBAN PARTNERSHIPS

    Secretary Peters. As you mentioned, several of them have to 
get enabling legislation in order to go forward and spend the 
money that we allocated from the 2007 budget for them. They 
have until March 31, 2008 to do that, the one exception being 
Seattle which has until September 2009.
    If they fail and are not able to get the legislation they 
need to move forward with those projects, then we will take 
back the funds and redistribute them to other cities.
    Why other cities, sir? We received 26 applications from 
cities who had put together very comprehensive plans to reduce 
congestion in their cities. If we are not able to go forward 
with New York or San Francisco or some of the other cities, 
then we will move to other cities who have good plans.
    Cities like Los Angeles who wish they had been in the 
opportunity the first time, cities like Houston, St. Louis, 
Atlanta, Denver, and many other cities at the ready to give us 
a very strong proposal to spend this money in their areas. That 
is why we have requested an additional allocation of money in 
the President's 2009 budget because there is a tremendous pent-
up demand in our urban areas.
    Senator Bond, if we were able to fix some of these problems 
in urban areas, then we would improve air quality 
substantially, as well as congestion. We're going to use 
technology and learn tools that will help us to reduce 
congestion in other areas.
    Where we are able to bring private sector revenues to bear, 
as would be the case in supplementing what we have allocated to 
these cities in many areas, then that frees up money that we 
can spend on other important priorities, like our rural roads.

                   STATUS OF THE DULLES RAIL PROJECT

    Senator Bond. Jumping over to mass transit, what's the 
status of the Dulles project? I understand you're reviewing it. 
When's there a final determination? If the money doesn't go 
forward, I understand there will be considerable funds lapsing. 
How would you handle them should that project not go forward?
    Secretary Peters. Senator Bond, we're in continuous 
discussions with the project sponsors about the Dulles Rail 
Project. It's been emphasized to me by many people how 
important that project is to this region.
    Our responsibility, of course, based on statutes that 
govern the program, is to ensure that we are allocating the 
money in a manner that gives the public, whose money it is, the 
best opportunity for investment. So, we're working very hard 
with the project sponsors to try to work out details on that 
project.
    Senator Bond. I understand from the head of that division 
that there are significant problems with that in your initial 
analysis.
    Secretary Peters. Senator Bond, that is correct. In January 
we put in writing for the project sponsors some of our 
significant concerns about the project. They have been back in 
touch with us and we are working to obtain additional 
information from them, but we have not yet reached a final 
decision.
    Senator Bond. Thank you very much, Madam Secretary. Senator 
Lautenberg?

                                 AMTRAK

    Senator Lautenberg. Thank you. Madam Secretary, you were 
careful to suggest that the President wants us to be 
responsible to the taxpayer dollars and as a consequence guards 
them very carefully.
    But is that without concern for the convenience of our--the 
reliability, the innovations that we desperately need on our 
transportation systems?
    I don't understand why, for instance, that when we look at 
Amtrak, Amtrak said it needs more than twice the $800 million 
that President Bush asked for in order to operate safely and 
reliably next year, and when I look at the President's budget 
requests over the years, there's no contact with reality.
    In 2002, the President requested $521 million. The 
appropriation came out to $826 million. The scene was repeated 
the next year, $520 million from the Bush office and the Amtrak 
request was $1.2 billion. It wound up over a billion. There's 
this constant reduction in offers to help Amtrak get to where 
it has to be to accommodate the rush and the interest for 
passenger loads.
    So, by law, you're granted a seat on the Amtrak Board along 
with six more of the President's appointees. Does the President 
know what the railroad's actual funding needs are when he makes 
these; you'll forgive me, ridiculous requests?
    Secretary Peters. Senator Lautenberg, as you mentioned, I 
have a seat on the Amtrak Board and I am represented on a 
regular basis by Administrator Boardman, the head of our 
Federal Railroad Administration (FRA). He works with the Board 
in terms of establishing their budget.
    We believe that Amtrak can operate more efficiently. You 
mentioned earlier the significant increase in ridership that 
Amtrak is experiencing. In fact, they generate about $2 billion 
in revenue annually. I have to say it is confusing to me how 
ridership can go up substantially but requests for subsidies 
also go up substantially. It would seem that there ought to be 
some economies with substantially increased ridership, that 
Amtrak would be able to operate more efficiently.
    That said, the President's budget proposes $900 million in 
funding, including $100 million that could be State matching 
grants. The reason for that, Senator, is that we see 
substantially increased ridership and efficiency in 
circumstances where States support routes. In fact, ridership 
was up 88 percent in those circumstances as opposed to 17 
percent overall.
    And finally, we believe that Amtrak management must 
continue the reforms and make strong business decisions----
    Senator Lautenberg. That recommendation is so hollow; 
you'll forgive me, Madam Secretary. You say that because the 
ridership has gone up on this antiquated system, it can't stand 
it. There are constant calls for better maintenance. There are 
constant calls for better trackage. There are constant calls 
for better equipment.
    So, why the needs are less is for me unfathomable. The fact 
of the matter is that the system is overworked just like our 
highways are overworked and our skyways are overworked. There's 
too much demand, and you cannot take profits out of these 
things and expect it to be realistic.
    It surprises me that the logic that you produced suggests 
that you're doing less and expecting more from the railroad. 
The railroad has never been funded properly, never, and as a 
consequence, they're ricketing along with equipment that long 
since should be off the tracks. I use Amtrak a lot and I see 
it. You can't ride on the best line that Amtrak has, the Acela 
line, and you can't write with a steady hand there because the 
ride is so bumpy and the thrusts right and left are so sharp. I 
saw one of the cabin attendants fall down the other day and 
that's the way the system is.
    Do you think it ought to be better than it is? Are you 
satisfied with what we've got out there?
    Secretary Peters. Senator, we think it would be better for 
the Government to invest in capital for Amtrak, and to reduce 
substantially over time the operating subsidies being paid to 
the railroad.
    Senator Lautenberg. Do you know of any system, any 
commuting system where they're able to cover their costs from 
ticket revenues?
    Secretary Peters. Senator, as you know, most do not. 
However, most----
    Senator Lautenberg. Most don't. I can't think of any that 
do.
    Secretary Peters. But most do not substantially continue to 
increase subsidies over time.

                        AIRLINE CONSUMER RIGHTS

    Senator Lautenberg. If they don't increase the subsidies, 
then the quality of the operation deteriorates rapidly.
    Last year I worked with leaders on this subcommittee to 
include a $2.5 million program for enforcement of airline 
consumer rights. Why did the President cut this funding level 
by $1.4 million in the 2009 budget? Shouldn't we be increasing 
funding during a time of more frequent delays and a rising 
number of consumer complaints, and don't you look at the--the 
Department look at what the prospects are that by 2014, delays 
are going to be 60 percent higher than they are now?
    Where do we deal with the customer complaints, learn from 
them and make the appropriate adjustments?
    Secretary Peters. Senator, you're right. Consumer 
complaints are a problem and we need to do something to fix the 
root cause so that people don't have unhappy experiences.
    That said, the 2008 appropriation includes $2.5 million for 
the Office of the General Counsel's Aviation Consumer 
Protection Enforcement Program. We are spending the money that 
was provided by Congress in December when the Consolidation 
Appropriations Act passed.
    We're increasing staffing levels so that we can pursue 
investigations and enforcement actions. We are also using the 
funding to enhance the Aviation Enforcement and Consumer 
Protection Program, including updating the Consumer Complaint 
Application System, and updating the Aviation Consumer 
Protection Web site so that flyers have access to information.
    Senator Lautenberg. But it all boils down to one thing. I 
don't mean to be rude. That is, we're not able to maintain the 
kind of service reliability that we need, and I point out here 
to you that since fiscal year 2004 till fiscal year 2007, that 
the subsidy per passenger mile on Amtrak has gone down over 20 
percent.
    So, it doesn't wash and we can go ahead with this 
unspecified response to these things by talking about what we 
ought to be doing and how we ought to make this adjustment and 
it doesn't wash.
    Madam Secretary, what we're doing today is not only a 
serious impairment to our functioning as a society but what 
it's doing is setting a trap for much worse things in the 
future and it's too bad.
    Thank you very much.

                            AVIATION DELAYS

    Senator Bond. Thank you very much, Senator Lautenberg. 
Madam Secretary, as those of us who try to fly know, delays in 
our aviation system were some of the worst on record last year 
with flights arriving on time only 73 percent of the time.
    Aside from the caps on operations for the New York-New 
Jersey area, what else is your Department doing to ensure what 
some of the folks who fly the airplanes see as being not just a 
repeat of last year but even a bigger problem?
    Secretary Peters. Well, Senator, we're working very hard to 
hopefully not let that happen. First of all, the caps that have 
been imposed already at JFK International Airport will be very 
quickly announced for Newark. LaGuardia, of course, is already 
operating under some limitations and we're looking at what we 
may need to do to refine that.
    Also, as Senator Specter indicated, Philadelphia is in the 
airspace. We want to make sure that we don't push in one place 
and have that pop out and overburden another airport.
    That said, a substantial redesign of the airspace in the 
New York region will give us operating efficiencies. We also 
put forth a change in what we call the airport rates and 
charges policy to allow airports more flexibility by varying 
charges by time of day. This hopefully, would help spread out 
the peak demand for those flights. As was just mentioned with 
Senator Lautenberg, substantially beefing up the Consumer 
Complaint Office would enable us to know what those complaints 
are and to respond to them.
    In fact just last week I met with a task force that deals 
with tarmac delays so that we can work with the airlines and 
the airports to find better ways not to have planes sitting out 
on the tarmac for lengthy periods of time in the event of 
weather system delays.
    We're working with the Department of Defense to establish 
``holiday express'' lanes. These are flight lines that the 
military normally uses along the Atlantic seaboard, but would 
be made available to commercial flights on a more frequent 
basis should the weather systems require that.
    We believe that if we can relieve congestion in the New 
York City region, where about 40 percent of the delays 
nationally emanate, then we can make a big difference. But I 
promise you, Senator, that the airlines, the airports, our air 
traffic controllers, and I, all of us are doing everything we 
can not to have a repeat of the Summer of 2007.

             AIRLINE SERVICE TO SMALL AND RURAL COMMUNITIES

    Senator Bond. As I believe I mentioned to you last year, I 
was one who experienced one of those tarmac delays. Not only 
was the 2\1/2\ hours I sat on Reagan runway unproductive, we 
landed from St. Louis and the airline said that the FAA won't 
let us move, the FAA said it's the airline's problem. So, I sat 
there for 2\1/2\ hours as the NFC playoff game was finished on 
television and that was brought back to mind as I was watching 
some recent football playoff games and I do hope that there are 
some common sense solutions. I would be happy to share ideas 
but something has to go be done.
    Now you mention pushing in one place and causing a problem 
in another place. I know that there's aviation congestion 
initiatives to charge higher rates during peak hours has some 
appeal, but let me ask you about how this could impact service 
to small and rural communities.
    Some of the carriers are telling us that feeder flights--if 
they're moved to off-peak hours--will not be profitable for a 
lot of carriers and small communities can lose service. You've 
got a one hand and the other hand. How are you going to balance 
that?
    Secretary Peters. Senator, that is an excellent question. 
We negotiated with the airlines when putting the caps in place. 
We did not want to cut out feeder flights that feed into other 
line-haul flights, and in the case of a number of airlines, 
international flights, which provide greater profitability than 
many domestic flights. That is why we negotiated with 
individual airlines in setting caps and in monitoring the 
situation so that we don't disadvantage certain areas from 
having flights meet at the feeder airport, if you will, at the 
right time.
    Senator Bond. Well, as one who sometimes uses those feeder 
flights, if you're maybe going a half hour earlier, if that 
would allow you to get the small planes in so you can meet with 
the larger plane and delaying the outbound feeder flight from 
the incoming plane, but that's going to require a lot of 
negotiations and I'll look forward to seeing that.
    Secretary Peters. And Senator, let me apologize to you and 
to all other passengers who had such miserable experiences. My 
youngest daughter spent the better part of a day in one of 
those delays with a then 8-month-old baby. So, it is 
unacceptable and I do----
    Senator Bond. I think that 8-month-old baby may have been 
on the plane on which I was delayed.
    Secretary Peters. Was she beautiful and quiet?
    Senator Bond. You talk about instant consumer feedback, 
that young passenger expressed him or herself very, very 
vocally and very firmly.
    Secretary Peters. You would have recognized her, sir. She 
is the most beautiful grandchild in the world with the 
exception of yours.

                 FEDERAL ROLE IN TRANSPORTATION FUNDING

    Senator Bond. Fortunately or unfortunately, I don't have 
one yet.
    Madam Chair, for the record, I think I better go vote, but 
I would ask the Secretary as chair of the National Commission 
Report to describe either in your testimony here or for the 
record what you believe the Federal role in transportation 
funding should be, and I thank you very much for your service 
and for your kind work in attempting to answer very difficult 
questions, and I wish you well and I'm happy to return it to 
the chair.
    [The information follows:]

    Our country is at a transportation policy crossroads. For the first 
time since the creation of the Interstate Highway System, we have an 
amazing opportunity to come together and completely re-assess our 
approach to financing and managing surface transportation systems. For 
too long, we have tolerated exploding highway congestion, unsustainable 
revenue mechanisms and spending decisions based on political influence 
as opposed to merit.
    Now, thanks to technological breakthroughs, changing public opinion 
and highly successful real-world demonstrations around the world, it is 
clear that a new path is imminently achievable if we have the political 
will to forge it. That path must start with an honest assessment of how 
we pay for transportation, not simply how much (our current focus). In 
fact, our continued transportation financing challenges are in many 
ways a symptom of these underlying policy failures, not the cause.
    Until we decide what our national transportation priorities are, 
and what roles are appropriate for Federal, State and local government 
as well as the private sector, we will be unable to adequately address 
our Nation's infrastructure needs. Trying to be all things to all 
people has proven to be an unsuccessful strategy.
    The Department believes that the Federal role in transportation 
should be completely re-focused on truly national imperatives. In our 
view those include:
  --Improving and maintaining the condition and performance of the 
        Interstate Highway System. Roughly one quarter of all highway 
        miles traveled in the United States takes place on the 
        Interstate System;
  --Reducing congestion in major metropolitan areas and increasing 
        incentive funds to State and local officials that pursue more 
        effective congestion relief strategies. A more effective 
        integration of public transportation and highway investment 
        strategies is central to this challenge;
  --Investing in and fostering a data-driven approach to reducing 
        highway fatalities;
  --Using Federal dollars to leverage non-Federal resources;
  --Focusing on cutting edge, breakthrough research areas like 
        technologies to improve vehicle-to-infrastructure 
        communications; and
  --Establishing quality and performance standards.
    To better prioritize funding, earmarks should be eliminated. In a 
September 2007 report by the DOT Inspector General, a review was done 
of 8,056 earmarked projects within the Department's programs that 
received more than $8.54 billion for fiscal year 2006. Ninety-nine 
percent of the earmarks studied ``either were not subject to the 
agencies' review and selection process or bypassed the States' normal 
planning and programming processes.''
    Beyond earmark proliferation, there are a wide array of special 
interest programs that have been created to provide funding for 
projects that may or may not be a State and local priority. While it is 
true that not all earmarks or special interest investments are 
wasteful, it is also true that virtually no comparative economic 
analysis is conducted to support these spending decisions. No business 
could survive for any meaningful period of time using a similar 
investment strategy. Recent studies have shown that the economic return 
on highway capital investments has declined into the low single digits.
    Virtually every economist who has studied transportation says that 
direct pricing of road use, similar to how people pay for other 
utilities, holds far more promise in addressing congestion and 
generating sustainable revenues for re-investment than do traditional 
gas taxes. And thanks to new technologies that have eliminated the need 
for toll booths, the concept of road pricing is spreading rapidly 
around the world. The brilliance of road pricing is that it achieves 
three major policy objectives simultaneously.
    First, it will immediately reduce congestion and deliver 
substantial economic benefits. Drivers have proven in a growing array 
of road pricing examples in the United States and around the world that 
prices can work to significantly increase highway speed and 
reliability, encourage efficient spreading of traffic across all 
periods of the day, encourage shifts to public transportation, and 
encourage the combining of trips. In fact, the National Household 
Travel Survey shows on an average workday, 56 percent of trips during 
the morning peak travel period and 69 percent of trips during the 
evening peak travel period are non-work related, and 23 percent of peak 
travelers are retired.
    Second, it will generate revenues for re-investment precisely in 
the locations that need investment the most. Recent estimates in a 
forthcoming paper, ``Toward a Comprehensive Assessment of Road Pricing 
Accounting for Land Use'' by economists Clifford Winston and Ashley 
Langer at the Brookings Institution conclude that utilizing congestion 
pricing in ONLY the largest 98 metropolitan areas would generate 
approximately $120 billion a year in revenues while simultaneously 
solving the recurring congestion problem in those areas. Implementation 
of a broader road pricing strategy tied to wear and tear and 
reconstruction costs would obviously produce even higher revenue. In 
2006, as a Nation, we spent approximately $150 billion on all of our 
highways. State and local officials would even gain additional 
flexibility to reduce the wide array of taxes currently going into 
transportation that have nothing to do with use of the system.
    Third, direct pricing will reduce carbon emissions and the 
emissions of traditional pollutants. According to Environmental 
Defense, a nonprofit environmental organization, congestion pricing in 
the city of London reduced emissions of particulate matter and nitrogen 
oxides by 12 percent and fossil fuel consumption and carbon dioxide 
(CO2) emissions by 20 percent; a comprehensive electronic 
road pricing system in Singapore has prevented the emission of an 
estimated 175,000 pounds of CO2; and Stockholm's congestion 
pricing system has led to a 10-14 percent drop in CO2 
emissions.

                      AIRLINE CONSUMER COMPLAINTS

    Senator Murray. All right. Thank you very much, Senator 
Bond. Madam Secretary, it seems that every couple years or so 
when passenger conditions get really bad, the airlines provide 
improvements for awhile and then things get worse again and the 
DOT Inspector General has said that your Department should take 
a more active role in overseeing some of the customer service 
and he made several recommendations, some of which date back to 
2001, asking that your Department conduct incident 
investigations of long onboard delays, oversee the airlines 
policies for dealing with these onboard delays and improving 
the airlines performance reporting.
    Can you tell us what progress you have made on any of those 
recommendations?
    Secretary Peters. Senator, I would be happy to. I want to 
go back to what you said about this being a recurring theme. In 
the summer of 2001, there were some pretty miserable 
circumstances. Tragically when 9/11 happened, that wasn't the 
case again.
    It is my goal and the goal of the Department not to have 
recurring delays. The Inspector General's report has been very 
important to us and we are following each recommendation very 
carefully. For example, I just mentioned the Tarmac Delay Task 
Force that we convened last week. It includes representatives 
of the airlines, airports, and passenger groups. Kate Hanna, 
for example, who by virtue of having had a miserable 
experience, started a passenger group to look at aviation 
delays.
    As I mentioned earlier, we are beefing up the Airline 
Enforcement Office to make sure that we are more responsive to 
consumers when they have complaints. We are categorizing delays 
and in the case of chronically delayed flights, we're going 
back to the airlines and putting them on notice that they will 
face substantial penalties if they continue to misrepresent to 
the public that a plane will take off at a certain time when in 
fact more than 70 percent of the time it does not take off on 
time.
    Each of the recommendations that the Inspector General made 
are very important to me. We're following up on those and I am 
taking this very seriously.
    Senator Murray. Okay. Well, one of the things the IG 
complained about was that your office was issuing enforcement 
orders to airlines and then just letting the airlines certify 
in writing that they'd complied, no onsite follow-up occurred.
    Do you really trust the airlines to police themselves when 
complying with your enforcement orders?
    Secretary Peters. Senator Murray, we're going to be able to 
do random checks to ensure that they have complied.
    Senator Murray. Are you doing random checks now?
    Secretary Peters. I don't--Madam Chairman, I will get back 
to you if they've started yet. I believe they have, but let me 
confirm that for you.
    Senator Murray. Okay. I'd appreciate an answer back on 
that.
    [The information follows:]

    The adoption of or compliance with voluntary airline customer 
service commitments is not required by statute or Department of 
Transportation regulation. Neither are carriers required to track their 
compliance with their commitments. In fact, only a limited number of 
air carriers have adopted such commitments and the commitments that 
have been adopted are couched in terms that would, in general, make 
them unenforceable. The Department is currently conducting a rulemaking 
to enhance airline passenger protections, 72 Federal Register 65233 
(November 20, 2007), which, in part, proposes to require carriers to 
conduct self audits of compliance with their customer service 
commitments.

           PRIVATIZATION OF PUBLIC TRANSPORTATION FACILITIES

    Senator Murray. Let me change the topic a little bit. 
You've been an advocate for the privatization of public 
transportation facilities and in my opening remarks, I talked 
about an increasing number of mayors and governors who've 
enjoyed huge cash windfalls by privatizing transportation 
projects, Indiana Toll Road, Chicago Skyway.
    However, in many cases, these cash windfalls have not been 
used to pay for transportation improvements. Now the city of 
Chicago wants to privatize Midway Airport which is one of the 
30 busiest airports in the country, over 300,000 flights a 
year.
    Do you believe that a mayor or a Governor that privatizes a 
transportation facility, be it an airport, a highway, should 
use their cash windfalls strictly for transportation?
    Secretary Peters. Senator Murray, ideally I think it should 
be spent on transportation. I will caveat whether or not I 
should substitute my judgment for that of Mayor Daley or 
someone else, if they believe that a higher public good can be 
served by spending the money elsewhere. I believe that it would 
break trust with people if that money were spent elsewhere, 
absent a thorough and open dialogue with the public and with 
elected officials before decisions are made.
    Senator Murray. Well, in terms of that, Midway Airport has 
received $370 million in direct airport grants from the FAA for 
infrastructure improvements and several million dollars more in 
direct investments to modernize its navigation air traffic 
control systems.
    Right now, there are a variety of financial institutions 
that are preparing bids to pay the city of Chicago a huge cash 
windfall in exchange for the right to lease that airport for a 
period as long as 99 years.
    Given that the Nation's airline passengers have provided 
hundreds of millions of dollars in grants to that airport, do 
you think the city should be required to spend their cash 
windfalls specifically on transportation needs?
    Secretary Peters. Senator, we're looking at that as the 
process moves forward on Midway Airport and on privatization. I 
hear what you're saying and will take another look at the 
decisions that we may be making in that light.
    Senator Murray. Well, since that city is moving to 
privatize the Midway Airport, the law does require the airport 
to pay back a portion of Federal grants that they've received 
over the years. However, we know that you as Secretary do have 
the authority to waive that requirement if the city requests 
it.
    Do you expect to grant Chicago an exemption from repaying 
its Federal grants?
    Secretary Peters. Senator, it would be premature for me to 
respond right now, absent knowing more about it, but I will 
look at the arrangements and the negotiations that are ongoing 
and get back to you specifically with an answer on that point.
    Senator Murray. Have you talked about that situation at 
all?
    Secretary Peters. We've talked about it, Madam Chairman. We 
have talked about it, but I don't--not to the level of detail 
that I would be comfortable giving you a definitive response to 
that question today.
    Senator Murray. Okay. Well, I would like to hear back from 
you on that question.
    [The information follows:]

    Under title 49 United States Code section 47134, ``Pilot program on 
private ownership of airports,'' a public-use airport that has received 
Federal assistance may apply to the Secretary of Transportation, and 
through delegation the FAA Administrator, for certain exemptions to 
allow for the sale or lease of an airport. In the case of Midway, for 
example, the city of Chicago may only apply for exemptions to lease the 
airport because the statute only permits the sale of general aviation 
airports. The FAA's decision to grant exemptions is permissive under 49 
U.S.C. 47134(b). The statute provides that the Secretary ``may'' grant 
an exemption. An exemption is neither automatic nor required by the 
statute.
    Two exemptions may be granted under the statute to a sponsor of a 
public-use airport. First, the statute permits the FAA to exempt a 
sponsor from the requirement to use proceeds from the sale or lease of 
the airport for airport purposes only. However, FAA may grant this 
exemption only if the amount is approved by at least 65 percent of the 
air carriers serving the airport, and by the air carriers that account 
for at least 65 percent of the total landed weight of all aircraft 
landing at the airport in the preceding year. Second, the FAA is 
permitted to exempt the sponsor of a public use airport from any 
obligation to repay to the Federal Government any grants, or to return 
to the Federal Government any property.
    The FAA accepted Midway's preliminary application to the FAA for 
participation in the Airport Privatization Pilot Program, established 
pursuant to 49 U.S.C. 47134. The city of Chicago states, on page 18 of 
its preliminary application for privatization of Midway, ``As part of 
its application to the FAA for approval of the proposed transaction the 
city will request that the FAA grant exemptions from otherwise 
applicable regulatory requirements, including the prohibition on use of 
airport revenues for non-airport purposes by the city and the private 
operator; and the requirement to repay Federal grant funds.'' However, 
this is only a preliminary application. If the city of Chicago applies 
for these exemptions in its final application, the FAA will apply, at a 
minimum, the statutory and policy requirements necessary for the FAA to 
evaluate an application, including any exemptions requested by the 
sponsor. The FAA may consider an application for an exemption only if 
the FAA finds the sale or lease agreement includes provisions to ensure 
the following:
  --The airport will continue to be available for public use on 
        reasonable terms and conditions without unjust discrimination;
  --The operation of the airport will not be interrupted in the event 
        lessee becomes insolvent or files bankruptcy;
  --The lessee will maintain, improve, and modernize the facilities of 
        the airport through capital investments;
  --Every fee of the airport imposed on an air carrier the day before 
        the date of the lease of the airport will not increase faster 
        than the rate of inflation unless a higher amount is approved 
        by at least 65 percent of the air carriers serving the airport, 
        and by air carriers who had a total landed weight during the 
        preceding year of at least 65 percent of the total landed 
        weight at the airport;
  --The percentage increase in fees imposed on general aviation 
        aircraft at the airport will not exceed the percentage increase 
        in fees imposed on air carriers at the airport;
  --Safety and security at the airport will be maintained at the 
        highest possible levels;
  --The adverse effects of noise from operations at the airport will be 
        mitigated to the same extent as at a public airport;
  --Any adverse effects on the environment from airport operations will 
        be mitigated to the same extent as at a public airport;
  --Any collective bargaining agreement that covers employees of the 
        airport and is in effect on the date of the sale or lease of 
        the airport will not be abrogated by the sale of the lease; and
  --he approval will not result in unfair and deceptive practices or 
        unfair methods of competition.
    The FAA will need a final application from the city of Chicago 
before FAA can apply these provisions.

                        AIR TRAFFIC CONTROLLERS

    At the end of 2004, the Department of Transportation 
published its first Workforce Plan for Air Traffic Controllers. 
That plan showed that the number of air traffic controllers the 
Department expected to lose and how many it planned to hire 
over the following 10 years. That plan has now, I believe, been 
updated twice and the record shows the FAA has gotten it wrong 
each and every year. They have consistently underestimated the 
number of controllers who leave the Department every year, and 
I continue to hear reports that the air traffic control 
facilities are understaffed, new air traffic controllers are 
not adequately trained, experienced air traffic controllers are 
too busy doing their own job to train new hires and experienced 
controllers will retire before your Department will be able to 
bring on fully trained replacements.
    Can you tell this committee if you are confident that the 
FAA management really has a handle on how to manage this 
workforce?
    Secretary Peters. Madam Chairman, we may have 
underestimated in some cases, but the differences are not as 
large as I think some folks have been led to believe. I'll give 
you the specific numbers.
    But before I do that, let me say how important the air 
traffic controllers are to the fact that we are enjoying the 
safest period ever in aviation safety. I think a great deal of 
the credit goes to air traffic controllers who do a magnificent 
job managing the planes with an antiquated system.
    We're facing a substantial increase in the number of 
retirements because, after the Professional Air Traffic 
Controllers Organization strike back in the 1980s, significant 
numbers of new air traffic controllers were hired to replace 
the controllers who were fired. Many of the new controllers who 
were hired back then are reaching retirement age. So, we're 
going to have a need for new controllers.
    Last year we planned to hire 1,386 controllers. We actually 
hired 1,815. We planned for 700 controllers to retire. The 
actual number of retirements was 828. There is other 
``leakage'' of air traffic controllers, such as resignations, 
removals and, tragically, deaths. We had assumed 243. There 
were actually 264.
    Transfers and promotions, this is an area where a number of 
the air traffic controllers are promoted into management. We 
had estimated 185 and the actual number that moved up was 407. 
There are also academy failures; we had estimated 69, and the 
actual number was 60.
    Based on the first quarter of this year, Madam Chairman, we 
are within the range of accuracy for the number of retirements 
we had forecast. We continue to monitor and modify the 
Workforce Planning document so that it can be as accurate as 
possible.
    I can tell you that we are meeting the controller hiring 
goals. We are also meeting the goals of getting those 
controllers through their training. The simulators that we have 
allow us to get the training done a little quicker without 
taking an experienced controller off terminal----
    Senator Murray. Yes.
    Secretary Peters [continuing]. And to assist them.
    Senator Murray. I'm well aware of that earmark that 
provided those simulators and I have heard you in the past say 
we don't--we shouldn't be doing earmarks and I just have to 
comment as you say that, that is one of those earmarks that's 
making a huge difference out there.
    Secretary Peters. Yes. The simulators are doing a great 
job.
    Madam Chairman, we never put an air traffic controller that 
isn't fully certified for a task on terminal to do that task. 
As air traffic controllers complete their training program, and 
prior to full certification on the tasks that they're certified 
to handle, we are mindful of not taking our more experienced 
controllers off terminal to assist others.
    Senator Murray. Well, I guess the larger question is do you 
feel confident that the FAA is managing its workforce well? I 
know now that bonuses are being paid to retain experienced 
controllers, there was no request for or money budgeted or 
planned for those bonuses. You're just paying them to keep 
experience levels there.
    So, I'm just asking you a confidence question. Do you think 
the FAA is managing its workforce? Are you confident in that?
    Secretary Peters. Madam Chairman, I am more confident today 
than I was 15 months ago. I have worked with Acting 
Administrator Sturgell very carefully on this issue.
    As you know, our Inspector General and others in the 
Department of Transportation, including our Assistant Secretary 
for Budget and Programs, have looked at the management of the 
FAA workforce. I am more comfortable today than I was when I 
first came to this position that we are managing the workforce 
correctly, but it is something we're going to have to stay on 
top of because, as I said, we're hitting a big retirement wave.
    Senator Murray. Well, you should know that we are very 
concerned. We're hearing a lot across the country, as I told 
you, about understaffing and not adequately trained and 
experienced air traffic controllers who are having a very hard 
time trying to train because of inadequate staffing. So, I 
would hope that you'd stay on it and get back to this committee 
throughout the next several months as we follow this.
    Secretary Peters. Madam Chairman, I will do that.

                         MOTORCYCLE FATALITIES

    Senator Murray. Okay. Let me turn to a topic that I know is 
near and dear to your heart and that is an issue about 
motorcycles.
    At last year's hearing, I complained about the fact that 
your agency was delaying by 3 years your very own deadline for 
reaching your highway safety goal of one fatality per 100 
million vehicle miles traveled.
    Now when you dig into the data as to why you are not 
reaching that goal, you discover that there's a big problem in 
the rising number of motorcycle fatalities. They have increased 
every year now for 9 years in a row and I know you're a 
motorcyclist yourself. You know the issue.
    Your own Department maintains that helmets are estimated to 
be 37 percent effective in preventing fatal injuries to 
motorists. However, over the last 5 years, helmet use has 
actually declined by 20 percent and now today there only 20 
States, the District of Columbia, and Puerto Rico, that 
actually require helmet use by all motorcycle operators.
    Do you support the mandatory enactment of motorcycle helmet 
laws?
    Secretary Peters. Madam Chairman, I support giving the 
information to States so that they can act on helmet laws. I 
have also made myself available to a number of States and, in 
fact, have called governors when I see substantial increases in 
the number of motorcycle deaths in a State, especially a State 
that has repealed its helmet law.
    I think it's very important. We could have saved easily 700 
lives last year if all motorcyclists wore helmets. So, I am 
very interested in pursuing this. In fact, we have recently 
sent out a letter asking that we have the ability to use some 
of our safety money for education on the importance of helmet 
use. We got some pushback, frankly, on that, but we think it's 
that important that we've stepped out to do that.
    Also, following our discussion last year, I filmed a public 
service announcement on motorcycle safety, including a hard 
push on helmet use, and reiterated the fact that had I not had 
a helmet on when I had a crash, I think that I would be a brain 
injury patient today.
    Senator Murray. I was aware of that.
    Secretary Peters. I keep that helmet in my office to remind 
me of how important that is.
    Senator Murray. Well, I understand that there are 
restrictions on DOT's lobbying efforts on behalf of specific 
laws, such as motorcycle helmet laws. However, as part of the 
last reauthorization law, DOT was given an exception that 
allows you to lobby on behalf of the enactment of primary 
seatbelt laws.
    Would you support a similar exception that would allow DOT 
to lobby on behalf of motorcycle helmet laws?
    Secretary Peters. Madam Chairman, yes, I would.
    Senator Murray. Very good.
    Secretary Peters. Maybe I should be careful with the use of 
the word ``lobby.'' There's been some concern about that term, 
but yes, I would support our ability to----
    Senator Murray. An exemption similar to the seatbelt law. 
Would you use that authority, if you had it, to go out and talk 
to States?
    Secretary Peters. Madam Chairman, yes, I would.

                       ALCOHOL-RELATED FATALITIES

    Senator Murray. Okay. Great. Let me ask you about another 
safety issue. Your staff has explained that another factor in 
missing your highway fatality reduction goal has been your 
failure to make progress in reducing the number of fatalities 
resulting from drunk driving.
    In 2006, the most recent year for which we have data, there 
are over 17,500 alcohol-related fatalities and 50 percent of 
those had a blood alcohol level that was at least twice the 
legal limit. I think we've got to start taking bolder steps to 
prevent drunk drivers from getting behind the wheel and this 
summer, the NHTSA Administrator urged increased use of ignition 
interlocks for our repeat drunk driving offenders.
    Given that we have not made any measurable progress in 
reducing the alcohol-related fatalities, haven't we moved past 
the point of merely urging, just asking for these ignition 
interlocks? Shouldn't we be looking at some requirements?
    Secretary Peters. Madam Chairman, as I mentioned earlier, 
generally speaking, we would prefer to use education and let 
State officials make these decisions.
    Governor Richardson in New Mexico, for example, was one of 
the first States to help pass a law for mandatory ignition 
interlocking devices for those convicted of drunk driving. The 
requirement has been very effective in that State and has since 
been replicated in a number of other States.
    So if one State shares with another what's been effective, 
then we believe that more States will adopt laws like this. 
Arizona, my home State, recently adopted very strict penalties 
for repeat offenders, especially for repeat DUI offenders.
    We're also aiming more of the money that you have made 
available to us for what we call ``high visibility 
enforcement'' DUI checkpoints, especially around holidays. 
Every holiday, I go out and meet with officers who are doing 
these kinds of checkpoints to reassure them that they're doing 
the right thing.
    Another problem we're having, Madam Chairman, is substance 
abuse. We haven't always provided the tools that law 
enforcement officials could use to distinguish someone who 
doesn't register a blood alcohol level in excess of the legal 
limit, but is obviously impaired. So, we're supporting law 
enforcement in terms of more tools to identify impaired 
drivers, and that's been very successful. More often, that 
requires a blood test instead of a breathalyzer test. But 
again, we are working with States to educate and make resources 
available to them to use to detect impaired drivers.
    Continued advertising campaigns such as, ``You Drink and 
Drive, You Lose'' help to push more information out there. 
Governor Napolitano in Arizona has been very effective in 
saying that if you drink and you drive, then you will go to 
jail. Make no mistake about it. They have worked with the 
judicial branch on adjudication. Too often, someone who is 
caught driving drunk pays a lawyer, gets a plea bargain, and 
the offense never appears on their driving record. Governor 
Napolitano has done a very good job of working with the 
judicial community to make sure that when drivers are caught 
drunk, then they're not allowed to plea bargain.
    Senator Murray. Okay. All right, well, thank you. I 
appreciate your aggressive efforts on that.
    Secretary Peters. Thank you.

                  CROSS-BORDER TRUCKING PILOT PROGRAM

    Senator Murray. Let me turn to one of your favorite topics. 
There has been a lot of discussion over the Department's 
interpretation of the language that was included last year in 
the Consolidated Appropriations Act on the Cross-Border 
Trucking Pilot Program.
    I understand the Commerce Committee is going to have a 
special hearing on the question and it may be that the courts 
will have to make the final decision, but I want to focus on a 
different question about this demonstration program. It's a 
question that I first asked you when you appeared before this 
subcommittee last March and I didn't get a very clear answer.
    And I wanted to know if your Cross-Border Program continues 
precisely what happens at the end of the 1-year pilot period in 
September?
    Secretary Peters. Chairman Murray, we will evaluate the 
pilot at the end of the year, and report back to you on the 
results. It would not be my intent to continue the program past 
that time, absent learning something different. We would 
certainly come back and talk with you about that.
    Senator Murray. So, we will expect that program to cease in 
September?
    Secretary Peters. Madam Chairman, that is my understanding 
because there is a prohibition in the 2008 appropriation 
against establishing a program. Our interpretation, as you're 
aware, is different than others. We are continuing to implement 
a program that has already been established.
    If we were to move forward at the end of our pilot program, 
I believe we would be in violation of the 2008 appropriation.
    Senator Murray. So, will the Cross-Border Trucking stop 
then in September?
    Secretary Peters. Madam Chairman, that would be my intent, 
absent something changing in the law prior to that time.
    Senator Murray. Okay, all right. Well, I will then assume 
you will come back to us with your exact intent at that time 
and if you want to continue any Cross-Border Trucking after 
that point, you will have to get our authority to do so?
    Secretary Peters. Madam Chairman, that is my understanding, 
based on the language in the 2008 appropriation. I will ask our 
Counsel's Office to follow up with you and be more precise. I 
am not an attorney, but that is my understanding, yes.
    [The information follows:]

    In clarification, as announced in February 2007, the Cross Border 
Demonstration Project was intended to last a period of 12 months. 
However, section 6901 of the U.S. Troop Readiness, Veterans' Care, 
Katrina Recovery, and Iraq Accountability Appropriations Act of 2007 ( 
the Supplemental Appropriations Act) required the Department to 
undertake the Demonstration Project in accordance with the pilot 
program statute found at 49 U.S.C.  31315(c). The latter provision 
authorizes the Department to extend the Project to a maximum period of 
3 years. As the Department noted in its brief in the 9th Circuit case 
challenging the Project, the Department has the discretion to extend 
the project up to 3 years pursuant to that provision.
    Section 135 of the Consolidated Appropriations Act, 2008, division 
K, provides that ``[f]unds appropriated or limited'' in that act for 
transportation into the United States by Mexico-domiciled motor 
carriers would be subject to the terms and conditions of section 6901 
of the 2007 Supplemental Appropriations Act. The 2008 Appropriations 
Act also prohibited the expenditure of funds ``to establish'' a cross 
border motor carrier demonstration program. The Department read that 
language as prohibiting the funding of any new programs, but not as 
prohibiting the funding of the ongoing Project, which was established 
in September 2007. The continued implementation or extension of an 
existing program, by definition, does not constitute the establishment 
of a new program and, therefore, would not be barred by the 2008 
Appropriations Act. At this time, although this extension authority is 
available, the Department has made no decision whether to extend the 
time frame for the Demonstration Project.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Murray. Okay. Well, I will submit some other 
questions on that and we will look forward to what your 
response is at that time.
    I do have some other committee members and myself included 
that do have some questions that will be submitted for the 
record and your prompt reply would be very much appreciated.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted by Senator Patty Murray
 
                       AIRLINE CUSTOMER SERVICE

    Question. Domestic airline delays last year were the second-worst 
ever recorded. In fiscal year 2008, this committee provided an 
additional $2.5 million for your General Counsel's office to increase 
its enforcement activities and better protect airline consumers.
    What specific activities are you funding with these additional 
funds?
    Answer. Our Aviation Enforcement Office is increasing its staffing 
levels in fiscal year 2008 to pursue investigations and enforcement 
action with respect to many areas of public concern, such as 
unrealistic scheduling, failing to provide timely refunds, and failing 
to provide flight delay information. A portion of the requested funds 
has been and will be used to pay the salaries and expenses of the new 
hires.
    The office is also using the additional funding for start-up costs 
to enhance the aviation enforcement and consumer protection program, 
including: (1) upgrading the consumer complaint application system and 
computerized tracking and monitoring system; (2) upgrading the DOT 
aviation consumer protection Web site to make it more consumer friendly 
and useful; (3) contractor support for drafting a regulatory evaluation 
to accompany a consumer protection rulemaking and a task force on 
tarmac delays; and (4) hosting ``listening'' forums to hear the 
problems that air travelers are encountering, and a disability forum 
concerning a new disability regulation. We have also put aside travel 
funds for on-site investigations and compliance reviews and trips 
related to carrier compliance education and consumer information and 
assistance. Further, the additional funds will be used by the Aviation 
Enforcement Office to print consumer brochures (e.g., Fly Rights) and 
widely distribute them to help consumers understand their rights and 
responsibilities as an air traveler. It would also enable the office to 
translate into Spanish new consumer protection-related materials 
developed by the office.
    Question. Do you believe your agency's enforcement actions have any 
meaningful impact on the airlines' behavior when it comes to customer 
service?
    Answer. Enforcement is one of the best ways to effect change. For 
example, the U.S. Department of Transportation's Aviation Enforcement 
Office has had significant success in reducing the number of 
chronically delayed flights as a result of its on-going investigations 
of chronically delayed flights operated by the airlines that are 
required to report on-time performance data to the Department. The 
office considers any flight that is late by 15 minutes or more at least 
70 percent of the time it operates during a calendar quarter to be 
chronically late. There were 183 chronically delayed flights in the 
first quarter of 2007. This was reduced to 79 chronically delayed 
flights in the first quarter of 2008. Moreover, during the first two 
consecutive quarters we reviewed (the first and second quarters of 
calendar year 2007), there were 27 chronically delayed flights in both 
quarters. This was reduced to 3 chronically delayed flights in both the 
fourth quarter of calendar year 2007 and the first quarter of calendar 
year 2008. No flights remained chronically delayed during three 
consecutive quarters.
    The Aviation Enforcement Office has been encouraged by the results 
of its investigation. In addition, based on carrier correspondence and 
meetings with the majority of the reporting carriers, the Aviation 
Enforcement Office has observed that carriers are now monitoring 
chronically delayed flights more closely. Moreover, the office is aware 
that the carriers are now taking concrete steps to correct chronically 
delayed flights, such as adding more flight time, moving departure 
times, changing aircraft routings, and providing spare aircraft and 
crews.

                          NEW STARTS PIPELINE

    Question. Madam Secretary, your budget proposal would fund the 
Federal Transit Administration at a level that is $200 million less 
than what is authorized by SAFETEA-LU. Your budget would fully fund the 
Small Starts program, but it would take the full $200 million cut out 
of the New Starts program. According to your staff, this is because a 
larger pipeline of projects is developing for the Small Starts program, 
while there is less demand for the New Starts program.
    From where I sit, there seems to be a great demand for the New 
Starts program. I hear all the time from metropolitan areas trying to 
compete for a New Starts full funding grant agreement, or ``FFGA.''
    Please tell me why the pipeline of projects competing for a New 
Starts FFGA is shrinking at the same time that there seems to be a 
great demand for Small Starts funding?
    Answer. Several factors likely contribute to the smaller New Starts 
pipeline, which the Federal Transit Administration (FTA) defines as the 
list of projects in the preliminary engineering and final design phases 
of project development.
    First, the reduction of the number of projects in the pipeline 
reflects FTA's improved management of the New Starts program. FTA is 
more actively managing the New Starts pipeline, approving into 
preliminary engineering only projects that FTA believes have a very 
strong likelihood of receiving a Full Funding Grant Agreement (FFGA). 
Many projects do not meet the criteria, so they never make it into the 
pipeline or drop out along the way.
    Second, project development delays sometimes reduce the New Starts 
pipeline. Such delays can be attributed to the lack of local funding 
commitments, unforeseen environmental impacts and concerns, and local 
decisions to make significant changes in the scope of the project under 
development to meet revised priorities, goals, and objectives. When 
these situations occur, project sponsors withdraw from the pipeline 
until such time as they can resolve local issues.
    Last, the simplified and streamlined Small Starts process created 
by the Safe, Accountable, Flexible, Efficient Transportation Equity 
Act: A Legacy for Users (SAFETEA-LU) is causing metropolitan areas to 
reconsider major capital investments in favor of less costly, smaller 
scaled projects.
    In summary, local decisionmakers determine whether they want to 
pursue funding under the rigorous New Starts program. The need for 
considerable technical resources and strong political and financial 
support can affect those decisions.

                  PROMOTION OF THE NEW STARTS PROGRAM

    Question. At a time when oil prices reach over $100 per barrel, and 
the President is learning that prices at the gas tank may pass $4 per 
gallon this spring, I do not believe that this administration is doing 
enough to invest in transit alternatives. Americans need another option 
than sitting in traffic congestion and burning gasoline.
    Madam Secretary, what are you doing to promote the New Starts 
program and ensure that metropolitan areas are able to compete for 
these valuable grants?
    Answer. During the past year, FTA has offered numerous training 
courses, attended conferences, and issued guidance pertaining to the 
New Starts program. The following table lists training courses 
sponsored by FTA and conferences at which FTA made presentations on the 
New Starts program.

               RECENTLY SPONSORED FTA NEW STARTS TRAINING
------------------------------------------------------------------------
   Training or Conference           Location           Month and Year
------------------------------------------------------------------------
Alternatives Analysis.......  Washington, DC......  April 2007.
APTA Bus and Paratransit      Nashville...........  May 2008.
 Conference.
Association of Public         Toronto, Canada.....  June 2007.
 Transportation Association
 (APTA) Legislative
 Conference.
Transportation Research       Denver..............  August 2007.
 Board: Transportation and
 Land Use.
Travel Forecasting..........  St. Louis...........  September 2007.
Alternatives Analysis.......  San Francisco.......  November 2007.
Alternatives Analysis.......  San Diego...........  February 2008.
APTA Legislative Conference.  Washington, DC......  March 2008.
Small Starts Workshop.......  Pittsburgh..........  April 2008.
New Starts Roundtable.......  Pittsburgh..........  April 2008.
Alternatives Analysis.......  New York............  April-May 2008.
Small Starts Workshop.......  Phoenix.............  May 2008.
New Starts Roundtable.......  Phoenix.............  May 2008.
World Bank..................  Washington, DC......  June 2008.
TRB-Innovations in Travel     Portland, OR........  June 2008.
 Forecasting.
------------------------------------------------------------------------

    FTA plans to sponsor an alternatives analysis course in Seattle in 
July 2008, and an alternatives analysis course in Washington, DC during 
the fall.
    FTA has also issued several guidance documents, which can be found 
on FTA's public Web site at http://www.fta.dot.gov, including: (1) New 
Starts, Small Starts, and Very Small Starts Fact Sheets--Spring 2007; 
(2) Reporting Instructions and Templates--May 2007; (3) Guidance on New 
Starts Policies and Procedures--June 2007; (4) Preliminary Engineering 
Checklist--August 2007; and (5) Proposed Guidance on New Starts 
Policies and Procedures--April 2008.
    In addition to promoting New Starts, FTA has been actively involved 
with the following other programs: (1) Public Transportation 
Participation Pilot Program; (2) Transit-Oriented Development & Joint 
Development; (3) Transportation Planning Capacity Building Program; (4) 
Public-Private Partnership Pilot Program (also known as Penta-P); and 
(5) Urban Partnership Agreement Program.

                   OVERSIGHT OF THE NATION'S BRIDGES

    Question. Recent news reports have highlighted some problems with 
your Department's National Bridge Inventory. While these stories may 
not have told the whole story, it seems that the best case scenario is 
that this database needs to be greatly improved in order to be a useful 
tool for overseeing bridge conditions. The worst case scenario is that 
States are neglecting to inspect thousands of bridges within a 2-year 
time frame as required by Federal regulations.
    Madam Secretary, other than collecting data from each State, please 
describe to me exactly what your Department does to ensure the safety 
of the Nation's bridges.
    Answer. The National Bridge Inventory (NBI) database contains more 
than 90 individual data items on nearly 600,000 highway bridges. 
Information in the NBI is used for apportioning Highway Bridge Program 
funds to the States, preparing the biennial Conditions and Performance 
Report to Congress and the annual report on bridge materials required 
under SAFETEA-LU, monitoring bridge conditions and compliance with the 
National Bridge Inspection Standards (NBIS), research, and other 
reporting.
    The collection and maintenance of bridge inspection data by the 
Federal Highway Administration (FHWA) does not, by itself, ensure 
bridge safety. However, this information is of critical importance to 
States, localities, and Federal bridge owners as they carry out their 
inspection responsibilities under the NBIS. Based on these inspections, 
safety is enhanced through timely maintenance, repair, and 
rehabilitation conducted as a result of these inspections, along with 
proper load posting and enforcement of load restrictions.
    FHWA monitors compliance with the NBIS regulation through various 
oversight activities. FHWA Division Offices oversee each State's bridge 
inspection program. The primary means of monitoring the State program 
is through a comprehensive annual review. The review includes assessing 
overall compliance with the NBIS as well as the quality of bridge 
inspection.
    A typical review involves a field check of a sampling of bridges to 
compare inspection reports for quality and accuracy; interviews with 
bridge inspection staff to review procedures; and a review of various 
inventory data reports to assess compliance with such things as 
frequencies, load posting, and data accuracy. Annual reviews are 
supplemented with periodic in-depth reviews of specific program areas 
such as bridge load capacity rating and posting practices.
    The FHWA Resource Center assists in oversight by providing expert 
technical assistance to Division Offices and partners; assisting in 
development and deployment of policies, advanced technologies, and 
techniques; and deploying market-ready technologies. Also, the FHWA 
Resource Center assists in coordinating and conducting bridge 
inspection reviews and program exchanges, as well as delivering and 
updating training.
    FHWA Headquarters' oversight responsibilities include issuing 
bridge inspection policies and guidance; maintaining the NBI; 
monitoring and updating an array of bridge inspection training courses; 
collecting, reviewing, and summarizing the Division Office annual 
program review reports; and monitoring overall NBIS compliance.
    FHWA also works with the States at Technical Committee Meetings of 
the American Association of State Highway and Transportation Officials 
Highway Subcommittee on Bridges and Structures to assure that the 
States and local agencies apply the state-of-the-knowledge in bridge 
design, construction, maintenance, and inspection practices to assure 
bridge safety and durability.
    Question. Are there additional tools that you need to be more 
effective in overseeing bridge safety?
    Answer. Bridge safety is ensured by the States, localities, and 
Federal bridge owners as they carry out their responsibilities under 
the NBIS. Various tools are used during bridge inspections as 
appropriate based on the type of inspection being performed. These 
tools include basic items such as hammers, binoculars, tape measures, 
and laptop computers, as well as more sophisticated non-destructive 
evaluation tools such as ultrasonic testing, eddy current, and infrared 
thermography equipment.
    With respect to FHWA oversight of the national bridge inspection 
program, the need for the types of tools described above is limited as 
FHWA does not conduct the physical inspections. FHWA relies on 
computers to assist in analyzing, summarizing, and maintaining data as 
part of its compliance monitoring activities. There have been advances 
in computing and software technology that have the potential to improve 
the effectiveness of FHWA oversight as well as general program 
administration, and those advances are currently being explored.
    Question. According to the news reports and staff at your 
Department, field offices of the Federal Highway Administration are not 
required to make a thorough review a State's bridge database to ensure 
that its inspections are up-to-date. I am disconcerted to hear that 
your staff may be doing ``spot checks'' of this important data.
    Madam Secretary, are ``spot-checks'' an adequate method for 
overseeing a State's bridge inventory?
    Answer. The NBI contains more than 90 individual items of data for 
nearly 600,000 highway bridges. More than half of the bridges are owned 
by localities. With such a large and complex database, spot checks and 
sampling of data are considered effective means of strategically 
utilizing limited resources to monitor a very large program; however, 
they do not guarantee 100 percent compliance with NBIS regulation 
provisions nor complete data accuracy.
    It is important that the NBI data be accurate and up-to-date. There 
are provisions in the NBIS regulation to ensure that States and Federal 
bridge owning agencies are keeping their data up-to-date (refer to 23 
CFR 650.315). There are also provisions within the regulation 
pertaining to the need for quality control and quality assurance 
procedures, in part, to maintain a high degree of accuracy and 
consistency in bridge inspection data (refer to 23 CFR 650.313(g)).
    The ``spot checks'' of data do not represent the entirety of FHWA's 
oversight. FHWA oversight of the National Bridge Inspection Program 
includes the following major components:
  --An annual review of each State's bridge inspection program with a 
        sampling of bridge site visits;
  --Resolution of any issues resulting from the annual reviews;
  --Preparation of an annual NBIS summary report for submittal to 
        Headquarters; and
  --Ensuring that the State submits their annual NBI data to 
        Headquarters.
    Procedures and guidelines for conducting the annual reviews are 
documented in the FHWA Bridge Program Manual. The reviews typically 
involve interviews with inspection personnel, bridge site visits, and 
data review and analysis using standardized and ad-hoc reports from the 
NBI along with data from specific inspection records. As an additional 
check on quality, individual NBI data submittals from the States and 
Federal agencies are checked for errors and inconsistencies prior to 
loading into the NBI.
    Inspection frequency is one of the NBIS provisions that are 
evaluated during each annual review, per FHWA policy. This evaluation 
most often requires the analysis of data; however, it may involve only 
a sample population of an individual State's total bridge stock. Since 
the NBI contains a snapshot of data at a given point in time, an 
analysis of inspection frequency often requires use of more up-to-date 
data from the individual State's inventory.
    Question. States can negotiate with your Department on a set of 
criteria for putting some bridges on a 4-year schedule for inspection, 
instead of the usual 2-year schedule required by highway regulations. 
The criteria for putting bridges on a slower schedule vary from one 
State to another, and your Department has set no overall standard for 
setting these schedules. Yet, on its own Web site, the Federal Highway 
Administration promises ``to work with our partners to ensure quality 
and uniformity in signs, signals, and design standards on the Nation's 
major highways.''
    Madam Secretary, can you explain to me why the Highway 
Administration should not also promote uniformity in bridge 
inspections?
    Answer. FHWA promotes uniformity in the national bridge inspection 
program. By definition, the National Bridge Inspection Standards 
developed by the FHWA establish national uniformity in inspection 
procedures, inspector qualifications, inspection frequency, inventory 
data, and organizational responsibilities.
    With respect to extended inspection intervals, the National Bridge 
Inspection Program statute, 23 U.S.C. 151, requires the establishment 
of minimum standards, including the maximum time period between 
inspections.
    Effective October 12, 1993, FHWA adopted as final the interim final 
rule that introduced a provision for adjusting the frequency of routine 
inspection for certain types or groups of bridges to better conform 
with their inspection needs. The provision allowed States to develop an 
alternative inspection program which specifies bridges that may be 
inspected at intervals longer than 2 years, not to exceed 4 years; 
however, FHWA approval was required to go beyond the normal 2-year 
interval. This provision was retained in the 2005 NBIS regulation 
update, but the intervals were revised to be stated in terms of months 
instead of years.
    The baseline requirements for FHWA approval of a 48-month 
inspection frequency policy are described in the Technical Advisory T 
5140.21, dated September 16, 1988. The Technical Advisory defines 
uniform basic criteria for identifying classes of bridges that, in 
general, would not be considered for routine inspection at intervals 
longer than 24 months. The basic criteria that apply to all State 
requests include:
  --Bridges with any condition rating of five or less.
  --Bridges that have inventory ratings less than the State's legal 
        load.
  --Structures with spans greater than 100 feet in length.
  --Structures without load path redundancy.
  --Structures that are very susceptible to vehicular damage, e.g., 
        structures with vertical over- or under-clearances less than 14 
        feet, narrow thru or pony trusses.
  --Uncommon or unusual designs or designs where there is little 
        performance history, such as segmental, cable stayed, etc.
    The Technical Advisory further states that the criteria developed 
for establishing the interval between inspections, if greater than 24 
months, shall include the following:
  --Structure type and description.
  --Structure age.
  --Structure load rating.
  --Structure condition and appraisal ratings.
  --Volume of traffic carried.
  --Average daily truck traffic.
  --Major maintenance or structural repairs performed within the last 2 
        years.
  --An assessment of the frequency and degree of overload that is 
        anticipated on the structure.
    The basic criteria are not negotiable; however, individual States 
may add to this list or establish more stringent criteria.
    Once the criteria for extended intervals have been approved by the 
FHWA, monitoring is required to ensure continued compliance with the 
criteria. FHWA has recognized the need to improve monitoring in this 
area and will focus on reviewing this during future annual compliance 
reviews.

                   ADA COMPLIANCE OF COMMERCIAL BUSES

    Question. Madam Secretary, access to transportation is critical to 
ensuring our Nation's disabled citizens can lead full and independent 
lives. Since the passage of the Americans with Disabilities Act (ADA), 
great strides have been made in making transportation more accessible 
to the disabled, yet work remains. As you know, DOT has its own ADA 
regulations, yet one agency--the Federal Motor Carrier Safety 
Administration (FMCSA)--contends that it lacks the authority to enforce 
the Department's own ADA regulations.
    This issue has already been litigated in court and the D.C. Circuit 
Court disagreed with FMCSA's claim that it lacked the authority to deny 
or revoke operating authority to commercial buses that are unwilling or 
unable to comply with DOT's own ADA regulations and remanded the case 
back to FMCSA. Yet, notwithstanding these reports of disabled travelers 
being denied access to transportation and the court's ruling, FMCSA's 
position has not changed. In response to the court, the agency 
reasserted its position that it lacks the authority to enforce 
compliance with DOT's ADA regulations.
    Can you explain to me why FMCSA--the sole Federal agency 
responsible for granting or denying operating authority to commercial 
buses--does not have the authority to enforce the Department's own ADA 
regulations?
    Answer. The U.S. Department of Transportation (DOT) is mindful of 
its responsibilities for ensuring access to transportation services for 
all travelers, including those with disabilities, and its multi-year 
Strategic Plan emphasizes the importance of enhanced access to 
transportation services by travelers with disabilities. The Federal 
Motor Carrier Safety Administration (FMCSA) also works to ensure access 
to transportation services by individuals with disabilities within the 
limits of its legal authority.
    In the D.C. Circuit decision that addressed FMCSA's authority to 
consider alleged violations of the Americans with Disabilities Act of 
1990 (ADA) in determining whether a passenger carrier is fit to receive 
operating authority, Peter Pan Bus Lines, Inc. and Bonanza Acquisition, 
LLC v. Federal Motor Carrier Safety Administration, 471 F.3d 1350 
(2006), it was the position of FMCSA that it did not have such 
authority. The court remanded the case to the agency because it 
disagreed with the FMCSA's determination that the relevant statutory 
language clearly did not permit the agency to deny operating authority 
for a carrier's failure to comply with ADA requirements. The court did 
not support FMCSA's interpretation that the statutory language was 
clear and unambiguous. It determined that the text of the statute was 
ambiguous, instructed FMCSA to re-examine the statute, and emphasized 
that remanding the case to the agency did not mean that FMCSA's 
interpretation of the statutory language was necessarily incorrect. The 
court further stated that after the agency revisits the issue, its 
decision will be entitled to deference by the court, as long as the 
agency's reading of the statute is reasonable.
    In a decision issued October 26, 2007, after thoroughly re-
examining the governing statute, FMCSA reaffirmed its earlier finding 
that it lacks statutory authority to enforce the ADA through the 
agency's licensing procedures. Peter Pan Bus Lines, Inc. and Bonanza 
Acquisition, LLC have sought review of this decision in the D.C. 
Circuit Court of Appeals and the parties will be filing their 
respective briefs with the court later this year.
    Question. While I disagree with your assessment that FMCSA lacks 
the authority to enforce the Department's own regulations, have you 
requested the specific authority that you think you need to begin 
enforcing these regulations?
    Answer. While this case is under consideration by the D.C. Circuit 
Court of Appeals, FMCSA has not sought specific authority to enforce 
ADA requirements when reviewing passenger carriers' requests for 
operating authority. However, FMCSA is closely monitoring the status of 
the pending legislation entitled the ``Over-the-Road Bus Transportation 
Accessibility Act of 2007,'' H.R. 3985. H.R. 3985 was passed by the 
U.S. House of Representatives on December 12, 2007, and was reported by 
the Committee on Commerce, Science, and Transportation, U.S. Senate, on 
April 24, 2008.

                   FUNDING FOR PIPELINE SAFETY OFFICE

    Question. I want to take a moment to discuss your budget request 
for the Office of Pipeline Safety. This office is seeing an increase of 
nearly $14 million, or 17 percent. I want to applaud you for 
recognizing the needs in that area. Just this past year alone, we saw 
pipeline-related fatalities in Mississippi, Louisiana and Minnesota.
    Last year, the Congress added 15 new inspection positions and your 
budget request for 2009 proposes to add 8 additional positions.
    Given the importance that we both see in this area, can we expect 
to see these positions filled promptly?
    Answer. The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) has launched an aggressive recruitment strategy to promptly 
fill vacant inspection and enforcement positions. PHMSA's strategy is a 
three pronged approach: (1) entry level--outreach to colleges and 
universities training future inspectors; (2) mid-level--offer current 
industry inspectors recruitment bonuses; and, (3) senior level--recruit 
retiring senior inspectors that are industry experts.
    PHMSA offers a variety of Federal incentives such as remote 
deployment from home and recruitment incentives. Recent legislative 
proposals with regard to pay setting in Alaska (as well as other non-
foreign areas) will, if passed, also assist in the longer term 
attractiveness of employment in that location and should aid in 
recruitment in that State. Since the Consolidated Appropriations Act of 
2008 was enacted, PHMSA has recruited 13 inspection and enforcement 
personnel.
    Question. Do you expect to have problems recruiting the right 
candidates for these positions? We would like to ask you to keep us 
regularly updated as to the progress you are making at bringing these 
people on board.
    Answer. The expertise required to maintain and expand any safety 
program is specialized, constituting inherent challenges to recruiting 
the ``right'' candidates. However, PHMSA's recruitment strategy is 
predicated on those challenges and the agency expects to address and 
overcome them. For example, qualified candidates are interviewed by an 
expert panel. In an effort to ensure that PHMSA is meeting its 
recruitment goals, the agency is monitoring the process and will 
provide the committee with monthly updates; the most recent is provided 
below.

         PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION

               PIPELINE SAFETY--FISCAL YEAR 2008 INSPECTION/ENFORCEMENT POSITIONS AS OF 5/31/2008
----------------------------------------------------------------------------------------------------------------
                                     Number of
                                    Inspection/     Actual On-       Accepted                       Percent of
            Location                Enforcement        Board          Offers         Vacancies       Positions
                                     Positions                                                        Filled
----------------------------------------------------------------------------------------------------------------
Headquarters....................              12               9  ..............               3              75
Eastern Region..................              13              11  ..............               2              85
Southern Region.................              14              11               1               2              79
Central Region..................              20              16               1               3              80
Southwest Region................              25              22               1               2              88
Western Region..................              25              22               1               2              88
                                 -------------------------------------------------------------------------------
      TOTAL.....................             109              91               4              14              82
----------------------------------------------------------------------------------------------------------------

                  FEDERAL INVESTMENT IN TRANSPORTATION

    Question. Secretary Peters, you have argued that tolling and 
privatization can translate into a greatly reduced role for the Federal 
Government in financing transportation infrastructure. In fact, the 
President's out-year projections for the Department of Transportation 
call for a major reduction in the Federal investment transportation.
    How would tolling and the private sector support a national 
transportation system that includes building infrastructure in 
disadvantaged areas? For example, would the private sector and tolling 
have built the Appalachian Development Highway System?
    Answer. Public private partnerships are a valuable supplement to, 
not a replacement for, the national highway system and networks of 
local streets and roads. In some parts of the country tolling could 
certainly be considered one of the options by States that can not 
afford desired improvements with the existing mix of Federal and State 
highway taxes to replace bridges or expand capacity of existing 
highways running through disadvantaged areas.
    Question. If certain States choose to toll, does that mean that the 
Federal Government should be spending less in those areas? Or put 
another way, will the citizens in those States be financing their own 
transportation while other places receive a greater share of Federal 
resources?
    Answer. Under current law, the amount of Federal funding that is 
distributed to States is not affected by whether or not a State has 
toll roads.
    Question. The details of your proposal are not part of your budget 
request; when will we see the specifics? Are you working on a 
legislative proposal?
    Answer. The authorization for current Federal surface 
transportation programs does not expire until the end of fiscal year 
2009. Reauthorization will be a major factor in the fiscal year 2010 
budget deliberations.
    Question. Most Federal oversight over the highway system consists 
of requiring State and local governments to meet Federal standards 
before receiving their highway grants.
    How would your Department continue to oversee the safety and 
performance of the transportation system when it no longer plays as 
critical a role in highway financing?
    Answer. Even if support from the private sector significantly 
enhances our transportation capacity, the Federal Government will 
continue to play a critical role in both highway financing and safety. 
The U.S. Department of Transportation has a proven ability to oversee 
the safety and performance of both transportation systems that it helps 
finance, such as highways and transit, as well as those that are 
predominantly controlled by the private sector, such as trucks, 
pipelines and railroads.

         NATIONWIDE DIFFERENTIAL GLOBAL POSITION SYSTEM (NDGPS)

    Question. The fiscal year 2009 budget requests funding at $4.6 
million for the NDGPS, which is consistent with the requests in prior 
years. However, the cost of this program is likely to increase in 
fiscal year 2009 by as much as $800,000.
    Is the budget request sufficient funding to maintain all current 
services and keep NDGPS equipment in good repair?
    Answer. The U.S. Department of Transportation (DOT) is committed to 
maintaining current inland (terrestrial) NDGPS services to the many and 
varied users of these services, as identified by the Research and 
Innovative Technology Administration (RITA) in its recently completed 
NDGPS Assessment. President Bush's fiscal year 2009 budget includes 
$4.6 million to continue inland NDGPS operations.
    In March 2008 DOT approved, and the interagency National Space-
Based Positioning, Navigation and Timing (PNT) Executive Committee 
(EXCOM) endorsed, a decision to continue inland NDGPS services as a 
national utility in support of America's surface transportation, 
precision agriculture, natural resources and environmental management, 
and surveying communities. (See: http://www.dot.gov/affairs/
dot5508.htm).
    Question. If NDGPS costs were to increase in 2009, where would the 
additional funds come from? Alternatively, in what way and to what 
extent might service be reduced?
    Answer. As part of its decision to continue inland NDGPS 
operations, DOT is seeking a cost-share mechanism with other Federal 
agencies that use NDGPS. DOT is still developing this mechanism through 
the interagency NDGPS team, and is examining if there are any changes 
that may be made to the near-term costs of operating and maintaining 
the NDGPS system.
    Question. The NDGPS has deferred maintenance requirements and also 
needs an upgrade to catch up with the Coast Guard's DGPS technology. It 
is reported that these could be completed in 2009 for $3.5 million, but 
will grow more expensive in the future.
    Does RITA expect to complete this refresh? If so, when, and what is 
the cost expected to be at that time?
    Answer. The 2009 budget includes $4.6 million for annual operating 
costs of the NDGPS system. The U.S. Coast Guard is expected to complete 
the Maritime DGPS refresh by second quarter fiscal year 2009. As is 
prepares the fiscal year 2010 budget and develops a cost share 
methodology, DOT and its partners are evaluating the costs of deferred 
maintenance, and of upgrading the inland component of NDGPS to be 
equivalent with the Coast Guard maritime component.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy

                       INFRASTRUCTURE MAINTENANCE

    Question. On your congestion initiative, which I do not believe has 
been authorized by Congress. There are vast areas of the country with 
transportation funding needs that have more to do with aging 
infrastructure than overcrowded roads. In Vermont, for instance, 453 of 
our 2,675 State- and town-owned bridges (nearly 20 percent) are 
structurally deficient.
    In fiscal year 2007, DOT was granted full authority to make 
spending decisions with all of its discretionary funding. Instead of 
using this opportunity to show fairness and evenhandedness nationwide, 
modal agencies across the DOT decided to give away all of their money 
to a few big cities. You should have seen the letters I received from 
my constituents back home. They ranged the gamut from disappointment to 
frustration to infuriation. And I agreed with every one of them.
    While the Minnesota bridge tragedy last year refocused Congress in 
the fiscal year 2008 appropriations process on the need to repair 
deficient bridges and roads, it is disappointing to look at the DOT's 
budget request for the coming year and again see a proposal that 
emphasizes congestion mitigation and kicks essential infrastructure 
maintenance further down the road.
    How will you ensure that rural areas around the country will be 
treated fairly and equitably under this budget proposal?
    Answer. The foremost transportation goal of Federal, State and 
local governments no longer is establishing connectivity, but rather 
ensuring that people and commerce are able to move efficiently. The 
Department is deeply concerned about the massive problem of traffic 
congestion, which presents significant challenges to this goal and 
affects millions of people across the Nation every day. Hence, we have 
proactively established the congestion initiative under the 
Department's existing authorities. It also bears mentioning that the 
Government Accountability Office has testified favorably before 
Congress regarding the Congestion Initiative, highlighting our efforts 
as ``encouraging'' and stating that ``successfully addressing the 
Nation's mobility needs [will require] strategic and intermodal 
approaches and solutions.'' \1\
---------------------------------------------------------------------------
    \1\ Statement of Patricia A. Dalton, Managing Director, Physical 
Infrastructure Issues, GAO. Testimony before the Subcommittee on 
Transportation, Housing and Urban Development & Related Agencies; 
Committee on Appropriations; House of Representatives; March 7, 2007.
---------------------------------------------------------------------------
    When implementing programs, I have been consistent throughout my 
tenure as Secretary in attempting to focus the Department's limited 
discretionary resources on projects that yield the greatest possible 
benefits. With this in mind, fiscal year 2007 discretionary funding 
decisions focused not on a big city ``give-away,'' but rather on the 
results of a competitive and comprehensive application and review 
process. This was Congress's intended role for the Department when 
Congress established various ``discretionary'' grant-making programs in 
SAFETEA-LU and in prior authorizations.
    With respect to the question of highway spending in rural areas of 
the Nation, I can assure you that the Department is concerned with the 
condition, safety, and performance of rural roads. The latest 
information published in the 2006 Conditions and Performance report 
notes that the percentage of travel in rural areas on roads of good 
pavement quality has steadily increased from 46 percent in 1995 to 58.3 
percent in 2004. Further, over this same time the condition of bridges 
in rural areas has also improved from year-to-year, with the percent in 
deficient condition at their lowest levels in the most recent year for 
which we have data. Safety levels on rural highways have also shown 
considerable improvement over the last decade.
    The steady improvements we have witnessed on the condition of rural 
highway and an safety performance nationwide is commensurate with the 
level of spending on these roads. Highway capital outlays in 2004 on 
arterial and collector roads in rural areas amounted to $22.9 billion, 
as contrasted with $36.2 billion for the same class of roads in urban 
areas. When looked at on a per vehicle-mile of travel (VMT) basis, 
outlays were 2.4 cents per VMT for rural roads and 2.2 cents per VMT 
for urban roads.
    In summary, highways in rural areas of the Nation are being 
improved at a steady pace, and their condition and performance reflect 
the fact that highway funds are being directed to these road systems at 
an appropriate level.

                       INFRASTRUCTURE MAINTENANCE

    Question. You recently chaired a national commission on 
transportation financing that concluded we are not spending nearly 
enough to build and maintain our transportation infrastructure. While a 
majority on that panel agreed that we must keep open the option of 
increasing the Federal gas tax in order to upgrade our existing 
transportation system, you dissented and said the Federal Government 
should instead pursue ``a different kind of investment,'' like tolling, 
congestion pricing, and public-private partnerships. I am not sure if 
you have been to Vermont before, but I am afraid that the traffic 
volume on our roads will not even pay for the tollbooth operators, much 
less the huge backlog in deferred maintenance projects piling up at the 
Vermont Agency of Transportation. On top of that, I do not foresee many 
private equity firms being interested in getting a piece of the action 
on I-89, I-91, or I-93 in Vermont--except maybe during leaf peeping 
season.
    Has your Department developed any specific financing proposals that 
would be ready to implement as part of this year's appropriations bill 
or next year's reauthorization bill to address the over $225 billion in 
new investment that the national commission said we need annually to 
upgrade our transportation system?
    Answer. The Department disputes the validity of the Commission's 
assertion of $225 billion in annual needs. First, this figure 
represents simply an estimate of projects whose benefits slightly 
outweigh their costs--a criterion that does not take into account the 
fact that resources are limited, and on which we do not base investment 
decisions in any other sector of the economy. Raising the fuel tax 
reduces disposable incomes available for private sector expenditures--
many of which may have benefits in excess of their costs. Second, 
several of the investment assumptions used in the Commission analyses 
include unjustifiable investments, and are not based on a strict 
benefit-cost analysis. Finally, the Commission Report gives inadequate 
consideration to the potential for controlling demand for investment 
and increasing the efficiency of the current system, including through 
the use of congestion pricing to increase the performance of existing 
roads.
    Regarding congestion pricing, this is one tool available to States 
and localities for improving the performance of transportation systems. 
We do not suggest it is a blanket solution for addressing all highway 
funding needs. Where there is considerable congestion, pricing can be 
an effective strategy for managing traffic and producing revenues that 
can support local transportation systems. Where there is not 
congestion, local governments will likely continue to rely on 
conventional financing mechanisms, at least for the near term. As 
technologies develop Federal, State, and local governments will have 
growing opportunities to use innovative means to raise transportation 
funds, regardless of the level congestion.
    The Department is currently developing financing proposals to 
address the Nation's surface transportation infrastructure needs, which 
we hope to present to Congress later this year as part of a broader 
surface transportation reauthorization proposal.

                         ESSENTIAL AIR SERVICE

    Question. I am disappointed that the administration once again has 
proposed such a significant cut in the Essential Air Service program 
and a new general provision that would lead to considerable reductions 
in service to rural communities across the country. Specifically, the 
President's budget requests only $50 million for the EAS program--far 
less than half of the $125 million that Congress appropriated last 
year. The $50 million funding level is clearly insufficient to meet the 
needs of EAS communities around the country, as over 60 would be 
dropped from the program immediately under the administration's 
proposal.
    While this is not the first time that this administration has tried 
to kill the EAS program, as its chief administrator, how do you expect 
small communities around the country, like Rutland, Vermont, to 
maintain their Essential Air Service with only $50 million in direct 
funding?
    Answer. The Essential Air Service program was designed when airline 
rates, routes, and services were regulated as means of providing 
temporary support to some communities during the transition of the 
airline industry to a deregulated structure. Although the program was 
eventually made permanent, it has remained fundamentally unchanged 
since its inception. That is one reason the administration has proposed 
reforms over the last several years. We believe that the program needs 
to be targeted to serve the needs of the most truly isolated 
communities across the country, and the administration's plan offers 
specific proposals to accomplish that objective.
    It is clear that the EAS program must be reformed or the costs will 
continue to escalate. As more and more regional carriers upsize their 
fleets to larger turboprops or even regional jets, it will leave more 
and more communities reliant upon subsidized EAS. In addition, as the 
spread of low-fare carriers continues, more local communities will be 
unable to support their local airport's service as travelers will drive 
to nearby, low-fare jet service. EAS service of two or three round 
trips a day cannot compete with low-fare jet service, and more and more 
communities are falling into this situation. The administration's 
budget request is wholly consistent with the notion that the most 
isolated communities should continue to receive subsidized EAS in order 
to keep them connected to the national air transportation system.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein

                              SMALL STARTS

    Question. The fiscal year 2009 budget proposal included funding for 
five projects in California through the ``small starts'' program. These 
projects will allow a number of California communities to expand their 
public transit offerings. I have worked to secure past funding for this 
project, and I appreciate the administration's support.
    Can you describe for us the rigorous review that ``small starts'' 
proposals undergo? Am I correct that these projects are some of the 
most cost effective transportation projects in the Country?
    Answer. The Small Starts evaluation and rating process is a 
simplified version of the process used for New Starts projects. Small 
Starts projects must meet the criteria specified in law, which include: 
project justification (cost-effectiveness, transit supportive land use, 
and other factors such as economic development) and local financial 
commitment. The rigorousness of the Federal Transit Administration's 
(FTA) review depends on the estimated capital and operating costs of 
the Small Starts project. Those projects which qualify as Very Small 
Starts (under $50 million total capital cost, less than $3 million per-
mile capital cost, and more than 3,000 riders in the corridor today) 
essentially qualify automatically as meeting the project justification 
criteria specified in law. Therefore, FTA performs little review other 
than to ensure the project qualifies.
    For projects that do not qualify as Very Small Starts, FTA reviews 
and evaluates their estimates of ridership, cost-effectiveness, and 
transit supportive land use. Those projects with estimated operating 
costs totaling less than 5 percent of system-wide operating costs 
automatically qualify as meeting the local financial commitment 
criteria, so FTA again performs little review. If the project's 
operating costs are greater than 5 percent of system wide-expenses, 
then FTA reviews and evaluates a detailed financial plan submitted by 
the project sponsor.
    There are seven projects in California approved for project 
development and these are included in the Annual Report on Funding 
Recommendations (the ``New Starts Report''). Four are Very Small Starts 
(limited review and evaluation by FTA) and three are Small Starts 
(subject to more rigorous FTA review/evaluation). The Very Small Starts 
are automatically ``warranted'' as being cost-effective based on the 
aforementioned qualifying criteria. The three Small Starts projects are 
cost-effective (San Francisco received a High rating for cost-
effectiveness, San Bernardino received a Medium-High rating for cost-
effectiveness, and Riverside received a Medium rating for cost-
effectiveness.) Of these seven projects approved for project 
development, five were recommended for funding in the fiscal year 2009 
President's Budget. The other two projects, San Bernardino E Street 
Corridor and Van Ness Avenue BRT, were not ready for a funding 
recommendation.

            CORPORATE AVERAGE FUEL ECONOMY (CAFE) STANDARDS

    Question. The fiscal year 2009 Department of Transportation budget 
proposal requests $855 million for the National Highway Traffic Safety 
Administration (NHTSA), an increase of only $17 million for the agency 
that administers Corporate Average Fuel Economy (CAFE) Standards. 
Considering that NHTSA has to write a whole new set of CAFE standards 
to comply with the Ten-in-Ten Fuel Economy Act, I am concerned that 
this increase is insufficient. What assurance can you provide the 
Senate that this budget request will allow NHTSA to put out new CAFE 
regulations on time?
    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 CAFE program was appropriated $1.88 million in 
fiscal year 2008 as part of the $12.8 million provided by Congress for 
NHTSA's rulemaking activities. NHTSA estimates that it will require an 
additional $3.8 million in fiscal year 2008 to support expanded CAFE 
activities, and submitted a reprogramming request to the committee on 
June 2, 2008. The fiscal year 2009 budget request is $3.88 million.
    Question. The law requires NHTSA to issue draft CAFE regulations at 
least 30 months before they go into effect. Therefore, NHTSA must issue 
draft CAFE regulations for Model Year 2011 this year. Is NHTSA on track 
to issue draft CAFE regulations on time? In what month do you expect 
NHTSA to issue draft regulations?
    Answer. On April 22, 2008, NHTSA announced a notice of proposed 
rulemaking for CAFE standards applying to model years 2011-2015. After 
a 60-day comment period that ends July 1, 2008, NHTSA will begin work 
to finalize CAFE standards for those years. NHTSA expects to publish 
the final rule before the end of this year. This rule must be published 
by April 1, 2009, to be effective for the 2011 model year.
    Question. The Ten-in-Ten Fuel Economy Act requires a fleet-wide 
average of at least 35 miles per gallon by 2020. Between now and 2020, 
NHTSA must increase fuel economy ``ratably'' and issue the regulations 
in 5 year increments. Will the draft rule, for the first 5 years, 
accomplish at least a 5 mile per gallon increase, so that NHTSA 
maintains steady progress towards 35 mpg in 2020?
    Answer. Overall proposed CAFE standards for the entire light duty 
fleet would increase by approximately 25 percent over 2011-2015, as 
shown the table below. This is a 4.5 percent average annual rate of 
growth and exceeds the 3.3 percent annual average increase required in 
the Energy Independence and Security Act of 2007 (EISA). The overall 
proposed fuel economy requirement in 2015 is 31.6 miles per gallon 
(mpg). This is 6.3 mpg higher than the combined standard in 2010. If 
these standards were finalized, the agency would only need to increase 
CAFE standards by 2.1 percent per year from 2016-2020 to achieve a 
combined standard of exactly 35.0 mpg in 2020 (as required by EISA).

                              PROPOSED PASSENGER CAR AND LIGHT TRUCK CAFE STANDARDS
----------------------------------------------------------------------------------------------------------------
                                                                                                     Combined
                              Year                                 Car Standard   Truck Standard     Standard
----------------------------------------------------------------------------------------------------------------
2011............................................................            31.2            25.0            27.8
2012............................................................            32.8            26.4            29.2
2013............................................................            34.0            27.8            30.5
2014............................................................            34.8            28.2            31.0
2015............................................................            35.7            28.6            31.6
----------------------------------------------------------------------------------------------------------------

    Question. Last year the 9th Circuit Court of Appeals struck down 
NHTSA's new fuel economy standard for light trucks and SUVs, in part 
because NHTSA refused to quantify the benefits of reducing greenhouse 
gas emissions as part of its cost effectiveness analysis. Has NHTSA now 
developed a valuation method to quantify the benefits of reducing 
emissions of gases that cause global warming?
    Answer. In its April 22nd notice of proposed rulemaking, NHTSA 
proposed placing a value on reductions in carbon dioxide emissions. 
NHTSA reviewed the literature and proposed a value based on information 
from Working Group II's contribution to the Fourth Assessment Report of 
the United Nations Intergovernmental Panel on Climate Change (IPCC). 
The IPCC report tentatively concluded that the most likely value for 
the global benefits was $14 per metric ton of carbon dioxide. However, 
the value for benefits to the United States could be as low as $0 per 
metric ton of carbon dioxide. The IPCC conclusion was derived from a 
peer-reviewed study that examined 103 estimates of the social cost of 
carbon from 28 published studies. While NHTSA used the midpoint of the 
$0-$14 range ($7 per ton) as a value for the analysis in our notice, it 
also conducted sensitivity analyses around the upper and lower 
boundaries. NHTSA realizes that substantial variability exists in 
estimates of the domestic and global values of carbon dioxide 
reductions. The agency consulted with the Environmental Protection 
Agency and the Department of Energy on this issue and will continue to 
do so for the final rule. The agency also requested and anticipates 
receiving comments during its rulemaking process on how to estimate 
properly the value of reducing carbon dioxide emissions.
    Question. The fine for failing to meet CAFE standards equals $55 
per mile per gallon, per vehicle below the standard, which is below the 
cost effective price of improving fuel economy. As a result, some 
European firms choose to pay CAFE fines year after year instead of 
improving fuel economy. Historically the big three U.S. automakers have 
complied with the standards because paying fines would have led to 
stockholder lawsuits. But now one of these firms is privately held, 
creating the possibility of increasing fuel economy violations. Should 
Congress consider increasing CAFE fines so that it is in the economic 
interest of automakers to comply with the standards?
    Answer. NHTSA is committed to achieving the fuel savings sought in 
EISA, and will continue to work with Congress to achieve the goals of 
EISA. Historically, most manufacturers have met fuel economy standards. 
Should we see a reversal of this trend, NHTSA will examine all options, 
including a provision to double the fine and/or additional legislative 
authority.
    Question. According to an investigation conducted by the House 
Oversight Committee, Secretary Peters and numerous other staffers 
contacted the Environmental Protection Agency and Members of Congress 
to ``solicit comments against the California waiver,'' as a Department 
of Transportation official put it. Did Secretary Peters call Governors 
and urge them to oppose the California waiver? According to internal 
DOT e-mails, Secretary Peters spoke with Steve Johnson about the 
California waiver on June 6, 2007. Did Secretary Peters encourage him 
to deny the waiver?
    Answer. To repeat a clarification that we have made in response to 
previous Congressional inquires on this subject, the Department of 
Transportation (DOT) did not under take any improper ``lobbying'', as 
that term is used in the anti-lobbying restrictions found in 18 U.S.C. 
1913, or provisions routinely contained in annual appropriations acts 
restricting the use of appropriated funds for ``publicity or propaganda 
purposes'' to support or defeat pending legislation. As we have 
previously acknowledged, however, DOT undertook an effort to contact 
Governors and Members of Congress to inform them of California's waiver 
petition and of its possible implications.
    As I have previously indicated, I spoke with EPA Administrator 
Stephen Johnson concerning the California waiver petition. I recall a 
conversation in which he indicated that the docket would benefit from a 
wider array of commenters, including State Governors or other elected 
officials who represent stakeholders. We discussed the possibility that 
such potential commenters might need an extension to the comment period 
on order to submit comments. We also discussed DOT's longstanding 
position in favor of a uniform national fuel economy regulatory scheme.

                      CALIFORNIA MARITIME INDUSTRY

    Question. On February 11, I wrote to Maritime Administration 
Administrator Sean T. Connaughton:
    ``. . . to express my concern that the actions of the U.S. 
Department of Transportation Maritime Administration (MARAD) are 
causing harm to the maritime industry in the State of California. This 
industry, which I have worked to expand for more than three decades, 
employs thousands of Californians on board ships, in ports, and in our 
shipyards. I request that you explain why MARAD has pursued an effort 
that may significantly decrease cruise ship visits, cruise ship turn-
around operations, and cruise ship maintenance in California.''
    In order to better understand how MARAD's recent efforts conformed 
to its mission, I asked a series of questions, but I have received no 
response. Please answer the following questions, first asked in my 
letter nearly one month ago:
    If CBP finalizes its draft ``Hawaiian Coastwise Cruises'' rule, 
does MARAD estimate that any U.S. flagged cruise ships will begin 
servicing Californian ports of call? If so, how many annual ports of 
call will result?
    Answer. Based on information available to the Maritime 
Administration, operators of large U.S.-flag cruise ships do not appear 
to currently have plans to offer services from ports in California to 
Hawaii, regardless of the final outcome of the Customs and Border 
Protection (CBP) rule. Whether U.S.-flag cruise ships service 
California ports of call is a market decision, so it is not possible to 
provide at this time a specific number of annual ports of call that 
will result.
    Question. If CBP finalizes its draft ``Hawaiian Coastwise Cruises'' 
rule, does MARAD estimate that total cruise ship visits to California 
ports will decrease? If so, how many annual ports of call will be lost 
as a result?
    Answer. Under the CBP proposal, foreign-flag ships could alter 
itineraries and still call in Hawaii in order to provide a cruise 
experience similar to what is currently offered, resulting in little or 
no decrease in calls to California ports. However, it is far more 
likely that poor economic conditions and highly elastic demand for 
leisure travel will reduce the total number of cruise ships visits to 
California ports in the short term. The Maritime Administration has not 
received specific information from cruise ship operators on the 
projected effects of the CBP draft rule. Therefore, the Maritime 
Administration has not developed estimates of the potential reduction 
in the number of port calls in California.
    Question. Have you or any other MARAD officials visited cruise ship 
operating companies to discuss their round-trip cruise itineraries that 
depart from California ports and visit ports of call in Hawaii?
    Answer. The Maritime Administration regularly meets with ship 
operating companies. Some companies have identified some aspects of 
their plans to reduce round-trip cruise voyages from California to 
Hawaii based on operating economics and poor demand. These business 
decisions, however, were based on the industry market assessment made 
prior to the November 2007 announcement of the CBP to reinterpret 
Passenger Vessel Services Act (PVSA) rules.
    Question. If so, have you or any other MARAD officials encouraged 
cruise ship operating firms to reduce their total number of annual 
round-trip cruises that depart from California ports and visit ports of 
call in Hawaii?
    Answer. The Maritime Administration has not encouraged any operator 
to reduce any legal vessel operations in any trade. On the contrary, in 
pursuit of its mission to improve and strengthen the U.S. marine 
transportation system, the Maritime Administration supports the cruise 
industry, operating in compliance with the PVSA.
    Question. Do you believe that advocating for decreased cruise ship 
activity in California's ports is consistent with the mission of MARAD 
if no increase in U.S. flagged service in Californian ports is expected 
to result?
    Answer. The Maritime Administration has not advocated for decreased 
cruise ship activity in California's ports. Rather, the Maritime 
Administration strongly supports cruise industry operations that are in 
compliance with the PVSA.
    Question. Approximately 40 percent of all container traffic enters 
the United States through the ports of Los Angeles and Long Beach. 
Moving the goods out of the ports has severe economic consequences and 
human health impacts. What does this budget proposal do to address 
these impacts?
    Answer. One of the primary objectives of the Maritime 
Administration is to ensure the continued success of our Nation's 
Marine Transportation System. This includes not only the ports and 
near-port intermodal connectors, but also ensuring water access and the 
interstate road, rail and Marine Highway corridors that move the 
freight into and out of the ports.
    Nowhere is this more important than the ports of Los Angeles and 
Long Beach. Included in this budget are the resources necessary to 
staff our Southern California Gateway Office, located in the port of 
Long Beach. This Gateway Office, as in the other nine Gateway Offices 
in our Nation's major ports, works to identify bottlenecks and ways to 
improve freight movement, as well as work on environmental and 
community challenges in the ports and their intermodal connectors.
    This office also supports the broader Department of Transportation 
National Strategy to Reduce Congestion and one of its key elements, the 
initiative to reduce Southern California freight congestion. The 
Maritime Administration led the development of a Southern California 
National Freight Gateway Cooperation Agreement, signed in October 2007, 
among Federal, State and local entities to achieve an agreed agenda to 
seek improvements in freight throughput capacity in Southern 
California, balanced with environmental and community concerns. The 
team is actively assessing issues and potential solutions that are 
compatible with California's Goods Movement Action Plan. The Maritime 
Administrator and Deputy Administrator have met frequently with port, 
environmental, and community stakeholders to identify solutions that 
improve the environment, health and community while sustaining 
international trade.
    For example, the Maritime Administration is actively working with 
the Port of Los Angeles and Pacific Rim ports to transfer emissions 
reduction and energy efficiency technology. The Maritime Administration 
continues to participate in the International Maritime Organization and 
the International Standards Organization to develop international 
regulations standards that address marine emissions from vessels and 
ports. At the same time, the Maritime Administration continues to 
collaborate with academia to develop unique and groundbreaking tools 
that assess optimal crossmodal freight routing in an effort to reduce 
energy consumption and emissions.

                    NATIONAL GOODS MOVEMENT STRATEGY

    Question. California has identified $48 billion in transportation 
infrastructure needs directly related to goods movements. In November 
2006, Californians passed Proposition 1B, agreeing to tax themselves to 
pay for a $20 billion transportation bond, $2 billion of which are 
about to go towards goods movement projects. What is the status of the 
Department of Transportation's efforts to develop a national goods 
movement strategy and what revenue sources do you intend to seek to 
finance a national system?
    Answer. The Department of Transportation commends the State of 
California for its vision and planning to improve freight flows, both 
through individual efforts at the local level as well as through the 
comprehensive Goods Movement Action Plan released in 2005 and the 
follow-on Multi-County Goods Movement Action Plan. The continued 
efficient flow of freight through Southern California to and from 
factories and consumers across the Nation is a vital component of the 
national economy. The port complex of Los Angeles/Long Beach is the 
busiest container seaport in the Nation and the fifth busiest in the 
world. The rapid increase in freight volumes through the complex has 
strained existing infrastructure and has raised the urgency of 
environmental concerns surrounding this activity that is so essential 
to our Nation's economic growth.
    The Department of Transportation is addressing the need to improve 
freight movement nationwide through our comprehensive National Strategy 
to Reduce Congestion. Transportation system congestion is one of the 
single largest threats to our Nation's economic prosperity and way of 
life. Whether it takes the form of cars and trucks stalled in traffic, 
cargo stuck at overwhelmed seaports, or airplanes circling over crowded 
airports, congestion costs America almost an estimated $200 billion a 
year.
    In 2006, the Department of Transportation announced a major 
initiative to reduce transportation system congestion. This plan 
provides a blueprint for Federal, State, and local officials to 
consider as we work together to reverse the alarming trends of 
congestion, which is critical to improving freight flows through our 
transportation system. Several components of the initiative are 
directly addressing goods movement. They include congestion relief 
programs, public-private partnerships, national road and rail 
corridors, and technological and operational improvements to the 
transportation system and its business processes.
    A recent example of the actions taking place to improve freight 
flows is the plan announced by Secretary Peters on April 25, 2008, to 
cut traffic jams, provide better bus service, and clean the air in Los 
Angeles. The area is eligible for more than $213 million in Federal 
Congestion Reduction grants. The funds would also finance the creation 
of new High-Occupancy Toll (HOT) lanes, which single-occupancy vehicles 
can use by paying a variable toll. Through the concept of ``congestion 
pricing,'' these tolls would vary with travel demand and real-time 
traffic conditions throughout the day so that transportation 
authorities can better manage the number of cars in the lanes to keep 
them free of congestion, even during rush hour. As congestion is 
reduced, freight velocity will improve.
    The Department is implementing other congestion pricing 
demonstrations in areas of extreme congestion in order to reduce 
gridlock and clear the air. These demonstrations can be replicated in 
other cities and regions to improve the efficiency of the 
transportation system across the Nation. The initial demonstrations are 
being funded with grants from the Department of Transportation, 
including $495.1 million through the Urban Partnership Program and 
$366.7 million through the Congestion Reduction Demonstration Program. 
In addition, the Department is advocating that metropolitan planning 
organizations designate freight projects as funding priorities in their 
transportation planning.
    The Department also recognizes the potential for private sector 
participation in national, regional and local transportation projects. 
A major element of the National Strategy to Reduce Congestion is the 
potential for public-private partnerships (PPPs) to jointly finance 
transportation projects. PPPs provide benefits by allocating the 
responsibilities to the party--either public or private--that is best 
positioned to control the activity that will produce the desired 
result. With PPPs, this is accomplished by specifying the roles, risks 
and rewards contractually, so as to provide incentives for maximum 
performance and the flexibility necessary to achieve the desired 
results.

                             CONTAINER FEES

    Question. There seems to be a growing consensus that container fees 
are likely to be the most significant source of funds to pay for the 
billions of dollars necessary to move goods through Southern 
California, if not the Nation. For example, there are now bills both in 
Congress (Rep. Rohrabacher) and the California legislature (State Sen. 
Lowenthal) proposing container fees. The ports of Los Angeles and Long 
Beach have already approved, but not yet implemented, their own 
container fee plans. Has the Department of Transportation explored the 
feasibility of a national container fee system at water, land and air 
ports of entry as a means to finance goods movement infrastructure 
specifically? What is the department's position on container fees?
    Answer. The Department of Transportation has not explored the 
feasibility or desirability of a national container fee system to 
finance goods movement infrastructure. There are several approaches and 
alternatives to the implementation of container fees that the 
Department is evaluating. Direct assessments on shipments is an 
approach that has been presented to Congress and to the California 
legislature. Other approaches, such as the successful PierPass program 
at the ports of Los Angeles and Long Beach, uses a congestion pricing 
model that provides an incentive for cargo owners to move shipments at 
night and on weekends. Cargo owners moving containers at the two ports 
during peak daytime hours are required to pay a Traffic Mitigation Fee, 
which helps fund the cost of operating five new shifts per week at 
marine terminals. Another approach is the use of public-private 
partnerships as a means to finance infrastructure growth and congestion 
mitigation.
    The Department has consistently heard from shippers, carriers and 
the transportation industry that the acceptability of the concept of a 
fee depends upon how the fee is structured and collected, the amount of 
the fee, and how the funds are used. Of particular concern is that an 
assessment be clearly tied to specific transportation improvement 
projects that will improve freight flows, and that it be clear from the 
outset whether the fee is permanent or would sunset after the specific 
projects are completed. Another key issue is whether non-containerized 
cargoes using port facilities and rail and road connectors would also 
be included in the assessment.

                           SUPPORT FOR S. 406

    Question. Public Transportation Systems serving urbanized areas 
exceeding 200,000 in population may not use funds received through 
section 5307 of the United States Code to pay for operating expenses. 
However, some very small systems--with fewer than 100 buses--exist in 
urbanized areas. I have cosponsored a bill (S. 406) that would allow a 
system with fewer than 100 buses to use these funds for operating 
expenses, as other small bus systems are allowed to do.
    Does the Secretary of Transportation support S. 406? If not, please 
explain why.
    Answer. Currently, the Federal Transit Administration's (FTA) 
urbanized area formula program is focused on capital assistance; during 
the remaining time under the current authorization--SAFTEEA-LU--the 
agency is not prepared to support operating assistance in areas over 
200,000 in population. FTA believes a proposal based on fleet numbers 
is not appropriate for at least three reasons:
  --The urbanized area formula program is based on urbanized area 
        populations. The manner in which public transit is organized in 
        an urbanized area is a local decision, which FTA is prohibited 
        from regulating.
  --FTA also believes good public policy should not include any feature 
        in the urbanized area formula program that could be viewed as 
        discriminating between transit agencies in a single urbanized 
        area.
  --A proposal based on fleet numbers would discourage agencies from 
        expanding bus service for fear of losing operating assistance.
                                 ______
                                 
               Questions Submitted by Senator Ted Stevens

                 ALASKA FLIGHT SERVICE STATION NETWORK

    Question. The FAA is currently reviewing how to modernize the 
Alaska Flight Service Station network. As part of the FAA fiscal year 
2009 budget request, the FAA intends to conduct a final investment 
analysis of how to modernize the Alaska flight service stations. Could 
you provide the committee with an analysis of the alternatives the FAA 
is considering? Does the FAA intend to consolidate any current 
facilities? Will any new technologies be approved for new sites?
    Answer. The Federal Aviation Administration (FAA) has laid out a 
plan to modernize Alaska flight services in an evolutionary manner. FAA 
plans to modernize the current technology while maintaining existing 
operational flight services. The Alaska Flight Service Modernization 
(AFSM) plan is divided into two segments. Segment 1 is defined as the 
one-for-one replacement of the current automation system by February 
2010 when the current automation system's (Operational and 
Supportability Implementation System) period of performance on the 
contract will expire. Segment 2 is composed of two parts--the 
deployment of a new technology voice switch and the modernization of 
facilities (infrastructure).
    FAA is looking for ways to expedite the deployment of the voice 
switch (part of segment 2) by the end of 2011. After the automation and 
voice switch technologies are delivered with remote user access 
capability, FAA will have implemented the new flight services concept 
of operations.
    The strategy for the modernization of the facilities will be 
determined by what is required to support the new concept of operations 
in Alaska flight services. After approximately a 2-year period of 
demonstration and analysis, FAA will determine whether projected user 
benefits are being achieved and adjust our plan as necessary. 
Generally, FAA does not support the consolidation of Alaska flight 
services facilities, but does support expansion of flight services 
delivery. FAA has not completed the investment analysis work for 
facility modernization but expects to do so by 2014.
    FAA has an ongoing program to sustain Alaska flight service 
facilities that will continue to operate while the system is 
modernized. FAA will not consider implementing any strategies to 
consolidate facilities in Alaska until the technology has proven itself 
efficient, and full coordination has been completed with users and 
primary stakeholders, including congressional oversight authorities.

                            SMALL SHIPYARDS

    Question. The shipbuilding industry is vital to our Nation's 
commerce and security. In 2006 the Congress enacted legislation 
establishing a program within the Maritime Administration that provided 
financial assistance to small shipyards throughout the Nation. This 
program is especially beneficial to shipping communities in my State of 
Alaska. Small shipyards received $10 million in assistance last year, 
but the administration's 2009 Budget proposes no funding for this 
program. What do you plan to do to ensure the viability of our nation's 
shipping industry and small shipyards specifically?
    Answer. The Maritime Administration's (MARAD) fiscal year 2009 
budget proposal was developed well in advance of the enactment of the 
fiscal year 2008 appropriation for the small shipyard grants program, 
the first time this program has been funded. On April 22, 2008, MARAD 
awarded $9.8 million in grants to 19 shipyards throughout the United 
States. These funds will be expended for projects over the next 2 
years, which will enhance the viability of small shipyards.

                PIPELINE AND HAZARDOUS MATERIALS SAFETY

    Question. Why is the President's budget request for Pipeline Safety 
$10 million below what this committee authorized in the Pipeline 
Inspection, Protection, Enforcement and Safety Act of 2006?
    Answer. The Pipeline and Hazardous Materials Safety Administration 
(PHMSA) is making good progress toward achieving the goals of the 
Pipeline Inspection, Protection, Enforcement and Safety (PIPES) Act of 
2006. In its first budget submission since the PIPES Act, the 
Department is requesting a significant increase in funding of PHMSA's 
Pipeline Safety Program in order to continue implementation of the 
PIPES Act. The $93.3 million request, a $13.5 million increase over the 
fiscal year 2008 enacted level, supports the top three PIPES Act 
priorities: (1) increasing financial support for State pipeline safety 
programs; (2) preventing excavation-related damage to pipelines; and, 
(3) increasing Federal inspection and enforcement personnel. The 
administration has kept its commitment to help States with increased 
financial support, up to an average of 60 percent of program costs and 
closer to our shared goal of funding 80 percent of costs. We are 
supporting stronger damage prevention programs by providing incentives 
to States to develop more effective programs and to expand the use of 
civil enforcement authority against anyone who violates ``one-call'' 
laws. We are increasing PHMSA's pipeline safety inspection and 
enforcement personnel to 123 full-time positions. The national pipeline 
safety program has been successful in driving down risk by targeting 
safety areas of greatest concern. This budget will allow PHMSA to 
continue to sharpen its focus while maintaining the gains it has made 
over 20 years.

    Senator Murray. We thank you for taking your time today and 
your testimony as well as all your staff I know who have worked 
very hard for this as well.
    Secretary Peters. And again my apologies for being late 
this morning.
    Senator Murray. All right. Well, it was a transportation 
issue, I understand?
    Secretary Peters. Yes, it was.
    Senator Murray. That's under your jurisdiction.
    Secretary Peters. Indeed.

                          SUBCOMMITTEE RECESS

    Senator Murray. With that, this subcommittee is recessed, 
subject to the call of the Chair till next Thursday.
    [Whereupon, at 11:29 a.m., Thursday, March 6, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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