[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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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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