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


 
RECOVERY ACT 225-DAY PROGRESS REPORT FOR TRANSPORTATION INFRASTRUCTURE 
                               INVESTMENT

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

                                (111-66)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            October 1, 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)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                               TESTIMONY

Cox, Honorable John, Director, Wyoming Transportation Department.    42
Gallagher, Charles, President, Gallagher Asphalt Corporation, 
  representing the American Road and Transportation Builders 
  Association....................................................    42
LaHood, Honorable Ray H., Secretary, U.S. Department of 
  Transportation.................................................     7
Nye, Ward, President, Martin Marietta Materials, representing the 
  National Stone, Sand and Gravel Association....................    42
Soubry, Paul, President and CEO, New Flyer.......................    42
Taylor, T. Jeffery, Manager of Transportation, Elkhart County, 
  Indiana........................................................    42

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Cohen, Hon. Steve, of Tennessee..................................    62
Carnahan, Hon. Russ, of Missouri.................................    63
Cummings, Hon. Elijah E., of Maryland............................    64
Johnson, Hon. Eddie Bernice, of Texas............................    68
Oberstar, Hon. James L., of Minnesota............................    73
Rahall, Hon. Nick, of West Virginia..............................    81

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Cox, Honorable John..............................................    85
Gallagher, Charles...............................................    92
LaHood, Honorable Ray H..........................................   102
Nye, Ward........................................................   117
Soubry, Paul.....................................................   123
Taylor, T. Jeffery...............................................   126

                       SUBMISSIONS FOR THE RECORD

Committee on Transportation and Infrastructure, Majority Staff:..
      Chart entitled, "T&I Committee Transparency and 
        Accountability Information by States and Formula Funding 
        under the American Recovery and Reinvestment Act of 2009 
        (P.L. 111-5) ("Recovery Act") Submissions Received by T&I 
        Committee (Data Reported as of August 31, 2009)..........  lxii
      Chart entitled, "T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of August 31, 2009) Percentage of 
        Allocated Funds Associated with Project Stages: Highways 
        and Bridges..............................................  lxix
      Report entitled, "The American Recovery and Reinvestment 
        Act of 2009 Transportation and Infrastructure Provisions 
        Implementation Status as of September 18, 2009"..........  xiii
LaHood, Honorable Ray H., Secretary, U.S. Department of 
  Transportation:................................................
      Response to question from Rep. Coble, a Representative in 
        Congress from the State of North Carolina................    20
      Response to question from Rep. Cummings, a Representative 
        in Congress from the State of Maryland...................    27
      Response to request for information from Rep. Oberstar, a 
        Representative in Congress from the State of Minnesota...    29
      Response to request for information from Rep. Richardson, a 
        Representative in Congress from the State of California..    35
      Response to request for information from Rep. Richardson, a 
        Representative in Congress from the State of California..    37
      "USDOT TIGER DOT.GOV, Department of Transportation's 
        Implementation of the American Recovery and Reinvestment 
        Act of 2009," powerpoint presentation....................   108

                        ADDITIONS TO THE RECORD

American Automobile Association, American Trucking Associations, 
  National Association of Manufacturers and the U.S. Chamber of 
  Commerce, Open Letter to the President and Congress on 
  Transportation Investment......................................   130

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  HEARING ON RECOVERY ACT: 225-DAY PROGRESS REPORT FOR TRANSPORTATION 
                       INFRASTRUCTURE INVESTMENT

                              ----------                              


                       Thursday, October 1, 2009

                   House of Representatives
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The Committee met, pursuant to call, at 9:40 a.m., in Room 
2167, Rayburn House Office Building, the Honorable James 
Oberstar [Chairman of the Full Committee] presiding.
    Mr. Oberstar. Good morning. The Committee on Transportation 
and Infrastructure will come to order, after a very long delay 
on the George Washington Parkway this morning. It is one of 
those moments when sitting in traffic and hearing the radio 
area traffic reports, and I was in the middle of the mess they 
were talking about. Usually they are talking about something 
somewhere else and it doesn't do you any good. Well, it didn't 
me any good either, just made me feel better that everybody 
else was suffering.
    Mr. Rahall. Where is your bicycle?
    Mr. Oberstar. Where is my bicycle, Mr. Rahall wants to 
know. Yes, I could have pedaled in from our townhouse this 
morning. I could have pedaled in in less time than it took me 
to drive.
    The investments under the Recovery Act have played a very 
significant role putting Americans back to work. Our Federal 
agencies, the States, whether it is the State Revolving Loan 
Funds, the Airport authorities, all have shown that they can 
deliver our funding and the projects that we created in our 
portion of the stimulus. They put people to work and do it 
within the tight time frames that we set forth in the Recovery 
Act. Although I must say that the time frames in the Act are 
looser than the ones that were reported from this Committee and 
that passed the House; we had a 90-day provision.
    The photos you are seeing, especially this one here, is one 
I took with my BlackBerry on a project in Bemidji, Minnesota, 
where they are redoing an entire street and two and a half 
miles of road that goes through neighborhoods and concludes on 
the main street of Bemidji, and they are digging up 100-year-
old water lines and 50-year-old sewer lines. In another slide 
you will see the pipe that was dug up, rusted, and the new pipe 
to go in, and all of that shows the jobs that have been created 
both onsite and in the supply chain providing materials for the 
projects.
    Sixty-four percent at the end of August available formula 
funds for highway and transit projects have been put out to 
bid. Half of those were under contract. Forty-two percent were 
projects underway.
    I committed at the outset of this legislation, in fact, 
going back to January of this year, that we would monitor, we 
would follow the progress and report on those that are 
successes and those that aren't, and lay it all out so that the 
public has a clear understanding, and this is the fifth in the 
series of our hearings.
    Some critics of the Recovery Act complain about red tape 
obstructing quick and efficient use of funds. But apart from 
one--those pipes are also from the Bemidji project. Note the 
contrast of the old rusted pipe and the new pipe that will go 
in that will, because of its design and its coatings, both in 
and out, will last 75 to 100 years, while that pipe in the 
foreground is barely 50 years.
    The State DOTs have known from the very outset that this 
program would entail projects that have been designed, 
engineered, in which right-of-way is acquired, EIS completed, 
down to final design and engineering; that all that was needed 
by the State was to get the funds and put the project out to 
bid. There was no additional paperwork to be done, no permits 
to be undertaken; all of that had already to have been 
completed.
    There was one issue raised by an engineer in Indiana back 
in July. He said I have an engineer full-time and about all he 
is doing is red tape every day, filling out forms. Well, none 
of those forms were required by Federal Highway Administration; 
none of those forms were required by transit agency or any 
other Federal Government entity. Those were problems the county 
engineer had with his State DOT, and he will be on the witness 
panel later this morning to discuss his particular situation.
    The time line has moved very smoothly. When a State selects 
a Recovery Act project, the Federal Highway Administration has 
approved the project within a day or two. Once that is done, 
the Federal role is complete; it is then up to the States and 
their local partners to put the funds to work. States, in most 
cases, have moved aggressively to advertise, sign contracts, 
begin construction. We will hear today from one State, Wyoming, 
that has put nearly all of its Recovery Act highway funds to 
work on the job site.
    Just 10 days after the Recovery Act was signed, our 
Committee requested and insisted on transparency and 
accountability information directly from States, from the MPOs, 
from public transit agencies, and they have been reporting 
regularly to our Committee and we have been putting this 
information on the Web and making it publicly available and in 
our various hearings.
    This is another Recovery Act project. Actually, this one 
happened to be in my district.
    All in all, by the end of August, 8,000-plus highway and 
transit projects in all 50 States, territories, District of 
Columbia put out to bid, $22 billion, that is 64 percent of the 
total available formula funds for highway and transit; 6400-
plus projects have actually been put under contract, and that 
totals $16.8 billion; work is underway on nearly 5300 projects 
in the States, the territories, and the District of Columbia 
totaling over $14 billion. Our most current report shows 
122,000 direct on-project jobs. That is what we intended this 
project to do.
    I have heard some complaints and there was a report in a 
major newspaper last week saying, well, these aren't the best 
projects, these aren't the big-time projects. That is not what 
we intended. The surface transportation authorization bill is 
going to do the big futuristic projects. These are the backlog 
projects that State DOTs have had on their books for years and 
every State DOT has told me and other Members of this 
Subcommittee, and said it publicly, if only we had the money, 
we would do these paving projects like the one in this photo 
here. And that is all that this was intended to do, put people 
to do, create jobs, take people off unemployment rolls; put 
them on payrolls; off unemployment checks, giving them 
paychecks. That is what this is all about.
    The rest of my statement I will submit for the record. I 
just want to sum this whole thing up with an experience I had 
last August on one of these construction projects. The foreman 
called a truck over to the side. You have all seen them, those 
big bottom dump haul trucks, doing a mill and overlay. And the 
driver shut off the engine, jumped down and said, oh, Mr. 
Oberstar, thanks to you and the Congress, I am working.
    Two months ago, my husband and I just finished dinner, we 
were sitting there looking at each other across the table 
asking where do we go now? Our unemployment compensation is 
gone; our health insurance has ended; we are drawing down what 
little we have in savings to pay the mortgage. How are we going 
to put the two boys into summer camp this year? Where do we go 
from here?
    And then the next week our employer, Knife River 
Construction, called and said we won the bid for repaving of I-
35; report to work next week. And now we are off our 
unemployment and we are now getting a paycheck; and we are now 
paying our mortgage; and we have paid taxes, our Federal and 
State taxes; and, yes, the boys are going to summer sports 
camp.
    Real people, real jobs, real lives put back together.
    Mr. Mica?
    Mr. Mica. I thank you for yielding and also want to 
associate myself with your remarks. The most important thing we 
can do is get people working, and what a difference it does 
make in their lives.
    I am so pleased to see Secretary, our former colleague, Mr. 
LaHood, with us today. He has certainly done a great job in 
trying to join us with our intent of getting funds out. And I 
know he has done everything possible, humanly possible and then 
some, to try to make certain that transportation infrastructure 
money gets out there and people are employed and we hear more 
of the stories like Mr. Oberstar just relayed to us.
    Unfortunately, we still have problems in getting the money 
out, and this isn't something that should be a surprise. In 
fact, I had some CBO language or, actually, this particular 
article cites back some of CBO's projections. Unfortunately, 
when they told Mr. Oberstar and myself that there would be 
difficulty in getting that money out and that we would only be 
able to get out certain percentages, unfortunately, they were 
right, and have been right, because it is difficult.
    I think when we passed at least our portion of the stimulus 
bill, and you have to remember, out of $787 billion, less than 
7 percent was transportation and infrastructure-related, and of 
that, the Secretary, through DOT, has about $48 billion that he 
is responsible for, and we have tracked each of the agencies, 
and we tried to put in place protections to make certain the 
money was properly accounted for, and these hearings are 
something we also pledged to do to monitor how those funds are 
going out and keep good tabs, as trustees of the taxpayers' 
hard-earned dollars, where that money goes. So it has been a 
difficult process.
    The Chairman also cited that all the problem in the delays 
is not the Federal Government, although I would like to do a 
lot more in expediting the red tape and the hoops and all the 
delays like the bridge in Minneapolis. I think normally that 
would have taken seven to eight years to replace. That was done 
in 437 days. So we can target projects and we can get people 
working in significant infrastructure investment projects, but 
we do have a ways to go.
    Now, interestingly enough, when we started looking at the 
hearing today, we have the unemployment for the 10 States and 
the amount of infrastructure DOT spending, and I looked at 
this. This is the latest information. Remember, I do these 
charts. I did the chart, I think the first one, with the end of 
May statistics and I thought, well, let's see how our 
improvement is.
    Now, some of these States have changed a bit as far as who 
has the highest unemployment, but most of them are still with 
high unemployment figures. And you can see Michigan up here now 
has 15.2 percent; at the end of May, the beginning of June, the 
unemployment was 14.1 percent. So it has actually risen with 
this amount of spending.
    Actually, in every one of these, with the exception of 
South Carolina, unemployment has either risen--even with the 
stimulus money, unemployment has risen or remained the same in 
all of them except for South Carolina. South Carolina we spent 
the least amount of money, $6.9 million, and that is the only 
one where unemployment actually dropped. So I don't think this 
chart shows that what w e have invested has made--at least the 
transportation and infrastructure spending has made a 
difference in employment figures.
    That does raise concerns, and maybe we should work together 
in targeting some of these high unemployment States. It is 
ironic the one that got the least amount of money had half a 
percentage decrease in unemployment. It doesn't quite make 
sense. So I think what we should do is look at targeting some 
of the high unemployment areas and see how we can work with 
them to do some Minneapolis bridge type projects, major 
infrastructure projects that we know are pending.
    Now, my State has come a long way. And some of the 
assessment, too, has been critical of the way money has been 
spent. I had a hearing, too. My State was targeted for being 
51st out of I think 51 States and the District of Columbia of 
getting the money out. But when we looked at how they were 
approaching it, it wasn't just short-term small projects, it 
was longer term investment, which is also important in that 
analysis.
    But I do think we have an obligation to try to get, as the 
Chairman pointed out in his illustration of that one family, 
more of those families working so they are not losing their 
homes, they are not on unemployment, they are not losing their 
health insurance, they are able to send their kids to school 
and do the other things that they want to do.
    So I look forward to working with the Administration. I 
think maybe we might want to look at targeting, see how we can 
get those bucks out there to the high unemployment areas and do 
an even better job. We do have that obligation and I look 
forward to working with you, Mr. Chairman, Mr. Secretary, and 
yield back.
    Mr. Oberstar. Thank you, Mr. Mica.
    Your charts are very interesting and yet I think while they 
raise a point, your advocacy for more investment in areas of 
greatest need is provided for and required in the Act, it was 
something that I particularly insisted on, even though, in the 
conference between the House and Senate, there was push-back 
from the other body. Our language in the House bill to require 
States to give highest priority consideration for allocation of 
highway, water resource funding, transit funding to areas of 
highest unemployment as measured by EDA, the Federal Economic 
Development Administration, remained in the bill.
    In my State of Minnesota, 40 percent of the funds went to 
the areas of highest employment. Thirty-four percent of those 
are actually underway. In Florida, 35 percent of the State's 
$201 million allocated went to areas of highest unemployment. 
That, in fact, requirement is being carried out.
    In our surface transportation authorization bill we are 
taking in serious account the Minneapolis bridge reconstruction 
that you frequently cited, the 437-day wonder, and our Office 
of Project Expediting in the Federal Highway Administration is 
going to take the lessons learned from the Minneapolis bridge 
and apply them nationally. But we have to move, and with that 
continued participation we are going to get there.
    Mr. Mica. Mr. Chairman, will you just yield?
    Mr. Oberstar. Yes, I yield to the gentleman.
    Mr. Mica. A kind of sad day today. Today is the first day I 
can remember in 18 years that we have not had in place an 
extension of our highway reauthorization. I know we did 13 
extensions, but we never missed the mark. I guess the other 
body had a bad night last night; the last email I got was 7:25, 
and they had reached an impasse. But hopefully we can get the 
reauthorization extension done. But this is the first time I 
ever remember, in my legislative career, a short 17 years, 18 
years, of not having that done.
    Mr. Oberstar. The Senate has had that bill for a week. They 
were unhappy that I pointed that out yesterday. And when the 
Chair of the Senate Committee, Ms. Boxer and Mr. Inhofe, tried 
to move their bill, a Member of the other party objected. I 
don't know who it was, but all it takes is one to object in 
that body and you are right, it is the first time in a long 
time we haven't been able to get an extension, although it is 
covered in the CR.
    Do other Members wish to be heard?
    Mr. Rahall. Mr. Chairman?
    Mr. Oberstar. Yes.
    Mr. Rahall. Mr. Chairman, I just ask unanimous consent that 
my opening statement be made part of the record so that we can 
proceed to the Secretary.
    Mr. Oberstar. Without objection, so ordered.
    Mr. Rahall. I will be asking some questions in regard to 
the TIGER grants, the discretionary grant program. But I 
certainly want to welcome our dear friend and still dear 
colleague I like to call him, Ray LaHood, who I think has done 
an excellent job as our Secretary of Transportation. He 
certainly has reached across party lines, continued to reach 
across party lines, as he did while in this body, and certainly 
want to welcome Ray and thank him for the tremendous job he is 
doing for our Country.
    Mr. Oberstar. Mrs. Miller?
    Mrs. Miller. Thank you for recognizing me, Mr. Chairman. I 
will just be one quick minute. But since Michigan was raised, 
if I could, we do have the highest unemployment in the Nation. 
In fact, in the four counties that I represent, the average 
unemployment rate is 19 percent. We do have a shovel-ready 
project immediately in Southeast Michigan, and I have talked to 
the Secretary about it and the Chairman and Ranking Member as 
well, and that is the Blue Water Bridge, which is shovel-ready.
    And it is not like it is some local project, it is the 
second busiest commercial artery on the northern tier of our 
Nation. I have raised this issue with Prime Minister Harper, as 
well as the Chairman did, a week ago. We look at Canada as our 
biggest trading partner and their principal priority, really, 
is making sure that we continue to expedite the flow of goods 
between our two Nations. This is the genesis of I-94, and I-69 
is right at the foot of that bridge. It is a major project, as 
I say, for all of the right reasons, and in that particular 
city the unemployment is 26 percent right now.
    So I have to put a plug in for that because I think it is--
I am not trying to hawk some local project. This is a huge 
project of national significance, shovel ready. I know you do 
have some discretionary funds in the stimulus funds and, Mr. 
Secretary, I would ask you to look at that again, if you would.
    Thank you very much, Mr. Chairman.
    Mr. Oberstar. Mr. Secretary, thank you for being with us. 
Thank you for your very thorough report, including the 
attachment, as we asked you to do, on projects in economically 
distressed areas. I would like to join Mr. Rahall in 
complimenting you in your service as Secretary. You learned 
well in this Committee. You didn't stay long enough, you went 
over to Appropriations, but you have done a superb job as 
Secretary
    And I want to compliment you on your most recent initiative 
on using cell phones and texting while driving. You know, in 
the European Union, such activity is outlawed by their 
departments of transportation. In Portugal it is a crime to 
text while driving.
    Thank you for your report. The floor is yours.
    Mr. Ehlers. Mr. Chairman?
    Mr. Oberstar. Oh, excuse me. Just a moment. Mr. Ehlers 
wishes to be recognized.
    Mr. Ehlers. I apologize for being late, but I was in 
another meeting.
    I just wanted to add to the comments that Congresswoman 
Miller made. First of all, I want to compliment you, Mr. 
Secretary. I have heard you on the radio. I don't have time to 
watch TV, but I have heard you on the radio more than any other 
Secretary. And I am not saying that in a derogatory fashion; 
that just means you are getting out there to the public, and I 
think that is a very important role for any Secretary to have, 
to explain to the public what is going on and why it is going 
on, and I appreciate your active role in communicating to the 
people of this Country.
    The other comment I want to make is we have people on our 
side of the aisle who are keeping a list of all the stupid 
things money is being spent for in the stimulus package, and I 
don't get into that game, but I do want to second what 
Congresswoman Miller has said. I really expected, when this all 
started, that a lot of the money would be going to shovel-ready 
projects.
    And I have seen the list of shovel-ready projects. Not much 
money seems to be going there and a fair amount of money seems 
to be going to certainly less needed projects. And people 
wouldn't be able to keep these lists if it weren't going to 
less worthy projects. I am not talking so much about in your 
Department, but I think your Department doesn't seem to be 
getting the amount of money it needs to deal with all the 
shovel-ready projects that are sitting there, and you just 
heard one example this morning.
    So I would hope that you can carry the message back to the 
other folks that you have a lot of work ready to go. 
Unemployment is huge in this Country, especially in Michigan. 
We are about 15.3 percent now, and we can put that money to 
work right away. So keep up the good job and carry the message 
back, please. Thank you.
    Mr. Oberstar. Mr. Ehlers, for the record, and Mrs. Miller, 
according to the report that we have received, our most up to 
date report on projects in economically distressed areas, 90 
percent of Michigan's population is recorded as being in an 
economically distressed areas, measured by EDA, according to 
the law that we passed; and 87 percent of the projects reported 
from the State of Michigan DOT have been designated to areas of 
high unemployment. If you take issue with that, then we will 
have to have Michigan DOT come in here and explain to us what 
they mean by those numbers, and we will do that.
    Mr. Ehlers. Yes. And we met just a week or two ago with the 
Director of Transportation Department in Michigan and they are 
really getting the money out there and doing their best to do 
it. A big problem, of course, for the State, the whole State is 
so economically distressed that they don't have the matching 
money that is needed on a number of these projects.
    Mr. Oberstar. That is another problem. We will expect to 
hear from Secretary LaHood about that.
    Mr. Ehlers. Yes, right. So thank you for raising that 
issue. I am not economically distressed, but I am certainly 
mentally distressed at what I see in my State in terms of the 
problems of the people.
    Mr. Oberstar. Mr. Secretary.

   TESTIMONY OF THE HONORABLE RAY H. LAHOOD, SECRETARY, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Secretary LaHood. Mr. Chairman, thank you for inviting me 
to participate in this hearing. It is good to be back with you 
and your colleagues, and good to be back at the Transportation 
Committee, where I started my congressional service. I want to 
talk about the progress in implementing the American Recovery 
and Reinvestment Act.
    Last April I appeared before this Committee to share our 
initial efforts to get Recovery Act funds out the door to 
support transportation projects across the country, and I am 
pleased to report we have come a very long way since then.
    I want to recognize two career people at the Department of 
Transportation who are with me today, Lana Hurdle and Joel 
Szabat. They, from the very beginning, put together what we 
call the TIGER team, which is made up of all the different 
modes, when we realized that we would be receiving these funds, 
$48 billion, and that you all put very strict guidelines on 
getting money out the door. They organized a committee within 
the Department and they have done a wonderful job, every week, 
holding people's feet to the fire to make sure the money is 
being spent correctly.
    So to both of them I want to say thanks for doing what they 
have done to do it the right way. Thank you.
    [Applause.]
    Mr. Oberstar. We all know that good Member work is backed 
up by good staff work.
    Secretary LaHood. That is correct.
    Today, we are nearly at the halfway point of this historic 
effort. The DOT has obligated $29.4 billion, over 60 percent of 
our total Recovery Act funds, on over 9,000 projects 
nationwide. To date, almost $3.4 billion has been disbursed 
from the U.S. Treasury. And let me give you the top line 
numbers. The FAA has obligated 99 percent of its recovery 
money; the Federal Highway Administration has obligated 72 
percent; the Federal Transit Administration, 88 percent; and 
the Maritime Administration 100 percent. This represents 
substantial progress. Both the DOT and our State and local 
partners share in this success.
    The other good news is that we have met or exceeded all the 
Recovery Act deadlines, and have done so without any 
boondoggle, sweetheart deals, or earmarks; and we are very 
proud of that.
    Since the passage of the Recovery Act, I have personally 
visited 30 States, 54 cities, and have seen the positive 
impact, as you have, Mr. Chairman, these resources are making 
in our communities. Throughout all of these visits, one thing 
stays the same: I have yet to hear a complaint from anyone. The 
largest portion of the Recovery Act dollars are working to 
improve our highways and bridges; $19.4 billion have been 
authorized to support work on nearly 8,000 projects in all 50 
States and U.S. territories. Of that amount, more than half, 59 
percent, are obligated on projects located in economically 
distressed areas, where communities have been hardest hit by 
the recession.
    For example, the widening of Interstate 215 in San 
Bernardino, California, will help one of America's most 
economically distressed areas by creating jobs for 2,000 
workers in the first year. It will also improve access to one 
of the largest and fastest growing trading hubs in the San 
Bernardino International Airport.
    On the transit side, the Federal Transit Administration has 
worked with nearly 600 transit agencies nationwide to ensure 
that half of their share of Recovery Funds would be awarded by 
September 1st. FTA exceeded this deadline and to date has 
awarded 683 grants. These funds have been a lifeline to the 
industry, enabling transit agencies to replace aging equipment, 
improve safety and reliability, and reduce emissions.
    More broadly, Recovery Act funds have been instrumental in 
restoring transit service hurt by budget cuts. For example, 
with the aid of the budget stabilization funds, the State of 
Missouri was able to provide $12 million in emergency relief to 
the St. Louis Metro, which in turn rehired over 250 employees 
and restored a significant portion of transit service. We have 
also broken new ground in helping public transportation become 
more environmentally sustainable. Last week we awarded $100 
million in grants to 43 transit agencies focused on reducing 
greenhouse gases and fuel consumption, and we have received 
many more innovative proposals.
    The recipient of the largest award, Atlanta's Metropolitan 
Atlanta Rapid Transit Authority, is using the funds to provide 
bus canopies with solar paneled roofs in a bus maintenance 
facility. These green roofs will produce power that feeds into 
Atlanta's power grid and MARTA can generate new revenue by 
selling surplus electricity back to the utility.
    In aviation, the Federal Aviation Administration has 
awarded $1.1 billion for over 300 airport improvement grants to 
upgrade and improve runways and airport facilities. Most of 
these high-priority projects are under construction or 
completed. Airports are also benefitting from the Recovery Act 
provision encouraging the use of private activity bonds to 
finance debt and save money. Over two dozen airports have taken 
advantage of this program, selling more than $4 billion worth 
of bonds and saving hundreds of millions of dollars they can 
redirect toward long-term development costs.
    In the maritime sector, the Maritime Administration Small 
Shipyards Program has awarded $98 million to 70 small projects 
in 26 States and Guam. These funds make significant and, in 
some cases, long overdue repairs and upgrades to dry dock 
facilities, steel working machinery, and other infrastructure.
    As you know, one of the signature initiatives of the 
Recovery Act is $8 billion to help jump start high speed and 
inter city rail. The Federal Railroad Administration is 
reviewing over 200 applications it has received so far, with 
additional applications due this week. There is a tremendous 
amount of interest in this program across the Country, and we 
are grateful to Congress for their support. FRA did a great job 
reaching out to stakeholders.
    One other signature initiative, the $1.5 billion 
discretionary award program, is known as the TIGER Grant 
program. We are seeking innovative, multi-modal projects of 
regional and national significance. The response has been 
tremendous, with about 1,400 applications submitted from all 50 
States and the District of Columbia and three territories. We 
will announce these awards in advance of the February 2010 
deadline. We think that, taken together, these innovative 
cross-cutting programs will, over time, produce a profound 
strategic shift in our transportation capabilities, with far 
greater emphasis on efficiency and sustainability than the 
Country has seen in more than half a century.
    Finally, I want to note the tremendous positive impact of 
the Car Allowance Rebate System, known as Cash for Clunkers. 
Like the Recovery Act, this program has really helped to move 
the dial during the recession. A total of 694,877 cars were 
sold from 21,208 automobile dealers across America. So far, we 
have paid out more than $2.8 billion in rebates, with an 
additional 7,000 applications worth $28 million in final 
review.
    Thanks in part to this innovative program, consumer 
spending posted a solid gain in the third quarter. Ford, GM, 
Toyota, and Honda announced quarterly production increases, 
which are putting more people back to work, and through trade-
ins we have achieved a 60 percent improvement in fuel economy. 
I think the CARS program, which was wildly successful, and the 
Recovery Act clearly demonstrate that when the Federal 
Government, State and local leaders, and the private sector 
team up to take bold actions, the American public wins. 
Together we are putting America back to work.
    I look forward to your questions, Mr. Chairman.
    Mr. Oberstar. That is a splendid report. I read it last 
night and again this morning. I am very encouraged by what I 
saw, some of these additional details that you have supplied in 
your testimony to those that we have been tracking with our 
Committee documentation.
    On the CARS, I didn't know that is what its acronym was; I 
thought it was simply Cash for Clunkers.
    Secretary LaHood. Well, that is the way it was portrayed by 
some, but the acronym is CARS.
    Mr. Oberstar. CARS. I queried our State of Minnesota about 
the effect of CARS and found that the State has registered a 
1.5 percent increase in tax receipts because of car sales that 
had disappeared and now had come back. Not only tax benefits 
up, but car registration fees are up and license fees are up, 
and a whole host of such fees that are derived from the 
automobile sales sector benefitted dramatically in the month of 
August and September in the State of Minnesota.
    In February, after we passed the stimulus bill, I was asked 
by Minnesota news media and other national news media when will 
we see the effects. Well, there will be effects by May and June 
as contracts are awarded, work starts, and the States begin 
paying contractors and the Federal Government reimburses the 
States. But we in Northern Minnesota won't feel the effect 
until November, even December, because there is still a huge 
amount of steel inventory that is in steel company yards and in 
steel shaping industry yards, those that process steel for pipe 
and other purposes. But as those inventories are drawn down, 
the industry will have new orders and will have to melt those 
steel, and that will mean new iron ore.
    Well, it has actually happened earlier. Two weeks ago, 
three weeks ago, actually, the U.S. Steel, Cleveland Cliffs 
Mining Company, and another smaller operation have called back 
4,000 laid-off iron ore miners in Minnesota, and they have 
called back another 1500 in the upper peninsula of Michigan, 
which has two iron ore mines; they have been combined into one, 
the Empire and Tilden Mines. That additionally means that the 
lakers are operating, the ships that haul the iron ore, 1,000-
footers that carry 60,000 tons of ore, called back their crews. 
So 10 ships in the Great Lakes fleet, that is 300 seafarers 
have also been called back to work to haul the ore that we are 
now mining again, that had not been mined all summer and all 
spring, all since last December the mines were shutting down 
and laying off.
    It is happening faster than I anticipated because this 
Recovery Act money is getting out fast, as fast as we expected.
    You mentioned you have been to 30 States and 54 cities. It 
occurred to me, hearing you tell that story, how much traveling 
you can do if you don't have to report for votes on the House 
Floor. Big relief for you.
    I found that airport authorities are able to get their 
projects out faster than the State DOT. I asked the Bemidji 
Airport Authority, the Brainard Airport Authority, Chisholm-
Hibbing Airport Authority why were they able to get their funds 
out so quickly. They have a different contracting capability 
and different requirements than do States. They can prepare 
bids, issue the bids and take bids from contractors, and then 
hold those bids for even a year; and as soon as the money is 
available they can get right out into the field.
    Are you aware of those contractual distinctions?
    Secretary LaHood. Well, I think one of the reasons that the 
airports have done so well is because they have had these 
projects that were ready to go and they haven't had to really 
interface with that level of bureaucracy at the State level. I 
mean, our people work directly with the airports, they submit 
their applications, we check the boxes, and the project is on 
its way.
    Mr. Oberstar. There certainly are some distinctions in 
contracting authority between airports and State DOTs. The 
experience of the alternative minimum tax, which initially I 
didn't think was going to have much of an effect, you report as 
having a very substantial effect of selling $5 billion in 
bonds, $4 billion of which benefitted from the AMT provisions. 
Is there a lesson to be learned in this experience for us as we 
go forward with surface transportation program?
    Secretary LaHood. Well, I think that this has been a 
lifeline for airports, it really has, financially, and I hope 
that you will consider the use of this opportunity in the 
future.
    Mr. Oberstar. Well, I would like you to have your staff 
give some further thought to the AMT. I don't know how broadly 
we can spread this and what budgetary consequences there may be 
in the future of expanding that provision. We might have to 
have offsets and PAYGOs and so forth, but, because of this very 
significant experience, I would like to have your staff give 
this further thought and share with us on both the Democrat and 
Republican side to perhaps inspire some further improvements in 
our metropolitan mobility centers and in the future financing 
of the surface transportation program.
    Secretary LaHood. We will do it.
    Mr. Oberstar. A concern that has come up is that States and 
cities, because of drop-off in revenue, have not been able to 
provide the matching funds for the transit projects and, on the 
highway side, some States, it is reported, have cut back on 
their regular--not on stimulus; that is 100 percent Federal 
funding, there is no State match required, but that there have 
been some reductions in State regular program highway and 
bridge projects, but also on the transit side. Are you 
following those?
    Secretary LaHood. Well, as you know, Mr. Chairman, and you 
just stated, there is no match for economic recovery funds. The 
transit money, the $8 billion, almost all of it is out the 
door. There was no match required on that. And the other thing 
that has been a big assist to the transit districts is the 
provision that was put into the omnibus appropriation that 
allows them to take up to 10 percent and use it for operating 
costs. That has been very helpful. Every transit district that 
I have talked to, that has been a lifeline for them to be able 
to use that money to operate. It is one thing to say we are 
going to sell buses and they are going to buy buses, but if you 
don't have the people to drive the buses, it is kind of silly. 
That has been a good provision and I know that you all are 
considering that in the future.
    Mr. Oberstar. Yes, we are. What I am getting at is that 
there is a distinction in the news reporting that is not being 
made--there is a distinction that is not being made in the news 
reporting is a better way to say it--which is that the cutbacks 
by, for example, City of Chicago and a few others, have been in 
their regular program, not in stimulus program, bus 
acquisitions. Because they have not had the revenue coming in 
that they anticipate from their sales tax or other source for 
capital asset acquisition, they have cut back on the non-
stimulus program, while going ahead with stimulus funding 
purchases, which may in some cases----
    Secretary LaHood. No, that is true. I was just in Chicago; 
I met with Mr. Richard Rodriguez, and he told me--and the mayor 
was also there--that they are having some great difficulty, and 
it is true in other places in the country also, because 
ridership is down, there is a great reluctance to raise the 
fees during these hard economic times, and they are facing some 
financial difficulties.
    Mr. Oberstar. One last point, for the moment, at any rate, 
is that when we were shaping the stimulus in December of 2008, 
I gathered the representatives of the various organizations, 
the AGC and AASHTO, ARTBA and a number of the State 
transportation directors in Washington, then I further had a 
conference call, teleconference by TV with the five 
representative DOT commissioners and asked them to follow up 
with Federal Highway Administration on clearing out any 
obstacles or any questions that they might have about 
implementation, because I said this stimulus program is going 
to pass, it has the support of the President Elect and we 
intend to move it.
    Late in December and early January, Federal Highway 
Administration and Federal Transit were in touch with State 
DOTs and MPOs and State transit agencies, and after you were 
sworn in, I know you directed even further contacts. Now, that 
should have cleared out any of this question about red tape and 
made clear to States what was expected of them and what they 
needed to do and how to proceed with respect to equitable 
distribution of projects throughout a State, priority given to 
areas of highest unemployment, and clearing out. The report 
that I got back from AASHTO was we are very happy, we don't see 
any problems.
    Now, have you continued to keep the liaison--not you, but I 
mean the Federal Highway Administration, keep the liaison with 
State DOTs throughout this process?
    Secretary LaHood. Absolutely. Victor Mendez has been all 
over the country and he is in touch with these folks on a daily 
basis, and I think we do have our finger on the pulse on this.
    Mr. Oberstar. Thank you.
    Mr. Mica.
    Mr. Mica. Thank you.
    Again, welcome back, Mr. Secretary. Good to have you here.
    Tomorrow, I am told that the unemployment figures for the 
Nation might reach 9.8 percent. I actually presented earlier, 
in my opening statement, a chart that showed the 10 highest 
unemployment States right now, where we put money in. I 
actually went back and got the first charts we did when we did 
the first review hearing and found that nearly all of them had 
either stayed the same or increased, except for South Carolina, 
where we had the smallest amount of money and actually that had 
a half a percent decrease in this.
    The stimulus bill, too, if you go back and look at the 
arguments to sell it, was sold as an infrastructure bill. Of 
course, there was only a small amount in there as it ended up. 
But they targeted 8 percent, keeping unemployment at 8 percent.
    I think, Mr. Oberstar, you cited 122,000 jobs created.
    Mr. Secretary, our intent was, if we just use round 
figures, the whole intent of the stimulus was to get people 
working and jobs created, keep the unemployment below the 8 
percent level, and we still have had difficulty getting that 
money out and targeted to where we have the high unemployment, 
even though that is a requirement in the bill and you have done 
your best to get it out there.
    If we had the full 60--we will just round it off, we will 
say $60 billion out and you get 28 to 34,000--and we will round 
that out, to 30,000 jobs per billion dollars in infrastructure 
investment, we would have 1.8 million people working. So far we 
have actually spent out $3.5 billion, which is right on target; 
$3.5 billion is about 122,000 jobs. A long entry into my 
question, but how can we work with you? Do we need to go back 
and change the law? Do we need to do something administratively 
differently to get the money out, to get people working? Do you 
have a recommendation?
    Secretary LaHood. Well, what I would say is that we 
followed every guideline that Congress established in the law. 
The money is out the door. We have to make sure that the States 
are providing the correct information. But the other part of 
it, too, is that this is an 18-month program. A year from now, 
many of these projects will still be going on, at least half of 
them will, and the people that will be suspended from working 
because of the winter will be back at it next year, finishing 
up these projects.
    Mr. Mica. That is another problem we haven't even gotten 
into. And being from Florida, we don't think much about that, 
but in the north you lose months because you can't construct. 
So it probably will get worse, rather than better, as far as 
unemployment based on that factor alone. Then, of course, if 
you take States like Michigan, which are in the frost freeze 
belt, will probably be even harder hit.
    Again, if you come up with anything or we could sit down, I 
know Mr. Oberstar would welcome the opportunity, to see how we 
can target getting more money out. Obligated, we have--what is 
it?--$29 billion of the $48 billion that you have control over 
obligated. When do you think the balance that would all be done 
by the 18 months or do you think that we will have residual and 
that the Committee or Congress would have to come back and do a 
stimulus 2 or----
    Secretary LaHood. I think we will spend all the money that 
we have.
    Mr. Mica. You do?
    Secretary LaHood. Yes, I do.
    Mr. Mica. What about a stimulus 2, you think that is 
necessary?
    Secretary LaHood. I will leave that to all of you to 
decide.
    Mr. Mica. Very good answer on that one.
    [Laughter.]
    Mr. Oberstar. That's the six-year bill.
    Mr. Mica. It is nice for him to be on that side of the----
    Mr. Oberstar. That is the six-year bill. Stimulus 2 is the 
six-year bill.
    Mr. Mica. But we will not doing good on that.
    Mr. Oberstar. Well, we had a good vote last week.
    Secretary LaHood. I would say this, Mr. Mica. If we could 
get your support on a stimulus 2, I think there would be very 
strong consideration for it.
    Mr. Mica. Well, if it was factored right. I mean, Mr. 
Oberstar and I came back. The Speaker asked us to come back, 
you called me and said we have to go back and do some hearings. 
Was it just before the election or after the election?
    Mr. Oberstar. October.
    Mr. Mica. October, to do a larger bill. We wanted to do 
$120 billion to $150 billion, and we could have done it. Then 
we got the kickback from CBO which said you can't spend it, and 
again I said their words, unfortunately, and their counsel to 
us was that there would be difficulty in getting the money out, 
and it has proven correct. Not all by what we put in the 
legislation. We wanted good reporting and be good stewards of 
the taxpayers' money, but just the practicality of the 50 
States plus the District and others trying to get the money out 
under their requirements and things like the weather now that 
will deal us probably another setback. But my interest and your 
interest, I think, is getting the money out and getting people 
working, so we do want to work with you.
    And then sometimes we get the money out with good 
intentions. I have a report here. When Vice President Biden 
went to Minnesota to a factory, the New Flyer Bus factory, we 
gave $8.4--well, we have $8.4 billion in the stimulus bill, 
which you have gotten money out. They were a recipient of 
money, stimulus money, I understand, and last month the 
company--in fact, the Vice President said this is an example of 
the future, and last month that company that was a recipient of 
some of our money laid off 320 people, 13 percent of its 
workforce, after getting the stimulus money.
    Now, I know that there are factors, State cutbacks and 
other things, that influence that, but what I am trying to say 
is we have a challenge not only of getting the money out 
faster, we have a challenge of also trying to target the money 
to where we can secure jobs; and I hope that is not an example 
of the future where, again, additional people were laid off but 
we made a Federal investment in that particular operation.
    Is there anything that we should be doing to further 
examine where we are putting those monies?
    Secretary LaHood. Well, I have been all over the country, 
and everywhere I go where I see orange cones and orange 
barrels; I see people working; and when I talk to those people, 
those people were on unemployment in January, February, and 
March, and they are now working in good paying jobs.
    Look, if you are going to try and lay off all of the 
unemployment on the fact that we didn't have enough money or we 
are not spending it fast enough, I think that is just not 
accurate. It was a $787 billion bill. I think when you look at 
our portion of the economic recovery, a lot of people are 
working around America. Travel around your communities, look at 
the orange cones, look at the orange barrels. Fly into any 
airport that I have flown into; they are all resurfacing their 
runways. A lot of money out the door and----
    Mr. Mica. Well, my question, actually, was to the quality 
of the investment. Our intent here was to create more jobs for 
this bus company. It was producing green buses and we made a 
Federal commitment, but they have reduced their employment. I 
mean, I can take my own district. You got money out to Central 
Florida and my transit company is building bus shelters. The 
bus shelters are $25,000 to $26,000 apiece. I mean, I have a 
question about that much money for a bus shelter. That is 
another question.
    But my point is we are spending money and some people are 
working. Obviously, we haven't made an impact in the highest 
unemployment States. But the quality of the investment and 
getting jobs in the future with that investment and sound 
investments, do we need to do more as far as oversight 
adjustment of the legislation? Or if we are going to do a 
future bill, how do we protect that money going out?
    Secretary LaHood. I think in the construction industry, Mr. 
Mica, we have made a huge impact. And if you look at the 
unemployment in the construction industry, there are a lot of 
people working that without the recovery plan would not be 
working. With respect to whether your transit district ought to 
be building bus shelters or bus buildings, that is up to them 
to decide; it met our guidelines and it met the guidelines set 
out by Congress.
    If we got in the business of telling every transit district 
whether they can buy buses or build shelters or whatever, you 
all would be screaming at us. They follow their guidelines. And 
whoever built that bus shelter was probably a building trades 
worker, or two or three or four or five that were on 
unemployment earlier this year as a result of a lousy economy, 
and they were working on the selected project. So that part of 
it works.
    I think if you look at statistics having to do with our 
portion of economic recovery, we are driving down unemployment 
and a lot of people are working in good paying jobs, and that 
will continue through the life of the program.
    Mr. Mica. Well, we look forward to working with you both 
and getting the money out, getting people working, and then 
making certain that the money that we spend goes on good 
projects that are spent with the best interest of the taxpayer 
in mind. Thank you.
    Mr. Oberstar. Mr. Mica raised an interesting point that I 
discussed somewhat with you earlier, the issue of New Flyer and 
the City of Chicago was called to my attention by the officials 
at New Flyer about three, four weeks ago, who were very 
concerned that their order of 150 buses from the Chicago 
Transit Authority was being, at that time, reduced and then put 
on hold. They were anxious. This was not stimulus money; the 
buses the CTA ordered from New Flyer under stimulus was a firm 
order, and they are proceeding with that order.
    But at the very same time--and the reason I raised this 
earlier was the same Chicago Transit Authority was cutting 
back. Why? So I called Frank Kruesi, who is the aide to the 
mayor and directed the Chicago Transit Authority for some 
years, and asked, and he came back with a report that their 
revenues had fallen; their sales tax revenues were down; the 
source of funding for bus acquisition, capital acquisition was 
down. The city could not carry out their intention to order 144 
buses and put those bus orders on hold.
    As a result, New Flyer had to cut back its employment 
because they had ramped up in anticipation of this order from 
the Chicago Transit Authority. Chicago, too, is a victim of 
recession; their tourism dollars are down, the travel figures 
are down, O'Hare's numbers are down, train traffic is not as 
congested in the center of Chicago as it once was. I think the 
railroad companies would like to have that congestion back 
because it means that their shipments are down. Everything is 
down.
    The only thing that is up is the stimulus money, and all of 
the funds are going out according to plan, but we did not, in 
the stimulus program, direct States as to the type of project 
to be done or the quality of the project, or what its long-term 
benefit would be, but, rather, whether it would create 
employment. And the second directive we had was that the States 
allocate those funds on a priority basis to the areas of 
highest unemployment. That too is being done.
    Now, I will say to my good friend, Mr. Mica, that in our 
surface transportation assistance bill that we have reported 
from Subcommittee, we take a very significant step toward 
quality of projects in the future by requiring States--first of 
all, compressing the 108 categories of Federal Highway funding 
into four formula programs, eliminating 75 of them, and 
requiring the States to develop six-year strategic investment 
plans, something that you and I talked a great deal about and 
we are in agreement on. And initially the State DOTs said, oh, 
that is a great idea. Then they said, well, we don't like so 
much accountability, and they are nervous about it.
    But this is how we are going to achieve quality projects, 
long-term planning, coordination within the State, between 
State DOTs and Federal Highway Administration and USDOT and get 
better projects in the long run and concentrate the States' 
efforts. That is where--and we can do further refinements to 
make those stronger, and we have learned some lessons through 
the Recovery Act, so we are proceeding, things are going. Also, 
CBO was flat out wrong; they said this program would spend out 
at only 2.4 percent. They were dead wrong; it spent out at 64 
percent.
    Mr. Rahall.
    Secretary LaHood. Mr. Chairman, before Mr. Rahall, I thank 
you for the clarification. I was with the Vice President when 
he went to New Flyer, and I want to make sure everybody knows 
New Flyer is a very good company. It is a very well run 
company. And through no fault of their own, Chicago decided to 
cancel their contract for 150 buses. Now, they can't do 
anything about that, but I want to make sure the record is 
correct on this. This is a very fine American company. And what 
we are asking these transit districts to do is look to American 
companies to buy their buses. So we are happy that companies 
like New Flyer are in existence and run well.
    Mr. Oberstar. Their employment has increased 40 percent 
because of recovery, even with this layoff.
    Mr. Rahall.
    Mr. Rahall. Thank you, Mr. Chairman. I would like to shift 
the questioning to rural parts of our Country, an area from 
whence the Secretary comes and knows very well.
    That, of course, brings up the TIGER grants that you 
mentioned in your opening testimony, and I know you have your 
evaluation team with you that you have introduced to the 
Committee already. When the grants funding announcement was 
made back in June in the Federal Register, the announcement 
mentioned the DOT ``must take measures to ensure an equitable 
geographic distribution of funds in an appropriate balance in 
addressing the needs of urban and rural communities.'' And I 
believe you referenced some 1,400 applications in your opening 
testimony across the 50 States.
    Secretary LaHood. Yes.
    Mr. Rahall. Some close to $60 billion applied for, which 
you have just $1.4 billion available for these grants, so I 
appreciate the situation in which you find yourself and your 
evaluation team.
    My question, I guess, is--and you are certainly keenly 
aware of the urban/rural split that creeps into any spending 
debates in the Congress, but can you please touch upon what 
your evaluation team and you have done or will do to ensure 
this equitable distribution of TIGER grants, in fact, to ensure 
they do get into rural communities?
    Secretary LaHood. Well, look, rural America is very 
important. We say that everywhere that we go; we believe that. 
I think if you look at the way that some of our other money has 
been spent out, it hasn't been strictly in the urban areas. I 
have traveled to a lot of rural parts of America and I know the 
importance of rural America. There are people that have grown 
up in rural communities, want to stay there, want to retire 
there; they want to make sure there is affordable housing and 
good transportation for those rural areas so that people can 
get to a doctor's appointment or a hospital or a grocery store.
    I want you to know that, from my point of view, rural 
America is very important. We will look at the TIGER program 
and the kind of applications we have received and we will not 
overlook rural America.
    Mr. Rahall. You said you are going to make those 
announcements, I believe, a month ahead of the statutory 
deadline?
    Secretary LaHood. We will make them later this year or 
possibly in January.
    Mr. Rahall. So is the evaluation team, are they progressing 
on schedule?
    Secretary LaHood. They are. We have 10 teams. They have 
evaluation criteria and they review the applications and then 
the process continues from there. We think we have a very good 
evaluation process going on and we have a lot of people in the 
Department working on this.
    Mr. Rahall. And if you might just comment a little further 
of how this process is going to be determined.
    Secretary LaHood. They are going to make recommendations to 
me, eventually. I mean, the first eyes that are on them now, 
the 10 teams that are looking at these now are making sure that 
they meet the guidance that we put out and meet the criteria 
that we put out, and then they move to the next phase. If they 
meet that criteria, they move to the next phase. We are going 
to have to try and determine if the kind of requests that 
people have made, if they can come down from that a little bit 
or if there could be some adjustments in what they are trying 
to accomplish so that we can really do the best that we can for 
America with these TIGER grants.
    Mr. Rahall. So out of these 1,400-some applications, would 
you anticipate that coming down to you would be a shortened 
list of how many?
    Secretary LaHood. Well, at this point I don't know because 
there are 10 teams looking at those applications. But there 
won't be 1,400 recommendations.
    Mr. Rahall. Sure. Those 10 teams, are they divided up 
geographically? Are they examining certain geographic regions?
    Secretary LaHood. No. They are 10 teams that have been 
trained all identically. They are all using the same evaluation 
so there can be real consistency in the evaluation of the 
applications.
    Mr. Rahall. And each are?
    Secretary LaHood. They were just assigned--they were 
assigned a stack of applications and asked to review them based 
on the evaluation criteria.
    Mr. Rahall. Okay. Thank you.
    Thank you, Mr. Chairman.
    Mr. Oberstar. Mr. Coble?
    Mr. Coble. Thank you, Mr. Chairman.
    Mr. Secretary, good to have you back on the Hill.
    Secretary LaHood. Thank you.
    Mr. Coble. Mr. Secretary, I would be remiss if I didn't 
take the opportunity to make sure of the Interstate 85 Yadkin 
River Bridge, with which you are familiar, I am sure. As you 
probably know, the North Carolina Department of Transportation 
submitted a request to obtain funds to replace the bridge, rail 
infrastructure, and roads associated with the project via the 
TIGER and discretionary grant program.
    The bridge itself, Mr. Secretary, is functionally obsolete 
and structurally deficient; negatively impacts commuters, 
commerce, and air quality because of the congestion. This is of 
vital interest to my district, to my State, and to all those 
who traverse the I-85 corridor. It is the only project endorsed 
by the State of North Carolina for the TIGER and discretionary 
grant program, and has unanimous consent from the Members of 
our State's congressional delegation.
    I understand that your Department has been the beneficiary 
of over 1300 applications and the timetable for funding 
announcements is January 2010. Can you provide any further 
insight to applicants regarding the status and what to expect 
from this process?
    Secretary LaHood. Well, you are the final Member of your 
delegation to talk to me about this, Mr. Coble. I appreciate 
it.
    [Laughter.]
    Secretary LaHood. I have heard from everyone else. I know 
this is a very important project; it will get very serious 
consideration.
    Mr. Coble. And I thank you for that. I am glad we are on 
the ball; at least I hope you regard that as on the ball.
    Let me ask another question, Mr. Chairman, if I may.
    Mr. Secretary, I have heard from stakeholders in the 
transportation community regarding the EPA's efforts to 
regulate coal combustion byproducts, such as fly ash, as a 
hazardous waste. I also understand that EPA may consider a 
hybrid approach to regulating the material so that the 
beneficial use of fly ash is deemed non-hazardous, but the 
material that remains would be classified hazardous.
    We have been advised that if the EPA decides to implement 
either of these approaches, concrete producers would have to 
use an average of more than 15 to 20 percent more cement per 
year of concrete to replace the fly ash. Do you have any cost 
estimates as to how much this might increase the cost stimulus 
related transportation projects, such as the Yadkin River 
Bridge, should the designation be finalized? Is this something 
that DOD is aware of and monitoring, and have you voiced any 
concerns to EPA?
    Secretary LaHood. You know, what, Mr. Coble? I will have to 
get back to you on that. I don't have enough information to 
really talk intelligently about it.
    Mr. Coble. All right. I thank you.
    Secretary LaHood. But I will do that.
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    Mr. Coble. I thank you for that.
    Mr. Chairman, I thank you and yield back.
    Mr. Oberstar. Thank you, Mr. Coble.
    Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Secretary, thanks for being with us today. With your 
indulgence, I would like to change the topic slightly. I would 
like to discuss where we are at in terms of a longer term 
authorization of surface transportation transit and highway 
projects.
    Yesterday, the Senate failed to get unanimous consent to do 
a 90-day extension of the existing program, so we are operating 
now under a continuing resolution, which means roughly a 20 
percent reduction in investment. We are going the wrong way 
here. As we all know, we need actually to increase our 
investment to not only build out a 21st century system, but to 
maintain the legacy that we have. The legacy system is in tough 
shape.
    I am wondering if the Department or the Administration, 
beyond the Department, has rethought its position regarding an 
18-month delay, which, of course, would mean a two-to four-year 
delay, actually, which would mean status quo for probably the 
entire first term of the Obama Administration; and if not, why 
not? We feel a tremendous sense of urgency. The Chairman has 
been leading this Committee. We have stood down both the 
Administration and the Senate now on this issue because we feel 
so strongly that we have to go forward with new policies and 
more robust investment.
    Secretary LaHood. We talk every day about this, Mr. 
DeFazio, in the Department and with the White House, and 
particularly as the Administration evaluates the economy, 
evaluates the impact of our portion of economic recovery, which 
we believe is working and putting people to work and has really 
made a difference in rebuilding infrastructure in America. For 
the moment, I will tell you that we stand by our position of an 
18-month extension and then to work with Congress to get to a 
comprehensive robust bill. I will tell you that the President 
is committed to a very comprehensive robust bill and trying to 
find the way to pay for it.
    And we have had many discussions with Mr. Oberstar's staff 
on his ideas, on our ideas, and they are very compatible when 
it comes to the way forward and what we should be doing. So we 
continue to have many discussions about this, but for now we 
continue to believe that a longer term extension to get to a 
very good bill with all of you and also to find the money to 
pay for it is the best way forward.
    Mr. DeFazio. Well, we agree on the last point, a long-term; 
and I mean a six-year bill is what I would say is a long term, 
as opposed to an extension of the existing policies, because, 
again, your Department will be saddled with the policies of the 
past and there will be no increase in investment.
    Essentially when will all of the funds under the Recovery 
Act be obligated?
    Secretary LaHood. Probably about a year from now or a 
little longer. This was an 18-month bill. A lot of the money is 
obligated. But we know in certain parts of the country many of 
these projects will be suspended because of the weather and 
have to start up next year. But all of the airport money is out 
the door, so the runway resurfacings that are going on, some of 
those will have to be suspended because of weather. You know, 
more than 70 percent of the highway money has been obligated, 
but a lot of those projects will either be suspended or get 
started next year during the construction season.
    But I would say, in direct answer, probably about a year 
from now is when all funds will be obligated, or a little bit 
later, but not much later. The transit money is pretty much out 
the door for new buses and facilities and things like that, but 
on the highway side of it, we know these things will have to be 
suspended because of the weather.
    Mr. DeFazio. Something weird is going on with the system; 
all the lights are blinking on and off.
    Very quickly, since you raised the issue of aviation,--Mr. 
Costello is here; I am certain he would like to know--I have 
heard some talk that the Administration is rethinking the 
strategy for funding the FAA reauthorization. Do you support us 
going forward at this point in time with the authorization?
    Secretary LaHood. Absolutely. We hope the Senate will pass 
a bill and then we will be very involved in the conference.
    Mr. DeFazio. Okay. All right, thank you.
    Thank you, Mr. Chairman.
    Mr. Oberstar. We look forward to that miracle happening.
    [Laughter.]
    Mr. Oberstar. Not of you being involved in the conference, 
but of the other body actually doing something other than 
Supreme Court justices, treaties, and ambassadors.
    Mr. Duncan.
    Mr. Duncan. Well, thank you very much, Mr. Chairman.
    Mr. Secretary, good to have you back.
    Secretary LaHood. Thank you.
    Mr. Duncan. You were a great Member here and I think you 
are doing a great job as Secretary. I appreciate your being 
here.
    Since Mr. DeFazio mentioned the highway bill or the surface 
transportation bill, I do wish that some people would think 
about the fact that since we are running into problems on some 
of the other big legislation, if we could get out a highway 
bill in this Congress, it could be the greatest accomplishment 
of this Congress, and certainly I think almost all of us on 
both sides would like to see that.
    I apologize that I had meetings and couldn't get here 
before, so maybe you have covered this, so I will just ask one 
very brief question. There seems to be a pretty wide disparity 
between the States on the stimulus money, with the top five, 
let's say, compared to the bottom five. What are the States 
doing that are getting more of the money? What are they doing 
right and what are the others doing wrong? Can you give us some 
hints?
    Secretary LaHood. Well, this is not that complicated. The 
States have to submit their proposals to our Departments--in 
the case of highways, to our Federal Highway people--and if we 
can check off the boxes, we will obligate the funds and they 
need to then get the contracts going. And, you know, some 
States are far and away ahead of others because they knew what 
they wanted to get funded, they sent us the proposals, we 
checked the boxes, we obligated the money.
    I mean, as I said in my testimony, I have been to 30 
States. Every State I go to I try to meet with mayors and 
governors and legislators and people that are working on these 
projects, and I can tell you I have never met a worker that is 
complaining, because they were all on unemployment in January, 
February, and March, and now they are working in good paying 
jobs. Almost all the governors I have talked to have tried to 
do it the right way, by the book, so they can get this money 
going and get these roads built or bridges and get them 
resurfaced. The ones that have done the best job are the ones 
that have gotten the information to us, the paperwork; we check 
the boxes and--you know, I am simplifying a little bit, but if 
you talk to these State DOTs, that is the way it works.
    Mr. Duncan. I just was meeting in my office with the 
President of Norfolk Southern, and he said he was with you in 
Altoona just a few days ago.
    Secretary LaHood. Yes, sir.
    Mr. Duncan. So I do know you are getting around, and I 
think that is a great thing. I want you to come to Tennessee.
    Secretary LaHood. I will be there.
    Mr. Duncan. Thank you very much.
    Secretary LaHood. Thank you.
    Mr. Oberstar. I would just like to mention that we are 
likely to have a vote in the next 20 minutes or so and we have 
the Secretary until roughly 12:20. He has to leave for another, 
so I would like Members to be brief.
    Ms. Norton is next.
    Ms. Norton. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for all of your work, especially for what you have 
been doing with this summit.
    I have a question that comes from the precedent we have set 
with the stimulus and one that I think avoided both Civil 
Rights Act problems and, frankly, embarrassment considering 
where the greatest unemployment is. I congratulate you, Mr. 
Secretary, that you moved ahead on $20 million for an 
apprenticeship program so the minorities and women could get a 
foothold for the first time in the construction industry. This 
is a largely white male workforce because the Federal 
Government has not been in on the training, while, in fact, 
putting billions of dollars into roads and construction now for 
years. We are in some danger, but we have set a very important 
precedent.
    In the last bill, the Chairman and the Ranking Member saw 
that there was language that encouraged States to use some of 
these billions of dollars for training for a workforce of 
people of color and women. There is another reason to do this: 
the construction industry baby-boomer generation is aging out, 
so during the times before the collapse of the economy, there 
were actual shortages for journeymen in the skilled trades. So 
there is both an internal need and a need on the part of the 
Government.
    Seventeen States took this encouragement language in the 
most spotty fashion, little bit of it here and there. They 
preferred sometimes to spend all their money on roads with the 
same people who have been doing it for decades, without any 
training for the new workforce that they are going to need. 
Only two States did anything that could be approached to be 
called a program because, why? It didn't have to.
    So if the Federal Government is going to throw out billions 
of dollars and say, spend it the way you want to, it might be 
in violation of Title 7 and other parts of the Civil Rights 
Act. But if nobody says anything, then we are going to spend 
our money on roads. We are not talking about a lot of money, it 
was .51 percent or some such number; I don't recall.
    This Congress said $20 million in the highway bill will go 
for such training. I am also, in the part I have jurisdiction 
over in construction, $3 million is going for it. Paltry 
amounts, but important precedent. I want to know whether you 
would support a requirement that some reasonable portion of the 
new bill, the new reauthorization bill, in fact be devoted to 
training to allow people to get a foothold in this industry who 
have never had an opportunity in this industry before because 
the Federal Government has given out money without requiring 
any training to be done.
    Secretary LaHood. Absolutely. I would be happy to work with 
you on it. We are very proud of our DBE program. I am very 
proud of Brandon Neal, who runs the program. He is doing a 
great job traveling the country and making sure that this money 
is getting out. I am also very proud that he allocated some of 
his money to Spellman College to allow for a program for 150 
women from that school to become interns to get into 
transportation opportunities, whether it be engineering or 
whatever, so we can get those opportunities created at that 
level also. We just announced that program and it is the way 
for us to really encourage women and certainly women of color 
to get interested in transportation. But I will work with you 
on this.
    Ms. Norton. Thank you, Mr. Chairman. We are talking about a 
requirement in the statute, not making it permissive, but a 
requirement in the statute that some portion of the money--we 
would have to decide how much--be spent on training, because we 
have seen, unless you require it, States will not do it; and I 
very much appreciate your answer, sir.
    Mr. Oberstar. The gentleman from Kansas, Mr. Moran.
    Mr. Moran. Mr. Chairman, thank you.
    Mr. Secretary, thank you for the opportunity of having a 
dialogue with you this morning. I focus my questions in regard 
to TIGER grants. You indicated earlier about decisions made by 
the end of the year. Any ability to narrow that time frame?
    Secretary LaHood. Probably December.
    Mr. Moran. Very good. TIGER has a wide array of options for 
those funds to be used. There are those who have expressed some 
concerns about freight and passenger rail being left out or 
receiving a lower priority. Any opportunity to reassure those 
interested in that aspect?
    Secretary LaHood. Well, I think if you look at the guidance 
on our Web site for the TIGER grants, what you will see is that 
we are looking for multi-modal opportunities, and certainly 
freight fits into that. And I think as we have talked to people 
around the Country, prior to receiving their applications, we 
know that there were going to be port opportunities that would 
involve freight, that would involve taking trucks off the road, 
that would involve using the marine highway. I don't think that 
freight will be disadvantaged if it is a part of a multi-modal 
kind of opportunity.
    Mr. Moran. Okay. And in regard to a couple of other 
criteria, is there benefits to a local cost-share? Do they 
receive additional consideration if they put money into the 
project at a local or State level?
    Secretary LaHood. Of course.
    Mr. Moran. Okay. And is that significant?
    Secretary LaHood. Well, now you are going to ask me to put 
a weight on it, and--look, any time that people are willing to 
put some of their own money in the game, that is a good thing.
    Mr. Moran. I have never known you to answer a question you 
didn't want to answer, Mr. LaHood, so I am not fearful of 
causing you to say something you don't want to say. Finally, 
economically depressed areas, particular criteria or benefit 
for project being located in one of those areas?
    Secretary LaHood. Well, we all realize at DOT that this 
money is really to help communities recover from a lousy 
economy, so that is--the main criteria, though, is multi-
modalism, really trying to create opportunities that didn't 
really exist in other parts of the stimulus program, and 
economically disadvantaged communities have been a consistent 
part of what we have tried to do in all the different 
opportunities for economic recovery.
    Mr. Moran. I thought I knew what you were going to say 
until you said it. Is that a positive or a negative, then, if 
you are an economically depressed area, when it comes to TIGER? 
And the reason I ask that question is you said that this was a 
niche you were trying to fill. Has that niche, in your opinion, 
already been filled?
    Secretary LaHood. Well, if you look at our economic 
recovery plan, which I know you have, $28 billion went to roads 
and highways, $8 billion went to transit, $1.5 is our TIGER 
opportunities, $8 billion for high speed rail, $1 billion for 
airports. So if you look at that and then you think about 
intermodalism, the one that really has not been addressed in 
that portion of any of those have been ports. Is that direct 
enough?
    Mr. Moran. Always, Mr. LaHood.
    Secretary LaHood. Thank you.
    Mr. Moran. Mr. Secretary, thank you very much.
    Mr. Chairman, thanks.
    Mr. Oberstar. I think the answer should be without 
prejudicing the Department's decision-making process, or at 
least an instructive factor, is that we require in the law that 
priority be given to highway and transit projects and 
wastewater treatment projects, to areas of highest 
unemployment. That is in the law. It does not directly cover 
the discretionary grant program of DOT, but in the application 
of, and administering of the program, 63 percent of the funds 
have gone to areas of highest unemployment. So if the 
Department is following that logic, then they should also 
follow it through with the TIGER grants, I would think.
    Mr. Moran. Thank you, sir. Even more direct than Mr. 
LaHood.
    Mr. Oberstar. Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Secretary, good to see you here. Thank you for doing an 
outstanding job. Mr. Secretary, I think you would agree that 
our Country is embarrassingly far behind in the development of 
a modern high speed rail system. Fortunately, the Recovery Act 
provides $8 billion for high speed rail grants. The 
applications, I understand, for projects were due on August 
24th and applications for development programs are due 
tomorrow. Are we on track with regard to getting these high 
speed projects? And, if not, is there anything Congress can do 
to help?
    Secretary LaHood. We are on track. This is $8 billion more 
than the Department of Transportation has ever had in the 
history of the Department, and this is the vision of President 
Obama and Vice President Biden to get America into the high 
speed passenger rail business, and we will continue to work 
through the applications, evaluate them. But we are on track.
    Mr. Cummings. On another issue, Chairman Oberstar and 
Chairman Obey worked very hard, along with Members of the 
Congressional Black Caucus, Donna Edwards and many others of 
us, to get $20 million in funding in the stimulus for bonding 
assistance for disadvantaged businesses. We had a lengthy 
hearing, thanks to the Chairman, in this Committee where people 
basically poured out their hearts, saying that they were 
looking into the window of opportunity, but begging to get in 
the door; and the bonding was the thing that was blocking them. 
And the $20 million is wonderful, and I understand that you 
have now taken that and then moved on to combine it with some 
other programs, but can you give us the status of that?
    Secretary LaHood. Well, the airports have used this bonding 
power very significantly. In my testimony, I pointed out some 
statistics where they have taken advantage of some provisions 
in the tax code to use this very well, but maybe what I should 
do is really get some very specific figures for you to address 
your question.
    Mr. Cummings. I look forward to that.
    Secretary LaHood. Okay.
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    Mr. Cummings. Because that is a very, very big issue, 
because we can have all the opportunity, but if people cannot 
get the bonding to do the programs, they might as well not have 
the opportunities, to be frank with you.
    Secretary LaHood. Right. Right.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Cummings. Yes.
    Mr. Oberstar. It was Mr. Cummings, Mr. Secretary, who was 
the inspiration for the bonding idea based on a prior 
experience with the State of Maryland. So we took Mr. Cummings' 
suggestion and he spelled out in more detail the Maryland law, 
and we crafted it into the stimulus program providing that $20 
million.
    Mr. Cummings. That is right.
    Mr. Oberstar. We have also included and expanded it into 
our new authorization program for the surface transportation. 
So we will want, in our next recovery hearing, we will want to 
have a full accounting, but, meanwhile, I think it would be 
good for you to direct either RITA, the research information 
agency, to document the number of minority contractors who have 
received funds under the Recovery Act and the number of 
minority employees as well.
    Secretary LaHood. We will do it.
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    Mr. Cummings. Just one last question, Mr. Chairman, and 
thank you.
    You were talking about Brandon Neal and the job he is doing 
over there in the agency, and I agree; he has done an 
outstanding job. This Spellman College initiative, do you plan 
to expand it beyond Spellman College?
    Secretary LaHood. Absolutely.
    Mr. Cummings. Because, you know, there is a great effort to 
get more minorities into the pipeline. A lot of times these 
folks don't even know about the opportunities and, as I have 
often said, it is hard to dream if you don't see something and 
dream about it. So I just want to make sure that we go--
Spellman, I think that is wonderful, but there are 100 or so 
plus other HBCUs that I think would benefit tremendously from 
the same program. I just wondered what your plans were with 
regard to that.
    Secretary LaHood. What I would suggest is that maybe 
Brandon meet with your staff and we can outline for you what 
the plans are. We wanted to get started at Spellman.
    Mr. Cummings. Right.
    Secretary LaHood. I don't want to say it is experimental, 
because it is already a good program and it will get 
particularly African-American women involved in transportation 
opportunities, which, as you said, they don't know about. But 
we will have someone meet with your staff. We will have Brandon 
meet with your staff and sort of give you the outline of what 
our plans are.
    Mr. Cummings. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Oberstar. And we would include Mrs. Napolitano in that 
meeting, whom I have designated to coordinate the work of 
minority business enterprises and minority workers.
    Secretary LaHood. Absolutely.
    Mr. Oberstar. Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman.
    We really do appreciate your hard work, Mr. Secretary. One 
of the things, this Committee will have differences and things, 
but all of us agree that spending on the infrastructure is good 
spending for a variety of different reasons. The study that 
came out that we authorized in SAFETEA-LU or whatever, I think 
the average time that it took to build a road was like 13 
years, and I would encourage anything you can do from an agency 
standpoint, even an Executive Order standpoint; and this is a 
great experiment that we are going through now in the sense of 
having all these things out.
    If we really could, we have studied this thing to death, 
but through the experience that the agency is going through 
now, anything that we can do to reduce that time from 13 years, 
or whatever it is, down to a reasonable amount of time truly 
would give us so much more bang for the buck. Like I say, we 
have studied it to death, this and that, but I really would 
appreciate, and certainly myself, I think the Committee, I 
think I can speak for all of us, that is something that would 
be so beneficial. And I think we really have a window of 
opportunity that we could actually get something done in that 
regard.
    Secretary LaHood. Well, we put together a team of people, 
called our TIGER team, to get this economic recovery money out 
the door and met or beat all the deadlines set by Congress, and 
we should be able to do that with our other programs, I agree. 
The most common complaint I have heard is it takes too long to 
get these projects funded, and we have proven, with the 
economic recovery, it can be done, and it is done right and the 
money is spent correctly. I take your point on that.
    Mr. Oberstar. I would point out, and I appreciate the 
gentleman raising that, in our surface transportation 
authorization bill we restructure the Federal Highway 
Administration and the Federal Transit Administration to 
include within them an Office of Project Expediting to 
designate one person or staff that will ride herd on projects 
of a certain size to ensure that they go through the permitting 
process and there are permits of a whole range of issues and 
entities at the Federal, State, county, township level, to get 
those all coordinated.
    We attempted to do this in the SAFETEA bill with section 
6001 of Title 23, U.S. Code, but States have not implemented 
that language, so we have taken their experiences, why these 
projects have delayed. For a mill and overlay, on average, it 
takes three years; for a transit project, 14 years from idea to 
ridership. Meanwhile, the cost doubles and people lose hope, 
and the ridership on opening day falls off from the original 
expectations.
    But we are going to fix that in this next legislation, and 
that is why we need to get it done in the next three months, 
and not 18 months.
    You stopped nodding, Mr. Secretary.
    [Laughter.]
    Mr. Oberstar. You were doing well until that point.
    The Committee will stand in recess for these votes and come 
back. I think it is only one vote. We will come back 
immediately.
    [Recess.]
    Mr. Oberstar. The Committee on Transportation and 
Infrastructure will resume its sitting, with apologies to 
witnesses, although the Secretary understands very well; he had 
to go through that himself as a Member.
    Mrs. Napolitano is next on our list.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Secretary LaHood, it is great to see you, sir.
    Secretary LaHood. Thank you.
    Mrs. Napolitano. I was commenting to the Chairman that 
while there are figures that may not show the correct 
employment data, I think a lot of that data is usually so far 
behind in reporting the unemployment and the current 
employment, so that I don't think it is a true picture, at 
least not from where I come from.
    Secretary LaHood. I agree with that. I don't want to use 
unemployment, the fact that it is the lagging indicator, as an 
excuse, but I agree with you, the picture is better than has 
been portrayed.
    Mrs. Napolitano. Thank you, sir. I just want to make that 
clear because I think that we do ourselves and the Country a 
disservice when we use figures that are not current or updated, 
or true figures, for that matter.
    You have been in my area, you know the circumstances of the 
Alameda Corridor. I was also just dialoguing with some of my 
colleagues in regard to the need for California's mass transit, 
Southern California specifically. The fact that they are 
wanting to put in the high speed rail, which will impact some 
of my minority communities, yet, I still need mass transit. We 
only have buses and they clogged up in the arteries of the 
freeways and that ever-loving parking lot of the sky that we 
call it.
    How do we mitigate the noise, the congestion, the safety 
impacts that the high speed rail will bring? As I was 
mentioning before, it was brought to my attention by one of the 
mayors of my bordering city council that some of the other 
countries are beginning to do away with the normal high speed 
rail and going to mag-lev type because of the noise because of 
the use of electricity instead of energy that is now being used 
in trains and some of the other locomotives.
    And then the other question would be the railroad companies 
are opposed to utilizing their right-of-way to allow any high 
speed rail or any other mass transit when they have ownership 
of those areas. So that kind of ties in because they feel it 
hinders their goods movement, which, to a certain degree, I am 
in agreement with. But how do we address those things?
    And the third question would be since many of the 
California groups were not able to access the funds, the 
stimulus funding because they didn't have NEPA clearance. 
However, CEQA is more stringent than the California NEPA. How 
do we streamline that process?
    Secretary LaHood. Well, first of all, Mag-Lev is very, very 
expensive.
    Mrs. Napolitano. Correct.
    Secretary LaHood. And the $8 billion that was in the 
economic recovery plan for high speed rail, we have received 
some proposals; we will receive additional proposals. 
California, as you know, has been working on high speed rail 
for a decade or more. They were even--some folks were even able 
to convince the people to pass a $10 billion referendum, so 
there is money set aside to match with whatever Federal dollars 
are allocated.
    But that doesn't interfere with other opportunities for 
transit. I haven't really looked at the high speed rail 
proposal from California carefully enough to know, but I will 
say this, high speed rail in other countries is very quiet, it 
is not noisy, and it is very clean burning, and in some 
instances can get up to pretty good speeds, also. And that is 
not going to disadvantage a State or a community from getting 
transit money; the two are really separate and they are 
disconnected.
    So I would encourage you to continue to work on those 
transit needs with our Department, but knowing full well that 
California is in the mix when it comes to high speed rail, and 
wants to be, and has been working on it for a long period of 
time.
    Mrs. Napolitano. How do we get mass transit to be able to 
be co-joined with high speed?
    Secretary LaHood. Having the State get their act together 
so that their proposal is multi-modal, and that is what some 
States have done. I was just in Denver. They have taken Union 
Station in Denver, Colorado, transformed the facility. There 
will be six light rail lines running in there with an Amtrak 
connection. So you get these intermodal facilities that have 
buses coming in, light rail with a connection to passenger rail 
that goes at higher speeds. The way to do it is really to 
develop proposals that include multi-modal opportunities.
    With respect to NEPA, those are laws that were passed by 
Congress. I am sure your laws are much tougher in California 
because you folks are always well ahead of the curve on these 
things. But we follow the law and Congress has passed laws 
having to do with environmental impact statements and studies 
that have to be done before projects can be awarded. So I leave 
it up to all of you to decide. We go along with what the laws 
are that we have to follow that are passed by Congress.
    Mrs. Napolitano. May we work with you, then, to be able to 
bring those together so that we may be able to pass some 
amendment to the highway act?
    Secretary LaHood. Absolutely.
    Mrs. Napolitano. Okay.
    Secretary LaHood. Absolutely.
    Mrs. Napolitano. Thank you, Mr. Speaker.
    Mr. Oberstar. The gentlewoman's time has expired, but in 
our surface transportation authorization bill we do exactly 
that, we provide the means, the structural means by which we 
can be intermodal, starting with reorganizing the Department of 
Transportation, creating a council on intermodalism, 
establishing an under secretary for intermodalism, requiring 
the modes to meet at least once a month to establish six-year 
strategic investment plan; and within the Federal Highway and 
Federal Transit Administration, establish an Office of Project 
Expediting.
    And to carry further, to build on the provision I included 
in the current SAFETEA, where, instead of the sequential 
process for permitting, where every agency has a crack 
sequentially and they wait, no one does anything until the 
first one has acted, we turn it on its side and have them all 
provide authority for all of the permitting entities to act 
concurrently, rather than consecutively. And it hasn't been 
well carried out by State DOTs, so we are going to advance this 
process and cut from 14 years to 3 years the time it takes to 
do a transit project and get it underway. And with Secretary 
LaHood there at the helm, we will do that. We just have to get 
the six-year bill passed.
    Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for coming to testify today. I 
also want to say for the record that you have been in 
California. You are out and about. Everything that you said, 
you are out there. I want to say for the record I have found 
that to be actually very true.
    Secretary LaHood. Thank you.
    Ms. Richardson. So we appreciate your involvement.
    A couple questions that I had for you. The overall 
objective of the Recovery Act, the stimulus, was to sustain and 
create jobs, and probably each member has their own experience. 
But what I would say is, in my particular areas, I don't see 
new people getting hired. So what statistics are you keeping 
that is actually keeping track of folks who are getting hired 
and new people who are getting hired?
    Secretary LaHood. Well, I will be happy to provide to you 
the statistics for your district in terms of projects that have 
been funded, whether they be road, transit, airports, and the 
number of people--I mean, we are keeping track of the number of 
people and we have that documented according to congressional 
district and by State, and I will be happy to provide it to you 
by State or by congressional district.
    But what we have found is that certainly in the highway and 
bridge aspect of it, the $28 billion, thousands of people have 
been hired all over the country to do these jobs, and in some 
instances they are people that have worked for--these jobs are 
provided by contractors who do road work, and whether they are 
hiring new people or not, that is something that we can work 
with you on to really try and determine that.
    Ms. Richardson. I did pull up the list that you have on the 
Web site that has, by my district, the various projects that 
are being done, but I would like to see the statistical 
information of who is actually being hired. And even if it is 
not impacted for this particular program as we spend the money, 
it is lessons learned of what we need to do to write the 
legislation better in the future.
    Secretary LaHood. We will work with you on that.
    [Information follows:]

    [GRAPHIC] [TIFF OMITTED] T2650.069
    
    Ms. Richardson. The other question that I had, I cannot 
have this conversation with you as the Secretary without 
joining with some of my colleagues in stressing our desire to 
have an authorization much sooner than 18 months. And I realize 
that you work with the Administration and you all have to sing 
from the same song book, but it should be no confusion that 
this Committee, we are very concerned.
    We are not in agreement with an 18-month extension and we 
would like to move forward, and I would like that message to be 
delivered to the President and to the Administration. I think 
it is a mistake, I think it is going to come back to bite us, 
and I just think that it needs to be dealt with. So, for the 
record, I wanted to join with the Chairman and others who have 
spoken that that is not the will of this Committee and we are 
quite concerned.
    Secretary LaHood. I will deliver the message.
    Ms. Richardson. Thank you.
    Lastly, I want to talk about on the back of your testimony 
you reference the Attachment No. 1, which talked about 
economically distressed areas in California. Do you also have a 
list of where those areas are?
    Secretary LaHood. Sure, we can get that for you.
    [Information follows:]

    [GRAPHIC] [TIFF OMITTED] T2650.070
    
    Ms. Richardson. Okay. Then, finally, does Victor Mendez 
handle your overall recovery stuff and Brandon Neal handles the 
diversity training and contracts?
    Secretary LaHood. That is correct.
    Ms. Richardson. Okay. Thank you, sir, it is a pleasure to 
see you, as always.
    Secretary LaHood. Thank you. Thank you.
    Mr. Oberstar. I thank the gentlewoman for that message and 
for all the Members who have delivered that message. We have a 
good messenger to bring that to the White House.
    On the unemployment in the construction trades, I just want 
to interject at this point. In December of 2007, when I first 
proposed, and Democrats on the Committee first proposed the 
stimulus, unemployment in the building trades was 968,000. A 
year later it was 1,438,000. We had shaped our bill and had 
actually moved a bill through the House for a stimulus program. 
In August--well, actually, in early 2009, that number went up 
to 2,045,000, but in August it had gone from 2,045,000 to 
1,542,000. It is down another 30,000 jobs for construction 
workers since then, since August. So we have made about an 8 or 
9 percent reduction effect in the unemployment figures for the 
construction trades.
    Mr. Hare.
    Mr. Hare. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. It is good to see you. I just 
wanted to say, also for the record, how incredibly open you are 
to meet with Members. When I called you to sit down, I thought, 
well, maybe in about a month, and you were there in about three 
days. I appreciate your openness and your willingness to work 
with us.
    I just have one question for you. With the high speed rail 
projects that are going on around the Country, the proposals, 
when you have States that don't like the route or there is some 
litigation pending or whatever, is there something that we can 
do from our end to make sure? Because I think high speed rail 
is a top priority for this Country. We absolutely have to have 
it--and, obviously, I am very selfish--coming from my own State 
of Illinois, but around this Nation. And I am just wondering, 
from your perspective, is there anything that we can do or that 
your agency could do to sort of kind of clear up, if there is a 
problem or two that we can work on to get these things moving 
and not have a delay.
    Secretary LaHood. Well, we have received a number of 
proposals for high speed rail and we will continue to receive 
proposals, as of tomorrow, for the second phase of that. 
Illinois is a part of a regional program and the governor of 
Illinois has played a very key leadership role in calling a 
meeting of a number of the governors from around the Midwest 
region, and they have put together a very good proposal. And we 
are looking at all of those and if there are specifics that we 
think one region or another needs to look at, we have gotten 
back to those regions and talked to them about that for the 
next opportunity that will present itself.
    Our people have worked very closely with these regions 
around the country to make sure they know what were some of the 
key things that we are looking for as they present their next 
proposals, so this has been very collaborative and I think the 
regions will be submitting some very strong proposals for our 
high speed rail opportunities.
    Mr. Hare. Mr. Secretary, just so that I am clear, when does 
the money from the Department go to the States so that they can 
start the projects?
    Secretary LaHood. Probably later this year. We are still 
evaluating and working on that, but we hope later this year.
    Mr. Hare. Okay. Well, I just appreciate your coming here, 
and let me just echo what everybody here today has said in 
regard to the 18 months. I hate to sound repetitive, but we 
really need to move that up. Every dollar we invest in 
infrastructure we get $5 back, and if we are really going to 
get this Country moving, from my perspective, we have to get 
people working again. I think the Chairman said 140,000 people 
are working since we have done this. Just whatever we can do to 
get that done so that we can get these projects rolling and get 
people back to work. Also, just from a matter of public safety, 
I think it is incredibly important. But thank you for 
everything you have done and thanks for taking the time to come 
today.
    Secretary LaHood. Thank you. Appreciate it.
    Mr. Oberstar. That number is 123,000 in direct jobs as the 
end of September created on highway and bridge and transit 
projects, and another 80,000 in the supply chain for 200,000. 
That, plus the additional jobs that have been stimulated, means 
we have had a reduction of 500,000 of the unemployed in the 
construction trades, meaning $2.5 billion in payroll has been 
pumped into the national economy.
    Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman, and thank you for 
continuing this important work of examining the progress of the 
Recovery Act. I was pleased to vote in favor of it because 
Nevada has been hit very hard. We have the highest foreclosure 
rate; we have had the highest unemployment since we started 
keeping records. So the money that we get through this Act will 
go a long way to creating jobs.
    One of the things that worries me, though, is how well we 
are doing at the State level. In the last report that this 
Committee put out, Nevada ranked 46th of 50 States and 
Washington, D.C. I was hopeful that in the most recent report 
we would have moved up; instead, we have moved down to 47th. 
Now, when this happened, I sent a letter to the governor, 
asking what is happening in Nevada, why are we doing so poorly, 
and the response that I got from him through the secretary of 
NDOT or the director of NDOT was that Nevada had chosen to use 
the money on a lot of small projects, rather than one big 
project, so it took longer for the money to get out.
    Well, I reviewed some of the other States and have found 
that those that are far ahead of us on the list have also spent 
it on small projects, so I wonder, Mr. Secretary, if you can 
clear this up for me. Does that really make a difference or is 
something happening in Nevada that we need to improve?
    Secretary LaHood. Well, as you know, we have worked with 
governors in every State and the Department of Transportation 
in every State on the kind of priorities and projects that they 
felt they could fund, and I don't know enough about Nevada, but 
why don't I do this. Why don't I look at Nevada, do an 
analysis, and come up and see you and we can talk about that.
    Ms. Titus. Well, I would certainly appreciate it, because 
we need that money to be moving out, and I am afraid it is at 
that end, not at your end. But I appreciate that.
    Secretary LaHood. No, before we lay blame at anybody's 
feet, let us really do a good analysis so we get it right.
    Ms. Titus. Well, I appreciate that. Thank you very much. I 
look forward to it.
    Thank you, Mr. Chairman.
    Secretary LaHood. Thank you.
    Mr. Oberstar. Thank you, Mr. Secretary. I know you have a 
commitment and have to leave, but I do want to raise the issue 
that was highlighted in a USA Today news story that I already 
commented on and that I responded to various reporters saying 
they didn't get the best projects out in the Recovery Act, they 
are doing state of good repair, but they are not doing the best 
projects. Some people just can't be happy with success. It just 
drives me crazy. I just want to make it clear and I want to get 
your response. The USDOT does not make those decisions of which 
projects.
    Secretary LaHood. Correct.
    Mr. Oberstar. The Federal Highway Administration does not 
select projects.
    Secretary LaHood. That is correct.
    Mr. Oberstar. The State DOTs select the projects.
    Secretary LaHood. That is correct.
    Mr. Oberstar. They use the criteria we set forth in the 
stimulus act.
    Secretary LaHood. Right.
    Mr. Oberstar. And the stimulus act required States to 
select projects that could be under contract or obligated 
within 120 days.
    Secretary LaHood. Right.
    Mr. Oberstar. Did not make a distinction of what type of 
project, is this going to be a highway that will last 150 
years, is it one that is going to be the best. It is going to 
be the one that puts people to work, correct?
    Secretary LaHood. Correct.
    Mr. Oberstar. And it had to meet the other criteria that 
the projects had to be located, preferentially, in areas of 
highest unemployment according to the EDA designation.
    Secretary LaHood. That is correct.
    Mr. Oberstar. All right. So all this stuff that we are 
reading about is either misrepresentation, deliberately or 
through lack of knowledge--there is another word for that we 
need not use--and/or deliberate attempt to discredit the 
recovery program.
    Now, I cited earlier DOT and U.S. Federal Highway 
Administration work with the States. You gave them guidance, 
you helped them through. What paperwork issue could there be?
    Secretary LaHood. Mr. Chairman, I responded to that article 
with a letter to the editor of the USA Today, which I think 
might have appeared yesterday. I agree with you, that story had 
so much misinformation about it.
    Mr. Oberstar. Like putting out a grass fire.
    Secretary LaHood. You can call any governor or State DOT--
and I would encourage any Member to do this--and ask them has 
there been good communication, have we been helpful, has the 
money been spent correctly; and the answer up and down the line 
is yes. I have been to 30 States; I have talked to a lot of 
these governors and DOT folks. We are doing it the way you 
asked us to do it, the way you required us to do it, by the 
book; and I haven't seen one story written about an earmark, 
boondoggle, or sweetheart deal, I can tell you that, because we 
have done it by the book.
    Mr. Oberstar. And there hasn't been a single earmark either 
from the House or the Senate.
    Secretary LaHood. That is right.
    Mr. Oberstar. Not a single Member of the Appropriations 
Committee of either body has designated an individual project, 
they have all gone out by the book.
    Secretary LaHood. That is right.
    Mr. Oberstar. By the States; their choice, their decision. 
Just get them out fast, put people to work.
    Secretary LaHood. Right.
    Mr. Oberstar. I would like you to, as we continue this 
process, though, to do one additional thing, to direct Federal 
Highways to survey the States on the proportion of their 
portfolio of projects that need to be upgraded to state of good 
repair and to make a projection by the end of their expenditure 
of Recovery Act funds how much of that portfolio of state of 
good repair projects they will have diminished.
    Secretary LaHood. We will do it. I will have Victor work on 
that.
    Mr. Oberstar. This information will set the stage for the 
authorization.
    Secretary LaHood. Yes.
    Mr. Oberstar. The six-year authorization. You know we 
compressed the 108 categories into four formula programs, the 
first of which is critical asset improvement, and that category 
is to respond to the States' need and the two national 
commissions' recommendations and AASHTO's own recommendation 
that we attack and put funding in the backlog of projects that 
need to be brought up to engineering standards of good repair.
    Secretary LaHood. Yes.
    Mr. Oberstar. So we want to help them do that.
    Secretary LaHood. Good.
    Mr. Oberstar. But I want them to lay out a six-year 
strategic investment plan and annual benchmarks of achievement 
and reporting. Now they are accustomed to reporting.
    Secretary LaHood. Right.
    Mr. Oberstar. So we will have transparency, accountability, 
and action on the greatest need in our Federal Highway program 
is to get roadways up to state of good repair.
    Secretary LaHood. Good. We will do it.
    Mr. Oberstar. And we found that given the funding they can 
do that.
    Do other Members have any other questions?
    [No response.]
    Mr. Oberstar. Mr. Secretary, thank you.
    Secretary LaHood. Mr. Chairman, thank you for your 
leadership in so many ways, it has been a real treat to work 
with you and the Committee, because we have the same goals in 
mind, we really do, and we will get there.
    Mr. Oberstar. We are. We are getting there day by day. 
Things are better. Just keep Joyce Fisk in mind, that truck 
driver from Knife River Construction, whose kids have gone to 
summer camp, is getting her health insurance back. When she 
puts in her 1,200 hours, she will have her health insurance 
back, her husband will have; they are paying their mortgage; 
and they are putting food on the table; and they are paying 
taxes; and they are happy about it.
    Secretary LaHood. Thanks to your leadership.
    Mr. Oberstar. Thank you.
    We will call our next panel, which includes the Honorable 
John Cox of the Wyoming Transportation Department; Charles 
Gallagher, President of Gallagher Asphalt Corporation for 
American Road and Transportation Builders Association; Mr. Ward 
Nye, President of Martin Marietta Materials, representing the 
National Stone, Sand & Gravel Association; Mr. Paul Soubry, 
President and CEO of New Flyer; and Mr. T. Jefferey Taylor, 
Manager of Transportation for Elkhart County, Indiana.
    While the bells have rung for votes on the House Floor, we 
will begin with Director Cox, take your statement. Let's see 
where we are going. We are going from right to left here, all 
right. Very good. Welcome and congratulations on being number 
one.

    TESTIMONY OF THE HONORABLE JOHN COX, DIRECTOR, WYOMING 
   TRANSPORTATION DEPARTMENT; CHARLES GALLAGHER, PRESIDENT, 
GALLAGHER ASPHALT CORPORATION, REPRESENTING THE AMERICAN ROAD & 
   TRANSPORTATION BUILDERS ASSOCIATION; WARD NYE, PRESIDENT, 
  MARTIN MARIETTA MATERIALS, REPRESENTING THE NATIONAL STONE, 
SAND & GRAVEL ASSOCIATION; PAUL SOUBRY, PRESIDENT AND CEO, NEW 
   FLYER; AND T. JEFFERY TAYLOR, MANAGER OF TRANSPORTATION, 
                    ELKHART COUNTY, INDIANA

    Mr. Cox. Good day, Mr. Chairman, and thank you. As was 
stated, I am John Cox, Director of the Wyoming Department of 
Transportation. By the way, Governor Freudenthal sends his 
greetings to the Committee.
    Mr. Chairman, thank you for this opportunity to quickly 
discuss Wyoming's success in implementing the highway 
provisions of the economic recovery legislation.
    First, Mr. Chairman, let me thank you for your leadership 
and this Committee for its efforts to secure Recovery Act funds 
for transportation. We were thrilled, frankly, when a recent 
report by this Committee ranked Wyoming first among the States 
for promptly investing Recovery Act highway funds. I want to 
quickly discuss that today.
    Today, 100 percent of Wyoming's Recovery Act highway funds 
have been obligated, and over 99 percent of those are awarded 
to contract. Projects involving more than 95 percent of these 
funds are underway and nearly a third of the funds have already 
been expended. By latest count, in August, 1,739 jobs have been 
created or sustained in Wyoming because of these funds and 
their disbursement, and that is nearly one half percent of the 
State's working age population. These jobs are in addition to 
contractors' full-time workforces. Wyoming has also completely 
obligated the funds from our regular 2009 Federal Aid Highway 
Program.
    The projects that we have supported with Recovery Act 
highway funds have advanced the national interest in a 
connected transportation serving people and business from all 
over the Country. As one example, we have invested over $40 
million of our funds to improve Interstate 80, which is a 
critical route for both freight, commerce, and tourism. We are 
pleased that we have furthered both national and home State 
interest in promptly deploying our share of these funds.
    Let me quickly describe how we were able to produce so 
quickly.
    First, Wyoming began planning for the Recovery Act before 
it was passed, with great leadership from Governor Freudenthal, 
who was, frankly, determined to move promptly and efficiently 
to invest all Recovery Act funds made available to the State. 
He consulted early on with our legislators and, as a result, 
both the legislature and the governor supported our 
implementation efforts, the bottom line being that we were able 
to use our existing process to approve projects and award 
contracts in short order.
    During the same time frame, we worked closely with our 
Federal Highways Division office and identified the equivalent 
of nearly three years worth of projects that would proceed to 
contract quickly. We also confirmed that the contractor 
community was ready and had the capacity to deliver what we 
said we had ready. Both Federal Highways and the Wyoming 
Contractors Association are tremendous partners with whom we 
have a daily relationship.
    There were several other factors that kept us pushing hard 
to implement the law as quickly as we could. We thought that 
bid prices would be the most competitive in the early months 
following the passage of the stimulus. That was accurate, but 
they have also held strong throughout. We also considered our 
construction season. Because of our climate and elevation, we 
are very fortunate if we have six to seven months to work with 
in a given year. It also helped that the money was subject to 
current law, with only a few changes. Significant process or 
program changes may well have slowed our pace. Working from our 
list of ready to go projects, we considered the priorities and 
requirements of the law. We assembled a project list and then 
we aggressively scheduled extra lettings to award contracts.
    So, Mr. Chairman, basically what we did was we planned 
early and we pushed hard at all stages of the implementation, 
and we had the advantage of support from the governor and the 
legislature, both.
    Mr. Chairman, before concluding, I would like to emphasize 
that we are eager for the opportunity to make additional 
transportation investments. In case some may not be familiar 
with our part of the Country, let me suggest just a few reasons 
why Federal transportation investment in a rural State like 
Wyoming is in the Nation's interest.
    Investment benefits a much larger population than lives in 
Wyoming or even our region, with several nearby metropolitan 
areas. Other rural States are very similarly situated. Our 
highways are a bridge for through traffic. Trucks moving 
between the West Coast ports and Chicago, for example, cross 
our State, so the highway benefits citizens at both ends of the 
movement. Interstate 80 traffic, in particular, consists 
largely of through truck traffic neither originating nor 
terminating in our State.
    Our Federal highways also benefit tourism, providing 
visitors from all over the world access to scenic wonders like 
Yellowstone and Grand Teton Parks in Wyoming, Rocky Mountain 
National Park in Colorado, Glacier in Montana, Black Hills in 
South Dakota, and may other regional destinations. Our roads 
help crops and forest products move to market; they serve the 
energy industries, including wind energy, which is a big thing 
in Wyoming right now, with their many work and production sites 
in rural areas.
    We know that many needs exist throughout the Country, but I 
wanted to note for the Committee the strong transportation 
funding for rural States like Wyoming is decidedly in the 
national interest and it will help connect the metropolitan 
areas and populations.
    We look forward to continuing to work with Congress in 
making further progress in transportation investments in 
Wyoming and in the Nation, and we will keep putting funds to 
work promptly and effectively.
    Mr. Chairman, that concludes my statement. I would be happy 
to field any questions you might have.
    Mr. Oberstar. Thank you very much. You answered a number of 
questions that I already had intended to ask, but I will pursue 
some of those further. We would like to build on Wyoming's 
experience moving projects further, and I will have some 
questions for you about the rural transportation provisions in 
our surface transportation authorization bill. I would like you 
to just sort of think about that.
    We will recess at this point for the roughly 25 minutes it 
will take to complete these votes.
    [Recess.]
    Mr. Oberstar. The Committee will resume its sitting. We are 
safe for about an hour or so before the next votes and we will 
now continue with Mr. Gallagher for ARTBA.
    Mr. Gallagher. Thank you. Chairman Oberstar and Members of 
the Committee, I am Charles Gallagher of Gallagher Asphalt, 
President and owner of that company. I am also a past president 
of the Illinois Road and Transportation Builders Association 
and here on behalf of the American Road and Transportation 
Builders Association.
    Gallagher Asphalt was founded by my grandfather, James F. 
Gallagher, in June of 1928, just 17 months before the Great 
Depression. Gallagher is now owned by a third generation of 
Gallaghers, including myself.
    From the perspective of our company, the Recovery Act has 
been a real shot in the arm during one of the most difficult 
periods in our industry's history, and for that we thank the 
Members of this Committee for their efforts and your efforts to 
secure as much transportation funding as possible with the 
stimulus bill.
    The economic downturn has taken a severe toll throughout 
the Nation, including revenues on all levels of governor for 
highway construction, as well as our private sector 
construction. As evidence of this reality, I would like to 
share with you that our asphalt production at our Joliet 
facility is down 65 percent from the 2008 levels. Fortunately, 
Gallagher was low bidder on eight ARRA projects, totaling just 
over $15 million between April and June of this year. These 
projects directly employ 259 men and women, of whom 30 percent 
are minority and 7 percent are women. Twenty-nine new jobs were 
also filled for these projects.
    My company is proof that the Recovery Act is achieving its 
goal of sustaining and sometimes creating jobs. According to 
the Federal Highway Administration data provided to ARTBA, 
every State met the requirement that 50 percent of their 
formula funds be obligated within 120 days. State and local 
transportation agencies have obligated $18.4 billion, or 68.9 
percent, of the highway stimulus funds in six months. This is a 
much faster pace than under the core Federal Highway program. 
There are now 3,966 Recovery Act projects under construction in 
all States, including more than 600 that got underway in 
September. These projects are valued at $11 billion.
    The impact of the ARRA is even more evident when looking at 
new highway contract awards, which is the best indicator of 
future construction activity. State and local DOTs awarded $2.1 
billion fewer contracts for highway and bridge construction in 
the first four months of this year than in the same period in 
2008, reflecting recession-driven cuts to State and local 
highway funding. In the second four months of 2009, however, 
the value of new highway and bridge contracts exceeded the 2008 
levels by almost $4 billion. As such, the ARRA has more than 
offset State and local budgetary difficulties, and we are 
trending towards an increase in 2009.
    With $7.6 billion in highway recovery funds obligated for 
projects not yet underway and the remaining $8 billion still to 
be obligated, the ARRA will continue to boost the U.S. highway 
construction activity well into 2010. Furthermore, recent 
easing in material prices has increased the purchasing power of 
Recovery Act funds to support more projects and deliver more 
economic benefits. What that really means is that the 
contractors are really bidding low on projects, so your dollar 
is going a lot further.
    Mr. Chairman, the ARRA is doing what Congress intended: 
Federal funds are being obligated at a rapid pace; projects are 
being started; construction work is being performed; and firms 
across the Nation, like mine, are sustaining, and sometimes 
adding to their workforce. This year, the value of construction 
work performed on transportation projects will be above the 
2008 levels largely because of ARRA. Without the recovery 
funds, transportation construction would be down, way down, 
with no recovery in sight. That is the real story.
    The American public and our elected leaders need to 
understand, however, that ARRA is only a temporary solution. 
The Act's benefits will disappear quickly after 2010, and the 
jobs it is supporting will disappear. To sustain and build on 
the Recovery Act and re-energize the long-term growth potential 
of the United States, we need Congress to take on the six-year 
surface transportation authorization bill at the $500 billion 
level, and we thank the Committee for their activity in this 
regard.
    Thank you.
    Mr. Oberstar. Thank you very much, Mr. Gallagher. I 
especially support that support for the six-year authorization. 
I will take that part of your testimony and send it over to the 
Secretary and over to the White House so they see that as well.
    Mr. Gallagher. Very good.
    Mr. Oberstar. Mr. Nye, on behalf of the Sand and Gravel 
Association.
    Mr. Nye. Indeed. Good afternoon, Chairman Oberstar. It is 
good to see you again. It is a pleasure to be here today. My 
name is Ward Nye. I am the President of Raleigh, North 
Carolina-based Martin Marietta Materials, one of the Nation's 
leading producers of construction aggregates. I thank you for 
the opportunity to appear before the Committee today and to 
present the industry's perspective on the Recovery Act, which I 
may refer to interchangeably today as stimulus, and to discuss 
its impact on our industry.
    As background, Martin Marietta is a New York Stock Exchange 
company with 2008 sales revenue in excess of $2 billion. We're 
engaged principally in construction aggregates, meaning mining, 
processing, and selling crushed stone and sand and gravel for 
use in the construction of highways and other infrastructure 
projects, as well as in the commercial and residential 
construction industries.
    Aggregates, along with hot mixed asphalt and ready mixed 
concrete, are sold and shipped from Martin Marietta's 
distribution network to customers large and small in 29 States. 
We have been in this business, through our predecessors, since 
1939.
    That said, I am testifying today on behalf of the National 
Stone, Sand & Gravel Association, which you know as NSSGA, 
which represents the aggregates industry. According to the U.S. 
Geological Survey, NSSGA is the largest mining association by 
product volume in the world. There are more than 10,000 
construction aggregate operations nationwide, and 70 percent of 
our Nation's counties have at least one aggregate facility.
    Aggregates are used in critical forms in most forms of 
heavy construction. For example, 38,000 tons are used to 
construct one mile of highway; 15,000 tons are used in an 
average school; 400 tons are used in an average home, and that 
is not counting what is going on in the subdivision all by 
itself.
    Yet, due to the degree and severity of the current economic 
and protracted turndown, the industry is facing another year of 
economic turmoil and difficulty. For example, on June 30th, 
2009, at the half year, Martin Marietta reported its 13th 
straight--13th straight--quarter on quarter decline in 
aggregate shipment volume. Similarly, according to the USGS, 
aggregate production in the U.S. decreased 27 percent in the 
first six months of 2009 over the same period in 2008. This 
decreased usage in 2009 was on top of previous aggregate 
declines in both 2007 and 2008.
    In preparation for this hearing, NSSGA disseminated a 
producer member survey specifically geared toward measuring 
stimulus and its related activity. As prefatory comment to the 
survey's results, it is important to note that, on average, at 
least historically, roads and bridges constituted 40 percent of 
the industry's sales volume. Today that percentage is surely 
considerably higher.
    Of those NSSGA producer members responding to the survey, 
we are seeing some specific positive regional impacts in the 
Northeast and in the Midwest. While the majority responding had 
not yet seen a noticeable sales increase over the last three 
months, we believe this is due in part to stimulus projects 
taking longer than expected to advance to the actual 
construction phase in some places. But we also believe the 
stimulus has prevented significant erosion to the workforce in 
the transportation construction market of our industry.
    About one-third of the respondents to our survey think 2010 
will bring a sales increase. However, when asked about their 
2010 State transportation budgets, the majority surveyed 
responded that the State budgets are expected to be down, if 
not level, with 2009. The balance were hopeful that State 
budgets would increase.
    Indications are that about 25 percent of stimulus projects 
will commence in the second half of 2009, with most of the 
remainder in 2010. Accordingly, stimulus will have a 
significant positive impact on construction activity and 
employment. However, some beneficial aspects may be muted by 
State and local governmental budgetary difficulties, as 
discussed here earlier.
    Further, though challenging to quantify, jobs have been 
saved due to the investment of stimulus. Despite the efforts of 
this Committee, slow progress on reauthorization of the highway 
bill is retarding construction activity due to States' 
inability to plan for multi-year or major projects.
    Mr. Chairman, our industry has experienced its most 
significant decline since the Great Depression. For example, 
our 2009 mid-year numbers at Martin Marietta reflected a peak 
to trough volume decline of 34 percent. In real terms, this 
means a drop from 205 million tons in 2006 to around 130 
million tons by the end of this year. Our workforce has been 
significantly reduced and remaining employees are working fewer 
hours with little or no opportunity for overtime. Our capital 
expenditures, which last year were around $260 million, will be 
reduced by nearly $100 million this year.
    In conclusion, let me be clear. The aggregates industry has 
benefitted from stimulus and we are indeed grateful. 
Importantly, it has served to put something of a floor beneath 
our volume decline, as well as save jobs. However, we believe 
any momentum generated by stimulus will be in peril if Congress 
fails to act sooner than later on a well funded, multi-year 
surface transportation bill. Our transportation infrastructure 
is the very foundation of America's economic stability and 
growth, and has fostered its global competitiveness for over 
half a century.
    Yet, today, 33 percent of our major roads are in poor or 
mediocre condition; 36 percent of major highways are congested; 
over 160,000 miles of Federal aid highway pavement is rated 
unacceptable; over 150,000 bridges are structurally deficient 
or functionally obsolete; and the current backlog of needed 
road, highway, and bridge repairs totals $461 billion. Our 
Nation's transportation infrastructure must be a top priority, 
with all the stakeholders working together to build a 
transportation network of the 21st century.
    Mr. Chairman, these are serious short-and long-term issues. 
We are grateful for the attention, sensitivity, and vision you 
have brought to this debate, not just today, but, indeed, for 
many years. Again, I thank you for the opportunity to testify 
here today and look forward to any questions that you may have, 
sir.
    Mr. Oberstar. Thank you for your kind words, thoughtful 
words about my work, more importantly, that of the Committee, 
especially the homework that you and all the members of the 
panel have done. You have the numbers right. The need is great 
and I appreciate again your support for the six-year bill.
    Mr. Nye. Thank you, sir.
    Mr. Oberstar. Mr. Soubry.
    Mr. Soubry. Thank you, Mr. Chairman and Members of the 
Committee. My name is Paul Soubry, and I am President and Chief 
Executive Officer of New Flyer of America, a company you know 
well. We are the largest manufacturer of heavy-duty transit 
buses in the United States and Canada, and since 1930 we have 
delivered over 23,000 buses. In 2008 alone, over 40 percent of 
the buses delivered in North America were from New Flyer.
    New Flyer has manufacturing assembly facilities in 
Minnesota and after-market parts distribution centers in 
Kentucky and California. We employ over 1,000 employees in the 
United States. We have business relationships with over 240 
transit properties, including 20 of the largest 25. We have 
been the innovation leader in the heavy-duty transit space, the 
first in North America to offer low floored standard and 
articulating buses, natural gas buses, low-emission hybrids, 
and we are the only North American manufacturer of all-electric 
rubber wheeled trolleys.
    We have continued to pursue green technologies. We are 
currently building a zero emission hydrogen fuel cell fleet of 
buses that will be showcased at the 2010 Winter Olympic Games. 
And I am proud to report that just two weeks ago we delivered 
our very first production bus off of that order.
    As you know, on January 22nd of this year, my predecessor, 
John Marinucci, the former President and CEO of our company and 
now a director of New Flyer, testified before this Committee in 
support of transportation funding contained in the American 
Recovery and Reinvestment Act. He noted that funding of private 
transportation authority means--he knows what it means to 
purchase desperately needed new buses for transit authorities. 
In fact, the APTA, or the American Public Transportation 
Association, has data that shows that over 20,000 buses, or 
more than one-quarter of the fleet in America, are currently 
operating beyond their 12-year economic life. As you know, this 
life cycle is set by the FTA and is a threshold for eligibility 
for FTA funding of replacement vehicles.
    Given the significant and unprecedented pressure on the 
operating budgets on our transit authority customers, new 
equipment substantially reduces or eliminates inefficient 
deployment of urgently needed State dollars and local dollars 
to keep aging and unproductive buses on the road. New buses 
produce significantly fewer pollutants, have much better fuel 
economy; they are quieter and they are safer, far safer than 
the vehicles that are being replaced. All of this contributes 
to making a better public transit network throughout the United 
States, with significant reduction in reliance on foreign oil.
    I am here today to report that New Flyer has received 
orders from over 17 different transit authorities across the 
United States totaling 638 equivalent units that can be tied 
directly to ARRA or stimulus funding. This funding was provided 
directly to our local transit authorities. This quantity 
represents approximately 30 percent of our company's annual 
production. These orders provide over 800,000 hours, or 447 
person years, of direct labor. The spinoff for our component 
suppliers, whether it be spare parts, material, or services, is 
six times that of the direct labor in our facility, or 2,682 
person years, directly tied to the ARRA funding. Thus, our 
U.S.-based supplier partners, who provide 82 percent of all of 
the material or content that goes into a bus, are located in 30 
States across this Country. All have benefitted and multiple 
communities have benefitted.
    In addition, what is important, what Secretary LaHood told 
us and Vice President Biden, when they visited our facility 
earlier this year, stimulus money is as much about job creation 
as it is job retention and making sure we have sustainable 
businesses. All of those buses that are being purchased as a 
direct result of stimulus are being built either in 2009 or 
2010, and that is job retention. We believe that the ARRA funds 
have had a direct and material impact on new bus purchases and 
the significant domestic industry that designs, supplies, and 
builds these vehicles for such critical and essential service 
to the American people.
    The employees of New Flyer and our partner suppliers from 
all across America are tremendously grateful for the stimulus 
support for our customers. The reality is we have had a 
setback, which was talked about earlier today, in terms of a 
State government unable to fund a certain contract. The reality 
of it is ARRA funds has helped us sustain our business and our 
order book going forward. Every single dollar that comes out of 
stimulus has a tremendous impact on us and our customers and 
our suppliers. Orders and options exist, as you know. New Flyer 
has over 2500 firm orders and 6,600 options. Every single 
dollar helps with significant job retention and job creation. 
These are high-value, knowledge-based jobs in an industry that 
is in direct compliance with DBE safety and promotes diversity.
    The infrastructure is aging. As I mentioned, over 20,000 
buses are over 12 years old. The productivity and operating 
costs of local State transit authorities is significant. The 
pressure on reducing those costs is dramatic. New buses help 
reduce that operating cost requirement. The environmental 
impact of these new buses cannot be understated. Over 75 
percent of our backlog are clean energy buses, with clean 
emissions; hybrids, natural gas, electric trolleys. And now, as 
I said, we are now delivering hydrogen fuel cell buses.
    There is a tremendously widespread benefit to Americans. 
Our options are across 16 different States from 30 different 
customers, and our American supply base provides 82 percent of 
the parts. The accountability for every dollar spent has huge 
resonance with this Committee. Transit assets investment can 
put people to work immediately. The investment of $1 billion 
creates 44,500 person years of employment. In addition, the 
return on investment is immediate. With more stimulus and 
additional stimulus and support from the States, we can 
continue to put people to work immediately.
    Thank you for your time.
    Mr. Oberstar. Thank you very much, Mr. Soubry. I have been 
to New Flyer several times over the years. I was there for the 
groundbreaking for the construction of the new facility; 
shepherded the access road funding through the Committee and 
through the State DOT; am pleased with the management and the 
leadership. You have gone through some changes, I know, over 
time. The original Dutch investors have moved on, but they had 
the vision, they had the sense and direction of taking this 
company, and I am very proud of what New Flyer has 
accomplished. I will come back to you a little later.
    Mr. Taylor, we look to you for some lessons learned from 
the Recovery Act funding, and the floor is yours now.
    Mr. Taylor. Mr. Chairman, Members of the Committee, it is a 
pleasure to be here today, and thank you for the invitation. I 
am here to testify on behalf of Elkhart County Government and 
our experience with the stimulus thus far.
    Mr. Chairman, in February of this year, President Barack 
Obama traveled to Elkhart County, Indiana, to announce a bill 
before Congress, the American Recovery and Reinvestment Act. 
Elkhart County was billed as ground zero of the economic 
fallout due to the recession. At the time of our President's 
visit to Elkhart County, unemployment stood at 15 percent, with 
much of it attributed to the fallout from the RV industry. You 
can imagine the excitement spurred in the community by the 
prospect of jobs to be created by the legislation and the 
potential impact of families in the Elkhart area.
    The announcement that $27 billion of ARRA funds to be 
dedicated to infrastructure improvement really caught our 
attention. Elkhart County was and still is optimistic that the 
infusion of construction dollars into our local economy could 
and will result in economic relief. Many workers and their 
families in the community were and still are facing mortgage 
foreclosure and bankruptcy. Unemployment had blossomed from 4.4 
percent in July of 2007 to 18.9 percent in March of this year, 
and today that rate hovers somewhere around 15 to 16 percent. 
Mr. Chairman, any kind of relief is welcomed in Elkhart County.
    Soon after the announcement was made that funds were 
available, we in Elkhart County rolled up our sleeves and went 
to work aggressively pursuing funds for road projects that were 
deemed shovel-ready. We saw this as an opportunity to complete 
some long-overdue road construction projects and, more 
importantly, put many of the thousands of unemployed in our 
region back to work. We employ people regionally in Elkhart 
County.
    Like many other local governments, we found ourselves in a 
disadvantage for having a well planned transportation 
improvement program based on a pay-as-you-go philosophy. We 
maintain a 10-year capital improvement plan that is funded.
    Shovel-ready projects meant having a road or bridge project 
design completed, the right-of-way purchased, and all 
environmental approvals in hand. The system is structured that 
smaller counties are at a disadvantage. We will not go through 
a process of spending tax dollars for a project design, 
acquiring right-of-way, displacing our residents, securing 
final approval from the State DOT, and allowing federally 
funded projects to move forward without planning for the 
financial resources in advance.
    Our desire was to utilize the funds to construct another 
section of an important four-lane road connecting two vital 
manufacturing and supply bases. We learned the project did not 
qualify for shovel-ready, even though the design was complete, 
the right-of-way was purchased, affected residents were 
relocated, the environmental assessment was complete. 
Unfortunately, the project did not have final approval from the 
State DOT, and acquiring such could take months, going far 
beyond the time frame for utilizing ARRA funds.
    We soon discovered there was an enormous amount of 
paperwork required for even a simple roadway paving project. 
Nevertheless, we filled out all the documentation, submitted 
the photos, construction plans, cost estimates, and everything 
else, completing the requirements to permit the project to be 
constructed. To date, Elkhart County has completed all of the 
required submissions for the various roads to be resurfaced. 
According to reports, our projects are slated for a November 
bid letting. Consequently, it will be April 2010, at the 
earliest, before we see any new jobs created or retained 
locally. Some of the contractors I have talked to are looking 
at running at 50 percent capacity and about 20 percent 
unemployment in their construction sector.
    More discouraging is the distribution of nearly $18 million 
in rural stimulus funds allocated to our region of Northeast 
Indiana. Elkhart County has been allocated zero dollars so far 
from this funding source. Awards of rural stimulus dollars were 
made available on a first come, first served basis. Elkhart 
County did not get ahead in the race with other cities and 
counties, and we were told at this point that our request 
cannot be funded because all of the money has been obligated to 
requests that came in ahead of ours.
    Our concern is that if ARRA is to be focused on jobs 
creation and retention, then it seems appropriate to target 
rural stimulus funds to areas based on unemployment and 
prioritize those funds accordingly. Rather, Elkhart County, 
which leads the State of Indiana in unemployment, has not 
received any allocation of rural stimulus funds.
    It was my understanding, along with millions of other 
Americans, that ARRA was a jobs creation and retention bill. 
Mr. Chairman, I believe Congress and President Barack Obama 
intended it to be a jobs creation and retention bill. If it is 
true we are in an economic crisis, we should expedite the 
paperwork process at all levels, not just Federal, and target 
those areas hardest hit by the economic turndown.
    Mr. Chairman, Elkhart County will bounce back. We have and 
will continue to aggressively pursue investments in our local 
economy. Elkhart County has submitted a shovel-ready project 
requesting TIGER. This set-aside is for distressed economic 
areas for transportation projects and we think we have a 
project that will significantly impact our region.
    Be assured, Elkhart County is not looking for Government 
handouts. We see stimulus as an investment to jump start our 
local, regional, and State economy. Our residents are working, 
creative, and are noted for starting successful long-term 
businesses that impact the Nation and the world.
    Mr. Chairman, I thank you again for the opportunity to 
speak to you today and I look forward to answering any 
questions you might have.
    Mr. Oberstar. Thank you very much for coming, Mr. Taylor. I 
will have some follow-up questions, as I think there are some 
lessons to be learned from your experience.
    First, Mr. Cox, I took particular note of your comment our 
highways are a bridge for through traffic, trucks and tourism. 
You cited the plethora of units of the National Parks system in 
Wyoming, Montana, Colorado region. That is so true; there are a 
number of States that are sort of passed through, they are on 
the way to--traffic that is on the way to other destinations. 
They are still using your roads and you are having to sustain 
that road system and improve it.
    But how were you able to come out of the gate so fast, get 
your Recovery Act application ready and submitted? What was it 
that you did that might be different from other States?
    Mr. Cox. Mr. Chairman, I don't know how to comment about 
the experience of other States, but I can tell you what worked 
in Wyoming. Former Governor Sullivan has coined a phrase that 
Senator Craig Thomas used to use back here in Washington. He 
said Wyoming is a small town with really long streets, and the 
commentary was aimed at the fact that in Wyoming the culture is 
relationally based, which is to say that you don't get things 
done if you don't have relationships built from border to 
border. But you can get a tremendous amount done in a short 
period of time with that kind of neighborly ethic that exists 
in the State.
    Mr. Chairman, to start with that kind of as a big picture 
ethic, I would tell you that what worked well for us was a 
genuine roll up your sleeves and work together, not only 
starting with Governor Freudenthal and his kind of taking 
command of the ARRA possibility at that point, very early on, 
when it was really conjecture what was going to happen, and 
beginning to form up a template, if you want to call it that; 
and, frankly, his and our behind-the-scenes work with Members 
of our legislature to the point that when the Recovery Act 
become a reality, we simply had not only the approval, but the 
permission of the politicians in our State, the elected 
officials in our State to stand back and allow the already 
established process to carry through the implementation of 
these funds.
    There are two other groups that I mentioned in my spoken 
testimony that I need to reiterate here, too. Again, the same 
relational approach applies with Federal highways. We are on a 
first name basis with Phil Miller and his staff, so early on, 
when this was a possibility or a probability, and not a reality 
yet, we were working with Phil and his staff, and also with the 
Wyoming Contractors Association, Jonathan Downing and his 
people. They literally sat down at the table with us so we 
could examine every aspect of not only the projects that we had 
designed and on the shelf, which was three times what our 
annual Federal program would fund, but we also examined whether 
or not the contractors could deliver the capacity. That was a 
real concern for us because we knew we would hit the ground 
running. And Federal Highways was a partner in that 
conversation as well.
    So it was a combination of a number of elements, but really 
it boiled down to a bunch of committed people working together.
    Mr. Oberstar. I think that is very instructive. It is very 
important not only for recovery, but for our follow-on six-year 
program. You cited this coordination, this working together 
with the governor and State legislature, you mentioned. There 
were several States whose constitution requires the State 
legislature to approve their State DOT acceptance of Federal 
funds. Not all States have that requirement; some it just goes 
ahead, but others. So in some States the legislature had to be 
convened, if they were not already in session, and had to 
approve legislation to allow the State to accept the Federal 
funds.
    But you apparently foresaw all of this; you brought the 
entities of government together. Early on in the process 
Federal Highways was holding informational sessions, either in 
person or by teleconference. Did you participate in those?
    Mr. Cox. Mr. Chairman, our people did participate in those.
    Mr. Oberstar. Not you particularly, but I mean your 
Department, yes.
    Mr. Cox. Yes, sir. Our people were daily involved in those, 
and it really did help to set the stage. Wyoming is one of 
those States where, statutorily, the carrying out of Federal 
disbursement of Federal Highway funds is tasked to a 
commission, and in this particular case those informal 
conversations led to the legislature simply trusting the 
commission with that same process. So we were able to use a 
very familiar process to carry out this extraordinary 
opportunity.
    Mr. Oberstar. And does Wyoming DOT have a portfolio of 
projects, highway projects, that are in a state of disrepair 
and need to be brought up to the AASHTO standard of state of 
good repair? You have a catalog of such----
    Mr. Cox. Mr. Chairman, we do indeed have a list of such 
projects, and we were able, incidentally, to use ARRA funds to 
stave off or to prolong the life of some of those that were in 
decline.
    Mr. Oberstar. And all of those are projects in which the 
right-of-way is acquired, the EIS and other permitting have 
been completed, correct?
    Mr. Cox. Mr. Chairman, it would be accurate to say that the 
EIS has been complete in most of them, at least to the extent 
that it could; and right-of-way acquisition may not have yet 
taken place, but we know what we need, so we are ready to go 
with that if the funding were in place.
    Mr. Oberstar. But on the one submitted for recovery, those 
aspects of the process were already in place?
    Mr. Cox. Mr. Chairman, yes.
    Mr. Oberstar. That is what I intended in 2007 when we first 
proposed this stimulus, in 2008 when we moved the bill through 
Committee, through the House. We were very clear about it and I 
had numerous conversations with AASHTO, with ARTBA, had several 
revolving conversations with State DOT directors--I don't 
recall that you were involved in any of those--saying this is 
what we are intended to do, now, be ready for it. I really 
don't have any sympathy for States at this stage who come in 
and say, well, we didn't know this was happening. Baloney. You 
were all on notice. Everybody knew this was coming and you were 
readiest of all.
    In Minnesota, after the bridge collapse on August 1st, 
2007, I remember it so well. Mr. Mica and I were actually on 
the Floor together managing the conference report on the Water 
Resources Development Act, which hadn't passed Congress in six 
and a half years, and we were finally getting this major bill 
passed and eventually, parenthetically, President Bush vetoed 
it and we overrode the veto. Bipartisanship is alive and well 
in this Committee, I can say that.
    And I got the notice on my BlackBerry that a bridge had 
collapsed. I thought it was in some third world country. When I 
looked closer, it was Minnesota. But in 437 days they rebuilt 
that bridge. In 48 hours we had a bill through Committee, 
through the House, through the Senate to provide the emergency 
funding for Minnesota to rebuild that bridge. Of course, that 
helped immensely, and it was 100 percent Federal funding, just 
like Recovery Act funds.
    So now to my point. The contractor was on one wing of the 
building where they had their plans, designs, engineering work; 
Mn/DOT, Minnesota DOT, was on the same floor on the other wing 
of that building; and Federal Highway Administration was also 
on the same floor on the south wing of that building. They 
didn't send emails; they walked down the hall with their 
engineering plans and looked at it and said, all right, this is 
good, this is not good, we have to change this, change 
something else. There was instant communication. They didn't 
have to go through hoops because they talked with each other.
    Now, that is the sort of spirit that I want to inculcate 
into the next transportation bill to expedite permitting, to 
expedite process and projects coming through.
    Mr. Cox.
    Mr. Cox. Mr. Chairman, in a very rural kind of comparison 
to the I-35 bridge tragedy, we had a tragic incident on the 
Wind River Indian Reservation in Wyoming, where a bridge was 
hit by a motor vehicle and there were some fatalities involved 
in that, and it destabilized that bridge. That is the bad news, 
the terrible news.
    But the good news was that in a very short period of time 
our State DOT and the Reservation Department of Transportation 
were able to collaborate and get a temporary bridge in place 
using our equipment, and then to rebuild that bridge in a very 
short period of time. So those kind of cross-boundary and 
cross-discipline cooperations are, I believe, alive and well. 
Unfortunately, sometimes it is on the heels of a disaster, 
rather than in the everyday sense.
    Mr. Oberstar. Yes, you are quite right, and I thank you for 
those observations. I was going to ask you about the provisions 
of our authorization bill that deal with rural transportation, 
but I have just received a notice from the Floor; we are likely 
to have votes in about 15 minutes, so I will let you mull that 
over and give us your thoughts at a later time.
    Mr. Gallagher, your company has seen it all, on the 
threshold of the Great Depression to its cousin, the current 
one.
    Mr. Gallagher. Yes, sir.
    Mr. Oberstar. Your company has remarkably--I love these 
companies that are family owned and second and third 
generation. You really invested in your company's success and 
there is a certain kind of personal family pride. We have a 
number of such construction companies in my State and in my 
district.
    You said that a number of contractors have been bidding 
low. Is that because materials costs have come down as the 
Chinese and Indian economy flag and their pressure on world 
materials slacken, or is it just because of the downturn in the 
economy and more contractors are bidding and willing to cut 
costs in order to win the project?
    Mr. Gallagher. Mr. Chairman, I think it is both. I think 
that the material pricing has softened; crude oil has come 
down, so liquid asphalt has become less expensive. But I think, 
by and large, it is a number of contractors are into a panic 
mode, that they don't know what is coming next, so they are 
bidding as though they will never see another job, and that is 
a very dangerous environment for everyone, for that contractor 
and for the people that work for them. So we see a number of 
jobs being bid very, very aggressively because they don't know 
what the next program----
    Mr. Oberstar. Well, the Recovery Act is accounting for 
callbacks, restoring jobs for contractors. Eventually, that 
money will be committed, funds will be paid out, the program 
will come to an end, and we need a sustained program.
    Mr. Gallagher. Yes, sir.
    Mr. Oberstar. And what is that sustained program?
    Mr. Gallagher. The reauthorization, sir.
    Mr. Oberstar. All right. There we are. Terrific. You get 
the class award.
    I mentioned the Knife River Construction Company earlier, 
the truck driver who told the story sitting at the kitchen 
table, her husband also a truck driver for that company. Knife 
River kept their employees on health insurance program alive 
through December. They had no jobs, they had no contracts, they 
had nothing in prospect. It cost them $300,000; actually 
borrowed money to keep their employees' health insurance at 
least through the end of 2008. But then that ran out and that 
was unsustainable for them.
    I am sure that there are a number of ARTBA members across 
the Country that have had similar experiences and done their 
best to keep their workforce together. And keeping that 
workforce together was one of the reasons we said retain or 
create new jobs in crafting the language for the Recovery Act. 
Do you know of others who have had a similar experience? I 
think these are great human interest stories.
    Mr. Gallagher. Certainly, sir. We all really do look at our 
employees as--or I know at Gallagher Asphalt we do, we look at 
our employees much differently than just a number, just a 
person. We have over 20 different family relationships in our 
company; if it is a husband and wife, father and son, brothers, 
sisters.
    So everybody is very connected, and when we need to lay 
somebody off, it is not a simple thing because they are 
connected to people who are being laid off or people who are 
able to stay. We try very hard to work with the most motivated 
employees to make sure that they have health care so that they 
can have health care through the winter, that they have enough 
hours banked, as you have talked about, to allow them to 
sustain their health care coverage throughout the winter 
layoff.
    But, again, it can't go on forever. But we do take it very 
personally in our decisions of overhead reduction and employee 
layoff; it is not as simple as just looking at numbers on a 
page, these are real live people that we know the names of and 
have shared a lot with.
    Mr. Oberstar. I have traveled to so many recovery sites. 
Not as many as the Secretary because I have to stay here and 
vote. He understands that very well. But I have heard this 
story from so many contractors across the Country. It is a 
great human interest story; it puts a face and heart on the 
ARTBA members.
    Just as Mr. Nye and members of your association, the same. 
I have been to a number of sand and gravel operations that were 
closed. Forty percent in the State of Minnesota were closed; it 
got up to 60 percent. Now, in anticipation of the Recovery Act, 
they started reopening. Even though it was January and 
February, they began work preparation, calling people back and 
saying we anticipate projects.
    And I thank you for your support, but, again, 
sustainability is the important element of the surface 
transportation program and I don't expect there will be another 
Recovery Act. The real long-term stimulus that will create 6 
million new jobs and sustain 3 million jobs is the surface 
transportation authorization that we have moved through 
Subcommittee. I think that that is what your members have 
expressed support for.
    Mr. Nye. It is very much what our members have said. And we 
are back to the point that was made in the oral testimony and 
in the written work as well. The vast majority of what this 
stone, sand and gravel is going to find its way to will be 
infrastructure projects. That will simply be the driver. But 
every other component of the economy has also been heavily 
damaged.
    What we have seen in commercial has been the greatest drop 
that we could ever have imagined. People didn't just finish 
commercial jobs, they walked away from commercial jobs. There 
is simply nothing going on in housing. And our view is exactly 
what yours is, Mr. Chairman, and that is if we have a firm six-
year bill that this industry and the construction industry 
knows it can count on, it is going to spur growth, it is going 
to spur opportunity not just in transportation, not just in 
infrastructure, but everything that will spin off of that is 
going to be a remarkable economic vehicle going forward. So we 
see this as an incredible opportunity and one that is much 
needed sooner, rather than later, not just to get the largest 
component of our business going, but, indeed, every component 
of all of our businesses going.
    Mr. Oberstar. I am going to see to it that the Chairman of 
the President's Council of Economic Advisors gets the testimony 
from this panel and reads it. I have said several times that 
what we need is not a council of economic advisors, but a 
council of engineering advisors to get the Country back on 
track; get those economists, put them off in a corner 
someplace.
    Knife River, the company I have cited as one of several 
that I met with who said that 50 to 80 percent--in their case 
it was 80 percent of their work--was private sector--shopping 
centers, parking lots, various other private sector projects--
before the collapse of the economy. Since Recovery Act, 90 
percent of their work is public sector, that is, Recovery Act. 
I wonder if you have--now, your members are not directly 
involved in the pavement work, but you are selling to and you 
are supplying those who are. Have you seen that?
    Then, Mr. Gallagher and Mr. Cox, I will ask you the same 
thing.
    Mr. Nye. We have certainly seen those types of percentages 
move around. In fact, Knife River would be a member of the 
National Stone, Sand & Gravel Association, as well as ARTBA, so 
we know that company quite well. And the type of migration that 
Bill Schneider or others in that business would have described 
would have been a very consistent migration for our membership 
as well.
    Mr. Gallagher. We are certainly seeing that same shift. The 
previous three years our company had roughly 50 percent of its 
work came from the private sector and 50 percent came from the 
public sector. Currently, 98.5 percent of our business is 
public sector work, with only 1.5 of private work. It literally 
has just dried up and blown away.
    Mr. Oberstar. My goodness.
    Mr. Cox. Mr. Chairman, Knife River does a considerable 
amount of work for WYDOT in Wyoming.
    Mr. Oberstar. Oh, really?
    Mr. Cox. In our world, they represent a conglomeration of 
companies that used to be separate, smaller outfits that were 
assimilated by Knife River, and they are one of our best 
contractors in the State.
    Mr. Oberstar. Well, I think there is a lesson here. It is 
going to take much longer for the private sector to enjoy 
recovery, and that half to 50 or 60 percent of your work that 
was private sector stimulated or generated has been replaced by 
the public sector. In other words, we will need to sustain the 
public sector investment for your companies to sustain their 
activity for some period of time, until that recovery filters 
through the economy.
    Mr. Nye. That is entirely true.
    Mr. Gallagher. Yes, sir.
    Mr. Oberstar. Mr. Soubry, in the unfortunate situation that 
New Flyer experienced in Chicago--and you heard my comment 
earlier. When your staff called my chief of staff and said we 
have a real problem here, I called Mayor Daley and talked to 
him and then talked to his chief of staff, Frank Kruesi, who 
looked into the matter and said CTA has just lost revenue; our 
revenue base has declined so seriously that without the 
Recovery Act we wouldn't be buying any buses at all.
    So I want to place it on the record CTA is very high on New 
Flyer, they like your equipment, they are buying what they can 
through the Recovery Act, and if their economy or when their 
economy recovers and the revenues are back, they will come back 
to those buses. But I know that was a great disappointment for 
you. But MARTA has also purchased and I know that I am seeing 
on the streets of the District of Columbia New Flyer buses.
    Mr. Soubry. Yes, Mr. Chairman, thank you, you know, 
sincerely on behalf of our company for making those inquiries. 
Some of it was trying to understand the facts associated with 
the deferral of the order and so forth. As you know, in 
Chicago, the CTA needs the buses. It is not a matter of need, 
they have an aging fleet. They have had some issues over the 
last couple of years with another style of bus they had 
problems with. So it is not a need issue; we understand it is a 
State funding issue.
    In fact, as you know, CTA bought 58 buses directly tied to 
the stimulus money that came out of this Committee and that was 
greatly--in fact, we have a number of properties that have 
benefitted. Just to list, Philadelphia, Seattle, Washington, UC 
Davis, Rochester, Milwaukee, Charleston, Detroit, Boston, 
Honolulu, Cincinnati, Miami, New Orleans, Fargo, Morehead, 
Guardian of California, and some from Chicago. So clearly the 
stimulus dollars have made its way across America and has 
benefitted those that could take advantage of it in a shovel-
ready or a purchase order ready format, and that has been very 
successful; and it has benefitted New Flyer, but it has also 
benefitted those 30 suppliers that we have that are rippled 
throughout the United States, or those 30 States.
    Mr. Oberstar. You anticipated my next question, which was 
you have suppliers who provide parts for the buses and they are 
scattered all around the States, and those are jobs as well, 
right?
    Mr. Soubry. Absolutely, sir. As you know, our industry, we 
are an assembler, so we design and assemble buses, whether it 
is us or our competitors. The ripple effect on the supplier 
community and then down to the raw material suppliers is 
absolutely tremendous. So, as we have kind of stated, it is 
almost a six to one ratio; every job that is saved or created 
in our specific space or in our company ripples back through 
the supply community to a tremendous multiple.
    Mr. Oberstar. You probably don't want me to mention your 
competitors, but they are out there as well, Gillig, Van Hool, 
Orion. Are they experiencing similar upticks in production?
    Mr. Soubry. Well, every one of them has--you know, we are 
in a solid industry, we are in very good competitive business, 
we have tremendous domestic capacity and end capability, and 
there is room inside our facilities to do the work that we are 
contracted for and more, so we are going to see hunger on 
behalf of us and our competitors to try and retain our market 
shares and grow them. Every one of them has, in some way, 
shape, or form, benefitted from the ability to deploy stimulus 
dollars very quickly.
    Mr. Oberstar. Thank you. In our authorization bill, we 
listened to the various transit agencies across the Country who 
are concerned about their operating expense and their capital 
account, and want to increase the amount of funding they can 
use for operating expenses out of their capital account. I 
would like you to--and we will see that you get a copy of the 
language that we have crafted in the bill.
    But we limit that to only 5 percent for the biggest 
systems, those above a million population, and allow 
substantially greater amount, to 50 percent, for those under 
200,000. But I would like you and your colleagues in the supply 
side to look at that language and see what your thoughts are 
about that.
    Mr. Soubry. I think that is very, very important, sir. As 
you know, there is a real economy around the investments of new 
technologies, therefore, the direct reduction in maintaining or 
operating older fuel inefficient buses, and then there are 
safety issues and so forth. So that is a critical life butt of 
our industry, and we are under no illusion, the local transit 
authorities have to change the way they do business and reduce 
their operating costs, and it is incumbent on us as an industry 
to try and help facilitate that by continuing to offer fuel-
efficient equipment that can be purchased at the right capital 
price. So we would love that opportunity.
    Mr. Oberstar. There is a matter of principle involved here. 
The principle thrust of the Federal legislation is to provide 
the capital assistance to transit agencies to buy the 
equipment, then it is up to them to operate and maintain it. 
And the more money that goes into--if more money from the 
Federal side goes into operation, there will be less money for 
new capital. We have always seen the role of the Federal 
Government as being to increase the investment in the capital 
rolling stock, rather than in the operation account. It is a 
similar principle for the Federal Highway program as well. It 
is only recently, and by that I mean only the last 25 years, 
have we increased the amount for maintenance of the system.
    Mr. Taylor, some lessons learned. In following your 
experience, I inquired with Indiana DOT. They said that some 10 
projects have been approved under the Recovery Act for Elkhart 
County, totaling $23 million, and five are underway or have 
been completed. Can you validate that figure?
    Mr. Taylor. There are some State level projects, Mr. 
Chairman, that are underway, funded through DOT. I can't 
comment on a whole lot of those projects because they are 
Indiana DOT projects and not from Elkhart County.
    Mr. Oberstar. So, to the best of your knowledge, it is not 
10 Recovery Act projects in Elkhart County, but 10 projects in 
all that may involve either State funds or regular Federal Aid 
Highway funds?
    Mr. Taylor. No, my understanding is there are ARRA-funded 
State projects bid through INDOT. What I am here today to 
address is the difficulties we are having as a county getting 
our portion of stimulus funding that flows through either our 
MPO or through State funding, the rural stimulus funding pot of 
money, if you will. That is not working as well as the projects 
that you are mentioning.
    Mr. Oberstar. Well, you are out there on the front line, 
and so you should know, as the county engineer, whether these 
are Recovery Act funds or whether they are State funds only or 
Federal aid State projects under the 80/20 program. And I have 
asked your Indiana DOT and they told me that, additionally, $23 
million has already been allocated under the Recovery Act for 
Elkhart County and that 3 additional million dollars will be 
committed, and that they also approved an airport project of $4 
million on Recovery Act.
    Mr. Taylor. The airport project was for the City of 
Elkhart, which is a place that President Barack Obama visited, 
and that project, the $4 million project, is complete. So that 
was a successful project. It was bid and it is done.
    Mr. Oberstar. Was it a runway, do you know offhand?
    Mr. Taylor. It was a runway, yes.
    Mr. Oberstar. Runway extension?
    Mr. Taylor. Yes.
    Mr. Oberstar. So that was done. Well, airports have a 
different contracting authority; they can move faster. So there 
is a question about how much of that $26 million was Recovery 
Act funds and how much was 80/20 funding or maybe some State 
funding altogether.
    The second question, then, is the allocation. Under the 
Recovery Act, we directed States, State DOTs, to, on a priority 
basis, allocate funds to counties of highest unemployment as 
measured by the U.S. Economic Development Administration. They 
do it for the whole Country, county by county. Elkhart County 
obviously is one of the highest unemployment counties in the 
Country according to the figures from EDA. Did that not argue 
in your favor?
    What happened at Indiana DOT that they did not give you--
first of all, where does your county unemployment rate rank 
within the State of Indiana?
    Mr. Taylor. Number one.
    Mr. Oberstar. All right. So under the terms and conditions 
of the Act that we passed and the President signed, Indiana DOT 
should have given Elkhart County priority consideration.
    Mr. Taylor. That is correct, Mr. Chairman.
    Mr. Oberstar. Why did they not?
    Mr. Taylor. That is a very good question that probably 
needs to be posed.
    Mr. Oberstar. I asked that question and Indiana DOT said it 
took Elkhart County two months to submit their projects. Is 
that correct?
    Mr. Taylor. Two months to submit our projects? In April we 
began filling out paperwork for the projects to submit. Photos 
were submitted as required.
    Mr. Oberstar. Okay.
    Mr. Taylor. And I don't know that time allows me to go into 
all of the details. I will take all the time that you would 
like.
    Mr. Oberstar. Ship those details. I don't want to set up a 
conflict between you and Indiana DOT, but this is your 
opportunity to tell your story, and I am asking the questions 
because we are crafting this new bill.
    Mr. Taylor. Yes.
    Mr. Oberstar. And I want to see what we can do in the 
future for the regular program to cut out these kinds of 
disconnects.
    Mr. Taylor. Understood, Mr. Chairman. We attended a meeting 
early on at the Fort Wayne District of INDOT in Fort Wayne, 
Indiana, where all of the local government entities were told 
what the plan was for rolling out this program. We were told it 
was going to be a first come, first served program. In other 
words, those entities that went home, got busy, got the 
paperwork in on time and correct were going to be the first to 
receive. I may be mistaken, but I don't recall any language 
about distribution based on economic need or unemployment.
    Mr. Oberstar. It is in the law. I wrote it into the law. I 
insisted on it in House-Senate conference and it is in the law 
that the President signed. So they didn't tell you about that.
    Mr. Taylor. We took photos, we filled out reports, 
submitted them to INDOT. They were returned to us, said you 
didn't take enough photos to show all of the pavement 
distresses that are required in order to justify this segment 
of road as being resurfaced.
    Mr. Chairman, we have design engineers on staff who have 
designed, currently, $19 million bridge. The largest pre-
engineered arch structure in the United States was designed in-
house by our staff. I think we can determine whether a road 
needs to be paved or not. Yet, these forms were returned to us, 
only to be revised and sent back again and again. When you do 
that, you fall at the end of the line and the money had run out 
by that point.
    Mr. Oberstar. You know, I have enormous respect for county 
engineers. I have 17 counties in my district. I meet with each 
of them in the course of a year, and one of the county 
engineers in my district, Dwayne Blank, was your County 
Engineers Association president a few years ago. I know the 
competence that exists at the county level. So there is some 
disconnect between Elkhart County and Indiana DOT.
    Now, the County Engineers Association--I am going to have 
to conclude here because I have a minute to get to the Floor 
and vote--has asked, over time, for a separate allocation under 
our Federal Aid Highway programs of funds to go directly to 
counties by percentage allocation. I suspect you would like 
that idea and I suspect that you think it would be a good 
thing, rather than having to go hat in hand to the State DOT.
    Mr. Taylor. Mr. Chairman, I would welcome that opportunity. 
Our department works very closely and very well with Mr. Bob 
Talley, who is the Federal Highway representative for the State 
of Indiana who works out of Indianapolis. We work very well 
with him. We have had some challenges in the past; not with 
him, but challenges in designs and so forth, and worked very 
closely together to get those resolved. We would look forward 
to that opportunity to work through challenges of Federal aid 
projects.
    Mr. Oberstar. Well, I suggest that you talk with the 
National Association of County Engineers and perhaps craft some 
suggestions for us to include as we refine the future surface 
transportation bill.
    Mr. Taylor. Thank you.
    Mr. Oberstar. Thanks to all of you for your contributions, 
for your work on the front line of recovery, for putting people 
to work, creating jobs, moving America ahead. We will have, in 
another month, the sixth in our series of hearings, and that 
will be principally on EPA, the FAA, the Public Building 
Services, the Corps of Engineers under our Committee 
jurisdiction, where, again, there are people at work, getting a 
payroll, getting a paycheck, and making America better. Thank 
you all very much.
    The Committee is adjourned.
    [Whereupon, at 2:17 p.m., the Committee was adjourned.]

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