[Senate Hearing 110-1250]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 110-1250

 
                        FUTURE FEDERAL ROLE FOR
                         SURFACE TRANSPORTATION

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



                                HEARING

                               before the

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 25, 2008

                               __________

  Printed for the use of the Committee on Environment and Public Works


      Available via the World Wide Web: http://www.access.gpo.gov/
                            congress.senate

                               __________



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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED TENTH CONGRESS
                             SECOND SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York     JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont             LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota             LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island     CHRISTOPHER S. BOND, Missouri

       Bettina Poirier, Majority Staff Director and Chief Counsel
                Andrew Wheeler, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                        WEDNESDAY, JUNE 25, 2008
                           OPENING STATEMENTS

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     3
Lautenberg, Hon. Frank, U.S. Senator from the State of New Jersey     5
Isakson, Hon. Johnny, U.S. Senator from the State of Georgia.....     6
Baucus, Hon. Max, U.S. Senator from the State of Montana.........     7
Sanders, Hon. Bernard, U.S. Senator from the State of Vermont....     8
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......     9
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland   150

                               WITNESSES

Seely, Bruce E., Chair of Social Sciences And Professor of 
  History, Michigan Technological University.....................    10
    Prepared statement...........................................    13
Responses to additional questions from:
    Senator Carper...............................................    28
    SenatorWhitehouse............................................    29
    Senator Inhofe...............................................    30
Grenzeback, Lance R., Senior Vice President, Cambridge 
  Systematics, Inc...............................................    33
    Prepared statement...........................................    36
    Response to an additional question from Senator Carper.......    53
    Responses to additional questions from Senator Whitehouse....    55
Marvaso, Kathleen F., Vice President of Public Affairs, American 
  Automobile Association.........................................    57
    Prepared statement...........................................    59
    Response to an additional question from Senator Carper.......    63
    Responses to additional questions from Senator Whitehouse....    63
Pisarski, Alan E., Independent Consultant........................    65
    Prepared statement...........................................    67
Responses to additional questions from:
    Senator Carper...............................................    81
    Senator Whitehouse...........................................    84
    Senator Inhofe...............................................    86
Lovaas, Daron, Vehicles Campaign Director, and Smart Growth and 
  Transportation Program Director, Natural Resources Defense 
  Council........................................................    90
    Prepared statement...........................................    92
Responses to additional questions from:
    Senator Carper...............................................   114
    Senator Whitehouse...........................................   115
    Senator Inhofe...............................................   116
Staley, Samuel R., Director, Urban and Land Use Policy, The 
  Reason Foundation..............................................   119
    Prepared statement...........................................   121
    Response to an additional question from Senator Carper.......   125
Responses to additional questions from:
    Senator Whitehouse...........................................   126
    Senator Inhofe...............................................   127

                          ADDITIONAL MATERIAL

Highway Trust Fund Letter........................................   152


                        FUTURE FEDERAL ROLE FOR 
                         SURFACE TRANSPORTATION

                              ----------                              


                        WEDNESDAY, JUNE 25, 2008

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The full committee met, pursuant to notice, at 10 a.m. in 
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer 
(chairman of the full committee) presiding.
    Present: Senators Boxer, Inhofe, Barrasso, Baucus, Cardin, 
Isakson, Lautenberg, Sanders, and Whitehouse.

           OPENING STATEMENT OF HON. BARBARA BOXER, 
           U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Boxer. The meeting will come to order.
    We are very happy to call this meeting to order because the 
topic that we are talking about today is essential for the 
economic growth of our great Country. The hearing is entitled 
The Future Federal Role for Surface Transportation. The current 
SAFETEA-LU that is the highway transit and highway safety bill 
will expire on September 30th, 2009. As we prepare for the next 
authorization, it is important for us to examine the role the 
Federal Government has played in the development of our current 
transportation system, and to look ahead to the role the 
Federal Government should play in the future.
    The upcoming transportation bill should address modern 
concerns in a post-interState era. Highways and bridges built 
in the 1950's and 1960's are reaching the end of their expected 
service life and additional funding is needed for major repair 
or replacement. This means we need to make significant 
investments in the short term just to maintain our 
infrastructure at safe levels, followed by, in my view, even 
larger investments over the next 20 to 30 years to completely 
replace aging infrastructure.
    Not only is our infrastructure aging, but our population is 
growing and placing greater demands on existing transportation 
systems. According to the Census Bureau, by the middle of the 
century, the Nation will have grown to 420 million people from 
the 300 million mark hit in 2007. This equates to 11 new Los 
Angeles metropolitan areas and an increase of 50 percent in 50 
years.
    The DOT has estimated the cost to our economy from 
congestion alone is $200 billion per year. With freight 
movement expected to nearly double over the next 30 years, 
congestion will become an even larger problem. But it is not 
too late. Transportation programs and policies have evolved 
over time as needs and policy objectives have changed.
    The authorization of the next bill gives us the opportunity 
to take a fresh look at the current program and make the 
changes necessary to ensure the Nation's transit systems will 
meet needs in the coming years. Given tight financial 
constraints, determining what is truly in the Federal interest 
is even more important as we balance competing interests.
    However, the Federal role is not just to provide funding. 
There is a Federal role in increasing the safety of our 
Nation's highways. There is also a Federal role in ensuring the 
efficient movement of people and goods which affects our 
economy and quality of life every day.
    Protection of the environment to me is another Federal 
role. In this next bill, we need to more closely examine the 
linkage between transportation and the environment, including 
air quality, air quality, greenhouse gases and land use. This 
is the Environment and Public Works Committee and we need to 
successfully address the environment and public works issues 
together.
    These are but a few of the issues that may be raised today. 
This hearing is intended to start the discussion on the key 
policy issues that will frame the future Federal role in 
surface transportation beyond SAFETEA-LU.
    I want to say a thank you to my ranking member, Senator 
Inhofe, who as you know was chair of this Committee for quite a 
number of years. We don't see eye to eye on certain things and 
we are very open about it, but when it comes to the 
infrastructure of our Nation, so far we have worked very well 
together, and I am very hopeful we can continue. That also 
means Senator Baucus, Senator Isakson, and Senator Lautenberg, 
who plays such a key role in all these matters. I think the 
bipartisanship that we can bring to this issue will serve our 
Nation well.
    With that, I will call on Senator Inhofe.
    [The prepared statement of Senator Boxer follows:]

             Statement of Hon. Barbara Boxer, U.S. Senator 
                      from the State of California

    The current highway, transit and highway safety 
authorization legislation, SAFETEA-LU, will expire on September 
30, 2009.
    As we prepare for the next authorization, it is important 
for us to examine the role the Federal Government has played in 
the development of our current transportation system, and to 
look forward to the role the Federal Government should play in 
the future.
    The upcoming transportation bill should address modern 
concerns in a post-Interstate era. Highways and bridges built 
in the 1950s and 60s are reaching the end of their expected 
service life, and additional funding is needed for major repair 
or replacement.
    This means we need to make significant investments in the 
short term just to maintain our infrastructure at safe 
functioning levels, followed by even larger investments over 
the next 20 to 30 years to completely replace aging 
infrastructure.
    Not only is our infrastructure aging, but our population is 
growing and placing greater demands on existing transportation 
systems. According to the Census Bureau, by the middle of the 
Century, the Nation will have grown to 420 million people from 
the 300 million mark hit in 2007. This equates to 11 new Los 
Angeles metropolitan areas and an increase of 50 percent in 50 
years.
    The Department of Transportation has estimated that the 
cost to our economy from traffic congestion alone is as high as 
$200 billion per year. With freight movement expected to nearly 
double over the next 30 years, congestion will become an even 
larger problem.
    But, it's not too late. Transportation programs and 
policies have evolved over time as needs and policy objectives 
have changed.
    The authorization of the next bill gives us the opportunity 
to take a fresh look at the current program and make the 
changes necessary to ensure our nation's transportation system 
will meet needs in the coming years.
    Given tight financial constraints, determining what truly 
is in the Federal interest is even more important as we balance 
competing interests.
    However, the Federal role is not just to provide funding. 
There is a Federal role in increasing the safety of our 
nation's highways. There is also a Federal role in ensuring the 
efficient movement of people and goods, which affect our 
economy and quality of life every day.
    Protection of the environment is another area in which 
there is a Federal role. In this next bill we need to more 
closely examine the linkage between transportation and the 
environment: including air quality, greenhouse gases, and land 
use.
    This is the Environment and Public Works Committee; we need 
to successfully address the environment and public works issues 
together. These are but a few of the issues that may be raised 
today.
    This hearing is intended to start the discussion on the key 
policy issues that will frame the future Federal role in 
surface transportation beyond SAFETEA-LU. I appreciate all the 
witnesses being here today, and I look forward to your 
testimony.

          OPENING STATEMENT OF HON. JAMES M. INHOFE, 
            U.S. SENATOR FROM THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman. I agree with 
those comments. We have a serious problem here and we are going 
to handle it together. As we begin to focus more on the 
transportation issues with the expiration of SAFETEA-LU, I 
think it will be increasingly important to evaluate the 
structure and performance of the highway program.
    One indication of the lack of focus of the program is the 
enormous number of programs that DOT frequently cites, with 109 
programs varied within a large highway and transit program. Of 
course, simply reducing the number of the programs is not going 
to resolve the problem. We have to re-think the fundamental 
role of the Federal Government highway program. The current 
Federal program now tries to be all things to all people.
    Now, 50 years ago-plus when President Eisenhower first 
conceived the InterState system, he envisioned the system to 
connect the Nation's, and hence the national defense. The 
enormous economic benefits provided by the system would not be 
fully understood for some time. Since then, many new 
responsibilities were added, largely because of the success and 
popularity of the program. In other words, when we were able to 
get funding, everyone else wants in on the deal and I think we 
have too many things that are in on the deal.
    Many of the activities that were added over the years are 
very meritorious, and my primary question is whether the 
highway program is the appropriate vehicle, especially given 
the limited resources that we are facing now that we were not 
facing back during the conception of the program. The new 
responsibilities were added while maintaining essentially the 
same revenue resources. The result is that there are not 
sufficient resources to properly address the core 
responsibilities of the program, let alone some of these things 
that have been added on. As we begin the reauthorization 
discussions, I would hope that we would be able to work 
together to redefine the core mission.
    Now, finally I want to point out that yesterday Senator 
Boxer and I, I guess the day before yesterday, along with 65 
other Senators, sent a letter to the Finance Committee and to 
the leadership urging a quick resolution to the looming highway 
trust fund crisis. Due to the high gas prices and the weaker 
economy, the gas receipts have fallen far below the 
expectations of SAFETEA. Now, we have to address this.
    I know there are a lot of things that we are all 
uncomfortable talking about, even to the extent of adding on 
the about $8 billion shortfall from the expectations of this 
program Initially, maybe in the form of something on the 
extension of the FHA or someplace, I feel comfortable as a 
conservative going back to 1998 when I complained bitterly when 
President Clinton at that time took $8 billion out of the trust 
fund and put it into the general fund. At that time, I said we 
were going to regret that we did it. Well, I now regret that we 
did it. I think everyone else does too.
    I think that we could actually get that replaced, and it is 
my understanding without CBO scoring on this thing. I think we 
have to do it. We are all concerned about our own States, but 
also about the overall program. I know that in my State of 
Oklahoma there are a lot of jobs at risk, along with the fact 
that we desperately need the infrastructure that we had 
anticipated with the reauthorization of 2005.
    So let's work together and try to make it happen.
    [The prepared statement of Senator Inhofe follows:]

            Statement of Hon. James M. Inhofe, U.S. Senator 
                        from the State Oklahoma

    Thank you Chairman Boxer. I appreciate the opportunity to 
examine the role of the Federal Government in our nation's 
transportation system. As this Committee begins to focus more 
on transportation issues with the expiration of SAFETEA 
approaching, I believe it will be increasingly more important 
to evaluate the structure and the performance of the highway 
program.
    One indication of the lack of focus of the current program 
is the enormous number of programs--DOT frequently cites 109 
separate programs buried within the larger highway and transit 
programs. Of course simply reducing the number of programs does 
not provide focus. We must rethink the fundamental role of the 
Federal Government in the highway program. The current Federal 
program now tries to be all things to all people.
    When President Eisenhower first conceived the InterState 
System over 50 years ago, he envisioned a system to connect the 
Nation and enhance national defense. The enormous economic 
benefits provided by the system would not be fully understood 
for some time. Since then many new responsibilities were added 
largely because of the success and popularity of the program. 
It now funds everything from building museums to a program 
designed to get our children to exercise more.
    Many of the activities added over the years are very 
meritorious. My primary question is whether the highway program 
is the appropriate vehicle--especially given the limited 
resources.
    The new responsibilities were added while maintaining the 
essentially the same revenue sources. The result is that there 
are not sufficient resources to properly address the core 
responsibilities of the program, let alone the extra programs 
we have added.
    As we begin SAFETEA reauthorization discussions, my hope is 
that we will be able to work together to re-define the core 
mission of the Federal highway program. We need to determine 
the fundamental missions of the Federal program and ensure that 
those needs are being met and those aspects of the system are 
performing well. We must be bold in refocusing our limited 
resources to our nation's greatest infrastructure needs.
    And finally, I want to point out that yesterday Senator 
Boxer and I along with 65 other Senators sent a letter to the 
Finance Committee and leadership, urging a quick resolution to 
the looming Highway Trust Fund crisis. Due to high gas prices 
and a weaker economy gas tax receipts have been far lower than 
expected when we wrote SAFETEA. As a result, the Highway Trust 
Fund is going to run out of money next year. We need to solve 
this problem as soon as possible.
    Senator Boxer. Senator, I would ask unanimous consent to 
place in the record this letter that you and I signed, along 
with many of our colleagues from both sides of the aisle, so we 
have that in the record.
    Now, it is a pleasure to call on Senator Lautenberg.

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

    Senator Lautenberg. Thank you, Madam Chairman.
    For almost daily in big cities and small American towns, a 
gallon of gas hits a new record high in price. These high 
prices are a strain on family budgets and force Americans to 
make choices that they should never have to make between 
filling their stomachs or filling their gas tank, or between 
driving to work or saving some gas for a ride with the kids on 
the weekend.
    But these high prices also spotlight the lack of planning 
for our current transportation demands. If we want to permit 
life to have a semblance of days past, when families could 
routinely go places where and when they chose, we must change 
the way we travel. The Federal Government has to lead the way.
    First, America needs more and better passenger rail 
service. When good rail service is available, people take the 
trains. As an indication of the need for change, May 2008 was 
the highest month for travel on Amtrak in history. Ridership 
was more than two million passengers, which was up more than 12 
percent from May 2007. Along the northeast corridor, which is 
critical to New Jersey and other populous States, ridership on 
Amtrak regional train was also up more than 12 percent.
    So I am glad that after passage in both the Senate and the 
House, the President will soon have a chance to make a 
contribution to grow passenger rail in America by signing my 
Amtrak bill. Getting cars off the road and getting people onto 
trains is more convenient, energy efficient, and economical, 
especially with such high gas prices.
    Second, we need to support transit options for our 
commuters, from subways and buses to commuter trains. Just like 
with Amtrak, more people are riding America's public transit 
options than ever before. In the first 3 months of this year, 
ridership on the Nation's trains, subways, buses and other 
transit options was up more than 3 percent. Just think, in 3 
months it was up 3 percent compared with the year before. That 
is a rapid shift in choices.
    Third, there is no question that we need a lot of repair 
for our highway infrastructure. When our bridges are 
collapsing, as we saw last year in Minnesota, there is no need 
to debate whether or not our bridges and roads are in 
disrepair. In fact, nearly 25 percent of our Nation's bridges 
are deficient. They have to be fixed if we are going to rely on 
them for the future.
    The bottom line is this, to meet demands of tomorrow, we 
need to make major changes in our surface transportation 
programs today. We clearly have to fix what we have and make 
sure that passenger rail and mass transit play major roles in 
our future.
    Travelers can no longer get to where they need to with just 
their cars. They need better options, and transit and rail are 
a key part of the solution. Madam Chairman, I am pleased that 
we are having this hearing because if we don't focus now, we 
are going to be in even worse difficulty than we are in the 
future.
    Thank you.
    Senator Boxer. Senator, thank you. I think the timing is 
key here because the House has already said that by January 1, 
they are going to have the principles of the bill already put 
out in outline form. I think that means we have a lot of work 
to do because we want to get the principles of this bill done. 
We are going to be leaving fairly early this year. We have a 
lot of work to do.
    One of the key people who's going to be a big player in 
this, and that is Senator Isakson. I just want to publicly say 
what a pleasure it is to work with you, Senator, not only on 
this, but so many other issues.

           OPENING STATEMENT OF HON. JOHNNY ISAKSON, 
             U.S. SENATOR FROM THE STATE OF GEORGIA

    Senator Isakson. Thank you, Madam Chairman. I join you and 
Ranking Member Inhofe in full support of the transfer of the $8 
billion back from the general fund back to the Highway Trust 
Fund. We all have to recognize that is a temporary fix that 
does not solve a long-time problem that we have in terms of 
financing surface transportation in the future.
    Finding the appropriate role in ensuring a well-performing 
service transportation system in light of our limited resources 
and our revenue-raising mechanism is crucial to ensure we have 
a robust reauthorization bill. The Federal role, whatever it 
may be, must be able to adapt to an ever-changing demand on our 
system.
    Finding solutions in my State is critical. The State of 
Georgia's Transportation Department estimates we are $7 billion 
short in funding current commitments that they have made. In 
Fiscal Year 2007 alone, it was estimated alone that 
maintenance, safety, and other transportation improvements were 
$445 million short.
    On that note, I do believe the current revenue mechanism 
for surface transportation is broken and no longer appropriate 
for funding our Nation's surface transportation infrastructure. 
Just raising the tax on an already-broken system will not solve 
the problem.
    Madam Chairman, recently our State legislature convened a 
joint study committee to study the Federal role in 
transportation and the State role in transportation. They 
recommended that USDOT turn back the Federal Highway Transit 
program moneys to the States and allow them to collect the 
money and spend those revenues in coordination with their 
transportation plan. This is just one of the out-of-the-box 
proposals that we have to consider as we move toward this 
reauthorization.
    I am very grateful for the opportunity to work on this 
Committee and in particular focus on surface transportation, 
and I thank you for the time today.
    Senator Boxer. Thank you so much.
    I was so pleased that Senator Baucus could join us, who is 
the Chair of the Subcommittee on Highways. We are just thrilled 
to see you here, Senator.

             OPENING STATEMENT OF HON. MAX BAUCUS, 
             U.S. SENATOR FROM THE STATE OF MONTANA

    Senator Baucus. Thank you, Madam Chairman. I assume 
everyone else has spoken.
    Senator Boxer. Yes.
    Senator Baucus. Good. Thank you.
    Thanks for calling this hearing. Let me start by saying our 
national population is expected to increase by about 150 
million over the next half-century, and by 2020 freight volumes 
will have grown 70 percent over the levels around the end of 
the 20th century. Further, a recent study estimated that we 
need to invest $225 billion annually across all levels of 
government for the next 50 years to stay globally competitive.
    To meet these needs, I think we need a robust Federal role 
in surface transportation, now as much as ever before. Some 
people look at our current situation and say we need to abandon 
the Federal role. Even right now, I have a bill that would fix 
the Highway Trust Fund for a while, but is getting blocked in 
the Senate.
    While we do need to consider all options, I think the most 
crucial thing is we need a program that is national in scope. 
As with other national programs such as our defense, space and 
farm programs, where our shared efforts benefit all Americans, 
our transportation system is inherently a national program. My 
State of Montana relies on the Federal program. My constituents 
frequently drive long distances along Federal-aid roads across 
a vast rural State, and at nearly 28 cents per gallon for 
gasoline and 29 cents per gallon for diesel, we have one of the 
highest fuel taxes in the Country, but our smaller population 
makes it impossible to generate sufficient tax revenue to cover 
needs.
    Meanwhile, it is very difficult to afford to tolls roads 
because we have one of the Nation's lower per capita income 
taxes. We are about 48th or 47th in the Country. As a rural 
State, we are less likely to generate private investment. 
Simply put, without Federal investment, Montana cannot meet the 
needs.
    It is important to remember that the needs in Montana are 
not just restricted to Montanans. We have fewer than one 
million residents, but approximately 10 million people travel 
to Montana annually to see our natural wonders and scenic 
areas. Also, like other nearby rural States, Montana serves as 
a key bridge State for freight movements that rely on seamless 
roads across State borders.
    Finally, Montana enjoys a positive trade balance, which 
demonstrates that those not lucky enough to live in Montana 
need my State's agriculture and mineral products. As Chairman 
of the Subcommittee on Transportation which is charged with 
taking the lead in writing key parts of this bill, I held a 
recent hearing on global competitiveness because I believe that 
for our Country to be competitive, we have to have a much, much 
more robust national transportation system than we now have. 
Clearly, we must think way out of the box and not just go down 
the usual ways of doing business.
    Witnesses discussed other countries' efforts to invest 
massive amounts of money in infrastructure. One point is clear: 
They understand the significance of infrastructure. I don't 
know how many here have been to the Shanghai Port, but anybody 
here on this Committee who has been to the Shanghai Port will 
be blown away by what Shanghai is spending on infrastructure, 
and immediately ask yourself, why in the world are we so far 
behind in America? Go to Shanghai. Madam Chairman, if you take 
our Committee to Shanghai, you are going to get a good 
transportation bill.
    Today's hearing is another part of that process where we 
determine just what we need to do for the future. I have worked 
on several of these bills and I am looking forward to putting 
together a strong, far-sighted bill this time.
    I again thank you very much for this hearing. We have a lot 
of work ahead of us, but the main thing is it is exciting.
    Senator Boxer. It is exciting.
    Senator Baucus. We have great possibilities here, great 
opportunities to do a lot for this Country. We are on the cusp 
of doing something big.
    Senator Boxer. I am so happy that you came by. I know what 
your duties are these days. My goodness, you have 10 things you 
are juggling. We are just so happy you came by. Thank you.
    Let's see. We will go back and forth. Senator Barrasso, are 
you ready? Or do you want to wait for Senator Sanders?
    Senator Barrasso. I would be happy to wait for Senator 
Sanders.
    Senator Boxer. OK.
    Senator Sanders.

          OPENING STATEMENT OF HON. BERNARD SANDERS, 
             U.S. SENATOR FROM THE STATE OF VERMONT

    Senator Sanders. Thank you.
    Maybe it talks about the way we live our lives here in the 
Senate. I agree with Senator Baucus that this is really 
exciting. Now, the rest of the world probably would not think 
transportation infrastructure is exciting, but that is the 
world we live in, and he is absolutely right. There are 
enormous opportunities to improve the quality of life of the 
American people, to create millions of good-paying jobs, to 
strike a blow against greenhouse gas emissions and global 
warming, to clean up our environment. We can do all these 
things within a transportation bill.
    I was in Shanghai some years ago. My wife and I were coming 
back from the airport, and she is always more observant than I 
am. We were just driving in this bus and I was half asleep when 
she said, ``What was that went by?'' It was the magnetic 
levitation train that went by. I didn't see it, of course, but 
she saw it zooming by. It does say something that we have a 
rail system which is crumbling and China has trains that we 
don't even have in this Country.
    It says something. There was an editorial, Madam Chair, in 
the Brattleboro Reformer, a paper in the southern part of the 
State of Vermont, comparing rail transportation from southern 
Vermont to New York City in 1919 compared to today. You know 
what? We have fewer trains, slower trains today than in 1919 
from Brattleboro, Vermont to New York City.
    Meanwhile, we talk about the need to reverse global warming 
and address pollution, and that is where we are today. It is 
absolutely insane, and I know Senator Lautenberg is working so 
hard on Amtrak. But we need a revolution in transportation.
    So I think clearly in my State and all over this Country, 
all you have to do is drive down a street in Burlington, 
Vermont. There are potholes all over the place. Cities and 
towns don't have the resources to address that. We have a rail 
system which is crumbling. We have all kinds of infrastructure 
needs. Especially in these difficult economic times, we have 
the opportunity to put a large number of people to work in 
good-paying jobs by rebuilding our infrastructure.
    Also, I think it is fortuitous that on this particular 
Committee where we deal with issues like global warming, we are 
also dealing with infrastructure because, Madam Chair, we have 
the opportunity now to make sure that new transportation modes 
are addressing the environmental and global warming challenges 
that we face.
    Today, in the United States of America, and I don't know 
how it is in Montana, but I will tell you in rural Vermont 
people have no option but to use the automobile. I don't know 
how it is in Montana. There is virtually no efficient bus 
systems, so people have to use their cars at great expense. It 
makes no sense to me at all. We have to do something about 
rural transportation in general.
    So as I think Senator Baucus indicated, if you look at what 
goes on in Europe, if you look at what goes on in Scandinavia, 
Asia, we are behind the eight-ball. We have the opportunity in 
this bill to take some giant steps forward.
    Now, obviously, for the great challenges that we face, we 
don't have enough money. We are going to have to do some hard 
thinking. I think investing in infrastructure, creating jobs, 
cleaning up the environment, dealing with global warming--this 
is exciting stuff. I look forward for us to engage these 
issues.
    Thank you very much, Madam Chair.
    Senator Boxer. Senator, thank you so much.
    Senator Barrasso.

          OPENING STATEMENT OF HON. JOHN A. BARRASSO, 
             U.S. SENATOR FROM THE STATE OF WYOMING

    Senator Barrasso. Thank you, Madam Chairman. I do thank you 
for taking the time to hold this hearing today.
    I appreciate the panel for taking your time to join us as 
we take a look at the future Federal role in the highway bill 
authorization.
    For those of you who are not very familiar with my home 
State of Wyoming, I will describe it in a few words. Wyoming is 
a rural State with small towns and very long roads. It is not 
uncommon for people in Wyoming, as in Montana, to commute 100 
miles round-trip to work, to school, or just to shop for 
groceries.
    Wyoming still serves the national interest, and we do that 
as an integral bridge as people State products from the West 
Coast all the way from various ports to a pinch-point in Utah, 
where they then all come onto InterState 80 and then across the 
Country toward Chicago. I-80 runs across the entire State. It 
is 401 miles long. Sixty percent of the traffic on I-80 is 
truck traffic, and it is truck traffic most of which does not 
originate or terminate in Wyoming.
    This constant flow of traffic results in significant damage 
to the InterState system, but the current highway formulas 
don't recognize that pressure on I-80. It is a national issue 
and deserves national attention.
    When I was in the State legislature, I served and was 
Chairman of our Transportation Committee. We realized then in 
Wyoming that we could not rely solely on Federal funding to 
maintain our roads. So we dramatically put up State dollars, 
knowing that Federal highway bill funding was not going to be 
all things to all people. That was a tough and expensive 
decision for the people of Wyoming, but I believe that this 
Committee is going to have additional tough decisions as we 
move forward, such as: What are the Federal roles?; What is the 
local role?; Is congestion a Federal role or a local role?; Are 
there Federal aid programs that are duplicative and can be 
consolidated?; Do we put more money into urban areas or do we 
increase funding for other programs?; How do we pay for the new 
highway bill?; Who is paying for it?; Are motorists paying 
taxes at the pump that fund ferries and rail systems, or are 
the users of the rails and other mass transit modes paying for 
their infrastructure?
    In Wyoming, we are always proud to serve our Country, 
whether it is in the military or simply getting goods across 
the Country. However, we must also not forget the rural States. 
Montana and Wyoming work closely together as rural States. Both 
of those States serve the national interest, although we are, 
as I say, few people, small towns, long roads.
    So I am looking forward to participating in this. Madam 
Chairman, thank you again for holding this hearing. I look 
forward to hearing from the witnesses today.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you so much, Senator.
    Now, we are going to start with our experts. I am going to 
ask you to hold to 5 minutes. Just given how much interest 
there is, we want to get to the questions.
    So Dr. Seely, Chair of the Social Sciences and Professor of 
History, Michigan Technological University. Welcome, sir.

   STATEMENT OF BRUCE E. SEELY, CHAIR OF SOCIAL SCIENCES AND 
    PROFESSOR OF HISTORY, MICHIGAN TECHNOLOGICAL UNIVERSITY

    Mr. Seely. Thank you, Madam Chairman, and members of the 
Committee.
    I began my interest in highways as a dissertation project 
with support from the National Science Foundation almost 30 
years ago. I am glad to hear that there are others who think 
transportation infrastructure is of some interest. There are 
times when even my own children are not sure that this is an 
exciting topic.
    Listening to you, though, I am struck by the fact that this 
is not the first time these kinds of issues have come up. I 
could tell you of examples when other members sitting in other 
committee rooms in this building talked about very similar 
issues in the past. What I cannot do is tell you where the 
future is going, and I don't necessarily have very specific 
policy recommendations. What I can try to do is explain as a 
historian how we came to be in some of the situations that we 
are in.
    I have periodized in my testimony three periods, and I want 
to in each instance suggest some features of the Federal role 
that emerged. Two hundred years ago, Albert Gallatin, Secretary 
of the Treasury for Thomas Jefferson, was presenting to the 
Congress a plan for roads and canals as a national system that 
was necessary for the Country. The key thing that emerged at 
that time in Gallatin's idea was that this was a national 
system that had to be addressed, not something that could be 
addressed on a smaller, piecemeal role.
    Over the course of the 19th century, a second key feature, 
though, was that the Federal Government was one of a series of 
actors in this story. Local, State and private, each had their 
own role. The Federal Government's role tended to be to address 
those problems of national significance that others lacked the 
resources, the capacity, or the expertise to deal with.
    Real innovation began in terms of the Federal role with the 
push for highways at the turn of the 20th century, and a number 
of very important features are connected with that story of 
building highways. A key emphasis was the need to provide 
technical expertise and knowledge, and was something that only 
the Federal Government was deemed to be able to address.
    In the course of doing that, especially at the turn of the 
century, there was a special emphasis on efficiency. The idea 
was very strongly held that technical experts, especially 
engineers, were the best people to try to make sure that 
Federal funds would be spent most efficiently and best in terms 
of the national need. This was not easily accepted. Senator 
Borah in 1919 with some horror addressed the question to the 
Chief of the Bureau of Public Roads, Thomas Macdonald, who 
would serve from 1919 to 1953 as head of the bureau. That is an 
amazingly long period of time. But Macdonald testified that 
roads in this Country would never be completed, and that the 
Federal role would never be done. Senator Borah, a 
conservative, was a bit bothered by this, but that role has in 
fact proven to be true.
    The Federal aid system is also a big part of this story, 
that it has been done cooperatively with the States, but always 
focused on a national network as the key focus of Federal 
activities. The Federal role changed rather substantially, as 
in so many aspects of American life, during the depression. It 
was only in 1938, for example, that cities were eligible for 
Federal aid highway funding. That has certainly opened up a 
major change in the process.
    But the InterState system, funded in 1956, but conceived in 
the 1930's, planned in the 1940's, funded in 1956, and then 
built over the next 30 years, fundamentally alters many aspects 
of American life. Funding and technical standards remain key 
aspects of the Federal role, but ironically the InterState 
program also bore the seeds of its own problems, because the 
so-called freeway revolt of the 1960's altered in very 
substantial ways this idea that we could leave experts to take 
care of the problem of building American highways.
    Public hearings, environmental impact statements, 
beautification of highways, attention to aesthetics, a whole 
range of things emerged in the 1960's as new pieces of the 
Federal role in highways.
    In the end, we have lost trust in expertise, I fear, with 
some less than positive results for the way that funding has 
been produced for highways in the last few years. The emergence 
of earmarks, demonstration projects and a whole range of things 
that have displaced expertise as a central, but not the sole 
factor in deciding how to spend for highways is one result.
    The last point I would make is that the entire process by 
which transportation policy has been addressed in this Country 
has tended since 1912 at least, even earlier, to be modal. We 
have policy on roads, aviation, shipping, canals, buses. We do 
not have transportation policy. In 1991, the transportation 
bill that year, ISTEA, emphasized intermodal service as the 
essential dimension. We have only begun to try to get there, 
but unfortunately not only do we still think in terms of modes, 
Congress is structured in terms of modes. So this Committee 
deals with highways, while others deal with railroads, with 
aviation. The result is an inability structurally to talk about 
transportation, as opposed to trying to deal with a mode-by-
mode analysis.
    Looking forward, I would suggest then issues of intermodal 
ability, of conception of a national system, and especially one 
focused on the Federal role in terms of expertise would be key 
issues that I would suggest we should be thinking about for the 
next 50 years.
    Thank you.
    [The prepared statement of Mr. Seely follows:]
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    Senator Boxer. That was very interesting.
    Now, we would call on Lance Grenzeback, Senior Vice 
President of Cambridge Systematics, Inc. Welcome, sir.

   STATEMENT OF LANCE R. GRENZEBACK, SENIOR VICE PRESIDENT, 
                  CAMBRIDGE SYSTEMATICS, INC.

    Mr. Grenzeback. Thank you.
    Madam Chairman, Senator Inhofe, distinguished Committee 
members, my name is Lance Grenzeback. I am Senior Vice 
President of Cambridge Systematics. We provide transportation 
policy, planning and management consulting services to Federal, 
State and local transportation agencies and to private sector 
transportation and investment companies.
    I am pleased to appear before you to discuss the Federal 
role in surface transportation. I will focus my remarks today 
on freight transportation on the Nation's highway system. I 
will argue that the key Federal role should be to maintain the 
capacity and the reliability of the highway freight system, 
reduce major highway bottlenecks to freight movement, authorize 
new institutional arrangements to improve and operate highway 
networks, especially at the multi-State and corridor levels, 
and balance the economic risks as the freight transportation 
system adjusts to changes in demand, fuel and fuel costs, 
carbon taxes, and greenhouse gas regulation.
    On the first point, maintaining capacity and reliability, 
as several of you have mentioned, the economy is forecast to 
grow at about 2 and a half percent per year over the next 30 
years. This will nearly double the demand for freight 
transportation. The major drivers of this growth will be 
consumption, production, trade, and supply chain practices.
    The U.S. population will grow to about 380 million by 2035, 
consuming more food, clothing and housing, which will mean more 
freight moved on the highways. The number of people employed in 
manufacturing will likely continue to drop, but industrial 
production will rise because of automation, generating more 
products to be shipped. Trade is expected to grow faster than 
the economy as a whole, increasing the flow of imports and 
exports through international gateways such as the ports of 
L.A. and Long Beach.
    Finally, more businesses are moving toward on-demand supply 
chains, replenishing whatever the customer consumes as soon as 
it is sold and generating even more shipments. Most of the 
demand for freight transportation will center around our major 
cities and their surrounding major regional trade areas, as 
shown in figure 1 of the handout, which I believe you have with 
you. Trucks will carry upwards of 80 percent of all domestic 
freight tonnage.
    Figure 2 on the handout shows the projected growth of 
freight truck trips. The black line indicates the highest 
growth in highway truck strips. The growth is widespread across 
the Country, including many of the jurisdictions that you 
represent.
    In studies for the U.S. Chamber of Commerce and the 
Transportation Research Board, we have calculated that annual 
spending by all levels of government is nearly $50 billion less 
than needed to maintain the condition and performance of the 
Nation's highway system alone.
    Senator Boxer. Could you say that one more time, sir?
    Mr. Grenzeback. Yes, ma'am. We did a study for the 
U.S.Chamber of Commerce and a followup study for the 
Transportation Research Board. In the studies, we looked at the 
difference between current revenues and the level of 
expenditures needed to maintain the condition and performance 
of our highway and transit systems. For highways alone, the gap 
is approximately $50 billion annually.
    Senator Boxer. Fifty billion dollars.
    Mr. Grenzeback. Yes, $50 billion--five-zero. That is 
correct.
    In this environment, I think it is vitally important that 
the Federal Government act to maintain the capacity and 
reliability of the highway freight system. If we do not, we 
will--as many of you have mentioned--we will certainly increase 
the cost of doing business and the cost of living for all of 
us.
    On my second point, reducing delays and highway 
bottlenecks. As more urban areas become saturated with traffic, 
bottlenecks have grown along the freight routes, creating 
corridors of congestion instead of corridors of commerce. The 
worst bottlenecks, shown in Figure 3, are at the urban 
InterState interchanges in our metropolitan areas. These 
bottlenecks affect three critical elements of our highway 
freight system. The metropolitan networks shown in Figure 4, 
which account for about 40 percent of our large freight truck 
trips. The mega-region networks shown in Figure 5, which 
account for about 30 percent of trips and serve the core of the 
Nation's warehousing and distribution operations. And then the 
national trade corridors, shown in Figure 6 of the handout, 
which also account for about 30 percent of trips, and are key 
to linking our cities, our regions and our gateways.
    Dealing with traffic bottlenecks in urban areas has 
traditionally been the responsibility of State and local 
governments, not the Federal Government, but we are not 
reducing these bottlenecks because their costs are often so 
high that they cannot be tackled by a single State or city. We 
need a new national program that pools and focuses Federal, 
State and private sector resources on reducing major highway 
bottlenecks. We need to focus on these bottlenecks soon. 
Capital improvements take a considerable amount of time to 
implement. In the short term, we need to look more intensively 
at operations.
    My third point deals with authorizing new institutional 
arrangements. I suggest that Congress take a lead role in 
defining new institutional arrangements that allow States to 
coordinate their highway investments and operations at the same 
scale as the private sector businesses. Most major industries 
and the motor carriers and railroads that serve them, operate 
at a multi-State trade area level, but State departments of 
transportation and their economic development agency 
counterparts do not. We need institutional mechanisms that 
bridge the gap between national and State government, 
addressing freight transportation at the multi-State level.
    One idea emerging from the I-95 Corridor Coalition's 
projects and workshops would involve congressional 
authorization and initial capitalization of a national 
transportation infrastructure bank which could, in turn, 
establish multi-State or regional infrastructure banks. These 
would enable groups of States to finance projects of regional 
and national significance. This would facilitate public and 
private investment where it is most needed--in major bottleneck 
projects that have a long economic life and substantial 
economic benefit.
    Finally, to my fourth point, balancing economic risk. 
Increasing demand, fuel costs, carbon taxes, and greenhouse gas 
regulations, will trigger changes in supply chains and business 
location, affecting industry competition, jobs, and economic 
development across the United States. I suggest that Congress 
work aggressively to coordinate national policies on 
transportation, energy, greenhouse gas regulation, and 
particularly economic development, with the objective of 
balancing the economic risk between business and carriers, the 
public and private sectors, and regions and communities, so 
that uncertainty about the future does not lead to continuing 
under-investment in our freight transportation system.
    Thank you for the opportunity to appear before you today.
    [The prepared statement of Mr. Grenzeback follows:]
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    Senator Boxer. Thank you so much.
    Now, we are pleased to hear from Kathleen Marvaso, Vice 
President of Public Affairs, the AAA, American Automobile 
Association. Welcome.

  STATEMENT OF KATHLEEN F. MARVASO, VICE PRESIDENT OF PUBLIC 
            AFFAIRS, AMERICAN AUTOMOBILE ASSOCIATION

    Ms. Marvaso. Good morning. Thank you for the invitation to 
speak with you today. I am Kathleen Marvaso, Vice President of 
Public Affairs for AAA.
    AAA is a federation of motor clubs in the U.S. and Canada 
serving over 51 million members. Our members are the prime 
users and beneficiaries of the surface transportation system. 
They are commuters and leisure travelers and they use public 
transit. The system plays a vital role in their lives, and of 
course it underpins the economic well being of our Nation.
    As we look to the next funding bill, we think there is an 
enormous funding challenge, and we have to contemplate asking 
users, who have little appreciation for the importance of the 
transportation system and who are already highly skeptical of 
how their money is spent, to pay more. This is a time when they 
are dealing with record-high fuel prices in a tough economy.
    AAA's interest in the transportation system has always been 
focused on personal safety and mobility. We face serious 
challenges in both regards in terms of the number of crashes, 
injuries and deaths on our roadways and the increasing 
congestion which disrupts our lives and our economic activity 
in this Country.
    AAA has traditionally supported a strong Federal role in 
transportation, especially as it relates to safety. We believe 
that significantly more investment is needed, and we are 
willing to consider all options that put the public interest 
first. Safety is an area where AAA believes that national 
leadership is critical and a strong Federal role is required, 
but we do not favor just maintaining the status quo of the 
program.
    More than 42,000 people die each year on U.S. roads. It is 
about 117 a day, about five an hour, and millions more are 
injured each year. Despite the very sincere and committed 
efforts at the Federal and State levels, we are stalled in 
those efforts to turn that tide. We need to adopt new 
approaches in what we are doing.
    Motor vehicle crashes are a public health threat and they 
should be treated as such. Like other high-profile public 
health challenges, smoking and disease prevention, it is 
expected that the Federal Government has a role in protecting 
the public health. The same is certainly true in traffic 
safety.
    If the fatality and injury numbers alone are not a strong 
enough argument for the continued Federal leadership of traffic 
safety, consider the economic and quality-of-life impacts. This 
spring, AAA worked with Cambridge Systematics on a first-of-
its-kind study of the societal costs of crashes, as compared to 
congestion. This report calculates the cost of crashes for the 
same metropolitan areas covered by the annual urban mobility 
report that is produced by the Texas Transportation Institute.
    While certainly not intended to argue that congestion is 
not an important issue, we found that the societal cost of 
crashes is a staggering $164 billion annually in the urban 
areas studied, nearly two and a half times the $67 billion 
price tag for congestion. These safety costs include medical, 
emergency and police services, property damage, lost 
productivity, and quality of life.
    So we certainly believe that is a compelling need for a 
national focus on safety. But here, too, there is a need to re-
think the existing approaches. We need increased focus on 
results and metrics in order to properly evaluate current 
safety programs so we are investing in those projects and 
programs that are actually having an impact. We need to employ 
new approaches to change behavior, which is our greatest 
challenge. We need to foster more integrated approaches to 
safety to overcome the limitations of the current Federal 
structure.
    To achieve success, there needs to be increased cooperation 
and joint planning in all levels of government between health, 
transportation, law enforcement and in some cases, like drunk 
driving, criminal justice system professionals. All of these 
sectors need to work closely to develop new and better ways to 
address the epidemic loss of life on our highways. It is 
difficult to imagine what the safety atmosphere would look like 
without Federal leadership, guidance and oversight.
    The Federal Government must also continue to play a major 
role in collecting and managing data to measure what is 
working, whether that is in safety, freight mobility, 
congestion, or other programs. Limited transportation dollars 
can be applied more effectively throughout the system by 
increasing the focus on testing and evaluation. We need to move 
toward more performance-based, outcome-driven approaches in 
what we do. To accomplish this transformation, we need 
significant improvements in data collection and analysis.
    Now, we recognize that the challenges before you are not 
easy and the prospect of completely reforming the Federal 
transportation program is daunting, but this reexamination is 
long past due and it is imperative to do this if we want the 
public's buy-in going forward for changes. We are prepared to 
do our part in educating our members and the public of the 
importance for the transportation investments we need and for 
program reforms.
    So again I thank you for the opportunity to be here and I 
look forward to answering any questions you may have.
    [The prepared statement of Ms. Marvaso follows:]
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    Senator Boxer. Thank you so very much.
    Our next speaker is Alan Pisarski, an independent 
consultant, sir.

                STATEMENT OF ALAN E. PISARSKI, 
                     INDEPENDENT CONSULTANT

    Mr. Pisarski. Thank you, Madam Chairman. My name is Alan 
Pisarski and I am honored to be back before you once again. I 
recall with great pride that I participated in the first Senate 
hearing on ISTEA, and again on TEA-21 and SAFETEA-LU, so it is 
really a responsibility that I take very seriously.
    My focus today will be on taking the long view on the 
Nation's travel activity trends and demographic future. We face 
great challenges. We all know the massive energy costs, housing 
market in severe distress, and a poorly performing economy. But 
taking the longer view, perhaps our greatest challenge will be 
demographic in nature. Senator Moynihan often said, demography 
is destiny. I think this is never more true than today.
    The hallmark of SAFETEA-LU demographically was as we 
crossed 300 million, Madam Chairman, as you mentioned. The 
hallmark of this next authorization cycle will be the first of 
the Baby Boomers hitting 65. There are three impacts of that 
over time, serving a new work force, serving an aging 
population, and serving and creating an affluent society. We 
are going to have to address all of those.
    Transportation will have to be a major contributing factor 
in the enhanced productivity that will make a wealthier society 
possible and sustainable. Although certainly facing many 
economic challenges in an increasingly competitive world, 
America will continue to be a highly affluent society propelled 
by tremendous technological advantage.
    The major surge of Boomers into the retirement years will 
present key challenges, most importantly including the need to 
access, to find, skilled workers to serve a growing economy. 
The critical interactions will be between employers in search 
of replacements for the retiring Baby Boomers, and amenity-
seeking workers looking for the best locations for their 
families. Employers will go where the skilled workers are or 
where they want to be.
    Connecting distant workers with jobs will be a critical 
productivity function of transportation. As a result, rural 
populations will be even more critical to the Nation's economic 
health and massive metropolitan regions will result.
    Looking at these trends through the lens of the current 
energy crisis seems to lead to almost opposite conclusions, but 
I think we have to be very careful and maintain our long-term 
perspective here. Just as the great responses to air quality 
issues of the past decades were resolved by vehicle and fuel 
technologies, I believe that what we will see again is where 
American lifestyle preferences will lead and technology will 
respond. What we will see change is the calculus--the 
arithmetic--of housing and transportation relationships.
    How does the Federal Government function in that 
environment? Research in Europe and Asia shows that increasing 
travel speeds expands the effective labor market size and pays 
immense dividends in productivity. I think it is something we 
have to recognize. The great benefits of productivity have come 
and will come in the future from increased specialization of 
labor and the technological support that it generates. 
Increases in the specialization of the labor force will mean 
that workers will need to be drawn from larger and larger pools 
over greater distances.
    The central Federal role must be to assure that local and 
State governments recognize that they have the responsibility 
to serve the needs of interState commerce and international 
trade as part of their metropolitan mobility planning. I 
foresee conflicts between metropolitan mobility arguments and 
the needs of interState commerce.
    A major contribution can be made to improving the well 
being of the society by reducing congestion--I won't dwell on 
that and others have already mentioned it--and our immense 
national backlog.
    In closing, my proposed goal for you to consider is that 
transportation's goal is to reduce the effects of distance as 
an inhibiting force in our society's ability to realize its 
economic and social aspirations. We must accept that people 
travel for rational reasons. Trips have economic and social 
transactions at their end that benefit the trip-maker and the 
larger society. With a threatened economy, this is not a time 
to be inhibiting the economic interactions of our society. 
Rather, we should be seeking to stimulate them.
    There were tremendous gains in the last decade among 
minorities, African Americans particularly, with regard to 
access to vehicles and access to jobs through that means. Those 
people on the margins of affordability may have lost ground 
here in recent times. We should not be trying to adapt 
ourselves and our economy to high transportation costs. Rather, 
we should imagine a world where low-cost transportation permits 
us to overcome the time, energy and dollar costs of distance 
and visualize how that world might come to be. That should be 
our goal and our sense of the Federal role in guiding us to 
that goal.
    Thank you, Madam Chairman.
    [The prepared statement of Mr. Pisarski follows:]
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    Senator Boxer. Thank you so much.
    Our next witness is Daron Lovaas, Vehicles Campaign 
Director and Smart Growth and Transportation Program Deputy 
Director of the Natural Resources Defense Council. Welcome, 
sir.

  STATEMENT OF DARON LOVAAS, VEHICLES CAMPAIGN DIRECTOR, AND 
   SMART GROWTH AND TRANSPORTATION PROGRAM DIRECTOR, NATURAL 
                   RESOURCES DEFENSE COUNCIL

    Mr. Lovaas. Thank you, Madam Chairman, and thank you, 
Ranking Member Inhofe and other members of the Committee for 
having me here today.
    For the past half-century, the Federal role in 
transportation has been substantial in helping shape the 
Country's development patterns and transportation options in 
ways that are beneficial, but also costly. It supports a huge 
asset class. The built environment is 35 percent of the U.S. 
economy and many consumers get their piece of the old American 
dream, specifically a house, a car, a lawn.
    The dark side of the old American dream is that air and 
water pollution problems get worse in many regions due to 
increasing vehicle miles of travel. Government fiscal resources 
are stretched to cover far-flung infrastructure, and household 
budgets groan with strain as gasoline hits $4 a gallon and 
consumers face a dearth of transportation alternatives in their 
neighborhoods.
    The next 50 years are likely to be quite different due to 
at least three drivers: a radical demographic shift pushing up 
demand for development alternatives; growing concern over oil 
security; and the urgent need to constrain carbon dioxide 
pollution.
    First, demographics are destiny. In the decades from 2000 
to 2025, there will be more than 30 million new households 
added to the Country. Nearly 90 percent of them will be child-
free and one-third will be single-person. This is a big change 
from the last 50 years. The aging of the Boomers will change 
things, too, as from 2012 to 2025 the ranks of senior citizens 
jumps by an eye-popping 1.5 million a year. Nearly 50 million 
new homes will be built from 2000 to 2025, and the different 
preferences of empty-nesters, no-nesters and singles mean that 
demand is forecast to outstrip supply for attached and small 
units, with excess supply of large-lot units.
    Another change agent is concern over oil addiction. We use 
20 million barrels as day, a quarter of world consumption, yet 
hold only 3 percent of world reserves. Transportation is 
responsible for the lion's share of consumption and is 96 
percent reliant on oil. We are in the middle of the largest 
transfer of wealth in history, spending more than $500,000 
daily on oil imports. Oil accounts for more than half our trade 
deficit. We must drive down the oil-intensity of our economy 
and our transportation sector.
    The third driver is the pressing need to cut heat-trapping 
pollution. Global warming harms species, water resources, 
public health, and coastlines. Unchecked, it would cost the 
economy trillions of dollars a year by the turn of the century. 
Boosting energy efficiency in transportation must be a part of 
a global warming action plan.
    In short, there needs to be a strong Federal role to help 
shape the future as it helped shape the past, with at least 
five components. First, strategic investments in system 
improvements based on performance goals, building a bridge to 
somewhere, rather than nowhere. Goals must include cutting 
pollution, saving oil, providing travel choices besides 
driving, minimizing the overall environmental footprint, 
repairing existing facilities, making our economy more 
competitive and equitable, and reduced fatalities.
    Second, we need a national strategy for freight traffic. 
Increasing trade means more container ships, more trucking, and 
more rail traffic if there is no national plan for managing 
growth with an eye to efficiency and environmental protection.
    Third, we need a world-class rail system to complement our 
highway system. A multi-modal system connecting cities would 
help route the coming wave of freight and passenger traffic, 
easing congestion, saving oil, and cutting pollution.
    Fourth, we need to empower local governments, which is 
where most people and economic activity are located. Sixty-five 
percent of Americans live in metropolitan areas. Metropolitan 
areas generate three-quarters of the Nation's economic activity 
and local governments own three-quarters of our roads. But just 
5 percent of Federal dollars go directly to localities. That 
deserves a boost.
    Fifth, we need incentives for local governments to reform 
development rules. Demographic changes mean there is already 
pent-up demand for development that is walkable, with a smaller 
environmental footprint than traditional car-dependent suburban 
sprawl. Yet even the idyllic corner store is illegal in most of 
the Country. Almost 80 percent of developers say they would 
built walkable products if allowed. Consumers deserve more 
choices.
    The trust fund is also suffering from a shortfall and with 
high energy prices the gap will only get wider. Road pricing is 
proven to reduce congestion, provide important revenue for 
transit projects, and cut carbon dioxide emissions. Another 
tool, pay-as-you-drive insurance, doesn't provide public 
revenue, but offers traffic and pollution reduction benefits 
and would save most consumers cash when they need it most, 
about $500 a year.
    Last, but certainly not least, I commend the Committee for 
including investments for States, cities and transit in the 
climate bill that was considered just a few weeks ago. The 
climate bill is a repair kit for our environment and the 
transportation bill, which actually is also an energy bill 
deciding the future of transportation energy, adds 
indispensable tools to the kit.
    I look forward to working with the Committee to hone those 
tools, transforming transportation into a low-carbon energy-
efficient system more suited to our changing demographics.
    Thank you.
    [The prepared statement of Mr. Lovaas follows:]
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    Senator Boxer. Thank you very much.
    Our last speaker is Dr. Samuel Staley, Director, Urban and 
Land Use Policy at the Reason Foundation. Welcome, sir.

  STATEMENT OF SAMUEL R. STALEY, DIRECTOR, URBAN AND LAND USE 
                 POLICY, THE REASON FOUNDATION

    Mr. Staley. Thank you. I am very pleased to have this 
opportunity to speak to the Committee on this issue.
    What I would like to do in the few minutes is to really 
emphasize three different points, one of which is probably the 
most important. Also I think it is off the radar screen of many 
not only in the policy community, but also in much of the 
planning community. That is the way that mobility and travel 
patterns have changed so significantly over the last 30 years, 
which has created a very important challenge.
    Very often what I will find is that the debate over the 
Federal role tends to be framed in the historical context of 
the InterState Highway System. However, if we look at the way 
travel patterns have changed and we look at those particularly 
in urban areas, where most of our congestion is, not to dismiss 
the importance of rural areas--and I will get back to that in a 
few minutes--but what we are finding is that travel is much 
more complex and much more dynamic than it has been in the 
past.
    If we look at the nature of the traffic congestion in 
particular, as well as the kinds of bottlenecks that are 
emerging that are interfering with our freight system, much of 
that is wrapped up in the dynamics and the complexity of these 
travel patterns. Notably, in most urban areas, 85 percent of 
the traffic is not interState or through-traffic. It is local 
traffic that is using our Interstates as a local connector. 
More than half of the traffic on our Interstates in urban areas 
in peak times is in fact not work traffic. So the commuting 
element of our travel has been reduced significantly.
    What this really means for me, as someone who really 
focuses on urban economies and productivity, is that when we 
are looking at issues of traffic circulation, and when we are 
looking at issues of traffic congestion, on the urban level we 
are really looking at a local problem. The local and regional 
organizations are going to be in the best position to address 
those concerns. So there is an important element of redefining 
the Federal role to enable State and local organizations, as 
well as regional organizations, to address traffic congestion 
and transportation capacity issues, using as many tools as 
possible.
    I think we also need to make sure that this debate over the 
future of transportation and the Federal role keeps in mind 
that there will be significant adjustments in behavior, and 
most of those adjustments, particularly by consumers of travel, 
are going to be to maintain mobility. What we know 
historically, as well as through data analysis, is that 
wealthier nations and, wealthier cultures value mobility and 
they will pay to maintain that mobility.
    Now, in the context of the current case, particularly with 
gas prices going up, what that means is that there are 
tremendous incentives to adopt and develop new technologies 
that will enable to maintain that mobility while minimizing the 
actual out-of-pocket costs. I will just use us as a quick 
example. Simply shifting most of your miles from a minivan to a 
Toyota Prius essentially gives you a fiscal net-positive cash-
flow even in the current environment with gas prices. I 
actually ran the calculations, and personally that is what we 
did in my family. So we are preserving our mobility without 
having to move our house or move our household in a significant 
way. We need to keep that in mind.
    But tied into that, and keeping in mind that technology, 
and that we will see trends toward less and less use of oil, we 
are seeing the technology come on-board, which is allowing us 
to move to different types of ways to power that mobility. We 
need to make sure that we are not too keyed into short-term 
changes in energy markets when we are thinking about long-term 
changes in travel behavior.
    The final thing is that it is critical that we find and 
create new tools for bringing new resources into the 
transportation problem. At the Reason Foundation, we have 
talked an awful lot about the importance of being able to tap 
into private capital to finance new infrastructure. Certainly, 
looking at road pricing should be a critical part, we believe, 
of this Committee's deliberations and the use of public-private 
partnerships to enable local and State governments and regional 
entities as well to begin to develop infrastructure in order to 
meet the travel needs of local regions.
    Now, this is not to dismiss the importance of rural 
investments. In fact, I think that what we will have to do is 
re-think what the Federal role is on a number of different 
issues. I think we believe that rural maintenance of major road 
infrastructure, particularly as it relates to freight 
corridors, will remain a Federal role and an important one as 
well.
    But probably the most important thing from our view that 
the Federal Government can do is to allow more tools and 
resources to be available for local and State entities to use 
creative financing to meet these transportation and 
infrastructure capacity needs.
    Thank you.
    [The prepared statement of Mr. Staley follows:]
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    Senator Boxer. Thank you, sir.
    Well, we are going to go back and forth, 5 minutes each.
    Let me say, Mr. Staley, our family made the Prius change as 
well. It is a big difference when you can take a car and get 
over 50 miles per gallon. It is a big difference, and it does 
help you continue to move and not feel the changes as others 
are feeling it. My hope is that our American car companies will 
step up to the plate. They are starting to do it, and it will 
change the nature of the debate, I think. So I wanted to 
mention that.
    Now, I am going to go to you, Mr. Grenzeback, because you 
said, and I want to make sure I got it right, that we are 
falling short $50 billion a year. That is what the Chamber of 
Commerce said? Who did you quote on that? You said we are 
falling short $50 billion a year. Is that what you said?
    Mr. Grenzeback. Yes. We have done two studies.
    Senator Boxer. When you say we?
    Mr. Grenzeback. My firm, Cambridge Systematics. We have 
done several studies within the last 4 to 5 years, the first 
was for the U.S. Chamber of Commerce and the second was for the 
Transportation Research Board. We have done similar work for 
the Federal Highway Administration and AASHTO. All these 
studies looked at the difference between current revenues and 
the level of experience need ed to maintain or improve the 
Nation's highway and transit systems.
    What you find is that if you look out over the next 10 
years, the gap between current revenues and what you need to 
maintain the system----
    Senator Boxer. Just to maintain it?
    Mr. Grenzeback. Just to maintain. To maintain the condition 
of pavements and bridges and keep congestion at about the same 
level it is today, and is running in the range of about $50 
billion per year for highways, and you would add another $8 
billion to $10 billion for transit.
    Senator Boxer. Oh, my goodness.
    Mr. Grenzeback. If you want to move to the next level, 
which is to try to improve the performance of the 
transportation system--that is to invest in projects that have 
a positive economic return to the economy--you could double 
that.
    Senator Boxer. OK. Oh, my goodness. Stop right there.
    I just want to proceed, then I will call on you, Mr. 
Pisarski.
    This is kind of sticker-shock, so I just want to go through 
this with you and just talk it out.
    You are saying that just to maintain what we have, does 
that mean major fixes to bridges that are falling down, I 
trust?
    Mr. Grenzeback. Yes, I would hope so.
    Senator Boxer. Yes. OK. So to maintain what we have, do the 
infrastructure repairs, and rebuilding of what we have, just 
for the highway piece, we are short $50 billion a year. If we 
look over at the transit side, we are short about another $10 
billion a year.
    Mr. Grenzeback. In round numbers, yes.
    Senator Boxer. OK. So just for my colleagues to know, and 
my staff will correct me if I am wrong, the last bill we passed 
was $286 billion over 6 years. If we adopt just the $50 
billion, and ignore the transit part for a minute, it gets us 
to $586 billion of a bill that we would need to pass just to 
maintain what we have.
    Mr. Grenzeback. Yes. We have built a very extensive road 
system, excellent highways.
    Senator Boxer. I am not challenging you.
    Mr. Grenzeback. We must maintain that system.
    Senator Boxer. I am not challenging you. I agree with you. 
I am just trying to get it in my head what this Committee is 
faced with. Max called it exciting. He is right. It is exciting 
and challenging, which leads me--and I will get to Mr. Pisarski 
in a minute to comment on the question--but I think Senator 
Inhofe and colleagues on both sides, you know, when the House, 
both Don Young and Oberstar came out and said they needed a 
$500 billion bill, I looked at my staff and said, well, what 
are we going to get for that? They basically said we are going 
to be able to do what we are doing, but make sure we keep 
everything up. It is just something we need to think about as 
we go forward.
    Mr. Pisarski, I am going to call on you, but before I do, I 
hope you will answer this. We are all looking at creative ways 
to be able to pay for this. Senator Inhofe and I are going back 
and forth with new ideas and thoughts on how. And I know 
Senator Baucus is going to have a major, major, major role in 
his committee on all of this.
    So could you, Mr. Pisarski, first of all confirm if you 
agree with this $50 billion number, and it is $60 billion if 
you go to transit? And second, if you have any thoughts of how 
we could look at the funding gap, and what ideas you have for 
funding. And then I will open it up to the rest of the panel to 
see if you have ideas for funding. But why don't we start with 
you?
    Mr. Pisarski. Thank you, Madam Chairman.
    Yes, in fact I worked on the Chamber study and the 
Transportation Research Board study with Lance. I testified a 
couple of weeks ago in the House that our current backlog is 
about one and a half reauthorizations worth of funding. The 
numbers that Lance used are now a year old, and with the 
increases that we have seen in the cost of materials, the 
numbers will be higher for sure.
    Senator Boxer. Does that include State share?
    Mr. Pisarski. Yes, ma'am.
    Senator Boxer. OK. That is important.
    Mr. Pisarski. We are talking about total national capital.
    Senator Boxer. OK. That is good. That is better.
    Mr. Pisarski. It is total national capital.
    Senator Boxer. That is better. And the State share is about 
25 percent?
    Mr. Pisarski. It is 25 percent of total amount, but 50 
percent of capital, roughly 50/50. Susan Binder, who used to do 
the condition performance report, is painfully aware of this 
work. The new Condition and Performance report that will be 
coming out in 2006 I would assume would update these numbers.
    Senator Boxer. OK. My time has expired, and no one has 
given us the golden answer. But let me just say, I want to take 
a minute. Bettina, would you introduce Susan? I think everyone 
on both sides should know about this exciting new hire we made. 
So Bettina?
    Susan, stand up. Tell them her background.
    Ms. Poirier. She worked for the government for over 30 
years, including DOT and the Maryland Department of 
Transportation, and was the Executive Director of the blue 
ribbon panel.
    Mr. Pisarski. Madam Chairman, may I say that USDOT only 
lost about 20 percent of its capability when Susan came over.
    Senator Boxer. We are thrilled that she did do this. We are 
very happy. We think that she has proven she can work with both 
sides. This is good for our Committee.
    Anyway, Senator Inhofe?
    Senator Inhofe. Let me say also, Madam Chairman, that we on 
the Republican side love Susan just as much as you do.
    [Laughter.]
    Senator Inhofe. Let me make one comment.
    Mr. Lovaas, I think you are kind of fighting a trend here. 
We did have, as you well know, 3 weeks ago a climate bill. We 
know the outcome of that. I think trying to insert some of this 
stuff in a transportation bill that is otherwise totally 
nonpartisan would be doing a great disservice to our coming up 
with some solutions. That is just my observation on that.
    Let me clarify, Mr. Grenzeback. When you talk about the 
figure of $50 billion, isn't that primarily State, county, 
Federal? That is all dollars, and not just Federal?
    Mr. Grenzeback. Yes, sir.
    Senator Inhofe. And Federal is essentially about 40 percent 
of that.
    Mr. Grenzeback. Yes, spending by all levels of government 
are included in that $50 billion.
    Senator Inhofe. I think it is important to clarify that. It 
is something that is important for clarification purposes. You 
know, I am going to use my time in trying to come up with 
something that the Chairman and I were talking about just a few 
minutes ago. Regardless of what happens in the upcoming 
election, should the majority change, it wouldn't make any 
difference at all as to how we are going to treat this. I am 
sure that Senator Isakson, Senator Baucus, the Chairman and 
myself are going to try to resolve this problem. We have to 
make some major changes.
    The young lady sitting behind me, Ruth Van Mark, has been 
with me for over 20 years. We spent 8 years on the House side. 
I have to say to you guys that times have changed. Those were 
the good old days. We always had a surplus in the Highway Trust 
Fund. We sat around there and a lot of people thought we were 
spending too much money on transportation. Frankly, I think we 
were at that time. But times have changed.
    Now, we are faced with a situation where we are going to 
have to do something. What we are talking about up here is 
maybe going back, just something we might be thinking about, 
and we can talk about this later, to the original concept.
    Back when it all started 50 years ago, the amount of money 
that was in the trust fund was really used for expanding and 
just maintaining surface transportation. That is what it was 
all about. Maybe we need to start segregating in our minds 
rail, safety, surface, and go back and maybe the amounts that 
we would have to work with would work in surface 
transportation.
    Now, I mentioned in my opening statement that it appears 
that because of the increase in the price of fuel, and people 
are driving less, and the Highway Trust Fund is not a 
percentage but a centage, which is the problem. It has gone way 
below expectations, to about $8 billion, we are approximating. 
That happens to be about the same amount of money that in 1998 
when then-President Bill Clinton looked at a $16 billion 
surplus in the trust fund and took $8 billion out of it and put 
it in the general fund.
    My feeling is, in whatever vehicle is out there we might 
want to be looking at, is to undo what shouldn't have been done 
in my opinion, which I stated on the floor in 1998, and bring 
that back into the Highway Trust Fund. In fact, we have CBO and 
a neutral scoring that should happen.
    Now, what I would like to do in this brief period of time 
is have each one of you, starting over here, kind of comment 
briefly on the idea that we just are thinking about up here 
that maybe go back to the original concept, and then have each 
of the other programs, which are very important--transit and 
everything else--kind of stand on their own.
    What are your thoughts about that? Let's start with you, 
Mr. Grenzeback.
    Mr. Grenzeback. I think that having each system stand on 
its own makes good sense, except that you must treat the 
national system as an integrated transportation system, so you 
will want some flexibility to move moneys among the various 
modes to solve capacity and congestion problems.
    I think that Mr. Seely alluded earlier to the fact that in 
the 1800's, we had a consensus that investment in rail was the 
direction for economic development. In the mid-1900's, we had a 
consensus that investment in the highways, especially the 
InterState system, was the foundation for economic development.
    I think we have approached the point today where we are at 
capacity on almost all of our systems--highway, freight rail 
and transit rail. We are up against the question, again, as to 
where we invest strategically for economic development. I would 
suggest that you want to approach investment in our 
transportation systems this from a very broad perspective, 
looking at what we need to do for economic development.
    Senator Inhofe. I think what we are talking about is 
independent funding sources, because we have to do something.
    Any comments, Mr. Seely? I know my time has expired here.
    Senator Boxer. If I could just jump in here, this is 
something we have been batting back and forth. The notion is 
that we need to get more funding. Let's face it, we do. So 
let's just say--and I am throwing this out, it is just a 
thought--if we decided, for example, that rail was important 
and we needed to make more investments in rail, who really 
benefits from that? Obviously, the people who ship goods in and 
put those containers onto the rail. If you were to be able to 
agree on a fee per container, that would go for rail.
    So what we are trying to talk about here is a way to not 
try to take this dwindling Highway Trust Fund and put every 
single thing that we do into that. It is just not there. So 
that is the kind of thing we are talking about, if that helps.
    Senator Inhofe. That is correct.
    Senator Boxer. Yes, that type of idea. That is not a fee 
that we agree on or anything. That would be an idea, though. 
What do you think of that?
    Mr. Seely. The point that strikes me is there has always 
been a highway financing crisis. We have moved through a series 
of these. In the 1920's, with the first effort, the question 
was how are you going to pay for these roads. It was mainly 
local and State. Bonding was used. Convict labor was used. 
There is a long, long roster of ways to fund it.
    The gas tax emerged, and one historian has called it the 
only popular tax in American history. Part of the logic was 
that people were willing to pay a penny or two for gasoline, 
with the understanding it would lead to improved roads. But 
when the Highway Trust Fund comes along, the innovation is not 
that we are creating the trust fund. It is that we are 
segregating a variety of funds and again connecting them to 
roads. But the Highway Trust Fund was created with an increase 
in funding because of the increase in the size and scale of the 
system to be funded.
    So now we are in a situation where once again we are 
looking at a mechanism to do this. A whole range of different 
avenues have been out there. I think the crucial thing to avoid 
is the idea that there is a magic bullet out there. Instead, 
what I think we need to look at is the totality, as is being 
suggested here, of local, State, national funding and private 
opportunities so that you are able to do this.
    My only concern, Senator Inhofe, is that if you start 
thinking again of individual forces, you find yourself back in, 
then, one answer, one piece. But again, the issue of 
integration is the fundamental challenge. The InterState 
highway system in advertently had a major detrimental impact on 
the Nation's rail system. Funding for airports also in the 
1950's again had a detrimental impact. No one considered the 
unintended consequences for other modes of transportation.
    Senator Inhofe. I appreciate that. I am not sure I agree 
with you totally. If I could just get one comment from Mr. 
Pisarski, because I think he is uniquely qualified to address 
this.
    Mr. Pisarski. I guess my sense is that over the year the 
Highway Trust Fund has been a very powerful tool. Over the 
years, it has accrued more and more people who are interested 
in helping to spend that money. It seems to me that it is not a 
multi-modal program simply because we have a source of revenue 
that everybody spends unless it is a multi-modal source of 
revenue generation. We have two tools that really work well: 
the Aviation Trust Fund and the Highway Trust Fund. We have a 
bunch of other modes that need Federal help and they have been 
trying to draw on those trust funds. I think we are tapped out 
in those trust funds. The Highway Trust Fund is no where near 
close to being even able to address the highway program, much 
less the ancillary programs and the goals that people have for 
it.
    Madam Chairman, you asked me before about what we need to 
do. I think the answer is, unfortunately, it is one of those 
``all of the above things.'' The thing that upsets me most is I 
hear people arguing about tolling versus tax, private versus 
public. We need all of it. We need private help. It is a small, 
but a significant part. We are going to need bonding, as people 
have mentioned. We are going to need trust fund revenues. We 
are going to have to look at general revenue. In the Chamber 
study, we did propose something on the order of a container fee 
for pieces of interState trade coming into the Country.
    We are just going to have to open the door to almost every 
opportunity.
    Senator Inhofe. Yes. Let's go on.
    Senator Boxer. OK. Thank you, Senator.
    I am going to call on Senator Baucus. Before I do, I want 
to say that we love Ruth as much on our side.
    Senator Inhofe. As we love Susan, is that what you are 
saying?
    Senator Boxer. Yes.
    [Laughter.]
    Senator Boxer. Senator Baucus.
    Senator Baucus. Thank you, Madam Chairman.
    Mr. Pisarski, I appreciate that you recognize many sources 
of revenue. My real question is, how can we keep this a 
national system? I believe it is national. We just can't let 
each city--the wealthy cities, the powerful cities--do their 
thing, the wealthy States, the donor States do their thing. It 
just won't work.
    So my question is, how do we keep this national in scope so 
there is buy-in nationwide? So we are all as Americans in the 
same boat together here?
    Mr. Pisarski. Forgive me, Senator, for making a little bit 
of a historical point. When Senator Moynihan was chairing the 
Committee, I once said to him that even if you abolish Montana, 
forgive me, it is still going to be just as far from Chicago to 
Seattle. I think the point is that we have a national geography 
that is massive. We have a massive society of 300 million 
people, and we need national systems to support that.
    I am very concerned about the donor-donee issue. I am more 
concerned about the varying levels of growth that we are seeing 
in the Country. I think it is going to make it extremely 
difficult for you to form legislation with that in mind. Part 
of that, I think, will be the necessity to focus, to come down 
to interState commerce, to come down to the fundamentals that 
the Nation looks to the Congress to support.
    Senator Baucus. Senator Moynihan must have had a fixation 
on Montana.
    Mr. Pisarski. Yes.
    [Laughter.]
    Senator Baucus. This is a divergence because when Senator 
Moynihan was still in the Senate, I was at a big lunch and he 
had two charts on easels. One chart was, in descending order, 
the amount of dollars spent per State on public education, 
elementary and secondary. And New York was at the top, and it 
went down the list. The other chart was math and science scores 
of maybe sixth-through eighth-graders in the Nation. On that 
chart, Montana was up there, with North and South Dakota and 
some of the other States. Senator Moynihan said, what possible 
correlation can you draw between these two charts? That is, 
spending on education versus performance. He said, there is no 
logical conclusion. One cannot draw any conclusions from these 
two charts, except if you want your child to have good math and 
science education, move to Montana.
    [Laughter.]
    Senator Baucus. But I would like to ask Mr. Seely about any 
thoughts you have to keep this national in scope, so that we 
are all working together.
    Mr. Seely. The thing that I guess strikes me as a historian 
is that the key points about building national systems was 
consensus on the importance of the effort. So in 1916 and 1921, 
with the initial legislation, there was broad agreement on how 
essential it was. Even within those 5 years, the focus changed 
from post roads to highways.
    Senator Baucus. How do we get broad agreement today?
    Mr. Seely. How do you get broad agreement? The problem was 
too large to be addressed individually. In effect, Senator 
Moynihan's comment was really the same as was being addressed 
throughout all of those. It would be wonderful to talk about 
keeping all the funding in the States with large populations 
and large bases, but unfortunately they would lose the benefits 
if other States that couldn't afford to do it were left out of 
the mix.
    The InterState system, though, created the same kind of 
common focus. There was excitement about it. Often, though, 
ironically it comes to a sense of crisis. In the 19-teens and 
1920's, there was a recognized sense that if you don't do 
something, you have a major crisis.
    In 1956, the InterState legislation emerged after eight and 
a half years of battling in Congress over how to fund this 
system. Indeed, the 1956 legislation doesn't create the 
InterState. It creates the trust fund that allows the 
construction and funding of the InterState. The system has 
roots that go back another 15 or more years.
    So it is not unusual to have gaps in this process. What is 
really intriguing is that at some point, ironically, in our 
American democratic political system, it often takes a crisis 
before it tips things over.
    Senator Baucus. That is correct. So how would you define 
the crisis?
    Mr. Seely. Right now, I think the crisis is the essential 
necessity of this kind of national-scale infrastructure for 
competing in a global economy.
    Senator Baucus. About two or 3 years ago, I was with a 
group of folks at the Business Roundtable talking about how 
crisis moves America, whether it is Pearl Harbor, Sputnik, 
whatever it was, then we move. Otherwise, we tend not to move 
very far. My view is that international competitiveness is the 
looming crisis. It was easy to respond to Sputnik because you 
can see it up there, and we put a man on the moon. But this is 
a crisis that is like a stealth crisis. It is subtle. It is 
like the frog in the hot pot. It is not boiling, and so forth.
    It is so hard to see anyway, and I'm sorry to repeat myself 
here, but in the group I mentioned all that. And one of the 
CEOs of a major railroad popped up and he said, Senator, I have 
seen Sputnik. It is the Shanghai harbor. I agree with him. I 
agree with him. Once you see that Sputnik, then there is a 
sense of what we have to do as a Country, and get moving here.
    Senator Boxer. OK, Senator, we are going.
    Senator Baucus. We are going to Shanghai.
    [Laughter.]
    Senator Boxer. Get ready and pack your bags. We will go to 
Shanghai.
    Senator Baucus. Thank you very much, Madam Chairman.
    Senator Boxer. OK.
    Senator Baucus. I have another question that I would like 
to submit for the record.
    Senator Boxer. That would be terrific. OK.
    Senator Isakson.
    Senator Isakson. You know, on that point, one of the 
problems we have is the average Georgian says the crisis is $4 
gasoline. We are talking about a crisis of crumbling 
infrastructure. One of the things we have to do is educate the 
American public that with a coordinated intermodal system that 
is up to standard, you raise economic prosperity. But if it 
crumbles, your economic prosperity goes down, which makes the 
cost of gasoline and everything else even more of an economic 
problem. I think we have an education job to really work on as 
we go about this.
    Ms. Marvaso, twice in your remarks you used the word 
mistrust. At the end, and I am going to read this for a second, 
you said, ``If we fail to understand the amount of mistrust the 
public has in our ability to deliver recognizable 
transportation improvements and be good stewards of the 
motorists' dollars, we will fail in reducing fatalities, fail 
in cutting commuter times, and fail to grow our economy in a 
way that keeps us globally competitive.''
    Would you elaborate on the mistrust?
    Ms. Marvaso. I would be happy to, Senator.
    You have gotten onto a line of discussion that AAA believes 
is really critical, and that is the public perception. We have 
done some research on this over the years. We have done a 
number of focus groups in the past 5 years. We find this to be 
just absolutely pervasive. It is a deeply held mistrust of the 
system.
    It is not just the Federal system. It is all levels of 
government who spend their money. So what we have is a populace 
that doesn't understand that they are paying for their roads 
when they go to the pump. They mistrust deeply what is 
happening with the money that does go into their roads, whether 
or not it is well spent or not. They just don't perceive it 
that way.
    I think considering that we have such a very, very serious 
gap in the funding and the need for such significant 
investment, and one way or another it is going to come down to 
the road users. You know, they are going to be paying these 
fees whether it is in gas taxes or road fees or registration 
fees for vehicles or any other way you can look at this. Even 
if you put a container fee, ultimately it is going to be passed 
along to the consumer.
    You are not going to be able to do this without strong 
public backlash unless there is a greater understanding of the 
importance of this transportation system. We have found, and we 
have just done some focus group research in the last couple of 
months, and we were very surprised to find, as near and dear as 
safety is to our heart, when we talked about safety arguments, 
we didn't get a lot of resonance with people about 
understanding and appreciating the importance of the system. 
What really, really resonated was global competitiveness. You 
can really talk about that and get people to pay attention to 
what you are talking about.
    So we think that this is critical. We are doing our part, 
but we are a not-for-profit. We are going to be having to look 
at other stakeholders and partners to do this. Public education 
is critical. We have a monumental task ahead of us and we 
cannot do it, I don't believe, with a secure commitment for the 
kind of investment we need, one way or another, it is going to 
take more investment, and we can't do it without bringing the 
public along.
    Senator Isakson. To that end, when you say the word 
mistrust, two words pop into my mind. One is corruption and the 
other is incompetence. Would you rate that mistrust either way? 
Because mistrust is a general, generic term.
    Ms. Marvaso. Yes. I am trying to think about our focus 
group. I am visualizing what they were. Really, honestly, some 
of it is fair and some of it is not fair. I think that the 
public grabs onto some notions, certainly the bridge to nowhere 
is one, but there are local projects that are another. They 
have the perception that their projects go on and on for years, 
that they are over budget, and that they are late, whether they 
are or not. It is just a deeply held view that, whether it is 
the State Departments of Transportation or the Feds or 
whatever, do not execute this well. They do not do things on 
time and on budget.
    Senator Isakson. Well, on that end, Dr. Staley and Mr. 
Lovaas both made comments regarding the importance of local 
planning. You talked about the 80 percent walkable communities. 
You talked about shopping traffic using Interstates. We have 
had that problem in Atlanta. A lot of this incompetence or 
mistrust I think we cause some of it in the laborious mechanism 
that we force the process to go through before in reality a 
road is built.
    I will give you one example. I ran for office for the first 
time in 1976 and was elected on a commitment to get a road 
widened. This is the Johnson's Ferry-Abernathy in Atlanta, 
which is irrelevant. Thirty years later, they are finally 
finishing the last EIS study and they are acquiring the right-
of-way and they are going to start construction next year. That 
is a gross example of the problem.
    We have to in some way as we protect our air and keep it 
clean, recognize that in urban areas where local traffic is 
using an InterState, we need to work on ways to make that not 
happen, yet the Clean Air Act sometimes prohibits those 
improvements from taking place because it is a non-attainment 
area. We had a situation like that in Atlanta. We have to do a 
better job on educating people on density. You can have density 
and have green space at the same time. I know you work with 
Earl Blumenauer a lot, I think, on a lot of stuff in urban 
areas. I know I am going over my time here, but part of that 
mistrust is what the system makes to appear to be incompetence, 
which is in face due diligence in a myriad of disciplines that 
you have to go through before you put a new project in the 
ground, whether it is a highway or a local road or possibly 
even a rail corridor.
    I apologize for going over. Thank you.
    Senator Boxer. That's fine.
    Senator Sanders.
    Senator Sanders. Thank you, Madam Chair.
    I was elected Mayor of Burlington in 1981. One thing I 
learned, as someone who inherited a crumbling infrastructure of 
our city streets and water systems, is that the longer you 
delay, it just doesn't get any cheaper. It just gets more 
expensive. So one of the insanities of this whole thing is that 
we allow our infrastructure to crumble rather than maintaining 
it, and we just spend zillions of dollars more than we should. 
So this is an issue we have to get a handle on.
    I am sorry Senator Inhofe is not here because once again I 
would slightly disagree with his approach in ignoring 
environmental issues. I think given the crisis of greenhouse 
gas emissions and global warming and other environmental 
problems, I don't think you can ignore them.
    The other point that I would make is what Dr. Seely said. I 
think you have to look at transportation totally as an 
integrated matter because every time you invest in one area, it 
has an impact on another area. For example, there have been 
studies out there that if we had a good rail system it would 
mean fewer people having to go by car to airports, for example. 
And it would impact air traffic if you can go between major 
urban cities by rail, for example.
    The issue, Madam Chair, about funding is obviously going to 
be a crucial issue. I think we all agree. No matter how you 
divide it up, we need more money. It will be a big debate about 
that. I would just throw into the hopper my feeling that it is 
not good enough. I think where Ms. Marvaso was coming from, we 
have to explain to consumers. Well, they understand something. 
You know what they understand? They understand that the middle 
class in America is collapsing; that poverty is increasing; but 
many of them are working longer hours for lower wages.
    You can explain all you want to them about why you want to 
raise their taxes, and they don't feel good about it. And they 
are right. The other thing you can explain to them is that the 
top one-tenth of 1 percent of income earners earn more money 
than the bottom 50 percent.
    So I think we have to take a hard look at how you raise 
money. It is not simply, in my State as in Montana and in 
Georgia and in rural States, people travel long distances to 
work. Senator Isakson has people who make $10 an hour who are 
traveling 100 miles to and from their jobs. You can tell them 
all the good reasons why you are going to raise their taxes, 
but they are not going to be too sympathetic. And you know 
what? They shouldn't be too sympathetic. We have a very unequal 
distribution of wealth and income in America. Transportation is 
a national issue. If you can pay $12 billion a month for the 
war in Iraq, we can start putting money through our national 
income into transportation as well.
    I would like to ask Mr. Lovaas just a question. Talk 
radically, if you want. Talk boldly, because I think we need 
some bold thinking about green transportation, if you like. 
Now, I know the other problem that we have in the Senate, that 
I learned after a year and a half here, is the incredible 
Balkanization. Next door, they are doing something else of 
importance. We are doing it here, and people are not talking to 
each other. We don't talk. We don't have the responsibility for 
wondering why, as you said, Madam Chair, we don't have plug-in 
hybrids today which get 150 miles per gallon, while GM is 
giving us the Humvee which gets eight miles per gallon. But 
that is part of what this debate should be about, and why we 
don't have rail is, in a sense, in another committee, and 
aviation is over there.
    Mr. Lovaas, talk both from a cost-effective point of view 
and an integrated environmentally conscious point of view about 
where you think we should be going transportation-wise.
    Mr. Lovaas. I think we need to carefully consider what the 
next 50 years are going to look like. Frankly, in terms of the 
revenue question, I feel we are putting the cart before the 
horse here. The American public before they agree to pay 
additional levies to fund transportation infrastructure want to 
know what they are buying. In the last 50 years, it was buying 
a world-class interState highway system. The question is, what 
is next? Maintaining that system makes sense. Dealing with the 
growing freight problem makes sense. And investing in other 
modes----
    Senator Sanders. When you say dealing with the growing 
freight problem, are you talking about rebuilding our rail 
system, among other things?
    Mr. Lovaas. Building a rail system to complement the 
highway system to connect our cities we believe makes sense. So 
in terms of the environment, as Mr. Pisarski mentioned and I 
think Mr. Staley mentioned as well, we are making leaps in 
technology with our vehicles and our fuels, and that is 
terrific. And we will fall short of our energy goals and our 
environmental goals unless we also address the problem of 
runaway vehicle miles traveled.
    Senator Sanders. Given the jurisdiction of this Committee, 
which our Chair has to deal with, what ideas do you have? What 
incentives can we provide in this Committee, given our 
jurisdiction, to enhance energy efficiency, say, in 
transportation?
    Mr. Lovaas. Well, basically the Committee needs to lay out 
a vision for what the transportation system will look like 
under the highway title, which is the jurisdiction of this 
Committee. That should be bound by certain performance goals, 
including oil savings goals and environmental goals, including 
greenhouse gas emissions. It should work more with local 
jurisdictions and with metro areas to improve transportation 
choices within those areas. Because what is happening right now 
is that Americans really don't have as many choices as they 
would like, especially environmentally beneficial ones. This 
would make a huge difference out there, and it would complement 
the remarkable progress we are making with vehicle technology 
and cleaner fuels.
    Senator Sanders. Yes, sir?
    Mr. Grenzeback. Senator, in answer to your question, you 
have to separate our transportation and funding of the 
transportation systems from our environmental and energy goals. 
Right now, we are on the wrong side of the curve. We are 
basically dependent on people spending more on gasoline and 
driving more in order to fund the maintenance and upkeep of our 
highways. I think we should begin to look at separating those.
    In the short term, we are going to have to rely on fuel 
taxes, either indexed or increased. Our fuel taxation program 
is efficient and accepted. But I think in the longer term, we 
must look at tolling to support the improvement and maintenance 
of roads where there is a market and the congestion to support 
it.
    Senator Sanders. But the essence of tolling means that 
somebody, the worker who is using it?
    Mr. Grenzeback. But beyond that, we must look to charging 
user fees on vehicle miles of travel, as opposed to taxing just 
fuel----
    Senator Sanders. I understand where you are coming from, 
but from my perspective, those are fairly regressive 
approaches.
    Mr. Grenzeback. It would allow you to separate your fuel 
policy----
    Senator Sanders. Yes, but you are going to be adding more 
expenses and more taxes on low-income working people.
    Mr. Lovaas. Senator, regardless of what you do to generate 
revenue, the reality is that the Federal gas tax, we haven't 
been able to increase it for 15 years, and there are real 
reasons why. Those reasons include the fact that the American 
public doesn't buy the product line anymore. They have lost 
faith in it, as the spokesperson from AAA said. We need to give 
them an alternative vision for the next 50 years that makes 
sense.
    Senator Sanders. Well, I don't really agree with that. We 
have provided hundreds of billions of dollars in tax breaks for 
the wealthiest 1 percent. Most of my constituents do not come 
to me and say that is really a great idea. When you are talking 
about politics and the power of special interests right here in 
Washington, DC, I would say those hundreds of billions of 
dollars could do a lot more going into building our 
infrastructure than giving tax breaks to millionaires and 
billionaires.
    Yes?
    Mr. Staley. Senator, I think it is a really important point 
that you are raising, but I think one of the things that we are 
missing, particularly in the area of tolling, is there is 
another important aspect to tolling which really speaks to Ms. 
Marvaso's point about the trust in government. There is a 
reason why almost half of our lane miles have been added 
through tolling over the last 10 years. There is also a reason 
why we have been able to expand capacity along the I-15 in San 
Diego, as well as the 91 express lanes in Orange County that 
are doing so well. It is because tolling creates transparency 
in terms of where the revenues are going and the facilities 
that are being built. People can actually see the benefit, and 
then they also have the option.
    What we have seen happen is that although there has been a 
lot of resistance to tolling at the beginning of each of these 
projects, whether they are in Minneapolis or Denver or San 
Diego or even Orange County, once the facilities are built and 
the tolling is in place, the popularity increases significantly 
because at that point is when the benefits become transparent 
and people are willing to pay for facilities when they know 
that they are going to have that benefit.
    So I think that is an element of tolling that needs to be 
considered because it helps address the question of whether we 
trust whatever organization it is to actually provide these 
kinds of transportation facilities.
    Senator Sanders. Thank you.
    Senator Boxer. Yes. Let me say before I call on Senator 
Whitehouse, and I'm looking forward to hearing from him, I just 
want to say, Senator Sanders, there is a way for us to help the 
middle class and the working poor, even if they do have to pay 
for vehicle miles traveled, through the tax code. In other 
words, I would support, for example, because I think you do 
have to look to the people who are using the system to help 
keep it up.
    Now, there is a way to make a refundable tax credit. They 
just should say how much they pay, and if they fall into a 
certain income category, we can deal with it. But I am of a 
belief that we are going to have to pay for this. We are going 
to have to pay for it, and I don't believe it is the general 
fund. We have a lot of other things we need to do with the 
general fund--education and all the things you and I want to 
do.
    I am just thinking, and I hope you will open your mind to 
the notion, for example, because I now drive a Prius, I use 
less gas. I am paying less taxes. I was smart. I bought a 
Prius. Terrific. I figured gas would go up and it did. But I am 
using the highway as much as Joe Smith, who is driving an old 
car because he doesn't have enough money to go buy a Prius.
    Now, it is not fair that I am now paying less into the 
Highway Trust Fund. I feel bad about that. I want to support. I 
don't want to support the oil companies. I am happy. I am 
thrilled. I wave when I go by the gas. But I want to support 
the Highway Trust Fund.
    So the point is, there ought to be a way to do vehicle 
miles traveled in a way that I have to pay. Maybe when I 
register my car, if I go 50,000 miles or more, I pay X. If I go 
less than 10,000, I don't pay anything. And then my friend, Mr. 
Smith, who now has to pay a little more, but is in the working 
poor, he ought to be able to get a refundable credit back to 
him.
    So I just hope you will keep your mind open to the fact 
that I don't think we are going to get anywhere if we decide we 
want to spend, say, on the Federal share, $400 billion--I am 
pulling a number out of the air--and we don't pay for it. I 
think it is a non-starter. I think we are going to have to pay 
for it and figure out a way to give back the money to the poor 
person you are talking about who can't afford it, but the rest 
of us I think have to pay.
    Let me hear from you back.
    Senator Sanders. I would just say that I think 
infrastructure and transportation has got to be looked at in 
the overall context. An important part of what we do is an 
overall government. If we can fund $12 billion a month for 
Iraq, if we can give hundreds of----
    Senator Boxer. But I am not for that.
    Senator Sanders. I know you're not. Believe me, I know 
you're not. And if we can give hundreds of billions of dollars 
in tax breaks to people who don't need it, I think we have to 
take a hard look at those issues and say infrastructure is 
enormously important for every single American.
    Senator Boxer. So you think it ought to be paid for out of 
general tax funds, and not specific----
    Senator Sanders. My main concern, coming from a rural 
State----
    Senator Boxer. Yes.
    Senator Sanders. I just don't want to see some guy who 
through no fault of his own travels 100 miles to and from the 
job, very common in my State.
    Senator Boxer. And in mine.
    Senator Sanders. OK. And I don't want to see that person 
have to pay for all of these----
    Senator Boxer. Yes, but there are other ways to get at it.
    Senator Sanders. We can discuss those, but that is my 
concern.
    Senator Boxer. I just want to say that I share your view 
completely. I come out at a different conclusion, because I 
don't think you are going to be able to fund everything we want 
to fund without user fees. I think user fees make sense, but I 
think we need to always take care of the folk that are forced 
into the situation. We have a lot of time to discuss it.
    We will hear from Senator Whitehouse, then Senator Cardin.
    Senator Whitehouse. Thank you, Madam Chairman. First of 
all, thank you for holding this hearing. This is my first 
venture into the wonderful world of Federal transportation 
policy, so it is helpful to start with a real foundational 
hearing like this for me.
    I have some very probably elementary, you will forgive me 
if they are too elementary, foundational questions for the 
witnesses. It strikes me that in government, we are not that 
great at distinguishing between capital and maintenance. We are 
not that good at distinguishing things between that and the 
private sector one could economically finance, rather than 
expense; as we look at whether to spend to pay for a particular 
project or function, whether to borrow, whether to deficit 
finance, whether to toll, which is basically privatizing the 
borrowing. I don't see, and maybe you can explain, where in our 
policy oversight of this transportation sector, we force 
disciplined decisions in those different categories where we 
calculate what the returns on the investment would be that 
would justify treating it as a capital expenditure, or where 
are the economic gains.
    I think we are all prepared to generally understand that 
the investment in the InterState highway system created 
enormous economic gains for the Country and should probably be 
treated as a capital expenditure. Once we get beyond those sort 
of broad-brush strokes and you get down into, OK, here is a 
project that is going through Vermont, and here is what we are 
going to have to do about it, that it goes through a rigorous 
process of definition into those funding categories, and that 
there is a principled basis for putting things into those 
different funding categories.
    Could you elaborate on that? Let me know if I am off-base 
and what the structure is out there for making those 
determinations.
    Do you want to go first? I am sorry, I can't see any names.
    Mr. Pisarski. Senator, there is a long history here in 
government about how you deal with capital. Maybe Bruce can 
opine on that. Over the years, we have talked about the fact 
that when you invest in the highway system, you in effect are 
adding to the Nation's assets, as opposed to when you are doing 
operating costs, maybe you are just expensing something.
    We in many cases have now asked the States to keep track of 
the total asset value of their system. There is an accounting 
system that permit it. As I recall, Lance maybe remembers, I 
think it was like $1.4 trillion or $1.5 trillion as the total 
asset value of the national highway system, and that the need 
to support that system and to make sure that next year it is 
not $1.3 trillion is a very important factor.
    Treating expenditures differently when you are adding to 
assets and when you are not I think is a very important, 
potentially significant perspective.
    Senator Whitehouse. But the Highway Trust Fund doesn't do 
that now. The Highway Trust Fund is just like a checkbook, 
money in and money out. There is no financing aspect to it. It 
is not a revolving loan program. It doesn't have any----
    Go ahead, yes.
    Mr. Grenzeback. Yes, you are correct. We put in place an 
InterState highway program and are used to funding it, but we 
have lost sight over the time that there was an economic value 
attached to those investments. People are now beginning to ask, 
what is the economic payoff of transportation investments. 
Interestingly, we are seeing that it----
    Senator Whitehouse. It has to be a pretty disciplined 
determination, because every single one of us is going to want 
to say that the project in Rhode Island creates massive 
national economic returns, and therefore we should borrow money 
to build it right now in Rhode Island. But making sure that is 
in fact true, and we can all be certain that when Senator 
Isakson wants to do one in Georgia that if the bill comes back, 
yes, this has great economic value, we can each have trust in 
this. I don't know where that----
    Mr. Grenzeback. The most innovative work is being done on 
the rail projects, where the States have said we cannot afford 
to invest in the highway capacity, but we would like to invest 
in rail freight capacity. We are beginning to get a discussion 
between the private sector railroads and the States on whether 
the States should make a public investment in the rail system. 
The debate is asking the questions, what is the proper share, 
what is the economic payoff, how do we divide that economic 
payoff between the public and the private sector, and how do we 
use that information to allocate roles and responsibilities in 
financing.
    We are beginning to see a little bit----
    Senator Whitehouse. But it is a pretty anecdotal and 
political process, right?
    Mr. Grenzeback. No, there are States that are doing a 
fairly rigorous analysis of the economic benefits of 
transportation investments. I would not say that it is at the 
level of standardization that you would like to put in 
legislation and move completely across the national highway 
program, but it is getting there. I think the highway agencies 
and the railroads are beginning to look at economic benefits 
because at core they are trying to justify why you should spend 
public dollars on transportation program as opposed to other 
public programs. Economic benefit analysis is creeping back 
into the system, and I think it would be well worth 
encouraging.
    Senator Whitehouse. Madam Chair, my time has expired. I see 
a lot of fingers and head nodding. I would just encourage 
anybody who wishes to fill in to please just, with a response 
to the record, get in touch with my office, because I don't 
want to take more time since my time has expired. But I am 
interested in this question of how we draw the line between 
what is an expensed item and what is an appropriate investment, 
and how you discipline that selection, and to what extent the 
existing regulatory and funding infrastructure presently 
accomplishes that function. If that could be a question for the 
record for anybody who wishes to respond to it.
    Thank you, Madam Chair.
    Senator Boxer. It is kind of like when we did the global 
warming bill. How do you know what offset really is truly an 
offset and is going to result in a diminution. We came up with 
a plan to have some sort of a seal of approval that we felt 
could accomplish that by people who know. But it is an 
interesting idea, and I think it is one we need to pursue.
    Senator Cardin.
    Senator Cardin. Madam Chair, thank you very much, and thank 
you for holding this hearing. I think it is an extremely 
important subject.
    I think the dilemma we face is that transportation 
infrastructure is more than just moving people and freight. You 
have talked today about safety issues, environmental issues, 
and smart growth--all that has a much stronger impact than just 
moving people and freight.
    The Chairman knows of my interest in public transportation. 
I was reminded just how important that was this week when I 
left the Capitol about 4:30 in the afternoon to get around four 
miles north of here. An hour and a half later, I arrived.
    Senator Boxer. Four miles?
    Senator Cardin. Yes. We invite you to visit Montgomery 
County any afternoon leaving from downtown Washington, and you 
will know what I am talking about.
    [Laughter.]
    Senator Cardin. Madam Chair, I could use your help in 
moving a bill we have here to modernize the WMATA system that 
seems to be held up by one Senator. I will just make one last 
plug on that. When at peak hours, it is the Federal employees 
who are trying to use that mass transit system, and we had a 
strong vote in the Committee, and it is now on the Amtrak bill. 
We hope that it will stay on the Amtrak bill and be signed into 
law, increasing the Federal Government's partnership.
    My point is this, historically we have looked at funding 
transportation through transportation revenues. We have fought 
to keep those transportation revenues for transportation 
infrastructure. But I think we have to look beyond that now. I 
think about the transit systems and the concept of fare box 
policies. We have one in Maryland that I don't think makes a 
lot of sense, quite frankly. We are trying to encourage people 
out of their passenger vehicles. There is a strong public 
reason to do that, and fare box policies don't always make 
sense.
    It seems to me, knowing the contribution that 
transportation infrastructure makes to other issues, there 
should be a greater understanding of the need to supplement the 
transportation revenues from other sources, broader sources. 
You did that on the global climate change bill, which made 
sense. We had a serious national issue, an international issue, 
to deal with greenhouse gases, and therefore we looked at ways 
of financing what we needed to do in a broader sense than just 
a narrow funding source. Quite frankly, I think the 
transportation revenues are becoming a narrow funding source.
    If we are going to have the infrastructure we need for the 
multiple purposes that this hearing has been focused on, then 
we are going to have to look at a broader way of how we meet 
those goals.
    I don't have the answer, but I do think we have to break 
the traditional thought here. I would welcome any comments. I 
have 2 minutes left on my time, so if any of you want to take 
the time, fine, to respond on this issue. I hope you support me 
on this.
    Senator Boxer.
    [Remarks off microphone.]
    Mr. Lovaas. Right. I just want to use this opportunity to 
say that we are actually looking at some alternative funding 
sources like the road pricing, which we discussed; like the 
potential for a VMT fee, that kind of thing, along with the 
potential to achieve land use changes through providing 
incentives, and to use the revenue generated by these new 
funding sources to build transportation alternatives which will 
remedy some of the equity questions that Senator Sanders was 
raising earlier.
    We are actually doing this study over the next year with 
the American Association of State Highway and Transportation 
Officials, the American Public Transportation Association, ITS 
America, Cambridge Systematics, the Urban Land Institute, among 
others. We look forward to unveiling it around the time of the 
next Transportation Research Board conference, where we hope to 
inform the debate about what is possible.
    But it can't just be about the revenue source. Again, that 
is putting the cart before the horse. The American public wants 
to know what they are buying.
    Senator Cardin. Absolutely. And transportation 
infrastructure is popular. If the people of this Nation know 
that the revenue source, the funds, are being used to improve 
the transportation infrastructure of this Country, they are 
going to support us. It can be broader than just a narrow user 
fee.
    Mr. Lovaas. I think that is absolutely right. A multi-modal 
program that is national in scope and that has clear 
performance goals in terms of transportation, economic 
competitiveness, energy and the environment, I think that will 
sell well with the American people.
    Mr. Pisarski. Senator, if I might add, to go back in 
history, the early transit programs at the Federal level were 
general revenue funds when HUD was the organization that 
managed it. There is no reason not to be looking at that again 
in more extensive ways because of the services that transit 
provides and its reach. I think the other programs need to be 
open to that as well.
    If you look at the Canadian system, for instance, they have 
a very different approach to funding, and they produce some 
very nice systems.
    Senator Cardin. Well, I agree. I think, Madam Chair, you 
are going to see the struggle next year on trying to pass a 
surface transportation reauthorization program with the size of 
the pie created by the dedicated revenues. It is going to make 
it impossible for us to achieve our goals, so we are going to 
have to look beyond.
    Senator Boxer. No question. But I just have to say that in 
a perfect world, if all of a sudden we were forming the 
government and we didn't have anything else on our mind. We had 
no deficits. We had no debt. And we sat down and said, what are 
the important things we have to do? Right up there, highways, 
transit, freight rail moving.
    Now, the problem is we have got that right up there. We 
have to deal with it, and we have deficits, we have debt. So I 
just think you are absolutely right. Look, in another 
circumstance, I would be saying this is a basic function of 
government and just that's it. But I cannot sit here and do 
that in a situation where we are facing these debts and 
deficits.
    So we have a Highway Trust Fund and it has gone down. We 
have people like me who own Prius's who are paying less into 
it, which isn't fair, which leads you to vehicle miles traveled 
as one way to help. You have the Bernie Sanders problem, which 
is a problem of people who really are living on the edge. We 
don't want them to be hurt, so we have to figure out a way that 
if we do these user fees, you know, somehow they are 
compensated for it.
    We have a lot of issues here. But I would just make a 
prediction. I don't see us, unless there is a change in the 
economy and all of a sudden we are in a great prosperity, and 
all of a sudden revenues are floating in to the government, and 
all of a sudden the Iraq war is over. It's not going to be over 
all of a sudden. It is going to take us months, even at the 
best of circumstances.
    So we are going to have to figure out how to pay for 
everything we want to do. I feel we can do it. Now, what I am 
struck by is none of you wants to really, except for Mr. 
Lovaas--congratulations on your courage--none of you really 
wants to put anything out there, which is a little troubling to 
me because we need to hear--well, I heard toll roads, but that 
really doesn't reach to the bigger question. That is just a 
little regional solution to a congestion problem. I don't love 
them. I can live with them. It's OK if people want them. It's 
OK. I don't look at it as an answer.
    I think what we need to look at is who is using these 
roads. Who is making a lot of money using these roads? There 
are a lot of big business that uses very heavy trucks. There 
are a lot of ships that are coming into port making our air 
filthy. That is part of our transportation system. And all 
those goods come off of those ships and they go on trucks, and 
they go through the place I live in California, and people have 
asthma real bad.
    So these people are using our system. In a situation where 
the gas tax is just declining with not that much end in sight, 
and let's just say wonderful things happen and we have a plug-
in hybrid, and let's just say--this would be my dream--because 
this is the Environment and Public Works Committee, maybe let's 
just say there is a breakthrough and now everybody goes and 
buys plug-in hybrids. Wow. Let's just say that. Gas tax. I want 
to say that. That is going to happen over time.
    So we really have to grapple with this question. We are 
going to have to have the courage to do it, and we are going to 
have to look to all of you as the experts here not to pound on 
us, because I just don't think saying it is going to be a 
general purpose of government now, because even if you could 
make the argument that it should be--and I could make that 
argument as a good Democrat--we can't do it because of all the 
competing needs that we have and our deficits and our problems.
    So we got a lot of great testimony today, which I so 
appreciate, but the thing is, and I guess I will close with one 
question to Ms. Marvaso, which is distrust. We have a problem. 
You talked about the 42,000 people in the U.S. who die each 
year in motor vehicle crashes, and millions more are injured. 
You say the status quo in safety is not acceptable. What can we 
do here to help with that, in this Committee?
    Ms. Marvaso. Well, it definitely is going to take, and we 
certainly have to do things differently. We need to look at the 
current program. We need to make it more----
    Senator Boxer. What does that mean? You are talking 
generalities. What do we need to do to cut back on these deaths 
and injuries? Give me specifics.
    Ms. Marvaso. We need a greater investment, to be sure, and 
I will say----
    Senator Boxer. In?
    Ms. Marvaso. In safety. We are pleased to see----
    Senator Boxer. And on the road, what does that mean?
    Ms. Marvaso. I'm sorry?
    Senator Boxer. On the roads, what does that mean to you, a 
greater investment in safety?
    Ms. Marvaso. I think a greater investment in the programs 
and the grant programs that we have.
    Senator Boxer. To do what? I am just driving you to find 
out what you mean. Grant programs that do what to make our 
roads safer? What makes our roads safer?
    Ms. Marvaso. Well, we have made wonderful strides, I think, 
in improving the roads. We certainly have made strides in 
improving the vehicle. We have a huge challenge when it comes 
to changing behavior, to getting people to wear seat belts and 
to stem the tide of drunk driving. It takes different 
approaches. We are not doing things currently that are making a 
very significant difference.
    Senator Boxer. You are talking about roads that are not 
safe.
    Ms. Marvaso. Yes.
    Senator Boxer. What about speed limits? What does AAA think 
about speed limits?
    Ms. Marvaso. Well, we certainly do acknowledge the fact 
that I believe 25 percent of all crashes are attributable to 
speed, so we do believe that speed is a serious issue.
    Senator Boxer. Do you think we should lower the speed 
limit?
    Ms. Marvaso. Changing behavior is really a serious issue. 
We have speed limits now that people exceed by 20 miles an 
hour. So it is behavior. How do you get to some of these people 
who are going to violate the law no matter what? That is I 
think where we are really missing it, and we have to look at 
new approaches. We need to meld the approaches that we have 
been doing for many, many years. NHTSA has good work. Federal 
Highway has good work. But we have to bring in some new 
approaches.
    Senator Boxer. Do you think railroad crossings are 
dangerous, where we have these railroad crossings across the 
highway?
    Ms. Marvaso. Certainly. We have made progress there.
    Senator Boxer. I don't know about your State, but in my 
State the railroad crossings are just--it's a terrible thing 
and very, very dangerous. The amount of money to cure that 
problem is just beyond. It is just billions.
    I will let you close.
    Senator Isakson. You could tell I had a question on my 
face.
    Mr. Pisarski, in the end of your last answer, you referred 
to the creative system in Canada. I took it to be a kind of 
creative system of raising revenue to build roads. Was that 
right?
    Mr. Pisarski. No, sir. We were just talking about transit 
programs. In Canada, the transit programs are almost entirely a 
function of local governments and provincial government. The 
national system stays pretty much out of it. I think it is on 
the order of $20 million a year, or something like that, that 
they put into it for special support programs. They have 
managed somehow to develop some very effective transit systems, 
certainly among the best in North America.
    Senator Isakson. You are talking about bus and rail?
    Mr. Pisarski. Particularly rail in Canada. What they have 
done over time is as capacity needs have risen, they have moved 
up the chain from certain limited buses to extensive buses to 
rail. They have moved that way and I think they have done a 
very, very effective job.
    Senator Isakson. So Canada transit is pretty much 
provincially run and locally run, without a Federal 
contribution or Federal oversight?
    Mr. Pisarski. I don't know about the Federal oversight. I 
am sure there is Federal concern and focus. My sense has always 
been that when the Feds get out of spending money, it doesn't 
mean they should get out of the subject. They need to have 
oversight. They need to look and see what is happening 
independent of whether there is a financial program or not.
    Senator Isakson. It is interesting you said that because in 
my opening remarks I quoted the Georgia General Assembly had a 
House-Senate Study Committee whose end recommendation was for 
Federal DOT to turn over the Federal gas tax money to the State 
and let the State run the system. It sounds like you are saying 
that is what Canada does.
    Mr. Pisarski. In many respects, it does. In other 
countries, it varies. It is more centralized or less 
centralized.
    Senator Isakson. OK. Thank you.
    Yes?
    Mr. Grenzeback. Except, Senator, I would point out that the 
Canadians have a very different approach to land use planning. 
They can very tightly coordinate their transit investments with 
land use planning so that people----
    Senator Isakson. Tell me what that means.
    Mr. Grenzeback. The government controls the land use much 
more than we do.
    Senator Isakson. The local government?
    Mr. Grenzeback. Yes, the provincial government and the city 
governments do. It is much less diffuse than our system. When 
the provincial government invests in transit, they can also 
make sure that you don't get sprawl around it, that development 
is very tightly concentrated, so that you get the travel and 
economic benefits of that investment.
    Senator Isakson. So you have provincial zoning basically, 
land use planning?
    Mr. Grenzeback. Yes. It is quite a different land use 
control system than we have in the United States.
    Senator Isakson. It's interesting. Well, my only point, I 
recognize if you were to do that, you still have a tremendous 
Federal role in coordinating transportation, and I think one of 
the more intelligent things that came out of this in the early 
comments was the fact that we have surface transportation in 
some international waters, and this Committee and the Commerce 
Committee has aviation. You know, we have a diffuse oversight 
in the Senate when it probably ought to be centralized--but 
that is a political issue for another day--because they are so 
interrelated.
    In Georgia, we have the ports of Savannah and Brunswick. We 
have the InterState system that feeds them, and then Hartsfield 
International Airport does the air freight. Every time we have 
a lack of coordination there, we have a runaway expense 
somewhere else.
    Thank you, Madam Chairman.
    Senator Boxer. Thank you.
    Thank you all so very much for your help. This is going to 
be a long journey, and we hope you will stay with us until we 
get it right. Thank you very much.
    We stand adjourned.
    [Whereupon, at 12:05 p.m. the committee was adjourned.]

          Statement of Hon. Benjamin L. Cardin, U.S. Senator 
                       from the State of Maryland

    Madame Chairman thank you for holding this hearing today.
    There is a Federal role in our Nation's surface 
transportation system. This role is not limited to investments 
in roads and bridges, but should also include public 
transportation within and between cities. The safe, rapid, and 
efficient movement of people and goods across our country is 
made possible by our interstate highway and passenger and 
freight rail systems--for which the Federal Government has a 
necessary and important role.
    When considering the Federal role in surface 
transportation, we must broaden our thinking well beyond the 
purview of our Committee's jurisdiction. We need a holistic 
approach to transportation policy which extends our focus from 
maintenance and construction of highways and bridges to the 
role of public transit in our transportation policy. We must 
also include in this discussion the impact our transportation 
has on the environment and the implications our changing 
environment will have on our transportation system.
    We cannot afford to focus exclusively on infrastructure 
without considering the Federal role in moving commuters out of 
their cars. In Maryland, between 1998 and 2006, vehicle miles 
traveled increased by 16.9 percent to 56.6 billion miles. While 
most Marylanders commute by driving alone, over the last 5 
years, the fraction of those driving alone has been steadily 
decreased as other modes of transportation (walking, transit, 
and carpooling) have slowly increased. By reducing vehicle 
miles traveled by passenger cars we open our highways up to the 
more efficient transport of goods.
    While investments in transportation infrastructure are 
required for the U.S. to remain competitive in our global 
economy, the Federal role extends beyond these investments to 
Federal transportation and energy policy: the link between our 
transportation systems and the environment requires Federal air 
quality standards, fuel economy standards, and greenhouse gas 
emission reduction targets.
    In prior hearings, we've heard that we need to get people 
out of their cars and into fast, convenient, and reliable mass 
transportation systems. That will take a major investment. Such 
an investment not only improves the quality of our travel and 
supports the increasing demands that commerce places on the 
roads and railways of our country. This required investment is 
not for convenience but is a necessity to help our Nation's 
economy to continue to grow in the longer term.
    The price tag associated with addressing these critical 
needs is measured in the hundreds of billions of dollars. Total 
current spending is well below what is needed to improve the 
condition of our national transportation infrastructure.
    Our transportation system is an essential part of our 
national security as well as our Nation's economic well-being. 
In the 2007-2008 World Economic Forum's Global Competitiveness 
Report, the U.S. ranked first among 131 The rankings were based 
on an index the WEF developed which measures competitiveness--
the set of institutions, policies, and factors that determine 
the level of productivity of a country. Among the 12 key 
``pillars of competitiveness'' used to determine these 
rankings, infrastructure, along with institutions, 
macroeconomic stability, and health and primary education were 
considered basic requirements. The U.S. ranked sixth out of 131 
countries in the infrastructure category.
    Despite our country's high ranking in this study, it is 
clear from testimony we've heard over the last several months 
that we cannot retain this ranking for long, given the lack of 
our Nation's investment in the transportation system and 
infrastructure in general.
    It is my belief that Federal investment in public 
transportation should be a national priority. Our nation 
receives extraordinary public benefit from mass transportation 
systems. These systems take thousands of cars off our congested 
highways. They take tons of pollutants out of the air we 
breathe. They move people efficiently into and out of our most 
important commercial centers.
    Congress should encourage smart growth through funding 
transit-oriented development corridors with upgrades in transit 
facilities, bicycle transportation facilities, and pedestrian 
walkways.
    Congress should create Federal tax incentives for employers 
who provide telecommuting to their employees. Telecommuting has 
successfully reduced both transportation and energy use, and 
the EPA reports that if just 10 percent of the nation's 
workforce telecommuted just 1 day a week, Americans would 
conserve more than 1.2 million gallons of fuel per week.
    I look forward to hearing from our witnesses, and to 
working with my colleagues on this committee to define the 
appropriate role the Federal Government should have in our 
Nation's surface transportation system and to identify and 
address our national surface transportation investment needs.
    Thank you Madame Chairman.

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