[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                          THE IMPORTANCE OF A
             LONG-TERM SURFACE TRANSPORTATION AUTHORIZATION
                    IN SUSTAINING ECONOMIC RECOVERY

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


                                (111-50)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                          HIGHWAYS AND TRANSIT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             July 16, 2009

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           ROBERT E. LATTA, Ohio
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
JOHN J. HALL, New York               ANH ``JOSEPH'' CAO, Louisiana
STEVE KAGEN, Wisconsin               AARON SCHOCK, Illinois
STEVE COHEN, Tennessee               PETE OLSON, Texas
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
VACANCY

                                  (ii)



                  SUBCOMMITTEE ON HIGHWAYS AND TRANSIT

                   PETER A. DeFAZIO, Oregon, Chairman

NICK J. RAHALL II, West Virginia     JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             DON YOUNG, Alaska
BOB FILNER, California               THOMAS E. PETRI, Wisconsin
TIM HOLDEN, Pennsylvania             HOWARD COBLE, North Carolina
BRIAN BAIRD, Washington              JERRY MORAN, Kansas
MICHAEL E. CAPUANO, Massachusetts    GARY G. MILLER, California
TIMOTHY H. BISHOP, New York          HENRY E. BROWN, Jr., South 
MICHAEL H. MICHAUD, Maine            Carolina
BRIAN HIGGINS, New York              TIMOTHY V. JOHNSON, Illinois
GRACE F. NAPOLITANO, California      TODD RUSSELL PLATTS, Pennsylvania
DANIEL LIPINSKI, Illinois            BILL SHUSTER, Pennsylvania
MAZIE K. HIRONO, Hawaii              JOHN BOOZMAN, Arkansas
JASON ALTMIRE, Pennsylvania          SHELLEY MOORE CAPITO, West 
TIMOTHY J. WALZ, Minnesota           Virginia
HEATH SHULER, North Carolina         JIM GERLACH, Pennsylvania
MICHAEL A ARCURI, New York           MARIO DIAZ-BALART, Florida
HARRY E. MITCHELL, Arizona           CHARLES W. DENT, Pennsylvania
CHRISTOPHER P. CARNEY, Pennsylvania  CONNIE MACK, Florida
STEVE COHEN, Tennessee               JEAN SCHMIDT, Ohio
LAURA A. RICHARDSON, California      CANDICE S. MILLER, Michigan
ALBIO SIRES, New Jersey              MARY FALLIN, Oklahoma
DONNA F. EDWARDS, Maryland           VERN BUCHANAN, Florida
GENE TAYLOR, Mississippi             ROBERT E. LATTA, Ohio
LEONARD L. BOSWELL, Iowa             AARON SCHOCK, Illinois
RICK LARSEN, Washington
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
VACANCY
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Braceras, Carlos, Deputy Director, Utah Department of 
  Transportation.................................................     8
Bruffy, David A., General Manager, Mountain Line Transit 
  Authority......................................................     8
Kienitz, Honorable Roy, Under Secretary for Policy, U.S. 
  Department of Transportation, Washington, D.C..................     8
Melaniphy, Michael P., Vice President, Public Sector, Motor Coach 
  Industries, Inc................................................     8
Potts, Charlie, Chief Executive Officer, Heritage Construction 
  and Materials..................................................     8
Poupore, Raymond, Executive Vice President, National Construction 
  Alliance II....................................................     8

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

DeFazio, Hon, Peter A., of Oregon................................    37
Mitchell, Hon. Harry E., of Arizona..............................    40
Oberstar, Hon. James L., of Minnesota............................    41

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Braceras, Carlos.................................................    47
Bruffy, David A..................................................    53
Kienitz, Honorable Roy...........................................    67
Melaniphy, Michael P.............................................    73
Potts, Charlie...................................................    80
Poupore, Raymond.................................................    91

                       SUBMISSIONS FOR THE RECORD

Melaniphy, Michael P., Vice President, Public Sector, Motor Coach 
  Industries, Inc., letter from William W. Millar, President of 
  the American Public Transportation Association.................    14

                        ADDITIONS TO THE RECORD

American Council of Engineering Companies, Dale J. Marisco, CCTM, 
  Executive Director, written testimony..........................    94
Community Transportation Association, Dale J. Marisco, CCTM, 
  Executive Director, written testimony..........................    96

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[GRAPHIC] [TIFF OMITTED] 51110.007



    HEARING ON THE IMPORTANCE OF A LONG-TERM SURFACE TRANSPORTATION 
             AUTHORIZATION IN SUSTAINING ECONOMIC RECOVERY

                              ----------                              


                        Thursday, July 16, 2009

                   House of Representatives
              Subcommittee on Highways and Transit,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, the Honorable Peter 
A. DeFazio [Chairman of the Subcommittee] presiding.
    Mr. DeFazio. The Subcommittee will come to order. We are 
going to take testimony today on the importance of a long-term 
surface transportation authorization in sustaining our economic 
recovery.
    I believe that it would be an extraordinary mistake for 
this Congress to accede to the demands that popped out of the 
White House three weeks ago, asking that we should delay 
changes in policy that are long overdue and needed, changes in 
objectives, changes in the organization of the Department of 
Transportation, and enhanced funding for additional investment.
    And, as we all know, an 18-month delay will not be an 18-
month delay. I guess the rationale there is we are after the 
next Congressional election. Well, after the next Congressional 
election we are into the Presidential election. Guess what? It 
is very likely to morph from 18 months to 42 months or probably 
56 months at that point. So, for that reason alone I find this 
a very misguided proposal.
    We have put together a bill and we will note, when we hear 
from the Administration witness, that we seem to be in sync on 
many policy changes that are necessary. If, at the end of his 
testimony, he said, therefore, we support the bill, as opposed 
to taking a left turn and saying, therefore, we have to have an 
18-month delay but would like policy changes, that would have 
made more sense.
    On the Senate side, Barbara Boxer, Senator Boxer has 
insisted that the 18-month delay be devoid of any policy 
changes, and that is what she reported out of her Committee.
    So we can go 18 months with the status quo, with programs 
that are in need of elimination, consolidation, a department 
that needs overhaul and streamlining, processes that lack 
benchmarks and accountability, that don't account for many of 
the 21st century objectives we would like to have in this bill, 
or we can press ahead; and it is the intention of this 
Committee, the full Committee Chairman, the Ranking Members, 
that we will push ahead. We recognize the short-term deficiency 
in the Trust Fund and we are in discussions with our leadership 
about how to get us to October 1st, but it is still our 
intention to go forward with a long-term authorization in 
September.
    And we can put this up there, but I am a low-tech guy. This 
is the difference. This is what we lose if we don't pass this 
bill. And I would hope that this Administration and all the 
advocates out there, and everybody who cares about the future 
of this Country and this economy, is thinking about this. Can 
we afford to walk away from six million jobs? I don't think so. 
The construction sector is the hardest hit sector in this 
Country; massive unemployment.
    And then the spillover effects. If you just take and look 
at the construction, say, of a new bus and where all the 
different States, there are about 30 States that have 
manufacturers that provide a piece of a new bus. And, of 
course, we have transit systems that are driving obsolete 
buses. I think there are over 20,000 that are past their 
theoretical expiration. We won't make the increased investment 
to acquire those.
    We won't make the ``Made in America'' streetcars the first 
ever, which was unveiled by the Secretary of Transportation 
just a few weeks ago in Oregon. We won't do that. We won't be 
building the light railcars and all the spillover jobs there. 
We won't be patching the potholes. We won't be rebuilding the 
bridges. We will still be detouring trucks. People will still 
be caught in traffic. And they will be told, oh, wait, in 18 
months we might have a plan for you. It is not acceptable.
    I turn to the Ranking Member.
    Mr. Duncan. Well, thank you very much, Mr. Chairman. I 
would say that I certainly agree with everything you just said. 
Not only do I agree with it, I am convinced that all the 
Members of this Committee and almost all the Members of the 
House on both sides agree with what you have just said. Not 
only that, but over these last several months, the last year or 
so, I have met and you have met with people from all over this 
Country who have come to see us, telling us of some needs in 
their States or in their areas.
    I appreciate your calling today's hearing. Today's 
discussion will provide Members of the Subcommittee and others 
with guidance on which path to choose, a short-term extension 
or a six-year authorization bill. I expect that most of our 
witnesses here today firmly believe that a long-term 
authorization of the highway safety and transit programs will 
create jobs and help improve our transportation and 
infrastructure system.
    Our investments in infrastructure, our investments in the 
future deteriorating bridges, congested highways and 
insufficient freight movement over our Nation costs this 
Country. Not only does it cost lives, it costs money, and it 
costs a lot of time. We have estimates that congestion costs 
this Country $78 or $80 billion a year. The American Society of 
Civil Engineers estimates that we need to invest $2.2 trillion 
in our Nation's infrastructure to remain globally, and even 
nationally, competitive.
    A short-term extension will force States to delay major 
transportation projects due to lack of predictable Federal 
funding. And we all know that any time we delay a project, the 
cost of the project increases greatly because the cost of labor 
and materials increase over time.
    A six-year authorization bill will allow States to make 
plans and begin hiring workers for long-term projects. States 
will be assured that funding will be available for multi-year 
projects and construction can begin. With unemployment closing 
in on 10 percent--and most people are predicting it is going to 
go much higher--we cannot afford to delay construction 
projects.
    I might add that the big stimulus bill was sold to the 
Country on the backs of stimulus. Because so many people, such 
a great majority of the people in this Country, support 
infrastructure funding, it was emphasized over and over again 
that the stimulus bill was an infrastructure bill. However, 
only somewhere between 7 and 8 percent of that bill was devoted 
to infrastructure.
    My own area, my home area of East Tennessee, for many, many 
years now, has been one of the most popular places to move to 
in the whole Country. Because of that, our economy has been 
very strong, stronger than most places in the Country. Yet even 
in my area, over the past year, we have started being hit 
pretty hard. In fact, I represent five full counties and a 
fourth of another county, so I don't represent all that many 
counties.
    One of my counties has 18 percent unemployment; another 
county has 14.5 percent unemployment; and another county has 
10.5 percent unemployment, which is the State average for 
Tennessee. So we need the work that could be done and the boost 
to the economy that a six-year full authorization would 
provide.
    I know there were 13 amendments filed at the Subcommittee 
markup and there are several more amendments that Members plan 
to file at the full Committee. We need to work through these 
issues to ensure that this bill will move with the support of 
all the Members of the Committee. A six-year bill will provide 
long-term economic stimulus that will create jobs and get 
people back to work. I support Chairman Oberstar and Chairman 
DeFazio's work to move a six-year authorization bill that will 
provide solutions to our Nation's transportation challenges.
    I look forward to hearing from the witnesses and I thank 
all of you for taking time out of your very busy schedules to 
come and be here today.
    Thank you, Mr. Chairman.
    Mr. DeFazio. I thank the gentleman.
    With that, I turn to see if any Members on my side have 
opening statements. Mr. Larsen has an opening statement. We 
reward brevity.
    Mr. Larsen. Well, you are going to maybe see something, Mr. 
Chairman, you haven't seen in a long time, and that is an angry 
Norwegian, because specifically for Mr. Kienitz today, I have 
to say that, in Washington State, we were shocked and 
disappointed by the U.S. Department of Transportation's 
decision that was announced Tuesday that Washington State was 
receiving only .012 percent--not 12 percent or 1.2 percent, but 
.012 percent--of the $60 million in the stimulus package that 
was directed for ferry systems around the Country.
    Although Senator Murray's efforts on our State's behalf 
have remedied this problem in the short-term, I am here to let 
you know that the situation still demands a full explanation of 
how the decision came to be made in the first place, and let me 
explain why that is.
    The Washington State ferry system serves over 23 million 
riders per year and nearly 11 million vehicles per year, which 
are 42 percent and 77 percent, respectively, of nationwide 
totals. So the math, frankly, doesn't add up at all.
    DOT granted funding to several small city and county 
ferries that carry a couple thousand people across rivers and 
other bodies of water each year, including one in my own 
district Gwimus Island Ferry, $750,000 which represented that 
.012 percent of the $60 million total.
    Given the size of Washington State's ferry system, and 
being one of the States most dependent upon this water-borne 
transportation element, it was a shock to us about the 
egregious neglect from the U.S. DOT.
    I should also note for the Chairman, Chairman DeFazio, 
that, unfortunately, the situation is a perfect example why I 
am not sure that we can rely on the U.S. DOT to be trusted to 
make the right decisions on some of these issues, and 
highlights while I and others are pushing to make Federal ferry 
dollars in the reauthorization go out through a formula. 
However, it makes me skeptical that the DOT can be relied upon 
to provide the Committee with the appropriate assistance in 
developing that formula.
    So, as we hear from our witnesses, and certainly from Mr. 
Kienitz today, I look forward to hearing a few answers:
    Did DOT take into account whether a State's transportation 
system is dependent upon ferries?
    What criteria did DOT use to make their funding decisions?
    Is there something specific about Washington State's 
projects that were a problem? It is my understanding that 
Washington State submitted projects that were both in 
economically distressed areas and non-economically distressed 
areas.
    And, finally, did this decision go through proper 
challenges at DOT before there was a sign-off?
    So, with that, Mr. Chairman, I appreciate the chance for an 
opening statement and yield back.
    Mr. DeFazio. I thank the gentleman.
    To the Ranking Member, Mr. Mica.
    Mr. Mica. First of all, I have to thank you, Mr. DeFazio, 
for convening this meeting. It is very timely; it is needed. We 
do need to look at the implications of not passing a long-term 
surface transportation authorization, and I think the 
implications are huge.
    Yesterday, I said that the action by the Senate, with an 
18-month extension, is a prelude to economic disaster. I cannot 
think of any piece of legislation that is more important than a 
six-year, fully funded transportation infrastructure bill that 
would help jump-start the economy and provide jobs. There is 
nothing that is under consideration or will do more to put 
people to work. We are in a very serious situation and it is 
turning south as far as unemployment, as far as economic 
activity in this Country.
    Let me say the problem is not going to go away, and by 
putting an 18-month Band-Aid, I think we are compounding the 
damage that will be done to the economy and the potential for 
any recovery in this Country.
    First of all, this is a betrayal of the code that we work 
under in the Congress. Mr. DeFazio will recall, Mr. Duncan will 
recall we had a Big 8 meeting with the Senate and they agreed 
and we all agreed to move forward with a bill, and that the 
House of Representatives would lead and Mr. Oberstar would take 
that lead.
    Now, I worked in a bipartisan fashion, Mr. Duncan did. 
There are some things in the bill that was passed that we 
didn't particularly like, but we felt this isn't a partisan 
issue, this is an issue that is important and vital to the 
Country, and we had to move forward. So we moved forward on 
this side of the aisle, as we said we were going to do, and we 
did it.
    I have never seen a Chairman undermined by an 
Administration in the 30 years I have been around this place 
like they hosed our Chairman. Coming out the day after we had 
reached agreement to pull the rug out from underneath him in 
moving forward with a long-term bill.
    Now, the Trust Fund is in crisis. It will go bankrupt next 
month. The problem is not going to go away. The manner in which 
a solution for 18 months, which would require about $20 
billion, a billion dollars a month, to fund the Trust Fund and 
keep this going at a minimal basis is not a solution. It really 
will close down any long-term major infrastructure projects in 
the Country.
    You read some of the testimony, and your staff, Mr. 
Chairman, did a good job in putting together the impact on some 
of the States. Read what it does to Illinois. Read what it does 
to Indiana. We are closing down the major infrastructure 
operations and we are short-changing State DOTs across the 
Country.
    So I am not very pleased about this, but I am pleased that 
you are holding a hearing that will deal with airing the 
consequences of this action. I do not intend to give up on a 
bill. That is the right thing to do. We started it in a 
bipartisan manner and I hope Members will support the Chairman 
and the effort to get people working to get infrastructure 
being built in this Country and moving a long-term solution to 
the crises transportation faces in our Nation.
    Thank you. I yield back the balance.
    Mr. DeFazio. I thank the gentleman.
    I am going to recognize other Members for opening 
statements, but I will just remind Members we do have a panel. 
We have a whole pile of votes coming up in the not too distant 
future, so I would urge Members to be brief if they need to 
speak.
    With that, I turn to Mr. Baird.
    Mr. Baird. Mr. Chairman, in the interest of brevity, you 
are right, the Ranking Member is right, and Mr. Larsen is 
right. I yield back.
    Mr. DeFazio. Wow. All right. That has got to get you 
another ferry at least.
    [Laughter.]
    Mr. DeFazio. Mr. Coble.
    Mr. Coble. Mr. Chairman, I will be equally brief. I want to 
thank our witnesses for being here. I have two other hearings, 
so I am going to have to come and go, but I want to associate 
with the comments you made, the gentleman from Tennessee, and 
the Ranking Member from Florida. You are on the money and I 
concur. I yield back.
    Mr. DeFazio. I thank the gentleman.
    Mr. Carnahan.
    Mr. Carnahan. Thank you, Mr. Chairman. In the interest of 
brevity also, I cannot believe the shortsightedness of our 
colleagues across the Hill in doing something as silly as they 
did yesterday in terms of our Nation's infrastructure and 
certainly our transportation, and I encourage every Member of 
this Committee to walk in lockstep to make sure that this 
doesn't stand and we can push a bill through rapidly. Thank 
you.
    Mr. DeFazio. I thank the gentleman.
    Others? Mr. Diaz-Balart?
    Mr. Diaz-Balart. Thank you, Mr. Chairman. I think there is 
a consensus here about the extension, about the fact that the 
one thing that we can do to really help this economy is get a 
bill out of here as soon as possible.
    Look, even though some may not want to publicly admit it 
yet, even though it is becoming more and more evident, the 
stimulus didn't work. We were promised 8 percent unemployment; 
we are way beyond that. We were promised 3.5 million jobs 
created; we lost 2 million jobs since the bill has passed.
    I have a bill that is not the answer, but it is an option 
that would get the unencumbered stimulus money and put it into 
the DOT Trust Fund to actually create jobs and start building 
projects.
    So, again, I think there is a consensus that, if there is 
one area that we know creates jobs, puts people to work, helps 
our economy short-term and long-term, it is transportation. So 
I concur with what has been said about we should be moving 
forward and not finding excuses to delay the process.
    Thank you, Mr. Chairman.
    Mr. DeFazio. I thank the gentleman.
    Mr. Arcuri.
    Mr. Arcuri. Thank you, Mr. Chairman. I will be brief.
    Too much is at stake for us to simply pass our 
responsibility by opting for a mere extension of the current 
law. We owe it to our constituents, the American people, to do 
work in a timely manner so as not to cause further economic 
disruptions. There has been talk here in Washington and around 
the Country about whether there is a need for a second stimulus 
or further action to stimulate the economy. The only additional 
action that is needed is for us to do that which we are 
supposed to already do. We must pass a long-term surface 
transportation authorization act; we must do it before 
September.
    Thank you, and I yield back the balance of my time.
    Mr. DeFazio. I thank the gentleman.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair. I also congratulate 
you and Ranking Member Duncan, but also Mr. Oberstar and Mr. 
Mica. I associate myself with the remarks of my Chairs and 
Ranking Members, especially of the full Committee.
    I strongly support, vehemently support passing the surface 
transportation bill. Lots of California jobs, jobs, jobs that 
are ready to go, and with the Trust Fund being on the brink of 
bankruptcy, we need to move, and we hope that everybody 
impresses upon our Administration the need to ensure that this 
does pass.
    Yield back.
    Mr. DeFazio. With that, okay.
    Oh, the Chairman. Excuse me. He came in so quietly and 
demurely, and he has no strong feelings about this, so he 
probably doesn't want to do an opening statement.
    [Laughter.]
    Mr. Oberstar. No, Mr. Chairman, thank you.
    Mr. DeFazio. I would recognize the Chairman.
    Mr. Oberstar. It is awfully good. It has been a good day. I 
got a good night's rest, I slept well, I went out and got a 10 
mile bike ride this morning, read all the witness statements, 
and glad to have all of you.
    Mr. DeFazio. While you were riding?
    Mr. Oberstar. No, after I rode the bike. No, you can't do 
that on the road; that is dangerous. That is worse than using a 
BlackBerry while you are driving a car.
    Mr. Kienitz, you said all the right things. I read your 
entire statement. It was really good; well prepared; good 
thought out. But you came to the wrong conclusions. It is just 
too bad.
    You know what I think this Administration needs--and every 
administration--in addition to or maybe in place of the Council 
of Economic Advisors is a council of engineering consultants. 
And probably Mr. Potts would agree with that, and a few others.
    While the President, Mr. Obama, as Senator, was campaigning 
for President, we weren't sitting on a stool somewhere; we were 
holding hearings in this Committee room over two years, in-
depth hearings to understand the needs, the problems, the 
shortfalls, the fixes that are necessary for the future of 
transportation. We fashioned them into a bill. We don't need an 
18-month learning curve, I have news for the Administration.
    You are a seasoned professional; you know better. We are 
not going to wait 18 months. And as other Members of the 
Committee have said, and as witnesses will testify this 
morning, we need to move ahead now. Inertia is the enemy of 
progress, and we don't have time to wait. The economy doesn't 
have--people who are spending 40 to 100 hours a year in 
traffic, goods that are wasting time en route to their 
destination, companies that are spending millions and millions 
of dollars in overtime charges and late delivery fees can't 
wait 18 months for this crowd to make up its mind.
    We made up our mind; we have a bipartisan bill. We need 
some refinements to it; we are continuing to do that. We will 
figure out a way to finance it. We just need your partnership. 
We need the partnership of all those at this table. We are 
going to move ahead; we are not going to wait 18 months.
    Thank you.
    Mr. DeFazio. Thank you, Mr. Chairman.
    With that, we will turn to our panel. We have, first, the 
Honorable Roy Kienitz, Under Secretary for Policy.
    Mr. Kienitz, as I believe you have all been informed, the 
Chairman has already told you he has read your testimony, and 
you can bet on it. He can quote it back to you in several 
languages. And I have read your testimony and highlighted it, 
and I am sure other Members have too. So what we ask you to 
do--because it gets really boring listening to people read--is 
summarize your most cogent and best points that you want to 
make that were either in your testimony, or respond to 
something you have heard here. You have two minutes, and then 
we will go on to questions.
    So, with that, Mr. Kienitz.

  TESTIMONY OF THE HONORABLE ROY KIENITZ, UNDER SECRETARY FOR 
 POLICY, U.S. DEPARTMENT OF TRANSPORTATION, WASHINGTON, D.C.; 
     CARLOS BRACERAS, DEPUTY DIRECTOR, UTAH DEPARTMENT OF 
TRANSPORTATION; DAVID A. BRUFFY, GENERAL MANAGER, MOUNTAIN LINE 
  TRANSIT AUTHORITY; CHARLIE POTTS, CHIEF EXECUTIVE OFFICER, 
HERITAGE CONSTRUCTION AND MATERIALS; RAYMOND POUPORE, EXECUTIVE 
VICE PRESIDENT, NATIONAL CONSTRUCTION ALLIANCE II; AND MICHAEL 
   P. MELANIPHY, VICE PRESIDENT, PUBLIC SECTOR, MOTOR COACH 
                        INDUSTRIES, INC.

    Mr. Kienitz. Yes, sir. I will do my best.
    Thank you, sir, and Members of the Committee for having us 
here. I have four basic points that I would like to make, which 
I think Mr. Oberstar probably summarized, actually, better than 
I will, so I will be very brief, the first of which is there is 
no disagreement from us about the long-term economic benefits 
of transportation and infrastructure investment; that is an 
obvious known and important thing. So that puts us in a 
position where I think our goals are very similar.
    Second, the best way to assure the greatest long-term 
benefits for the Country are through a long-term 
reauthorization of Federal transportation programs. I think we 
all understand why that is the case; it creates predictability. 
And, in particular, at this moment, given who the Chairs of 
this Committee are and the mood of the community, I think, 
there is a huge opportunity for major reform in a way that we 
haven't seen for a long time, and I know these two gentleman 
are certainly the biggest supporters of that around here. So we 
see that as a huge opportunity.
    Third, unfortunately, is the paid for issue, and I think 
that has been the biggest stumbling block. In past years, the 
struggle over this program, as the Members here have lived 
through, has been there is money in the Trust Fund; can we 
spend the money in the Trust Fund? Or taxes were dedicated to 
this program but have ended up going elsewhere. So there have 
been various Herculean efforts by Members of this Committee to 
assure that the taxes that appropriately should go for 
transportation do to go the Trust Fund and once in the Trust 
Fund they don't sit there with a very large balance while 
projects need to be funded but the monies provided are spent 
contemporaneously.
    This, I fear, is a case of a different order, where the 
shortfall between the funding levels that have been proposed 
here and the revenue levels that exist are quite large, as Mr. 
DeFazio's chart pointed out. So I think that is the principal 
thing that has led the Administration to propose an 18-month 
extension with, frankly, General Fund dollars hopefully paid 
for through matters that the Finance and Ways and Means 
Committees will work out to prevent a fall in funding in this 
interim period while principally the tax or revenue issues are 
worked out, but also then the details of the reauthorization 
are worked out as well.
    So I am 15 seconds short and I will stop.
    Mr. DeFazio. Thank you.
    Mr. Carlos Braceras, Deputy Director, Utah Department of 
Transportation.
    Mr. Braceras. Thank you, Mr. Chairman, Members of the 
Committee. It is a pleasure to be here today, and I will keep 
my remarks short.
    There has been quite a bit of discussion about the critical 
nature transportation plays in the Nation's infrastructure and 
also in our economy, and I won't belabor that point. We at 
AASHTO believe that we need to increase the investments at all 
levels of government for transportation because of the critical 
role that transportation plays in the lives of the American 
people.
    But the second point I would like to make is the very 
important point that AASHTO believes that we need to have a 
predictable, well-funded, multi-year authorization measure that 
reinforces the existing Federal-State partnership. To get 
transportation projects that represent a collaborative solution 
to transportation challenges, it takes time to do that, and we 
need to have that predictable funding source in order to be 
able to work with all partners at the local, State, and Federal 
level in order to come up with those appropriate solutions for 
that.
    AASHTO has called for an authorization bill with 
substantial reforms, many of which were also proposed in 
Chairman James Oberstar's bill. Nevertheless, we do have some 
concerns with some of the details, and we recognize that we are 
at the beginning of the process and look forward to working 
with the Members of this Committee to help resolve some of the 
concerns that our member States have. But simply put, a well-
funded six-year authorizing bill that respects that essential 
role of the States in administering and delivering the surface 
transportation program is critical for your State DOTs and for 
the governors.
    The short-term funding crisis is the element that--first of 
all, let me appreciate the work that is going on right now to 
help resolve this, but this is something that does keep me 
awake at night. We have contracts going right now, and we only 
have two weeks left to solve this issue. It is critical that 
Congress transfer an additional $8 billion from the General 
Fund to help get us through this fiscal year so that we can 
have surety in being able to pay those contractors that are 
working today out on our projects.
    Funding should also be provided to assure that there is no 
interruption in the 2010 highway program, which begins in 
October of this year. It is our estimation that an additional 
$10 to $12 billion will be needed to be transferred into the 
Highway Trust Fund in order to ensure solvency through the end 
of fiscal year 2010.
    Mr. Chairman, we urge Congress to increase the Trust Fund 
resources so the Trust Fund can meet the short-and long-term 
investment needs of our Nation. Thank you.
    Mr. DeFazio. I thank the gentleman.
    With that, we turn to Mr. David A. Bruffy, General Manager, 
Mountain Line Transit Authority, Morgantown, West Virginia.
    Mr. Bruffy. Mr. Chairman, Mr. Chairman, and Members of the 
Committee, thank you very much for the opportunity to offer 
testimony today. I would like to take a couple of minutes to 
highlight some of the more significant local impacts of your 
Committee's efforts and to answer any questions you might have.
    I have three primary points that I want to share with you 
and emphasize. This is a tenuous time for transit. It is 
imperative we have a new funding bill. We need a new national 
vision for surface mobility, and we can't wait any longer.
    This is a tenuous time for transit, a transit paradox, if 
you will, when fuel costs, insurance, utilities are all on the 
rise; local funding sources are being reduced, even in one of 
the strongest local economies in the Country, in Morgantown, 
West Virginia. West Virginia University has cut their funding 
by 16 percent this year. Another local funding source 
eliminated $100,000 in support that provided 95,000 passenger 
rides last year. At the same time, Mountain Line's ridership is 
up 41 percent year to date.
    This is a tenuous time for transit and I need your support 
so that we can plan the way forward for my service and for my 
community.
    Secondly, a new investment bill is imperative. With 
$950,000 in recovery money, my system bought three heavy-duty 
buses manufactured in California, with fare boxes built in 
Illinois, with seats manufactured in Michigan. They come from 
all over the Country. We need two new buses a year, at 
$700,000, to sustain our current services. Recovery investment 
is but a beginning; it needs to continue.
    Thirdly, we need a new vision for surface mobility. More 
than 40 percent of my buses are past their useful life. I get 
retired buses from other systems to expand service. I run 
light-duty buses with 280,000 miles on them and they are twice 
their intended life span. In the last six years, Mountain 
Line's FTA investments increased 33 percent, from about 
$400,000 to about $700,000.
    Yet, our ridership has increased 194 percent, from 400,000 
rides to 1.1 million rides. We serve seniors, rural areas, 
college students. We even go to Pittsburgh with intercity bus 
service. Currently, there is very little relationship between 
success and investment. We need a new vision that will enable 
people a meaningful alternative to the personal auto, and we 
can't wait any longer.
    Mr. Chairman and Members of the Committee, I respectfully 
request you submit my written comments into the record, and I 
look forward to your questions.
    Mr. DeFazio. Thank you.
    With that, we are going to turn to Mr. Charlie Potts, Chief 
Executive Officer, Heritage Construction and Materials, 
Indianapolis, Indiana.
    Mr. Potts. Mr. Chairman, Members of the Committee, good 
morning. I am here today as the Chairman of the American Road 
and Transportation Builders Association. I have spent over 40 
years in transportation development, both as an executive of 
the Florida Department of Transportation and as a CEO of two 
national construction and materials firms, and I would like to 
begin by saying that we are appalled by recent calls for and 
actions to postpone the enactment of a new surface 
transportation program investment bill until at least March of 
2011.
    I assure you the only people who might possibly see any 
benefit from such delay are right here in Washington, D.C. They 
are certainly not in the real world that I have worked in for 
four decades. In the real world, that delay means companies 
like mine will not be hiring people and will not be making the 
expensive capital investments in materials and equipment, 
because, quite frankly, there is no prospect that the market is 
going to turn around anytime soon without that investment. And 
make no mistake, the evidence shows the transportation 
construction market in this Country is constricting in many 
States at a very critical time.
    We are not expanding to help lead the economic recovery by 
creating jobs that this Nation desperately needs. We learned 
the hard way, from 2001 to 2005, that the uncertainty at the 
Federal level at a time of economic and State budget difficulty 
leads to an overall stagnation of national effort to delivery 
surface transportation improvements.
    Mr. Chairman, we commend you and your Committee for doing 
its job and leading in this effort. We encourage the Committee 
to continue pushing forward to enact a bill this year. And I 
want to thank you for this opportunity to participate in this 
dialogue with you and other Members of the Committee.
    Mr. DeFazio. I thank the gentleman for a very cogent and 
effective statement.
    Mr. Raymond Poupore, Executive Vice President, National 
Construction Alliance II.
    Mr. Poupore. Thank you, Chairman DeFazio, Ranking Member 
Duncan, and distinguished Members of the Highways and Transit 
Subcommittee. On behalf of the National Construction Alliance, 
better known as NCA II, partnership between two of the Nation's 
leading construction unions, the Operating Engineers and the 
Carpenters, want to express our appreciation for the 
opportunity to join you today.
    The two unions and the Alliance represent nearly one 
million workers, the same workers who build the Nation's 
surface transportation system. My message today is simple and 
straightforward: the NCA II respectfully requests that Congress 
move forward with the reauthorization of the Nation's surface 
transportation law as soon as possible.
    The Administration's proposal to extend existing legal 
authority for 18 months is unacceptable. An 18-month extension 
in practice indefinitely postpones reauthorizing the law, 
ensuring that substantive work developing this legislation is 
pushed into the 112th Congress.
    Chairman DeFazio, the NCA II seeks to make three main 
points: first, early signs of progress from the Recovery Act 
will quickly be dashed without long-range commitment to 
infrastructure; second, the uncertainty of an 18-month 
extension undermines the long-range planning of major 
transportation projects; and, third, there is no logical 
connection between the problems in the Highway Trust Fund and 
an 18-month extension of the Nation's surface transportation 
law. Indeed, both problems call for a solution.
    The NCA II fears that the short-term injection of resources 
into the Nation's transportation system from the passage of the 
American Recovery and Reinvestment Act will not have the 
intended result unless a longer range commitment to 
infrastructure spending through a timely reauthorization of the 
Nation's transportation law is passed by the 111th Congress and 
signed into law by President Obama.
    The good news, in a small subsector of streets and highways 
and bridges, we have picked up 60,000 jobs in the last two 
months. We can't afford to lose momentum on your efforts or on 
the investments contained in the Recovery Act. The policy 
issues are known: project delivery, infrastructure banks, 
public-private partnerships, and livability. The process is 
moving, the train is moving. The Administration needs to jump 
on board and engage Congress.
    The NCA II strongly urges the Subcommittee to continue the 
effort to pass the surface transportation authorization as soon 
as possible, to reject the Administration's 18-month proposed 
extension, and separately to fix the hole in the Highway Trust 
Fund. Mr. Chairman, America urgently needs a robust 
transportation bill along the lines of what you passed on May 
24th.
    Thank you so much. We appreciate your leadership. My 
members thank you. Through your actions, you put them to work 
and you help them sustain their families. You are the most 
important Committee here in Washington. We thank you.
    Mr. Oberstar. Amen.
    Mr. DeFazio. We now turn to the last member of the panel, 
Mr. Michael Melaniphy, Vice President, Public Sector, Motor 
Coach Industries, Inc.
    Mr. Melaniphy. Chairman DeFazio, Ranking Member Duncan, 
Chairman Oberstar, Members of the Subcommittee, thank you for 
the opportunity to present testimony this morning. I am honored 
to have an opportunity on behalf of Motor Coach Industries and 
the American Public Transportation Association.
    Mr. Chairman, the numerous and varied benefits of 
investment in public transportation, including the personal 
mobility, congestion relief, environmental and quality of life 
benefits that this critical investment brings are referenced in 
my written testimony. However, today, your focus is on the 
economic imperative of passing the surface transportation bill, 
and rightfully so. This next authorization bill is imperative 
for the jobs and economic opportunities it will create for 
companies such as mine and many others throughout the industry.
    This is an industry with a long and extended supplier base. 
Any investment that the surface transportation authorization 
act will provide will have an immense impact on jobs and our 
economy immediately and for many years to come. As we work our 
way out of this economic downturn, this bill provides us with 
one of the best vehicles for advancing economic opportunity.
    Mr. Chairman, I have two graphics I would like to show the 
Subcommittee up on the screen. The first is a diorama of a 
transit bus, and it shows where we source our parts to build 
those buses from throughout this Country. Big communities, 
small communities, communities at risk, where we get parts for 
buses. I have a similar slide for railcars. Investing in 
equipment across the Country yields jobs throughout our Nation. 
We benefit from those throughout the Country, including little 
places like Pembina, North Dakota, where there are only 700 
residents, and we employ over 300 people in that community 
alone building buses for this Nation.
    Our suppliers must wait for orders to come from us, the 
OEMs. The MCI factories alone are supplied by more than 3,000 
suppliers. If we look at the aftermarket support for our 
product, there are 10,000 suppliers supporting the bus 
industry.
    Mr. Chairman, jobs are at stake. The opportunity is around 
the corner and I commend the Committee on its dedication to 
completing a strong authorization bill, and my colleagues and I 
stand ready to work with you to ensure its passage.
    Mr. Chairman, I would also like to offer for the record a 
letter from APTA's President, Bill Millar, in support of 
passage of the authorization bill. Thank you.
    [Information follows:]
    [GRAPHIC] [TIFF OMITTED] 51110.008
    
    Mr. DeFazio. I thank the gentleman and thank all the 
members of the panel for being here and for summarizing their 
remarks.
    With that, we will proceed to questions.
    Mr. Kienitz, you said in your testimony that we need a more 
flexible funding system. Now, Secretary LaHood was attacked for 
proposing the possibility of a vehicle mileage tax. Secretary 
LaHood has said that the Administration is opposed to a gas 
tax. I have proposed taxing oil by the barrel, with the idea 
that some of that tax could flow upstream to the OPEC cartel, 
the oil speculators, Exxon-Mobil could lose a little of their 
obscene profits.
    And then, most recently, I have proposed the idea of just 
taxing oil speculators. Not hedgers, not trucking companies, 
not airlines, not railroads, not steamship companies; just 
financial speculators. One-tenth of 1 percent raises $40 
billion a year, and that is if we assume we drive down the 
price of oil dramatically because they all get out of the 
market like they said they would. That would be a good thing, I 
think.
    I proposed the idea of bonding by putting a construction 
cost inflation on the gas tax and delaying that until such a 
time as the economy recovers. So two years from today you might 
see a penny on the gas tax. But I figure that could put $60 
billion up front into the Trust Fund, which is broken.
    How much more flexible can you get? Give me another idea? 
Oh, we also have the infrastructure bank, which will work for 
some projects which provide revenue. It obviously won't work 
for transit, since all transit systems in the world lose money. 
So we have got it in there. What more flexibility do you want? 
Got any other ideas? Give me one.
    Mr. Kienitz. Thank you, sir.
    Mr. DeFazio. Or is that just a code word for we don't want 
to address revenues and increase investment in the Trust Fund 
until after 18 months? And I don't know how it is going to be 
any easier in 18 months, when the President is up for re-
election, than it is today, when all of us are up for re-
election.
    Mr. Kienitz. Let me make a few points, the first of which 
is I know that you have transmitted your proposal regarding the 
small tax on futures, quarter percent or whatever the number 
is, and that has been sent by you directly to the White House 
and the President's economic team, and I have talked to them 
about it, and they are analyzing it and the Treasury Department 
is analyzing it.
    I know that one of the questions being analyzed is the 
degree to which it would change the behavior of people who 
trade in those contracts in one way, at least, which is by 
moving those trades offshore.
    Mr. DeFazio. Well, remember, the provision would be that 
any entity or individual engaged in this trading domiciled in 
the United States of America would have to pay the tax. So you 
could start trading in Bahrain, but unless you want to move to 
Bahrain, you are going to pay the tax.
    Mr. Kienitz. I definitely don't want to move to Bahrain.
    Mr. DeFazio. Okay. But what I am saying is there are ways 
to do this. There is a long reach. Plus, if you might have 
noticed, there is also interest in the European Union on doing 
away with speculation in these markets. They seem to be a lot 
more serious about it than we are. So if you add up the EU and 
the United States, there are not a whole heck of a lot of 
places to go.
    Mr. Kienitz. And so, on that point, I know that that idea 
is being looked at seriously. I will make sure that this 
question of domicile is being properly factored into whatever 
analysis is done.
    As to our suggestions for long-term revenue, I think that 
is a place where the Administration is sort of not quite ready 
to make a particular proposal yet, and that is, I think, part 
of the motivation behind the proposed extension.
    Mr. DeFazio. Right. So we are going to put off a difficult 
decision for 18 months, hoping that somehow, miraculously, it 
won't be a difficult decision in 18 months. My State enacted a 
gas tax increase. We have the highest unemployment in America. 
The New York Times says our unemployment rate in the State of 
Oregon, when you factor in underemployed and exhausted 
benefits, is 23 percent, and we have well over 30 percent 
unemployment in our construction sector.
    Now, I think people in Oregon would be happy to pay a tiny 
bit more at the pump, instead of giving it to Exxon-Mobil, to 
see that we put more people back to work, and I think people 
all across America would like to see that kind of investment. 
So I think that the Administration is being unnecessarily 
averse in underestimating the capability of the American public 
understanding that when they put a little bit of money into 
transportation infrastructure, they get a better transportation 
system and we get jobs, real jobs. That, I think, is just where 
the Administration needs to rethink the strategy.
    But let's get to the other point. I agree with Chairman 
Oberstar. I read all the way through your testimony and I said 
this is really good, this is great, he is making good points. 
Then I came to the same point he did, which is well, now we 
have come to the wrong conclusion, which seems to have been 
appended on by someone other than whoever wrote the testimony; 
perhaps someone from the economic team, I don't know.
    So I guess my question is if you are confronted with what 
Senator Boxer has proposed, which is 18 months, no change in 
policy, you are stuck with the crippling and decrepit policies 
of the past, no reorganization, none of the other things that 
are in our bill, where are you going to come down here? Are you 
going to deal with us or are you going to deal with them? 
Because us, we want longer term; they, they just want status 
quo 100 percent, that is, we not only forego a million jobs a 
year, we forego any meaningful changes in policy to deliver 
projects more quickly and with less expense.
    Mr. Kienitz. What I think I can say about that is that we 
were appreciative of the action that Ms. Boxer's Committee took 
yesterday to move forward one step in the 18-month extension. 
Obviously, our proposal also includes some reform elements 
there, which we have talked to you all about in broad concepts 
and about which we hope to speak more in greater depth----
    Mr. DeFazio. But most of those concepts would be under the 
jurisdiction of EPW and not the subsequent referrals in the 
Senate. So it doesn't look like you are on track to getting 
what you want out of the United States Senate. You would get 18 
months status quo. Is that acceptable to this Administration, 
18 months with no change in policy? Is that acceptable?
    Mr. Kienitz. I don't think it is my place to try to make 
policy on that.
    Mr. DeFazio. We are not making policy, just asking if it is 
acceptable or not.
    Mr. Kienitz. How about this? I don't think it is my place 
to state an Administration policy on that point.
    Mr. DeFazio. Okay. Who states Administration policy on 
these things, Larry Summers? Axelrod? Who is it?
    Mr. Kienitz. I am coming to learn that that is a bit 
complicated.
    Mr. DeFazio. Okay.
    [Laughter.]
    Mr. DeFazio. Mr. Potts, I think it was--no, it was Mr. 
Poupore, excuse me. You mentioned the fact--and this is just a 
key point with me--if we do 18 months, how many 24-, 36-, 48-, 
or 60-month projects will be planned with an 18-month extension 
and begin construction?
    Mr. Poupore. I would probably say zero. Looking at the last 
reauthorizations that we have had, when you went with the 6-
month extension and 12-month extension, from my point of view 
in dealing with the contractors that do heavy and highway work 
throughout the Country, it is real lag by the time you actually 
put a bill in place and we actually get construction going. I 
mean, we are seeing that in the Recovery Act right now.
    My point is we are just starting; it is just starting to 
kick in, we are just starting to get some traction on that job 
creation. But this delay here and this business as usual is 
really unfortunate. I am very disappointed in the 
Administration's position and disappointed in what the Senate 
did yesterday. And I applaud you and your Committee here for 
trying to put America back to work.
    Mr. DeFazio. Is there anybody on the panel who thinks that 
States or transit districts would undertake very large scale, 
multi-year projects under an 18-month extension?
    [No response.]
    Mr. DeFazio. Okay. And then, for Mr. Kienitz, could the 
Department of Transportation do a full funding grant agreement 
on a large transit project that was going to take, say, five 
years? Do you think you have enough contingent contract 
authority under current funding levels? Our staff analysis says 
no. Basically, we are going to forego those things under this 
18-month extension.
    Mr. Kienitz. That is actually a pertinent question that we 
have spent some time looking at and has come into play, 
frankly, with a very large project in the New Jersey-New York 
area, where basically everything is apparently ready to go and 
we haven't been able to sign a full funding grant agreement 
because, as you understand, of the way the commitment authority 
rolls forward without a long-term authorization. That project 
is still on track to proceed as quickly as it can from an 
engineering point of view because of a smaller agreement we 
worked out with them.
    Mr. DeFazio. But if we do an 18-month with no policy 
changes, it is going to kind of grind to a halt, right?
    Mr. Kienitz. As long as you go at least a year, that will 
give us an additional year of commitment authority and will 
allow a number of projects to move forward.
    I will say, from the State side----
    Mr. DeFazio. To the exclusion of every other project in 
America at that point? Because our staff analysis is there is 
just not a lot out there, unless you get the new funding levels 
we are proposing and the new flexibilities we are proposing for 
transit within the congested urban areas.
    Mr. Kienitz. On the larger level I would agree with that, 
which is the problem with the New Starts program, one of the 
problems with the New Starts program is that it has become 
something for which demand wildly outpaces our ability to fund. 
So I think one of our priorities in any reauthorization will be 
to try to rectify that imbalance and create much more of an 
ability to fund many projects.
    Mr. DeFazio. Right. And we will have staff follow up with 
your staff, but you are thinking we can squeeze in this one 
major project with a year extension, but basically that would 
be it for transit; the rest of America would wait for 18 months 
or 12 months or whatever.
    Mr. Kienitz. No formal plan has been worked out as to 
whether that would be the resolution. There are other competing 
projects as well.
    Mr. DeFazio. It would be popular with Mr. Nadler and a few 
others, but not probably to many others up here at the dais.
    Mr. Kienitz. Correct.
    Mr. DeFazio. Thank you. I thank you. My time has expired.
    Mr. Duncan.
    Mr. Duncan. Well, thank you very much, Mr. Chairman. I 
won't have to ask many questions because I agree with almost 
everything that the witnesses have said here today, but I will 
say this. Our founding fathers instituted two-year terms for 
the Members of the House. We have to run every other year, and 
they did that on purpose because they felt that would put more 
pressure on the Members of the House to stay very close to the 
people.
    I think even they would be amazed at how accurate that 
prediction has become. Because of our good transportation 
system, most Members of the House go home just about every 
weekend; they probably spend almost as much or more time in 
their districts than they do here in Washington.
    So I think that almost all of us in the House really know, 
on a close, first-hand basis, the needs of our communities. So 
because of that, there is a tremendous desire, I think, on the 
part of almost all the Members of the House on both sides of 
the aisle to have a strong infrastructure bill, strong highway 
bill out, and have it out this year, without much delay.
    In fact, I think when we started this Congress, I think 
there was a desire to try to avoid in every way possible the 
20-month delay that we had on the last highway bill. This is my 
fourth highway bill. I was here for ISTEA in 1991 and TEA-21 in 
1998, SAFETEA-LU in 2005, and all of those bills have received 
overwhelming support on both sides of the aisle.
    One of several reasons, but one of the very most important 
reasons that I have always enjoyed my service on this Committee 
and have always treated this Committee as my main Committee out 
of the three on which I serve is because of the bipartisan or 
non-partisan nature of this Committee. And I think most Members 
know that I very seldom say anything partisan.
    I will say, though, that I think it is accurate to say that 
almost everybody on our side of the aisle, both on this 
Committee and in the full House, feel that the cap and trade 
bill and the health bill, that if the Congress passes both of 
those bills, that those bills, because of their tax increases 
and other costs that those bills will destroy jobs; and that 
those are the kind of bills that maybe we could pass in boon 
times, but not in times such as we face today.
    But the opposite of that is this bill, the highway bill, 
because I don't think anybody in the House can think of another 
big bill that would do more to help the economy and create jobs 
and do things for the people in this Country. I have mentioned 
many times in hearings in this Committee that I think it is 
very unfortunate that we have spent so many megabillions 
rebuilding Iraq and Afghanistan, and even other places around 
the world, and then we have so much trouble getting through 
legislation like this that is so needed in this Country.
    Now, let me just ask a couple of questions. Mr. Kienitz, 
you said in your testimony that if we did just the simple 
straight, clean extension that some people are talking about 
and that you advocate, that we still could do some targeted 
reforms. What targeted reforms do you mean?
    Mr. Kienitz. There are three areas in which we have made 
suggestions. Although I might say these are suggestions and we 
are open to other suggestions. The first would be an expanded 
effort by U.S. DOT, States, and regional planning agencies to 
do data collection and build up analytical resources in this 
intervening period so that, if and when we can get a major 
reauthorization, potentially with a significantly larger amount 
of funding, that the systems by which we are determining 
whether we are designing projects as good as they can be 
designed and selecting the best projects that generate the most 
benefits for folks locally and in response to the national need 
are as robust as they can be. So there is a bunch of complexity 
that can be behind that, but that is the basic idea.
    The second of which is certainly since the ISTEA bill in 
1991, there has been an increased focus on sort of metropolitan 
areas through the MPO planning process, and I think that 
certainly in the bill the gentlemen have introduced there is an 
even greater focus on there. So we want to undertake some 
cooperative work with those folks to make sure that their 
capacity to really ramp up and deal with the very difficult and 
complicated multi-modal transportation challenges in our larger 
metropolitan areas is as strong as it could be, so there would 
be some funding associated with that.
    The third is something I think you have heard the Secretary 
speak about, which is a local communities program. He believes 
that really can be a great thing going forward and that the 
Federal Government can be much more of a leader in that area, 
rather than sort of following local initiatives, which is a lot 
of what has happened until now; and that is bicycle and 
pedestrian infrastructure linked in with transit and transit-
oriented development. There are a bunch of pieces to that, so 
we think there is a great opportunity to get started on that, 
once again, to build towards an eventual reauthorization.
    Mr. Duncan. All right, thank you very much.
    Mr. Potts and Mr. Melaniphy, you are here as 
representatives for various companies around the Country. Would 
both of you tell me, if you can, a little bit more about your 
specific companies and how many people you employ now, what was 
the most ever number of people you employed, and how much 
difference you think it would mean for your specific companies 
to do just the temporary extension, as opposed to doing a 
strong, solid, approximately $500 billion bill? Mr. Potts?
    Mr. Potts. Well, first of all, we have, for the first time 
in about over 10 years, made reductions in our workforce 
because of lack of work, and we have actually shut down some of 
our aggregate operations because there is just no volume. But 
we are not the only ones that have done that. I was talking to 
the chairman of the board of Aztec Industries in your State 
yesterday, and he told me that, because of lack of orders, they 
have had to reduce their workforce by 25 percent. So it is not 
only our business, but all of the allied businesses that go 
along with it.
    In the last year the transportation construction industry 
has lost 37,000 jobs across the Country, and one of the bigger 
problems that I don't think people recognize in our business 
are the spikes up and down, and how it affects us in keeping 
our workforce in place. It is hard to attract new people into 
this industry when they don't have assurance of the stability 
of the jobs, supporting their families. The one thing that I 
think we don't see is that now our workforce is aging, our 
skilled workers, and trying to attract new people into the 
business is hard when they see two years it is great, feast and 
famine.
    As we see it, or as I see it personally, I think most of 
this, all we hear in the rhetoric is justifying the urge to 
procrastinate, although there are some people, in and out of 
government, who want a reauthorization delay to better advance 
their own policy agenda. But this, I think, is appalling when 
you look at the 37,000 jobs that have been lost in the last 
year. Unfortunately, along with it, the back and forth rhetoric 
is an exercise that is overshadowing the simple fact, and you 
pointed out a couple of the things: there are 22,000 fatalities 
every year that could be avoided if we corrected some of the 
road problems that we have; traffic congestion is causing us a 
problem; and the other fact is that it has affected our 
competitiveness in the global economy.
    I have lobbied and worked with Chairman Oberstar and his 
staff for at least the last six or seven years directly because 
I thought we needed a new vision and a new direction for this 
program. The House came forward with what I think is a robust, 
reform-oriented, multi-year program that would stabilize this 
industry, stabilize our direction, and, quite frankly, I think 
it is time to get on with it and do what you all brought to the 
table. Thank you.
    Mr. Duncan. Thank you very much.
    Mr. Melaniphy?
    Mr. Melaniphy. Michael Melaniphy, Motor Coach Industries. 
We are the largest manufacturer of motor coaches in North 
America. We have been in place for 76 years. We employ about 
2,000 employees, not just in Pembina, North Dakota, but in 
places like Lebanon, Tennessee, and Loudonville, Ohio where we 
have facilities. In Loudonville, we have 70 employees there; a 
major employer in that community.
    We recently came out of Chapter 11 restructuring. I can 
speak with great authority to the challenges of access to 
financing and the impact on jobs. Our company is split fairly 
equally between the private sector, tour charter companies, and 
line haul operators, and the public sector for transit agencies 
across this Country. Were it not for the investment in the 
public sector in transit right now, we would have significant 
layoffs. ARRA has made a significant impact on keeping jobs in 
our location.
    And as we look going forward, you have to understand that 
bus manufacturers typically run 12 to 18 months out from when 
an order comes in until we build a bus. So if we are talking 
about an 18-month delay, that is where we are already at with 
production schedules. Railcars are two to four years out.
    So if you look at investments in new products, new 
innovation, hybrids, alternative fuels, things like that, we 
have to look at investing money in the future. And if our 
customers don't know what funding they are going to have, how 
can we make investments and how can we go to our lending 
institutions that give us the funds we need to operate our 
businesses and say please give us those funds we need now to 
maintain the jobs to plan for the future, and we don't know if 
they are going to have that money?
    This is critical to the jobs of our communities. When we 
talk about high tech jobs, training people to build hybrid, 
high-tech buses in Pembina, North Dakota, those are major 
investments; and if we lose those people, they are going to go 
find other jobs, and it is not easy to attract people to come 
back to these rural at-risk communities and build these types 
of equipment. This is critical to our future in this industry. 
Thank you.
    Mr. Duncan. Well, thank you very much. I actually was born 
in Lebanon, Tennessee.
    Let me just take a moment, since Mr. Potts brought up the 
fatalities and since the main emphasis of this Committee has 
always been safety, I will tell you something, sort of a story 
about that.
    In my district, in East Tennessee, there is a highway, 
Highway 411, and it was known as a death trap, one of the most 
dangerous highways in the State of Tennessee, so much so that 
people were just getting killed on that highway on a very 
frequent basis. My chief of staff, Bob Griffiths, his only 
sibling, who was the quarterback of the Greenback High School 
football team many years ago, was killed on that very highway 
at the end of his senior year in high school.
    Fast forward from that about 30 years later, Mr. Griffiths 
has a first cousin whose son was the quarterback of the 
Greenback High School football team, who, at the end of his 
senior year, was killed on that same highway.
    Through this Committee, we got the funds to widen that 
highway and turn it into a four-lane highway with some turn 
lanes and made that into now one of the safest highways in the 
State of Tennessee; and I will tell you that is what has 
happened through the work of this Committee and these highway 
bills all over this Nation. These bills save thousands and 
thousands of lives, as you said, and I think that is something 
that we need to keep sight of and keep in mind as we go through 
this process.
    Thank you very much, Mr. Chairman.
    Mr. DeFazio. I thank the gentleman for his eloquent 
statement.
    Mr. Baird.
    Mr. Baird. I thank the Chair and would again associate 
myself with your remarks. You know, Mr. Chairman, we are 
working hard to pass a health care bill, but this is about the 
health of our economy, and I would ask our panelists--I didn't 
think we got much help from the Administration on the answer to 
your question earlier about how we are going to pay for this, 
and I think it is an important question.
    And I would like to ask the rest of the panelists what 
their thoughts are and also the thoughts about the consequences 
of not paying for it, which some of you have already addressed. 
But it is not cost-free to not do something; there is a huge 
cost to doing nothing. What are your thoughts, to the rest of 
the panel, on how we might try to pay for this? Because I 
believe we need to move this thing forward with great vigor and 
urgency.
    Mr. Bruffy. Congressman, if I may. I think that the result 
of us not doing anything is not going to be much, except that 
we are going to have more seniors that are shut in; we are 
going to have more people who can't get to doctors' 
appointments; we are going to have more people sitting in 
congestion. Safety may improve because my buses will be sitting 
on congested roads and nobody is going to be going fast enough 
to create a really bad accident.
    It is not going to make a big difference, and that is what 
we need. We need a big difference in what is going on out there 
in our communities, and without a new funding vision and a new 
orientation from the Federal Transit Administration or whatever 
its following agency is, we are not going to see that; we are 
not going to have that.
    This Committee's work, I think, steers us in the direction 
that we need to go. It has outlined a good framework and, 
frankly, I think we don't have any choice, we need to move this 
forward.
    Mr. Potts. I will make a couple of comments. One, we have 
consistently said that every option should be on the table to 
pay. Nothing is free. And to arbitrarily remove any option from 
the table is a negative. You have got to consider every option 
in order to fund it. But this is an investment in America, and 
it returns a high dividend. All of us in the private industry 
look at our return on investments that we put, and if we could 
get the same return on the investment we put in the 
transportation system in this Country, believe me, that is 
where we would put every dollar we have, because the return is 
extremely high.
    As I pointed out a while ago, just the loss of life alone 
is costing this Country $217 billion a year. Congestion is 
costing us over $80 billion. And worse than that, we are losing 
ground from a competitive standpoint in the world economy, and 
every job we create in this industry is not exported.
    Mr. Baird. Let me follow up on the point you just made 
about congestion costing $80 billion. We are talking about a 
$500 billion bill over five years. Eighty billion dollars is 
pretty close to $100 billion; you don't have to do a whole lot 
of complex math. One of the things about this Committee is what 
we do is paid for, unlike almost every other Committee in the 
Congress. But in Highway and Transit, we are talking about 
actually paying for it, and not only paying for it directly, 
but here we have a cost savings just in the congestion alone 
that nearly pays for the price of the bill.
    So the investment will return very generously to the 
American people, and I am certain all of us would say the lives 
of our loved ones are literally priceless; so the congestion 
and time away from our families, and the costs and opportunity 
costs of that time.
    And I would just say to the Administration: I don't get it. 
I have immense respect for the President and Secretary of 
Transportation, but we elected this President on a platform of 
change. This Committee, under the leadership of Chairman 
Oberstar and Chairman DeFazio, are proposing change, bold 
change, and instead, in one of the central areas of economic 
recovery, we are getting status quo or worse.
    So I would like to see some change we can believe in, and I 
would just urge this panel of witnesses to work with this 
Committee as you have already, but to get your members to talk 
to their Members of the House and Senate. The great thing about 
the United States Constitution, from my perspective, is Article 
1, and that is us.
    Mr. Chairman DeFazio and Mr. Oberstar, I fully support you 
in your urgency to pass something, and we should do so, assert 
our authority as the United States Congress, the legislative 
branch, and that place not too far from here called the Senate 
needs to follow our example and we will get this thing done. 
Thank you.
    Mr. DeFazio. I thank the gentleman.
    Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman.
    Mr. Kienitz, I posed some questions to you in my opening 
statement, and if I could summarize those for you in one 
sentence: What were you guys thinking? Could you answer that 
for me?
    Mr. Kienitz. Thank you, sir. I will tell you that I spent 
most of yesterday working on the issue that you are talking 
about.
    Mr. Larsen. So did I.
    Mr. Kienitz. I think a lot of folks did. I think there are 
two useful responses for me to give you, the first of which is 
we made an error, and the Secretary has taken personal 
responsibility for that and taken steps that you know about to 
try to correct the error.
    So I am not sure there is much more about it I can say than 
that. The policy that ended up being elucidated was not what he 
wanted and was not what was intended. By way of explanation, I 
think what happened in part was a result of criteria in the 
Recovery Act that are somewhat different than the criteria in 
the underlying ferry program.
    As you have stated well, the Seattle ferry system, on which 
I have ridden, I have family in Seattle, is an order of 
magnitude different than anything else we have in this Country, 
and so, traditionally, that has been an area where the Federal 
Government has successfully, I think, focused a significant 
share of that funding.
    The categorization of economically distressed areas that is 
in the Recovery Act I think is at the root of what may have 
happened here at the underlying levels of the Department, and 
it has helped highlight for us something we had already 
identified as an issue, which is the Recovery Act says a 
priority must be given to economically distressed areas.
    We have looked into the question of, under Federal law and 
regulation, what is an economically distressed area. 
Unfortunately, what we have found is that there are very 
specific criteria that the Commerce Department has elucidated 
and they involve going and looking back at employment and other 
data that goes back 24 months. So I think, as everyone here 
knows, the economic situation in the Country generally and in 
particular parts of the Country was very, very different 24 
months ago than it is now.
    So we both have a time lag problem in where economically 
distressed areas are being officially identified according to 
the process, and we also have a scale problem. I think King 
County, under the regulations of the Commerce Department, is 
not an economically distressed area. That doesn't mean that 
there aren't parts of King County that are economically 
distressed.
    So we have already been working with the Commerce 
Department to try to come up with a better way to identify the 
places that are economically distressed--we believe the 
intention of helping economically distressed is a good 
intention. We believe the method that we have been given to 
sift for that is not perfect and we are trying to find a way to 
look at it.
    But I think the most important thing is that we don't 
disagree with your critique. In fact, the Secretary agreed with 
it and that is why he is trying to remedy it.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Larsen. Yes, I will yield.
    Mr. Oberstar. The Secretary's analysis is somewhat correct. 
The EDA in the U.S. Department of Commerce, to which the 
Recovery Act legislation refers, does have some allocations or 
some designations for areas of SMSAs that may have higher 
unemployment figures than the SMSA itself. That has been 
standard in the EDA classification of distressed areas for at 
least 25 years. So I suggest you go back and reconsider those 
matters with EDA.
    Mr. Kienitz. Yes, sir, and we are in the process of doing 
that. It is officially the decision of the Secretary of 
Commerce, so we are working with them to try to work on that.
    Mr. Larsen. Claiming my time back, and thank you, Mr. 
Chairman, for that question as well.
    You are right in terms of the time lag. When this recession 
started, Washington State's overall unemployment rate was well 
below the national average, in fact, but because of our 
dependence on trade, when the recession kicked in globally, we 
quickly caught up and now are actually ahead of the national 
unemployment rate. So I can understand why, two years ago, if 
you looked at that number, you would think, well, nothing is 
wrong. When you look at today's number, it is as wrong in 
Washington State as it is in Oregon and other States. It is a 
pretty tough time.
    I guess the concern I have is about going forward, then, as 
well, and sorting out the formula as we move forward in the 
authorization bill and hope that we can all learn some lessons 
about this as we are moving forward and develop a good formula 
that is respectful of all the ferry systems in the Country, but 
also recognizes that there are some that are much larger and 
some that are much smaller than others.
    I would recommend one reform for the Administration. 
Instead of 18-month extension, you take away 18 months and make 
it six years; instead of extension, make it reauthorization. I 
think we will be fine.
    Mr. Kienitz. A minor amendment.
    Mr. Larsen. Very minor.
    Mr. Oberstar. I thank the gentleman for those comments.
    The gentleman from South Carolina, Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    Thank you, gentlemen, for coming and participating in this 
discussion. I know I was late coming in, but I was telling the 
Chairman that I was actually on the House Floor giving a one 
minute speech encouraging the President to do something about 
not delaying the reauthorization 18 months. I explained that in 
South Carolina our unemployment is over 12 percent. We are the 
third highest in the Nation. And you heard the Chairman of the 
Committee talk about Oregon being the same way.
    We are dealing with so many issues that really don't create 
jobs, but we absolutely know that transportation, building 
roads creates jobs. In fact, I think it has been calculated 
some 30,000 jobs are created with every billion dollars worth 
of construction, so, Mr. Secretary, I don't understand the 
strategy behind the President's decision to delay the highway 
construction.
    I know that in the stimulus bill only about $28 billion was 
put in there out of the $787 billion, which could have been a 
real employment opportunity, but it looks like we missed that; 
and I would hope that you would encourage the other members of 
the Administration to become serious about dealing with the 
unemployment, and we can do it by creating a new highway bill 
to be able to get people back to work.
    Another thing that I talked about this morning is about the 
red tape that it takes to get things moving. I think in South 
Carolina, of the $463 million that has been allocated through 
the stimulus package, only about $400,000 have been spent 
because of the red tape. I know we have some construction folks 
on the panel. Would anybody like to address that? Are you all 
finding the same problem in your arena?
    Mr. Potts. I think that is a common problem throughout the 
Country. There have been comments made earlier. My standard 
assessment is, if everything stays the same, the way it has 
been for years, once a bill is passed, it is anywhere from 18 
to 24, as much as 30 months sometimes, before we see the 
product. So that also tells you that if you extend for 18 
months and get into a new program, all you are doing is 
extending the inevitable. And it is hard to make investments, 
from our standpoint, with that kind of time lag. But, 
realistically, it has always been about 18 to 30 months, and it 
all has to do with just getting it through the process.
    Mr. Kienitz. If I might respond to that, sir. I think on 
the Recovery Act, in particular, there are figures out there 
that relate to sort of dollars spent and, traditionally, the 
number of dollars that have actually been outlaid; and our view 
has been that that understates the current activity underway 
due to the Recovery Act, particularly under the highway 
program, because it is a program in which we reimburse States 
for expenses that they have already incurred.
    So when we give a State a go-ahead, the right to go 
obligate funds for a project, they go out and start spending 
their money, and then sometimes 15 days, 30 days, 60 days later 
we get the bills, then we pay them out, and then the official 
data show the Federal Government having ``spent money.'' But 
there are currently over 5,000 projects that have been approved 
to proceed and where expenses are being accrued, but the data 
of Federal reimbursements lag well behind that.
    Mr. Brown. Mr. Secretary, if I could just follow through on 
another question which has been pretty dear to me. I know in 
South Carolina we have an infrastructure bank that we are able 
to use to accelerate some road projects, and I know you played 
a major role in designing the Administration's infrastructure 
bank proposal. Can you give us some more details about this 
proposal, about will the funds be reoccurring and what will be 
the rate that the banks can leverage funds?
    Mr. Kienitz. Yes, I have been part of a lot of discussions 
on that. At this point, what we have released is a sort of 
broad outline where we believe, at least for starting out, the 
banks should be focused on transportation projects, although we 
would be open to projects that have elements of other 
infrastructure in them, but transportation would be the focus. 
And it would be able to offer grants, loans, credit support, 
other things that we have some experience with the TIFIA 
program that this Committee has authorized, for which we would 
like to be able to do a lot more.
    As to the specific sort of leverage ratios or interest 
rates, I don't think those things have quite been worked out 
yet and, frankly, that would be, I think, a major point of 
whatever debate occurs here and in the Senate over creating 
that. But I know personally, when I worked in the State of 
Pennsylvania, we had a State infrastructure bank that was part 
of the program that this Committee helped to create, and it was 
of some good, but, frankly, too small to really have an impact 
on big projects; it helped us do some small things. But that is 
part of the provision. I think the President's proposal is to 
try to have a larger impact.
    Mr. Brown. Right. And that is the reason I guess part of my 
question was to determine exactly how you plan to fund it.
    Mr. Kienitz. As of now, there is a $2 billion allocation 
for the fiscal year 2010 in the budget resolution, so that 
could be the beginnings of it. I know that the Appropriations 
Committee here in the House the other day released a Chairman's 
mark for their Subcommittee, which I don't know if a reserve 
fund is quite the right word, but said there would be some 
funds in that appropriation that, if the thing were authorized, 
would be available to it for year one, $2 billion.
    I think it is realistic to say that it is something that 
would need to ramp up over time, so you might start smaller 
than you would hope to end up. The prospects for authorizing 
such a program in the next 60 days are perhaps not as high as 
some might like, but I think there has been some recognition 
that it would be a valuable exercise.
    Mr. DeFazio. I thank the gentleman.
    Mr. Carney.
    Mr. Carney. Thank you, Mr. Chairman.
    I have been working with my staff on the BlackBerry here 
trying to crunch some numbers on ratios of dollars spent in the 
transportation bill to jobs created and efficiencies gained, 
lives saved, pollution reduced, all the things the 
Administration claims that it wants to do; and, actually, what 
we have concluded is this highway reauthorization bill, the 
surface transportation bill accomplishes all that stuff for a 
hell of a good price, to be quite honest.
    I don't know why we are pushing back for 18 months. I think 
we should, for lack of a better term, start to hit the gas. 
Anybody want to weigh in on that, please? Mr. Melaniphy?
    Mr. Melaniphy. Congressman, in transit with APTA, we have 
had some studies commissioned through a number of committees 
and found that every tax dollar invested in public 
transportation generates an average of $6.00 in economic 
return. Every billion dollars in Federal funding invested in 
transportation infrastructure supports 30,000 jobs, and many of 
those are green jobs bringing technology to OEMs and others. We 
are building a green infrastructure for this Country and it is 
a very clear payback in investment.
    Mr. Carney. Sure. And the point is that these are all the 
things, through the campaign and early on in the 
Administration, they claimed they really want to do. Here is 
the opportunity.
    Mr. Poupore.
    Mr. Poupore. Thank you, Congressman. We are in the worst 
recession since the Great Depression. You would think the 
priorities would be to pass legislation that actually put 
people to work, long-range planning, and you can do it, as you 
have mentioned, right here for a penny's worth of gas. Maybe we 
need a nickel or a dime to fix the Highway Trust Fund, but six 
years and millions of jobs.
    What it creates also is the people that actually go out 
there and build our roads and highways, for the most part, the 
members I represent have their own health care, but they have 
got to pay into it themselves. If they don't have jobs, they 
lose that health care and you create this other problem.
    So the Administration has got health care out there and 
they have got cap and trade. I think they have their priorities 
wrong. I think first fix and reauthorize the highway bill, and 
then take a look at those other two major issues; and I hope 
maybe you can persuade them to do just that.
    Mr. Carney. It is our hope as well.
    Mr. Bruffy. Mr. Carney, we run a shuttle between Morgantown 
and Pittsburgh.
    Mr. Carney. Right.
    Mr. Bruffy. And when we put 40 folks on that bus, it only 
gets 6 miles to the gallon. But when you put 40 people on it, 
it gets 240 people miles to the gallon.
    Mr. Carney. Right.
    Mr. Bruffy. It only has one carbon emission engine; it is 
not 40 carbon emission engines going back and forth.
    Over the last couple weeks, I am beginning to feel a little 
bit naive. I thought with the stimulus we were being asked to 
go out there to help the minimum wage earners, give them a 
viable alternative for transportation so that they can use 
their money for health care, spend it in the local economy, 
save it for their kids' education.
    So instead of buying two buses with my stimulus funds, I 
bought three, and I invested some of our local reserve funds in 
it. I said, you know, this can be our contribution. Transit has 
always stepped up; we have always been able to help and do what 
we can. So I thought, well, we will take that extra step.
    But now, as everyone has pulled back, I am committed; I 
have a purchase order out there. They are not MCIs, but we have 
our purchase order out there, and we would like to see that 
pipeline continue. We are set, we are ready to go, and that is 
what we would like-- the direction of this Committee. We want 
to see that direction move forward.
    Mr. Carney. Well, not to sound too biblical here, but don't 
jobs beget jobs?
    Mr. Bruffy. They do.
    Mr. Carney. Thank you.
    Anyone else?
    Mr. Potts. Well, I try not to repeat myself, but I think 
this is the best return on investment we can make. If you look 
at the surveys that we have done in the past, what is the most 
concern when people talk about a delivery system talks about 
the impact on the economy, safety, and congestion. And now 
congestion has been number one on this.
    But this bill addresses each one of those, and ever since 
the Interstate Highway Act in the 1950s, this Country's 
economic engine has been our delivery system, and it is time 
for us to take a new direction with it, which this bill 
addresses. It addresses every single area, whether you are 
talking about energy efficiency, the climate, the economy, 
jobs. Every single issue is addressed by investing in the 
transportation system in this Country.
    Mr. Carney. Thank you. My time has run out.
    Thank you, Mr. Chairman.
    Mr. DeFazio. Thank you.
    Mr. Dent?
    Mr. Dent. Thank you, Mr. Chairman. I will be brief.
    One of the things I have noticed, too, I know we are here 
to talk about the long-term importance of a surface 
transportation authorization, but I want to mention something 
about stimulus funding, and maybe one of you can help me 
address this, perhaps from one of the States.
    In Pennsylvania, for example, I noticed that there is about 
$730 million of stimulus funding that has been obligated or 
committed, but, as of June 30th, about $9 million had been 
spent on road and bridge projects. That was actually spent. I 
understand much is committed.
    And I was just curious what is happening in some other 
States, whether it be Utah, West Virginia. Maybe one of you 
could comment on that issue for me. How quickly are you able to 
spend the money? And I am not blaming you if you are not able 
to do it quickly, because I understand you get one Federal 
dollar, you get a Federal process.
    So you are using the money to resurface roads, probably, 
and paint bridges, and that is about all you can do quickly, I 
guess. So could one of you perhaps help me with that, Mr. 
Braceras or Mr. Bruffy?
    Mr. Braceras. Congressman, I will start off. Carlos 
Braceras with Utah DOT. I think Utah may have stood out when we 
were working with Congress on the stimulus bill. We identified 
that we would have over $12 billion worth of projects that we 
could commit and have obligated within the potential 90-day 
period. To date, we received $213.5 million in Utah. We are a 
relatively small State. We have obligated over 95 percent of 
those funds. Two of those projects are actually complete and we 
are working on closeout right now; and most of the projects are 
under construction today.
    Now, there is that certain time lag where we have 
contractors out there working and the reimbursement requests 
are still lagging behind that, so I think what our member 
States have done has been truly remarkable in the way that they 
have all stepped up and have been able to commit these monies 
as quickly as they have. I think the urgency that was brought 
to the table from the States and from the Federal Highway 
Administration--they were remarkable partners in helping us get 
to this point--it was a big challenge, but we feel proud about 
what we have been able to demonstrate, that we can commit 
monies to good projects, projects that put people to work.
    And, really, we talk about the immediate need, the 
immediate crisis that we are in and the need to put people to 
work quickly, but we shouldn't lose sight of the long-term 
economic benefits that these projects are going to generate. 
They are going to be assets that are going to be a benefit to 
this Country for 50 to 100 years, and I believe, in the long 
run, the long-term benefit of these transportation projects is 
what is truly going to prove as a foundation for the economy 
and the quality of life in this Country.
    Mr. Bruffy. Congressman, our State, I can't speak to the 
specific numbers on highways, but I know that we did have three 
major projects in our three Congressional districts, and 
highways has moved forward. I know that they are also working 
on some smaller Federal highway projects because I experienced 
the paving on the way over here.
    For transit, what we did was encouraged all of our members, 
there are 18 transit systems in West Virginia, we encouraged 
those folks to commit their funds to large major capital items 
that wouldn't require environmental reviews, things like buying 
buses, things like buying equipment, so that we could get that 
money turned around and out the door very quickly.
    For my part, we had issued a purchase order March or April, 
I believe, for our $950,000, and I know our other urban 
partners had done the same thing with their transit funding; 
they turned it around very quickly to try and be a participant 
in the recovery, get that money out, make those commitments so 
that factories could hire and build up their output.
    Mr. Dent. Thank you.
    Mr. Kienitz, just very quickly. How do you feel about 
making some reforms to the NEPA process as part of a surface 
transportation reauthorization? The big complaint I keep 
hearing back home--I have heard it for years--is that it is 
just hard to get a lot of these projects moving because of the 
NEPA process. Do you think we need to engage in any type of 
serious reform of NEPA if we want to get work moving more 
quickly in this Country?
    Mr. Kienitz. This is something about which I have actually 
a fair amount of experience over the last 10 years or so, and 
what my experience has taught me is that what gets labeled as 
NEPA delay is really process delay. But there are a whole bunch 
of pieces of that process that are not particularly NEPA 
oriented. So if the question is are there ways to take the 
cumbersome process we have and make it work more efficiently 
and quicker, I would say absolutely. I think----
    Mr. Dent. What would you recommend?
    Mr. Kienitz. Well, there are things that have to do with 
how property is acquired. If property is acquired under eminent 
domain, how long it takes to settle with landowners and what 
are the standards under those, and how do the court reviews 
work? And then relocation of utility lines, relocation of 
railroad lines; engineering and design practices; 
reimbursement, how quickly the contractors get reimbursed for 
engineering and design; and wetlands permit, air permit, those 
types of permits.
    So the way in which I think the States that have been most 
successful in doing this have been by creating better 
relationships between environmental and transportation 
agencies, including, in some cases, transportation funds being 
used to make sure that there are enough employees in the 
environmental agency so that the stack of projects to review 
isn't sort of sitting in the in box, but it is getting handled 
quickly; as well as concurrent reviews of different types of 
permits. But it is sort of laborious process work.
    Mr. Dent. Well, whatever you call it, NEPA reform or 
process reform, I think a lot of people back home might suspect 
the State Transportation Secretaries would like to see process 
reform as well.
    That is all I have. I yield back.
    Mr. DeFazio. Mr. Arcuri.
    Mr. Arcuri. Thank you, Mr. Chairman. I will be brief.
    I would just like to raise one point. When the economic 
downturn started during the last Administration, the President 
proposed a tax cut. May of us, myself included, felt that the 
money might have been better spent in terms of putting it into 
infrastructure development. That didn't happen. I supported it 
because I felt it was good for the Country and we needed it.
    When the President came out with the stimulus plan, I felt 
that a significantly larger amount, and I know many of the 
people on this Committee felt that a significantly larger part 
should have gone to infrastructure. Not as much went into it as 
we would have liked to have seen.
    But I will say this. I was home recently and went to a 
dedication of--well, it wasn't a dedication but was actually 
the groundbreaking for beginning some road construction. I am 
from New York. New York State is not spending, they don't have 
a lot of money to spend on road construction. This was strictly 
stimulus money and we were seeing real people going to work as 
a result of the stimulus money.
    I went to Orion Bus Company, which is in my district, saw 
that they have just hired a significantly larger number of 
people because they are getting new orders for hybrid buses. 
Those are people that would not have been working but for the 
fact that we are spending money on infrastructure. It is 
something that we know.
    I am not sure about all of the other things that we did 
that the last Administration and this Administration did with 
respect to creating jobs, but the one thing that I know is that 
when we spend money on infrastructure, jobs are truly created 
and we end up with something very good in the long-term. We 
need to focus on this bill and we need to get this bill passed 
because we know from experience, both long-term and short-term, 
that this will create jobs.
    I have just one point, Mr. Braceras. When I talk to people 
in the private sector, business people, they always tell me 
when you act in Congress, please keep in mind that we, as 
business people, like to see long-term plans, because then we 
can structure our business plan based upon what you do. Do you 
find the same thing with respect to your planning in DOT with 
respect to the decisions that we make here on this Committee?
    Mr. Braceras. Absolutely, sir. It is critical for us to 
have some long-term predictable funding, some assurances of 
what we are going to have to do. Our processes do take longer 
than we wish they would take. Our customers wish we could turn 
around projects quicker, but it takes a long time to come up 
with a collaborative solution that works for all the different 
parties that we are trying to satisfy. But having that long-
term vision, understanding where we are going as a Country, and 
then also knowing that the funding is there allows us to begin 
those discussions in the first place.
    One of the things that is really critical for us and what 
we manage in Utah very specifically is we want to manage the 
public's expectations, so we will not begin a significant 
project, a large project if we do not have a way forward, if we 
do not understand how we are going to be able to pay for it or 
if it is going to be something that is supportive or aligns 
with the goals of this Nation. So what this Congress does is 
absolutely critical in how we are going to be able to move 
forward in the future.
    Mr. Arcuri. Thank you.
    Mr. Bruffy, I saw you nodding your head. Do you agree with 
that?
    Mr. Bruffy. Absolutely. We need to know what we can plan, 
and especially about what we tell the public-- what we promise 
them. We can't promise something we can't deliver. That day 
will come when we have to answer for that promise. If we keep 
in the pipeline--these buses that we are buying, you are 
absolutely right, the long-term investment in infrastructure, 
these are 10-and 12-year pieces of equipment. This is not a car 
we are just going to buy today and use; this investment is 
going to be out on the road providing public service for the 
next 10, 12, or the way my system runs, that means 15 or 20 
years. It is going to be in service for a long time.
    That is the investment that we need. We can do that over 
time. We keep those factories working; we keep those people 
employed. We need to keep the pipeline flowing, and that is 
what this bill proposes to do.
    Mr. Arcuri. Well, thank you very much for your work, 
gentlemen. Thank you, Mr. Secretary.
    I yield back the balance of my time.
    Mr. DeFazio. I saw Mr. Petri. Is he still here?
    Okay, Mr. Boccieri.
    Mr. Boccieri. Thank you, Mr. Chairman. I just have a couple 
quick questions. I will be brief as well.
    I notice that the Under Secretary, Mr. Kienitz, when you 
made your remarks, at least in your written testimony, you said 
that the Federal Government to implement a few targeted reforms 
in preparation for a six-year authorization when the economy 
begins to recover. First of all, I don't understand that 
notion, that rationale of thinking, that we are going to wait 
for the economy to recover before we implement targeted 
projects that are going to create jobs right now and that are 
ready to go.
    Secondly, is it fair to say that the Department of 
Transportation is balking or rejecting the consolidation 
efforts that would be comprised in this reauthorization bill?
    Mr. Kienitz. In answer to the second question, I would say 
I don't think it is fair to say that we are rejecting those. I 
think it is fair to say that we look forward to working with 
all the Members of this Committee to try to do a lot of that 
type of thing. We may have different points of view on 
individual pieces of it, but I think the larger sort of theme 
that Mr. Oberstar has laid out, which is a more multi-modal 
program, a more accountable program, a more consolidated, 
simpler program are all themes that I think almost everyone 
agrees with, and that includes us.
    Mr. Boccieri. Do you think the calls for revolution or the 
calls for reform and consolidation will quiet down in 18 
months?
    Mr. Kienitz. I haven't heard calls for revolution. Will 
calls for reform quiet down? I don't think they will. The 
question of the sort of 18-month extension I think, 
unfortunately, the key factor in that is really the shortfall 
between the desire for funding and the revenues to support it, 
and that is the piece where the current economic climate which 
one of the gentlemen down here described as the most dire in 
quite a long time, I think that that is the real horns of the 
dilemma, is the size of revenue increase that would be required 
to support. The authorization levels called for in the proposal 
is certainly much larger than anything Congress has even 
considered, let alone done, since I have been paying attention 
to this for 25 years. And this is a pretty bad time for 
something like that.
    Mr. Boccieri. Well, I will argue, as with the Chairman and 
Members of this Committee, from the long cast and litanies that 
you have heard today, that we are going to be judged by two 
measures, by action or inaction, and now is the time to act. 
Waiting another 18 months, who knows what the appetite for the 
Country will be. Who knows where we will be as a Nation if we 
allow unemployment figures to continue to skyrocket? This is 
the time to act, and we can make these long-term investments 
that will mean all the difference for States like Ohio and all 
these members' districts that sit on this panel.
    I yield back my time, Mr. Chairman.
    Mr. DeFazio. I just can't resist, Mr. Kienitz. And I 
proposed a lot of ways and tried to think out of the box on 
financing, but even beyond that, God forbid, maybe we would 
borrow the money. I think it would be a better investment than 
the 20 bucks a week that only those who still have jobs are 
getting. Those who are unemployed are getting nothing.
    And not filling in any potholes or building any bridges, or 
health care, IT, whatever that is. Maybe that could have been 
in the health bill, not borrowed money in the emergency 
supplemental. On and on and on.
    So it seems to me we can borrow money for all sorts of 
stuff. If you borrow money and build a bridge that lasts 100 
years, that is a lot better deal for someone 28 years from 
today, someone's grandkid who is paying taxes to pay back that 
debt than when granddad got the 20 bucks a week and spent it on 
a pizza. So I think there are a lot of ways to get at this. You 
want to talk about flexibility? Let's be flexible, and maybe we 
need to borrow the money, maybe we need to bond. There are a 
lot of things we can do.
    With that, Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman.
    Mr. Kienitz, based upon today's Committee's hearing, what 
will your message be back to the Secretary and the 
Administration? And if you could be as brief as possible.
    Mr. Kienitz. My message will be that the Members of the 
Committee, led by the Chair and Ranking Member of the 
Subcommittee and the full Committee, were unanimous in their 
desire to see a long-term reauthorization of the program at a 
high level to create jobs and support the economy of the United 
States.
    Ms. Richardson. Thank you.
    Mr. Kienitz. I hope I am getting that right.
    Mr. DeFazio. And be certain to tell them you were warmly 
received by the Committee.
    [Laughter.]
    Mr. Kienitz. I feel that I have been treated more than 
fairly.
    Ms. Richardson. Last Sunday, Vice President Biden was on 
one of the Sunday talk shows. Did you hear his comments 
regarding the stimulus and transportation results, or did you 
see the clips or any of the information?
    Mr. Kienitz. I saw recountings of it, I didn't watch it 
live.
    Ms. Richardson. And what was your impression?
    Mr. Kienitz. There has been a growing industry of push-back 
against the effectiveness of the stimulus program, and I think 
that that is something, frankly, that we don't disagree with.
    One of the big arguments when there have been past pushes 
for stimulus funding that has been an argument against 
including infrastructure investment is, well, we need stimulus 
right now, in the next three months, six moths, and 
infrastructure investment takes too long. I think one of the 
breakthroughs that was made in the Recovery Act was folks 
understood that the downturn was going to be a long downturn, 
so investing in things that are not instantaneous, but create 
employment and economic benefits over 6, 12, 18, 24 months, is 
well sized to the type of current economic situation. So the 
fact that we are four months in and the world hasn't changed 
dramatically overnight I think is not really the correct focus.
    Ms. Richardson. Okay, if your answer could be pretty brief 
on my last two, because I have got limited time.
    Mr. Kienitz. Yes, ma'am. Sorry.
    Ms. Richardson. Based upon your knowledge of the various 
departments within the Administration, do you have any 
perception or have you guys heard who has best performed with 
the stimulus dollars?
    Mr. Kienitz. I don't think that is something, honestly, I 
am competent to say. I am spending a lot of hours every week 
working on our piece of it, so I am not paying attention too 
much.
    Ms. Richardson. Okay. Well, let me use my last two minutes, 
then, to recap why I asked you the questions that I did. It 
seems quite clear to me--and I am going to be very frank for 
the record--we were in a caucus meeting and I saw our Chairman 
take a tremendous hit to push with the Administration to 
include more funding for the reauthorization. I thought he took 
an undue hit and, for the record, I think our Chairman was 
right and I think the President was clearly wrong.
    The message I would like for you to take back to the 
Secretary, I don't intend upon supporting any second stimulus 
bill. The second stimulus should be the authorization of this 
transportation bill. The Vice President has acknowledged, when 
he was asked the question what has been the success of this 
bill, the only one he could recite clearly was the results of 
the transportation funding. So that is my message back. Thank 
you very much.
    Mr. Kienitz. I will transmit it.
    Mr. DeFazio. I thank the gentlelady.
    I recognize the Chairman of the full Committee for such 
time as he might consume, and I will be going to vote and he 
will adjourn the meeting. Thank you all for being here.
    Mr. Oberstar. [Presiding] Thank you, Mr. Chairman. I want 
to thank Ms. Richardson for her courageous and thoughtful and 
straightforward comment and her thoughtful question to Mr. 
Kienitz.
    Mr. Potts, I think the table on page 7 of your testimony 
was brought up with excitement when I read that. I said, I have 
been saying this for months and someone has finally tabulated 
it. You have all the supply chain benefits, as I called them: 
iron and steel industry, cement and Ready Mix, oil and gas 
extraction, all the way down through landscaping and real 
estate insurance and so on. I have said that for--you tabulated 
it very well.
    Mr. Melaniphy, I thought your chart on the bus was 
terrific. I would like you to add to that where all those parts 
are manufactured. If you can do that for our next hearing on 
the progress on the Recovery Act, I think it would be very 
beneficial if we could have that not only for your company, but 
for the other bus and railcar manufacturers. It shows the wide 
distribution of jobs created not only at the point of delivery, 
but in the supply chain producing those products. Splendid 
testimony.
    Mr. Poupore, I also want to thank you not only for your 
testimony, which I all but cheered, jumped out of my chair, as 
well as Mr. Potts, but for your letter to the Committee from 
the building trades of the Senate Committee encouraging them 
to--you came close. You came close. But that is all right, the 
Senate has acted. That is a good thing. I think they have got a 
bill. It is the wrong bill, but they have a bill out there, and 
the idea of House-Senate conference is that we reconcile 
differences.
    The point is, though, that there is no need for extension 
of current law. All we need to do is plug the hole. There is a 
gap. The end of August, the Trust Fund, Mr. Kienitz, goes into 
a negative balance, right? Week of September 4, the Trust Fund 
will need an infusion. September 11, the vouchers from the 
States will total $2.4 billion and revenues deposit of Treasury 
into the Trust Fund will be $1.6 billion. That is an $800 
million shortfall.
    The week of September 25 through the following week, 
vouchers from the States will be $2 billion against $1.55 
billion. That is a $450 million shortfall anticipated, 
projected. Revenues could be different; not much, probably, for 
a $1.2 billion shortfall.
    If we did, as was done in 2008, make an intragovernmental 
transfer, that would keep the Trust Fund solvent; funds would 
continue to be paid out. And if you did a little bit more than 
that, you would assure that we would go into the second week of 
October with a full boat. The projection is that the week of 
October 8 vouchers from States will be $1.6 billion against 
revenues into the Trust Fund of $2.0 billion. That is due to a 
curious anomaly we crafted into anticipating this in SAFETEA in 
2005.
    So to do that requires only action by the Ways and Means 
Committee, who has jurisdiction over the Trust Fund, and 
authorize or direct an intragovernmental transfer from general 
revenues into the Trust Fund from those revenues that the 
Appropriations Committee over the last 10 years has taken out 
of the Trust Fund to pay for disaster relief from hurricanes 
and floods and earthquakes and other disasters that have 
occurred. They have taken $7.3 billion out of the Trust Fund 
revenues over and above the $100 million that we provide 
annually for disaster relief through the Highway Trust Fund. So 
that revenue is owed to the Trust Fund and needs to be 
repatriated. That is really all we need to do. We need not 
authorize anything else.
    We also can justify that intragovernmental transfer on the 
basis that the Trust Fund is owed $8 billion in interest 
foregone on revenues into the Trust Fund from Treasury that we, 
at gunpoint, figurative gunpoint, had to give up under Bud 
Shuster's Chairmanship in 1998 with the Clinton Administration 
and the then Republican majority in the House conspiring 
against Bud Shuster and me partnering on that bill to get the 
firewalls built around the Trust Fund.
    So, in the end, to get the deal, we gave up--it is the only 
trust fund that does not get interest payments on revenues into 
the Treasury, the only trust fund. Medicare does, the Social 
Security trust fund does, the harbor maintenance trust fund 
does, several others; but not Highway Trust Fund. We are 
treated like an orphan. Those monies are due back to the Trust 
Fund. We need to repatriate as well.
    I would like to ask Mr. Braceras at the beginning of the 
recovery process--actually, that goes back to December of 2007, 
when we first proposed working with AASHTO, with ARTBA, with 
AGC, with the building trades and the transit agencies, we 
asked for a listing of projects that were shovel ready, as the 
term has become. By that we define it to mean design and 
engineering, right-of-way acquired, EIS completed, down to 
final design and engineering, ready to go to bid; and that 
initial list of some 6500 projects was refined down to roughly 
5,000 projects by AASHTO.
    And now we have--let me see here on my list--we have 5,840 
projects approved by State DOTs and 4,098 projects out to bid 
through the end of May. That number will go up, as Mr. Poupore 
testified. Twenty-three hundred projects under contract worth 
$6.5 billion, under contract; and 1200 projects on which work 
is underway. That is only through the end of May. That number 
is almost double by now, maybe even more than double.
    So I am quite certain that you State DOTs have a list of 
additional projects that are state of good repair projects, 
projects to bring your roadways, your bridge surfaces up to a 
usable condition. And I would recommend to AASHTO, in 
cooperation with Federal highways, with ARTBA, with AGC, to 
refine that list and get it into us. Because if there is going 
to be a second stimulus, it is going to be a highways or 
nothing else, because I don't know of any person who has been 
put back to work by the $300 billion tax cut.
    I haven't talked to a single Member who has received an 
email, a thank you note, or a handshake from a constituent who 
said, gee, thanks for the tax cut. They don't even know that 
their taxes have been cut, but they do know that work is 
underway on highway projects and street projects and bridge 
projects all across America and that those transit buses are 
being built and put to use by the cities.
    So I think your testimony here has been wonderful. Mr. 
Kienitz, you said all the right things, came to the wrong 
conclusion. You are a good fellow. You are a seasoned 
professional. You have been a good point guard and spear bearer 
for the Administration doing your job. Thank you very much for 
your testimony.
    Thanks to all of you for your contributions. This is a 
partnership. We are not going to do 18 months; we are going to 
do a six-year bill, and we are going to need your help, all of 
you, so that we don't have to send the Administration through 
Head Start to understand what we need to do for the future of 
transportation. Thank you.
    The Committee is adjourned.
    [Whereupon, at 12:00 p.m., the Subcommittee was adjourned.]
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