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




 DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION
                                ________
   SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND 
         URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS
                 JOHN W. OLVER, Massachusetts, Chairman
 ED PASTOR, Arizona                TOM LATHAM, Iowa
 CIRO RODRIGUEZ, Texas             FRANK R. WOLF, Virginia
 MARCY KAPTUR, Ohio                JOHN R. CARTER, Texas
 DAVID E. PRICE, North Carolina    STEVEN C. LaTOURETTE, Ohio9
 LUCILLE ROYBAL-ALLARD, California
 MARION BERRY, Arkansas
 CAROLYN C. KILPATRICK, Michigan    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
            Kate Hallahan, David Napoliello, Laura Hogshead,
                    Lisa Pena, and Alexander Gillen,
                           Subcommittee Staff

                                ________

                                 PART 4
                                                                   Page
 Department of Transportation.....................................    1
 Federal Aviation Administration Fiscal Year 2010 Budget and Next 
Generation Air Transportation System..............................   99
 Department of Transportation Oversight: Top Management Challenges 
and High Risk Series..............................................  165
 Transportation Challenges of Rural America.......................  249
 The Future of High Speed Rail, Intercity Passenger Rail, and 
AMTRAK............................................................  329

                                ________

         Printed for the use of the Committee on Appropriations

 
 DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION

                                ________

   SUBCOMMITTEE ON THE DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND 
         URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS
                 JOHN W. OLVER, Massachusetts, Chairman
 ED PASTOR, Arizona                 TOM LATHAM, Iowa
 CIRO RODRIGUEZ, Texas              FRANK R. WOLF, Virginia
 MARCY KAPTUR, Ohio                 JOHN R. CARTER, Texas
 DAVID E. PRICE, North Carolina     STEVEN C. LaTOURETTE, Ohio
 LUCILLE ROYBAL-ALLARD, California
 MARION BERRY, Arkansas
 CAROLYN C. KILPATRICK, Michigan    

 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
            Kate Hallahan, David Napoliello, Laura Hogshead,
                    Lisa Pena, and Alexander Gillen,
                           Subcommittee Staff

                                ________

                                 PART 4
                                                                   Page
 Department of Transportation.....................................    1
 Federal Aviation Administration Fiscal Year 2010 Budget and Next 
Generation Air Transportation System..............................   99
 Department of Transportation Oversight: Top Management Challenges 
and High Risk Series..............................................  165
 Transportation Challenges of Rural America.......................  249
 The Future of High Speed Rail, Intercity Passenger Rail, and 
AMTRAK............................................................  329

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 53-756                     WASHINGTON : 2009

                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania             JERRY LEWIS, California
 NORMAN D. DICKS, Washington              C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia          HAROLD ROGERS, Kentucky
 MARCY KAPTUR, Ohio                       FRANK R. WOLF, Virginia
 PETER J. VISCLOSKY, Indiana              JACK KINGSTON, Georgia
 NITA M. LOWEY, New York                  RODNEY P. FRELINGHUYSEN, New 
 JOSE E. SERRANO, New York                Jersey
 ROSA L. DeLAURO, Connecticut             TODD TIAHRT, Kansas
 JAMES P. MORAN, Virginia                 ZACH WAMP, Tennessee
 JOHN W. OLVER, Massachusetts             TOM LATHAM, Iowa
 ED PASTOR, Arizona                       ROBERT B. ADERHOLT, Alabama
 DAVID E. PRICE, North Carolina           JO ANN EMERSON, Missouri
 CHET EDWARDS, Texas                      KAY GRANGER, Texas
 PATRICK J. KENNEDY, Rhode Island         MICHAEL K. SIMPSON, Idaho
 MAURICE D. HINCHEY, New York             JOHN ABNEY CULBERSON, Texas
 LUCILLE ROYBAL-ALLARD, California        MARK STEVEN KIRK, Illinois
 SAM FARR, California                     ANDER CRENSHAW, Florida
 JESSE L. JACKSON, Jr., Illinois          DENNIS R. REHBERG, Montana
 CAROLYN C. KILPATRICK, Michigan          JOHN R. CARTER, Texas
 ALLEN BOYD, Florida                      RODNEY ALEXANDER, Louisiana
 CHAKA FATTAH, Pennsylvania               KEN CALVERT, California
 STEVEN R. ROTHMAN, New Jersey            JO BONNER, Alabama
 SANFORD D. BISHOP, Jr., Georgia          STEVEN C. LaTOURETTE, Ohio
 MARION BERRY, Arkansas                   TOM COLE, Oklahoma
 BARBARA LEE, California
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, Maryland   
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado                                             

                 Beverly Pheto, Clerk and Staff Director

                                  (ii)



 DEPARTMENTS OF TRANSPORTATION, AND HOUSING AND URBAN DEVELOPMENT, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2010

                              ----------                              

                                            Thursday, June 4, 2009.

                      DEPARTMENT OF TRANSPORTATION

                                WITNESS

HON. RAY LAHOOD, SECRETARY OF TRANSPORTATION

                       Introduction of Witnesses

    Mr. Olver. The hearing will come to order.
    I apologize. I had suddenly realized that I could barely 
see out of my glasses, so I had to make a quick trip to clear 
the fog away.
    I would like to welcome the Secretary of Transportation to 
our hearing this morning, Ray LaHood, a former Member of our 
august body and a very honored Member as well.
    Mr. Secretary, this is your second appearance before the 
subcommittee this year, and we are pleased to have you with us 
this morning to discuss the fiscal year 2010 budget request for 
the Department of Transportation.
    You have been on the job now a little over 4 months, and 
you are getting your political team in place to lead the 
Department in a new direction. The Department has a unique 
opportunity to set new policy with major multiyear 
authorizations that are pending for the aviation and the 
surface transportation programs.
    The budget, which was released nearly 1 month ago, requests 
a total of $72.45 billion for the agencies and programs within 
the Department of Transportation and represents a little more 
than a 2 percent increase over the fiscal year 2009 enacted 
level, excluding the Recovery Act funding that was passed 
earlier this year.
    In many ways, this budget represents a positive step 
forward for aviation and passenger rail programs, but there are 
some urgent challenges that lie ahead for the highway and 
transit programs.
    While the budget proposes modest increases for the Surface 
Transportation Program, there is a general lack of detail for 
the specific Highway, Transit, and Safety Programs. The surface 
budget before us has overall funding levels but little 
information on the individual programs for each agency. This is 
underscored by the nearly $40 billion from the General Fund for 
the highway and transit programs, which is described as a 
placeholder until the administration comes forward with its 
reauthorization proposal. This causes the subcommittee some 
difficulty as we move forward to put together the fiscal year 
2010 bill, which is further complicated by the CBO and OMB 
projections that the Highway Trust Fund will once again face a 
cash flow insolvency crisis toward the end of the present 
fiscal year.
    Additionally, the current transportation authorization, 
SAFETEA-LU, expires at the end of fiscal year 2009, and it is 
uncertain whether a reauthorization will pass before it 
expires, leaving in doubt future funding and revenue levels.
    It is imperative that the long-term solvency of the Trust 
Fund be addressed. Solutions have been proposed. In the last 
year, two congressionally designated commissions on 
transportation infrastructure have recommended substantial 
reforms and have strongly suggested that we need additional 
revenues to maintain and improve our aging surface 
transportation system.
    Given the national long-term impacts that a change in the 
financing structure could have, I believe the administration 
must exert greater leadership in this area and hope that you 
will provide more specificity on the budgetary needs of the 
highway and transit programs as well as the administration's 
suggestions on how these programs ought to be financed.
    As I mentioned at the outset, there is some positive 
aspects to the budget pending before us. With regard to 
aviation, I am pleased that the budget request acknowledges the 
infrastructure needs at the Nation's airports. The previous 
administration repeatedly sought to cut the Airport Improvement 
Program by over $750 million a year. The budget also proposes a 
robust $865 million in the FAA's NextGen program, which was 
created to modernize our Nation's aging air traffic control 
system.
    However, given the aviation industry's declining 
performance record, exemplified by the steady drop in on-time 
arrivals, the successful implementation of the NextGen system 
is vital to managing air traffic growth and reducing delays, 
and I fear that your $850 million request is too little and too 
cautious in addressing that challenge.
    I am not sure what is going on here. My light seems to be 
saying that my microphone is on, but I keep slipping in and 
out. Apparently, maybe just because I am not really talking 
directly into it. That might help.
    Mr. Lewis. You sound great, Mr. Chairman.
    Mr. Olver. I actually don't need much of a mike.
    Concerning passenger rail, I am pleased that the 
administration requested $1 billion for high speed and inner-
city passenger rail to follow on the $8 billion appropriated in 
the American Recovery and Reinvestment Act. This is a 
significant step towards diversifying the Nation's 
transportation options and reducing congestion on our highways.
    Additionally, I am pleased that the administration has 
embraced the concept of livable communities. For too long, 
transportation, housing and energy policy have been viewed as 
separate spheres, with little or no coordination on the 
Federal, State, and local level.
    A few months ago, you and the HUD Secretary, Shaun Donovan, 
announced the new Sustainable Communities Initiative, and I 
want to learn more from you this morning on how the Department 
intends to move forward on that initiative.
    Last, I would like to commend your Department's 
implementation of the Recovery Act. As of May 8, your 
Department reports that over $7.5 billion in obligations have 
been invested in infrastructure projects across the country. 
These funds have been crucial in creating thousands of jobs and 
repairing our Nation's transportation infrastructure.
    Mr. Secretary, as I have just outlined, you are presented 
with many challenges but equally many opportunities. I strongly 
believe and I am sincerely hopeful that, under your leadership, 
we can break out of the historical practice of transportation 
silos and focus on holistic approaches of reduced congestion, 
improved modality, increased affordability, and reduced 
environmental impacts.
    Before we have an opportunity to hear from you, I would 
like to recognize our ranking member, Tom Latham, for any 
opening remarks that he would like to make.
    Mr. Latham. Thank you, Mr. Chairman.
    And good morning, Mr. Secretary Ray. It is great to have 
you here, and I look forward to your testimony today. We miss 
you in Congress, but I am very, very pleased that you are 
continuing to serve our country in your new role. I think the 
Department and the administration are going to be a lot better 
because of your leadership, your commitment to the programs, 
you are a great asset for the whole Department.
    I just want to thank you for your openness and coming to 
visit to talk about what we are looking at here in the future. 
I want to continue that dialogue, and as good personal friends, 
I am sure we will.
    I think we need, though, to really today probably cut to 
the chase about solvency of the Highway Trust Fund. That is a 
huge problem. There are both immediate needs, obviously with 
the shortfall, and in the future, the next 5 or 6 years to get 
through that authorization.
    I really appreciate the situation you are in, that you are 
working for the White House, and you need to represent their 
position. There is obviously a whole process that the 
authorizers need to complete, and you need to work with them, 
just as I hope the T&I Committee would work with us and 
appreciate the calendar and the process that we have. However, 
the clock is ticking, and time is short here.
    This has been a very bipartisan subcommittee, and Chairman 
Olver has been very gracious. And we are going to work together 
to make sure that we come up with as good a product as we can, 
working with the staff and the entire subcommittee. But you 
know, we probably won't agree with every provision down the 
road here, but I really have faith that we are going to come up 
with a good product.
    These issues, as you know, are extremely important for the 
people at home. And as we go around our districts and our 
States, all we hear about are the projects that need to be 
implemented or put in place, economic growth, safety concerns, 
all of those things.
    My concern, and again, I want to reiterate, it is not about 
you, but in the budget statement, there is the phrase in the 
testimony, ``The administration is developing a comprehensive 
approach for surface transportation reauthorization. 
Consequently, the budget contains no policy recommendations for 
programs subject to reauthorization, including those for the 
Federal Highway Administration, the Federal Motor Carrier 
Safety Administration, National Highway Traffic Safety 
Administration and the Federal Transit Administration.''
    We are in a bit of a quandary here. Chairman Obey said that 
we are going to have our bill marked up in July and off the 
floor before the August break. The Senate, probably, as usually 
happens, doesn't move quite as quickly. But we want to have a 
bill signed into law by the end of certainly this calendar 
year, and I want to work with the Chairman to make sure we get 
that done.
    I think everyone in the room knows full well that there 
will not be a Surface Transportation Reauthorization bill for 
signature this year, probably not even in 2010. And that puts 
us in a real difficult situation with the shortfalls, 
obviously, in the Trust Fund today. But there will be an 
appropriation bill, and we need to make sure that we get your 
input on this now because the train, whether it be high-speed 
rail or a local, is going to leave the station here pretty 
quickly, and we want to make sure that we work together to get 
it done. The States are depending upon their reimbursements 
beyond August, as you know, and they can't wait 2 years to get 
this all done.
    I really hope today we can just have dialogue. I know you 
are delivering the administration's budget proposal, but I do 
think you are going to hear a lot of concerns from the 
committee about the proposals or lack of some specifics as to 
what we need to go forward. I just hope you will go back to the 
administration and our good friends down at OMB, obviously, 
your being on the committee, we all know and love OMB, and make 
sure that they know how important it is to get these specifics 
to us as soon as possible.
    With that, Mr. Chairman, I appreciate it.
    And look forward to your testimony.
    Mr. Olver. Thank you, Mr. Latham.
    We are fortunate to have the ranking member of the full 
committee here today, Mr. Lewis from California.
    And Jerry Lewis, your opening remarks.
    Mr. Lewis. Thank you, Mr. Chairman. I do not have a formal 
statement, but I really have come to express my appreciation 
for the service of Ray LaHood in the Congress, and now the 
Secretary of Transportation. I look forward to the questions. 
Thank you.
    Mr. Olver. Thank you, Mr. Lewis.
    Mr. Secretary, the floor is yours. The full text of your 
testimony will be placed in the record. If you could contain 
your remarks to somewhere close to 5 minutes or so, then we can 
get on with the questioning.

                           Opening Statement

    Secretary LaHood. Thank you, Mr. Chairman, Mr. Latham, and 
members of the committee, for the opportunity to discuss the 
administration's fiscal year 2010 budget request for the United 
States Department of Transportation. I am grateful for the many 
kind remarks that all of you have expressed, and I appreciate 
that very much.
    The President is seeking a total of $73.2 billion in 
budgetary resources. This funding level supports the 
President's ambitious agenda for revitalization and enhancing 
our national transportation infrastructure.
    As you know, transportation is vital to the health of our 
economy and the American way of life. It is essential we 
continue to invest in these assets to keep our highways and 
rails in good repair, keep our freight and maritime shipping 
lines open, and keep all modes of transportation operating as 
efficiently and safely as possible.
    I am mindful that, on the road, on the rails, in the air, 
and on the water, safety always has been and will continue to 
be our chief concern at DOT. That is why over one-quarter of 
the Department's total budget request supports transportation 
safety.
    I want to highlight the President's funding request for 
some of our critical modes. First, high-speed and inner-city 
passenger rail. As you know, President Obama and Congress have 
made a historic $8 billion investment to jump-start new rail 
corridors around the Nation.
    Yesterday, we brought together eight Governors, along with 
the Vice President and myself, and we listened to them about 
their dreams and considerations for high-speed rail. The 
President's budget proposes to fund a 5-year, $5 billion High-
Speed Rail State Grant Program. This represents a major 
commitment by the government to offer the traveling public a 
safe and sustainable alternative to driving and to flying. The 
budget also includes $1.5 billion in grant dollars to support 
Amtrak.
    When combined with the $1.3 billion provided in funding 
through the Recovery Act, Amtrak is poised at last to address 
its longstanding capital needs. With respect to aviation, the 
President's budget requests nearly $16 billion for FAA. This 
level will enable us to fund the FAA's highest priorities, 
including $860 million to keep the NextGen Air Transportation 
System moving forward.
    With these resources, FAA will also be able to fund 
additional air traffic control positions and invest in nearly 
3,500 airport infrastructure projects at 1,500 airports. It is 
vital that we fully fund FAA in order to ensure we can 
modernize our air traffic control systems, attract and retain 
the talent that is needed to keep our aircraft flying safely, 
reduce congestion at the busiest airports, and reduce 
aviation's impact on the environment.
    The maritime industry also plays a vital role in our 
economy, with nearly half of all U.S. foreign trade by value 
traveling by water. The President's budget seeks $346 million 
for the Maritime Administration. This includes $15 million for 
a new Presidential initiative to enable MARAD to work with the 
Department of Homeland Security on modernizing our intermodal 
freight and infrastructure links that tie ports, highways, rail 
networks into a seamless transportation network.
    I am pleased to report that MARAD has addressed budget 
issues at the U.S. Merchant Marine Academy which have concerned 
many in the past. And I have directed the agency to establish a 
Blue Ribbon panel of experts to examine the Academy's long-term 
capital needs. This is a very high priority for me. I want to 
make the Merchant Marine Academy the same jewel that Air Force, 
West Point and Annapolis are. And we are going to do that, and 
it is going to take some dollars to do it. But the Merchant 
Marine Academy is in very bad repair. They have 900 cadets 
there. I visited the facility, and we need to do some work 
there.
    The Blue Ribbon committee will report back in 6 months with 
a complete plan about what needs to be funded, how much, and 
what it will take to do it. And our previous deputy assistant 
secretary, Admiral Tom Barrett, will chair that group and 
report back, and I will keep all of you posted on that.
    I am confident the President's Transportation budget for 
fiscal year 2010 will help our Nation continue to develop our 
most vital infrastructure assets for the 21st century.
    The most significant challenge our Department faces going 
forward is the ability to identify resources, to meet our goals 
and provide the American people with the transportation system 
they need and deserve. Obviously, I am grateful to Congress for 
your interest, for providing the $48 billion in transportation 
funding through the economic recovery plan. This historic 
investment is making possible thousands of transportation 
projects around the country. As a direct result, we are helping 
to save or create good-paying jobs that so many families and 
communities need right now.
    And we are rebuilding, retooling, revitalizing our 
airports, roads, bridges, ports, transit systems, and more. But 
we must also recognize the two primary funding sources the 
Department has relied on, fuel taxes and airline ticket taxes, 
are no longer sufficient. As you know, last year the Highway 
Account of the Highway Trust Fund required an $8 billion 
infusion from the General Fund. The current reduction in 
economic activity on our roads has made the problem of 
sustainability even more serious. We remain at risk for another 
cash shortfall in the Trust Fund later this year, probably by 
mid August, and this situation puts even greater pressure on 
the General Fund to supply resources that have historically 
come from the Trust Fund, and we clearly cannot go down this 
path.
    The administration has inherited a system that can no 
longer pay for itself. We must think creatively as we search 
for sustainable funding mechanisms. In the meantime, I want to 
assure you we are working on a plan to address the potential 
Trust Fund shortfall this summer. We believe strongly that any 
Trust Fund fix must be paid for.
    We also believe that any solution must be tied to reform of 
the current highway program. It needs to be more performance-
based and accountable to our priorities, including making our 
communities more livable and sustainable. We have pledged to 
work with Congress on these important challenges, and I am 
confident we will find the solutions.
    Mr. Chairman, thank you for the opportunity, and I look 
forward to your questions.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
                           HIGHWAY TRUST FUND

    Mr. Olver. Thank you, Mr. Secretary, for your statement.
    The tradition here is that I and the ranking member will 
have 5 minutes, and then we will go five by five, back and 
forth, in the order in which people have come into the room.
    So, with that, I will start with the first round of 
questioning.
    I am not sure exactly when, but there is some suggestion we 
may have votes some time not long after 11 o'clock. We 
certainly want to be out of here by noon, and we will move on 
as quickly as we can.
    Generally, Mr. Secretary, you have been very direct in your 
written testimony and also in your oral testimony about the 
state of the Trust Fund. And you have laid out exactly what we 
ran into last year, and you have stated quite clearly that we 
are going to run into the same thing again this year, with the 
ultimate being that there is the placeholder of about $36 
billion in there, coming from the General Fund, which 
ultimately gets settled somewhere in the reauthorization 
process.
    Mr. Secretary, you would remember that, in the last 
authorization process back 4 years ago, the position, really 
coming from, in a bipartisan way, both parties on the T&I 
Committee at the authorization level was that we needed more 
than what was being done. We needed more infrastructure. We 
needed to have more expenditure, but the agreement was finally 
reached to considerably limit what they had been asking for. 
And now here, in the next to last year of the authorization, we 
have already run into a problem, which has been exacerbated by 
the downslide of the economy as we go into this fiscal year.
    Now, the money in the Trust Fund goes pretty directly. 
Money is raised in specific areas. Money goes directly into all 
the surface transportation programs, but particularly highway 
and the transit programs for maintaining and improving and 
expanding the surface transportation systems.
    There is strong evidence that people around the country 
will support dedicated funding when it is clear, there have 
been referendum in various places to that effect, when it is 
clear that what is being asked for is being used for a purpose 
that people can see and that they may believe in. And I think 
maybe one of the most dramatic ones of those was in California 
where the people voted for a $9 billion authorization to build 
high-speed rail, which we hope that the kick-starting will 
certainly do.
    At the same time that you have been very direct about the 
problem, you have been like a dancer walking on a field of eggs 
as to the question of how this is going to be paid for along 
the way, though we have, clearly, the history of where 
dedicated funding can come from. And we have also the history 
of several commissions who have looked at this at great extent 
and then have made recommendations for some series of ways to 
raise money.
    Can you give us any indication of where we are headed or 
what you are going to be offering to the Authorization 
Committee on how one gets out of the pay-for question?
    Secretary LaHood. I think I have been very frank about the 
fact that the administration does not want to raise the gas 
tax. This is about one of the worst economic slumps that our 
country has seen. I have been in public service for 30 years, 
and I know many of you have, too. There are a lot of people 
hurting in America, and there are a lot of people out of work. 
I think that the last thing you want to say to people is that 
we are going to raise your gasoline taxes. A lot of people 
right now can't even afford to put a gallon of gasoline in 
their car because they don't have a job. We are not going to 
raise the gasoline tax. I will say that emphatically. We can't. 
The economy is in very bad shape. And so I don't think I have 
danced around on that one.
    What I have said is the Highway Trust Fund has been a great 
mechanism for building a state-of-the-art interstate system in 
America. We have a model for the world. The problem is that 
people are driving less. And when you drive less, you put less 
gas in your cars, and we have less money in the Highway Trust 
Fund. So we need to think creatively about how we can continue 
to use the Highway Trust Fund and build on it.
    And I have talked about some alternatives and hopefully 
some creative ways to do it. Some people like them, and some 
people don't like them, but there are about four or five things 
that we could do. I was in Miami where they, on an existing 
road, built what they call a ``HOT lane'' and used tolls to do 
it. So if you want to go faster and get out of congestion, you 
get in the HOT lane. And you can add capacity to highways by 
doing that. You can build bridges by tolling, and you can raise 
a lot of money to do it.
    We have also talked about public-private partnerships. 
There are people--maybe not right at the moment because the 
economy is not that great--who are willing to invest. When 
roads are being built, they are certainly willing to invest in 
the fiber to put broadband in areas of the country that don't 
have it. So there are many of these opportunities.
    In the Senate, they have talked a lot about the 
infrastructure bank. There are bills pending over there for 
that. And so there are other creative ways.
    But Mr. Chairman, and members of the committee, we are not 
going to be for raising the gas tax. We are just not, not right 
now.

                           FUNDING MECHANISMS

    Mr. Olver. Okay. Let me just use your quotes. I do commend 
you very strongly for being so direct about the difficulty with 
the Trust Fund, as I have said in my own comments. And the two 
comments that go in your written testimony that particularly 
come out to me, ``There simply is not enough money in the 
Highway Trust Fund to do what we need to do.'' And the 
authorizers are suggesting that we need to do much more than we 
have been doing in the past, that is my editorial comment. And 
then the further quote, ``We must think creatively as we search 
for sustainable funding mechanisms.'' So I am just looking for, 
what are those creative funding mechanisms?
    Secretary LaHood. Well, I mentioned three.
    Mr. Olver. You have mentioned several.
    Secretary LaHood. Some people like them; some people don't.
    Mr. Olver. Thank you very much.
    Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman.
    And I guess, kind of continuing the same line, the Trust 
Fund bankruptcy is coming. Like you said in your testimony, 
mid-August you look for it to be out of money. In Iowa, they 
are planning on doing about a half a billion dollars worth of 
work this summer, and obviously, a lot of that is to come out 
of the Trust Fund. And you said that you want to offset the 
money that goes in to replenish the Trust Fund. Can you give us 
any idea from the administration as to what those offsets will 
be, where this money is going to come from?
    Secretary LaHood. Thank you, Tom, for your earlier 
comments. I appreciate that very much. You and I and Mr. 
LaTourette came into Congress together, so we have, I think, 
developed wonderful relationships. When people ask me if I miss 
the House, I say I don't miss the roll calls, but I miss the 
relationships. I really do.
    We are trying to figure this out. We have made some 
recommendations to the administration. OMB gets involved in 
this. There are people in the White House that get involved 
with it. The leadership has to be involved with it. And we are 
going to come back to you with what we think is a way to pay 
for this. I mean, the administration is committed to paying for 
the $5 billion to $7 billion that is needed to plus up the 
Trust Fund in 2009, and it is about $8 billion to $10 billion 
for 2010. We are committed to paying for it, and I hope sooner 
rather than later we will be coming back to all of you and 
saying, here is how we think we should do it.
    Mr. Latham. In the supplemental just last week, the 
administration sent a budget amendment to release some stimulus 
funds for the flu pandemic preparedness. Is that a possibility?
    Secretary LaHood. Of using recovery funds? That is not 
something that we have had much discussion about.
    Mr. Latham. Okay.
    Secretary LaHood. To be honest with you, that money has 
really been committed in a lot of different ways. A lot of it 
is out the door.

                           RECOVERY ACT FUNDS

    Mr. Latham. And I commend you for doing--I wish we had a 
lot more money in your Department in that stimulus package that 
would have actually created more jobs in that regard--rather 
than some of the other places that the money has gone.
    Secretary LaHood. Well, I will say this, a lot of these 
projects are coming in under the expected cost, and we are 
going to use that money to fund more projects. So that part is 
good.

                            REAUTHORIZATION

    Mr. Latham. As far as the reauthorization, obviously, it is 
not going to happen this year, probably not next year; I don't 
think there is any appetite probably next year, with time 
limitations. Is there a plan B, or are you just going to 
continue the SAFETEA-LU programs? Is there any thought as to--
--
    Secretary LaHood. Well, there is a part of the debate that 
is going on among our Department, the White House, OMB, and 
others, and the leadership here. I mean, that will be a part of 
how we plan to plus up the Trust Fund, and what we do about the 
way forward as far as authorization.
    Mr. Latham. Is there a date that----
    Secretary LaHood. Sooner rather than later. This discussion 
is going on just about every day at the White House. I was just 
on the phone with some folks down there to see if I could give 
you any more intelligent answers. And I am sorry I can't be 
more specific, but I want you all to know that this is on 
people's agendas.
    Mr. Latham. On the stimulus funds, how many full-time 
equivalent positions have you hired to get those dollars out? I 
guess my question also would be, when those funds are 
disbursed, are those people going to stay at the Department?
    Secretary LaHood. One of the things that I have discovered 
at DOT is that, with only a handful of political people, we 
have been able to do what all of you asked us to do in the time 
frames you set, and get the money out the door in 120 days with 
the existing professional staff.
    DOT has some of the most professional people that I have 
ever seen in the 30 years that I have been in government. The 
professional staff have done the work. These are full-time 
people that work at the Department and are thrilled to come to 
work every day because they are doing what they love to do, 
which is work with the State DOTs and the transit districts and 
the airport officials. And they are working with them on 
getting this money out the door.
    So the people that we have hired are the political people 
in the different modes. We didn't bring anybody on to help us 
with this. We used the professional people in the Department.
    Mr. Latham. And I commend you for doing a good job.
    Secretary LaHood. Thank you.
    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Lewis.

                           MOVEMENT OF GOODS

    Mr. Lewis. Thank you very much, Mr. Chairman.
    Mr. Secretary, as you mentioned in your statement, goods 
movement is pretty critical to the impact of your Department 
upon our economic recovery. In the west, movement of goods, 
cargo from Long Beach or from the Port of Los Angeles is pretty 
fundamental; those goods flow through the Inland Empire in our 
territory and then go towards the east.
    Mr. Secretary, how does your Department plan to address the 
impact of goods movement throughout the country to help with 
this stimulus?
    Secretary LaHood. We have $1.5 billion in discretionary 
money. We put out guidance. And we believe that we will use 
some of the money to enhance our ports. The stimulus includes 
$28 billion for roads and bridges, $8 billion for transit, $1.3 
billion for airports, $8 billion for high-speed rail, and $1.3 
billion for Amtrak. For the $1.5 billion discretionary program 
that the Congress put in the economic recovery package, we 
believe we are receiving some significant projects that are 
intermodal. And there is nothing more intermodal than a port in 
order to expand capacity, and to relieve congestion. I think 
you will see a pretty good chunk of this money being used at 
ports around the country to do the things that you were just 
talking about.
    I was just at the Rotterdam port, and it is an economic 
engine for the Netherlands. And I know that ports around this 
country are an economic engine for the communities where they 
are located. And if we can use some of our dollars to help 
expand and relieve congestion, I think we have done a good 
service to the country.

                          ENVIRONMENTAL ISSUES

    Mr. Lewis. Thank you, Mr. Secretary.
    It might startle you to know that, when I arrived in the 
Congress a week and a half ago, I was considered to be somewhat 
of an environmental nut; that is, I was the author of the Air 
Quality Management District in Southern California. I know of 
the importance of the movement of goods as well as the movement 
of vehicles to improving our environment.
    Now having said that, there is probably nothing out there 
that is standing in the way of our efficiently moving forward 
with many of these programs that are driven by your Department. 
We do need policy action that will help the Congress interrupt 
this whole maze of conflicting, overlapping, et cetera, 
environmental requirements.
    I would be interested in knowing what your position may be 
regarding States waiving some of these requirements. And I 
specifically mention a relatively new thought, that is, maybe 
the Congress and the administration should consider helping us 
look at a special court to deal with environmental concerns to 
make certain that environmental interests are adequately 
addressed but at the same time don't stand in the way and drive 
a no-growth policy.
    Comments.
    Secretary LaHood. Well, I am part of a team of people that 
works in this administration, but our environmental portfolio 
has pretty much been around the idea of CAFE standards for 
automobiles. We have worked as a member of the Automobile Task 
Force. There is a group that is working at the White House on 
climate change issues. But our role relates a lot more to CAFE 
standards than some of the other things that you are talking 
about, Mr. Lewis.
    I would be happy to carry your thoughts back, but we don't 
necessarily have the jurisdiction, like the EPA would or they 
do at the Department of Energy, to do some of the things that 
you would probably like.
    Mr. Lewis. At the table, if, indeed, you are going to be 
able to directly have an impact upon what the environmental 
considerations, the lawsuits and otherwise, are doing to your 
ability to deliver product out there, I mean, it is pretty 
fundamental. So within that discussion, I would hope that you 
would at least think about the idea of a special court to deal 
with environmental concerns.
    Secretary LaHood. Yes, I will.
    Mr. Lewis. Thank you, Mr. Secretary.
    Mr. Olver. Thank you, Mr. Lewis.
    I am going to honor the placeholder that Mr. Rodriguez put 
into order. He was here before anybody else came and then went 
to do a quick markup somewhere else.
    Mr. Rodriguez.

                        AIR TRAFFIC CONTROLLERS

    Mr. Rodriguez. Thank you very much.
    And welcome back, Mr. Secretary.
    Let me ask you, on the air controllers, I know that a good 
number, or 80 percent, are scheduled to retire, and we have to 
go into a new system. I have been somewhat concerned about the 
diversity of that, and seeing how, as we provide the new air 
controller, that we have some diversity in terms of African 
American gender as well as Hispanic.
    I am wondering if you might want to comment on that because 
we have been working for a couple of years on trying to make 
something happen, and we just haven't been able to crack that 
nut in terms of trying to get through there and trying to get a 
little more diverse. And I know that they are actually picking 
them up off the street as far as I know in some cases.
    Secretary LaHood. We have a new administrator at FAA who I 
am sure will be before your subcommittee when you consider the 
FAA budget, and his name is Randy Babbitt. I think he has been 
3 or 4 days on the job. He is a former airline pilot of 25 
years, and also was the head of the pilots' union and a 
businessman. He knows of the concern in recruiting, that we 
really want to do a wide reach-out. And we have talked about 
this in the Department. We have talked about the idea of 
diversity when we are reaching out to fill a number of these 
FAA controller positions and other positions within the 
Department.
    This is a very high priority for the administration. It 
will be a high priority for Mr. Babbitt. And I will let him 
know of your expression of interest. I know that others on this 
subcommittee have had concerns. I know that there is a plan in 
place for us to do a lot more to reach out. And I want to 
assure you that we will do that. It is a priority.

                                  RAIL

    Mr. Rodriguez. Thank you. And I look forward to working 
with you there.
    In Texas, we have a rail, the South Orient, that basically 
the train runs at about 10, 15 miles an hour because of the 
conditions there.
    Secretary LaHood. Is that a passenger rail system?
    Mr. Rodriguez. No, it isn't.
    Secretary LaHood. Freight rail?
    Mr. Rodriguez. Yes, cargo rail. And there is a real need to 
improve the infrastructure there, and seeing what we might be 
able to do about that.
    Secretary LaHood. We work with our freight friends all the 
time on their opportunities to improve the railway grades. And 
freight is very important in our country. Really, it is very 
important to our ability to get to high-speed rail because we 
know that we are not going to have dedicated lines all over 
America, that freight rail is going to have to be a partner 
with us. So we have good relationships, and I will have our 
people look into this.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Rodriguez. I don't know if I have additional time, but 
also, as we look at major cities, looking at long-term 
transportation needs, such as San Antonio, and other 
communities between Austin and San Antonio, for passenger 
trains, I know there is a real need for them to come back with 
those master plans, not only for the States, but for the 
communities and the region. And I know the language is there to 
require that to occur. Is that my understanding?
    Secretary LaHood. Yes. On June 17, we will release the 
information, the criteria, the guidelines, the guidance for 
high-speed rail corridors or regions, and that will go out to 
every Governor and every State DOT. We have had regional 
meetings in which Texas was included, and I am sure your people 
were there. We will begin accepting applications in the fall 
and then making some allocations of money later this year.
    Mr. Rodriguez. Thank you very much, Mr. Secretary.
    Mr. Olver. Mr. LaTourette.

                             STAR ALLIANCE

    Mr. LaTourette. Thank you, Mr. Chairman, for the 
recognition. Mr. Secretary, it is lovely to see you again.
    I was commenting before, and I will say it publicly, that I 
want to congratulate you and the administration for the naming 
of John McHugh as the new Secretary of the Army. You couldn't 
have a better person. The only consternation that it has 
created on our side is that, as the President's Chief of Staff, 
Mr. Emanuel, continues to pillage moderate Republicans from the 
House and increase the Democratic margin, Mr. Latham and I are 
a little disappointed because he has gone from LaHood, skipped 
Latham, LaTourette, and went right to the ``M''s. So maybe if 
we could revisit that issue, we would appreciate it.
    Mr. Olver. You might be next in line.
    Mr. LaTourette. You never know. You never know. Maybe not 
after these questions. We will see.
    Mr. Secretary, you and I have talked about the Star 
Alliance. And I thank you for your work in getting out some 
documents on April 7. But as you know, that continues, even 
though that application has been pending for over a year; that 
is mired at the Department of Justice.
    I am looking for some guidance. The statutory deadline has 
come and passed, June 1. I talked to the President's Chief of 
Staff in small, four-letter words that he understands, and I am 
just wondering what it is that we can do to----
    Secretary LaHood. Are you talking about the alliance 
between United and Continental?
    Mr. LaTourette. I am.
    Secretary LaHood. That will be resolved to your 
satisfaction.
    Mr. LaTourette. And soon?
    Secretary LaHood. Of course. We will meet the deadline.

                            HIGH SPEED RAIL

    Mr. LaTourette. Excellent.
    Let's go to high-speed rail. I understood, in response to 
Mr. Rodriguez's question, that the guidance is out----
    Secretary LaHood. It will be out on the 17th.
    Mr. LaTourette. The 17th. And then it is going to be an 
application process. And who is going to be the decider of who 
wins and who loses?
    Secretary LaHood. Well, there aren't going to be any 
losers. There are a lot of people around America who have been 
dreaming about high-speed rail. As I said, we had about eight 
or nine regional meetings. Over 1,100 people showed up at these 
meetings. We just had eight Governors in town yesterday to meet 
with the Vice President and myself. And we know there are 
people all over America dreaming about high-speed rail. We have 
$8 billion now, and another $5 billion in the budget. But the 
answer to your question is, DOT is going to make the decisions.
    Mr. LaTourette. Great. And maybe there won't be losers; 
there might be some people disappointed. But everybody will 
win, I am sure, with your leadership.
    Secretary LaHood. I will try and make a point, Mr. 
LaTourette, to make sure there are no disappointed people.

                            AUTO TASK FORCE

    Mr. LaTourette. Excellent. We look forward to that.
    I want to congratulate you as well on the FAA 
reauthorization in terms of getting Jane Garvey involved in the 
negotiations with the air traffic controllers. It is a travesty 
that the former Administrator of the FAA imposed a contract on 
those people. And Mr. Rodriguez has talked about some of the 
difficulties of recruiting, but I am a believer that not 
everybody is entitled to a contract that they love when they go 
to work, but everybody is entitled to a contract when there is 
collective bargaining that has been collectively bargained. And 
so thank you for your work and your service on that.
    On the question of the Trust Fund and TEA-LU, as you know, 
the Blue Ribbon panel appointed in the SAFETEA-LU legislation 
recommended a 40-cents-a-gallon tax increase. You have been 
pretty clear about that. It also talked about vehicle miles 
traveled.
    When Mr. Latham was talking, I heard this giant thud around 
the corner, and I think that was Jim Oberstar falling over when 
he said that we are not going to have a reauthorization this 
year or next year. Chairman Oberstar tells me he is going to 
have the bill on the floor the third week of June. And as you 
know, the missing piece, and again, I would think it would be a 
travesty not to have a reauthorization. I think that President 
Bush was poorly served by some bean counters when they came in 
at $256 billion over 6 years, which was clearly inadequate. And 
2 years later, we delivered that bill, and we continue to have 
some problems.
    So I hope whatever the fix is, if it is vehicle miles 
traveled, if it is tolling, I guess we are not going to have a 
gas tax, but whatever it is, we need to have that program in 
place. It needs to be a solid 6-year program so States can plan 
and make improvements and do all the things that are necessary.
    The last thing I just want to--the yellow light is on, so I 
will be real quick. This Auto Task Force is a disaster, and it 
is a disaster because decisions are being made--and I listened 
to a speech you gave where the administration didn't make any 
decisions on the auto dealers; it was the car companies. But by 
creating these structured bankruptcies for Chrysler and General 
Motors, the task force has created an environment where the car 
manufacturers are going into court, and they are waiving the 
dealers' day in court in Federal legislation. They are 
trampling over State franchise legislation, and people who have 
sold cars, and each car dealer, according to NADA, employs 
about 60 people, if you add up the Chrysler and the GM car 
dealerships and forget about the 30,000 UAW workers that have 
lost their jobs and the 20 communities that are now suffering, 
it is over 200,000 people that are losing their jobs. And, 
quite frankly, the Sopranos would be proud of what General 
Motors is doing in this letter that they have sent out, that 
not only if you question them, you are out; if you don't buy 
more cars, you are out. They wouldn't be able to do that 
without this structured bankruptcy facilitated by the Auto Task 
Force.
    I know the President, when he announced the Chrysler deal 
on April 30--I am not one of those Republicans who wants the 
President to fail. I think if he fails, the country fails. But 
he said no communities would be disrupted by the bankruptcies 
and nobody that worked for Chrysler would be disrupted as a 
result of the bankruptcy. That is not true. And I would hope, 
since we have had a double delegation; Congress has delegated 
it to the President, and the President has delegated it to this 
non-elected task force, I would hope that when the President 
comes back from the Mideast you would sit down and chat with 
him. We have to have fairness in this, Mr. Secretary, and it is 
just not fair.
    Secretary LaHood. Well, I wouldn't mind responding to that, 
if you wouldn't mind, Mr. Chairman.
    Mr. Olver. Briefly.
    Secretary LaHood. I got your point.
    Look, I don't know of another President who has done more 
for the American automobile manufacturer than this President in 
terms of taking an interest, and devoting a lot of time and 
energy. And the amount of money that has been loaned to the 
American automobile manufacturer is substantial. It is real 
money.
    I think the fact that Chrysler is about ready to come out 
of bankruptcy means that it was a pretty good blueprint for 
saving Chrysler. And I will just tell you this, Steve, the Auto 
Task Force did not tell GM or Chrysler which dealerships to 
close. We didn't. And the President didn't say, okay, now you 
have got to close this one in Peoria or this one in Cleveland, 
or whatever. We didn't do that.
    I have talked to the GM executive, and I have talked to the 
Chrysler CEO. These are very painful, hard decisions. They were 
not made lightly. I will tell you, the GM CEO has worked for 
the company for 25 years. His father worked for the company for 
35 years. He knows a lot of these employees. I am not saying he 
knows every salesman around the country. But these are hard 
decisions for these people.
    And I think the administration has done all that they could 
have done to save the American automobile manufacturer. And I 
think the Chrysler thing is going to show that it seems to be a 
pretty good blueprint for saving the automobile manufacturer.
    Mr. Olver. Mr. Pastor.

                                NEXTGEN

    Mr. Pastor. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary. Congratulations, and welcome 
back to the appropriation room.
    Secretary LaHood. Thank you.
    Mr. Pastor. First of all, I want to congratulate you and 
also thank you for recommending Victor Mendez as the Federal 
Highway Administrator. He had his hearing Monday, so I assume 
he will be coming to work for you very shortly.
    Secretary LaHood. Well, thank you for recommending him.
    Mr. Pastor. Well, since I gave you one good recommendation, 
maybe you want to go back to the ``L''s. And as you look for a 
railroad administrator, you might go back to LaTourette.
    Secretary LaHood. After his statement, I don't think he has 
a shot right now.
    Mr. Pastor. I want to talk about NextGen. And being on this 
committee over the years, I see deja vu all over again in terms 
of how the process is working and the possibility that the 
system may not come out on time or under budget, and would 
continue to have some problems. That troubles me because, like 
you, we fly here frequently.
    And then when the report came from ADOT IG, it kind of 
perked me up again. And one of the comments that is made is 
that, ``The FAA lacks a detailed plan as to how to transition 
from the existing system to the NextGen architecture. The FAA 
needs to develop a strategy for assembling a skilled workforce 
that can appropriately manage and integrate these complex 
systems and contracts.'' The one that I think that you will 
probably resolve, ``The FAA needs to develop a stakeholder 
initiative plan that will ensure that aircraft operators 
acquire NextGen equipment.''
    It seems to me, I know you will be looking at it, but in 
the past, we had problems in getting the Federal agencies that 
were involved in developing NextGen just getting together and 
working on it. In conversations I have had with some of the 
stakeholders, the airline industry, both commercial and 
general, and the air traffic controllers, there seems to be 
that there isn't involvement of the stakeholders as this system 
is being developed. I can tell you that with the existing 
system, we sat here a number of hours talking about the radar 
screen and the mouse because the air traffic controllers were 
concerned about how the equipment affected them and how they 
could use it.
    Talking to some of the airline people, they are saying 
there is a pilot project, that U.S. Air is going to be involved 
with NextGen in Pennsylvania. But I think the system needs to 
develop itself with the stakeholders having meaningful input so 
that, at the end, the aircraft industry, both commercial and 
general, knows how it is going to fit and how it is going to 
work. The air traffic controllers will know whether or not the 
system is one that they can use effectively, and FAA will have 
a system that can transition from the old to the new 
effectively and make our sky safer for the Americans who will 
be up in the air.
    So I bring those thoughts to you. And I know that you are a 
problem solver, but I am concerned that, in the past, 
everything has been done kind of isolated in a vacuum, and I 
would suggest to you that there is probably a better way of 
doing it.
    Secretary LaHood. Look, I think, Mr. Pastor, you should 
know that this is a new day at the Department of 
Transportation.
    Mr. Pastor. I know that.
    Secretary LaHood. The President has appointed about as good 
an FAA administrator as we can have to get to NextGen. That 
will be Randy Babbitt's number one priority. He was a 
commercial pilot for 25 years. He knows this stuff. He knows 
the importance of the airline industry having the best 
equipment in the planes.
    The other thing is, I think there is a commitment from the 
White House that we have to get to NextGen. The President 
understands this, and so do his people. I think we will be 
there sooner rather than later, and sooner than a lot of people 
would have ever imagined. This is a big, big priority for us. 
It can really help us in saving a lot of fuel. If you have the 
right equipment, you can direct planes in and out of airports 
so they don't have to fly all over kingdom come, and you can 
relieve some congestion and save some jet fuel. But the safety 
part of it is the most important part of it. And this will be 
the number one priority for Randy Babbitt, for his time at the 
FAA, to get us there. And we think we are going to get some 
help from the White House on the funding part of it, too.
    Mr. Pastor. Thank you.
    Secretary LaHood. Can I just also say I was in Phoenix 
recently and had a chance to meet with the controllers there, 
but also to tour the air traffic control----
    Mr. Pastor. Did you like the tower?
    Secretary LaHood. Congratulations. I think you had 
something to do with that. It is state-of-the-art. It is 
magnificent. The controllers love coming to work there.
    Mr. Pastor. I can point it out to Jeff Flake that that is 
what an earmark can do for you.
    Secretary LaHood. I will let you tell Jeff that.
    Mr. Olver. Be careful, his head will get even larger.
    Mr. Carter.

                              SMART GROWTH

    Mr. Carter. Thank you, Mr. Chairman.
    And Mr. Secretary, I am pleased to see you. I always 
respected your wise counsel while we were colleagues, and 
certainly respect you on the big job you have taken on.
    Secretary LaHood. Thank you, Judge.
    Mr. Carter. First off, the first thing I was going to ask 
about is the first thing that Mr. LaTourette asked about. I 
have one of those hubs, and I am very happy to know that I will 
be able to report that that is going to have action very soon.
    Secretary LaHood. Yes, sir.
    Mr. Carter. Last time we all were here, you all talked to 
us about your concept of transportation as it relates to growth 
of cities and city density and so forth. And I had some 
questions and some concerns that I was trying to figure out. It 
really was less about transportation and more about density, 
but you all seem to be teamed on this. This smart growth idea, 
which would move us more to mass transit, if I understood it, 
we would basically turn the cities back into themselves and 
fill in the blanks before we would grow out any farther. And 
that raised a question that came to my mind, are we looking at 
a future of Federal land use planning, Federal zoning 
ordinances? Is there something that is going to restrict our 
city's outward growths to cause them to grow back into 
themselves and become a higher density? Is that the plan?
    And as part of that question, the EPA is already working on 
50--they got $50 million that they are out there working on 
smart growth already. Is this going to be a joint operation 
between DOT and HUD or how is this going?
    Secretary LaHood. Well, Judge, we are not going to create a 
national zoning department. We have no intention of doing that. 
We will leave that to local officials to decide what they want 
to zone and where they want to zone it.
    But I will give you an example. When I was in Houston, I 
took a light rail from downtown out to what I believe was one 
of the most comprehensive health communities in Houston where 
they have M.D. Anderson, the Children's Hospital, the Women's 
Hospital. And the people that I saw on that light rail were 
people who didn't want to get into their car and get into 
congestion in Houston and drive out there; and also people that 
maybe couldn't afford to buy a gallon of gasoline, but needed 
to go see their doctor. And that's what we are talking about--
is creating opportunities for people who maybe don't want to 
own two or three automobiles.
    Look, every family is going to have a car. We are not going 
to eliminate cars. We are not trying to do that. We are trying 
to say to people, if you would rather get on a light rail or a 
bus or a metro line or a bike path or a walking path to go to 
your doctor, to go to the grocery store--or even a street car--
then you should have the option.
    I mean, Portland is a classic example. They not only make 
the street cars there, they use them; and that enables people 
to think that they don't always have to get in their car to go 
somewhere, and they don't always have to sit in an hour and a 
half of congestion to go see their doctor or go to the grocery 
store.
    So we have the opportunity at DOT to work with EPA and HUD 
to create opportunities for people to use other modes of 
transportation. We are not going to get in the zoning business, 
though.
    Mr. Carter. Houston is a perfect example to talk about, 
because in 1960 I accidently got laid off on the other side of 
Houston trying to get back over to the southwest side of 
Houston, and found out to my chagrin that it was 168 miles 
across Houston by street. And so I wasn't going to walk home. 
But that's another story.
    Secretary LaHood. But maybe you could take a light rail.
    Mr. Carter. But a good light rail out of----
    Secretary LaHood. Yes, right.
    Mr. Carter. But the impression was given last time that the 
only way you would get the massive urban sprawl cities like 
Houston, L.A., and others to quit being further urban sprawl 
was there were going to be some kind of restrictions that say 
that, first, the cities filled--I believe this is exactly what 
the HUD Secretary said--would fill in the empty spaces inside 
the city before they moved out of the city. And they would 
correct some density areas and maybe make them higher density 
areas as the growth of the city's issues to provide the 
incentive for rail issues.
    I am all for high-speed rail. I am not knocking rail.
    It is interesting that that rail that you rode on, there 
used to be a trolley that ran up and down that street. They 
took it out before I was born.
    So, anyway, getting back to today, I am not so concerned 
about the rail as I am concerned about the density issues, 
because it looks like to me the Federal Government is going to 
have to impose restrictions to make people do that.
    Is that what you think they envision to do?
    Secretary LaHood. That is not what I envision to do. What I 
envision to do is create opportunities for people to use a lot 
of different modes so they have a lot of different options in 
the event that they can't afford a car or can't afford a gallon 
of gasoline, and they want to use a clean-burning light rail or 
a natural gas bus or a diesel bus and create the kinds of 
communities where you don't have pollution floating around the 
air, where you feel like you can go out and take a walk or ride 
a bike--you know, lots of options for people.
    Mr. Olver. And you are not going to get into zoning?
    Secretary LaHood. We are not going to become a national 
zoning department.
    Mr. Carter. That is good news. Thank you.
    Mr. Olver. Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman.
    I would associate myself with the nice remarks that have 
been made about you, Mr. Secretary. We are already talked about 
most of my issues before today, and I won't take up anybody's 
time.
    Do we have any problems that money won't solve?
    Secretary LaHood. No, sir.
    Mr. Berry. I was afraid of that. And I am glad to hear we 
are not going to have a national zoning commission, too. I 
applaud your efforts there.
    The reason they have got that situation in Portland is 
because Blumenauer won't let them have cars. He makes them all 
ride bicycles out there.
    Thank you, Mr. Chairman. I yield back.
    Mr. Olver. Ms. Kilpatrick.

                  METROPOLITAN PLANNING ORGANIZATIONS

    Ms. Kilpatrick. Thank you, Mr. Chairman.
    And good morning, Mr. Secretary. A breath of fresh air--
thank you so much--and one of the excellent appointments the 
President has made.
    Secretary LaHood. Thank you.
    Ms. Kilpatrick. My region of the world is in decimation, as 
you know, but there is some hope, there is always some 
opportunity. We have the ports, highways, the freight rail 
lines, airports, the bridges, the international waterway, high-
speed rail that comes from Chicago into Michigan--not across 
Michigan yet. We hope we will win one of those corridors, and 
we are working on it.
    We are primed to be one of the international gateways that 
the President talks about, and I want to work with you on it. I 
have done some work on it. We are ready for it.
    Our MPO--and we talked a little about this when we met 
recently, mine. I don't know about all of them, but all them 
need to be looked at; I am not sure how they fit. Mine had $100 
million out of the Recovery Act--can't yet find out what they 
are doing with it.
    The transportation authorization was due to Chairman 
Oberstar a week ago or so. We submitted 10 or 15 of them. Many 
of them--my MPO went to my district and asked them to ask for 
that. So I again I asked about them: What about the $100 
million? One of the things that Oberstar is requiring is that, 
if and when it is authorized, we have to have local money.
    I want to make sure our MPO works--helps on that. I don't 
know yet what they do.
    Secretary Napolitano was in our district last weekend 
looking at our bridges and waterways and the infrastructure 
needs and all that. One thousand less trucks a day cross that 
International Bridge.
    We were at $1 billion a day before the demise of the 
industry. We don't know what that is going to come to, but the 
whole traffic pattern, I am urging you to take a look at it. I 
am not opposed to one project over the other project. I want 
the encompassing vision that I talked to you about.
    If we use my hand, and this is the world, this is where 
Michigan is, back and forth. I want to do world stuff, and I 
want you to help us. Because as I said, as I started talking, 
we have the infrastructure for much of what is needed, the 
international waterway, our friendly neighbors with Canada. And 
doing what we need to do, not this project or that project 
based on old projections, but bringing it all together and 
becoming international to hire, to increase jobs, to increase 
our universities. I see all of that.
    We have a great university community, Wayne State, Michigan 
State, UofM right there. All of that needs to come together 
now.
    What I don't want you to do--and I think you told me you 
won't--don't get involved in this or that, because it is 
neither at this point--it is a bigger vision--a 1,000 less 
trucks a day, the revenue source decimated, people out of work.
    I love what you said before coming this morning. You have 
the vision, and I believe the President does too. I want to 
work with you on it. And, like Chairman Olver, as well, don't 
be bothered by individuals like myself talking about one this 
or that. It is a new America, and that is what I think we are 
building.
    So my question--it is not really a question, but a 
commitment from you, this light rail from Detroit to Ann Arbor, 
we started 5 years ago in the planning. We hope to get it 
reauthorized in the next session of whatever the LU is going to 
be, the next transportation bill. And Oberstar has said by 
October, Chairman Oberstar said he is going to have you an 
authorization bill, somewhere. I know some people said nothing 
is coming back.
    We need one, because transportation still is the engine 
that will fuel the development that we want to see.
    Can you speak on the MPOs? Have you had a chance to look at 
it? Are they archaic, need to be turned out? There has been no 
change in them. I chaired the transportation budget in the 
Michigan legislature. I have been here 13 years, so it had to 
be 17 years ago.
    Secretary LaHood. The MPOs did a good job over the last 
several years, but there is going to be reform of MPOs. They 
don't match the structure of America now. They need to provide 
a much wider opportunity for people. I have learned this from 
talking to Mayor Daley and other mayors who are hamstrung by 
the way that MPOs are structured now.
    We need to restructure them, reform them, make them look 
like planning organizations that reflect the area in which they 
now are operating. And they have to cover suburban areas, rural 
areas, so that they are much more inclusive.
    And I think we are working on that in the Department. That 
is one of our priorities.
    Ms. Kilpatrick. Thank you very much. And our MPOs are seven 
counties; two-thirds of Michigan's population live in those 
seven counties. I look forward to working with you on all the 
vision.
    Secretary LaHood. Yes. Let me just say also that your 
governor was with us yesterday for our discussions on high-
speed rail. And her suggestion is that if we need facilities to 
build the high-speed rail equipment because of the Buy America 
provisions that are in the economic recovery plan, there is a 
lot of capacity.
    Ms. Kilpatrick. And, fortunately, a lot of coal factory 
capacity can be retooled.
    Secretary LaHood. But if we used the Department of Labor 
people to retrain people, to build train cars, equipment like 
that--that is something that your governor suggested and it is 
a good idea.
    Mr. Olver. Excellent concepts, excellent concepts.
    Ms. Roybal-Allard. We need to move on.

                                TRANSIT

    Ms. Roybal-Allard. Thank you.
    Welcome, Mr. Secretary, and I also want to associate myself 
with the praises that you have been given.
    Secretary LaHood. Thank you.
    Ms. Roybal-Allard. I also would like to associate myself 
with the comments made by Mr. Rodriguez with regard to the air 
traffic controller positions; and I will be following up with 
Mr. Babbitt as well.
    Last year, as you know, Americans took 10.7 billion trips 
on public transit. That was the highest in 52 years. This 
increase in the use of public transportation requires expanded 
services and capacity, but with States, State budgets in 
crises, the opposite is happening. In fact, more than 80 
agencies across the Nation have been forced to cut service, lay 
off workers and raise fares. You have stated publicly in recent 
weeks that you are open to the idea of providing operating 
assistance to transit agencies.
    One idea that has been promoted by local agencies is to 
have the flexibility to use Federal capital moneys for 
operating assistance. Are you open to considering this option 
and, if not, what ideas are you considering to help transit 
agencies during this time of crisis to keep up with the current 
need?
    Secretary LaHood. I am open to this idea. If we provide 
money to buy all these buses and you don't have people to drive 
them or run the organizations, it is counterproductive.
    I am open-minded to this idea, and I know there is a 
provision already drafted. Somebody put an amendment on the 
Senate side to allow this to happen. I don't know if it will 
prevail or not, but I think it may be a part of the 
supplemental.
    But for the long term, I think we need to be open-minded. 
We need to have some flexibility about these things when there 
is a downturn in the economy.

                            HIGH-SPEED RAIL

    Ms. Roybal-Allard. Thank you.
    There has been a lot of discussion here about high-speed 
rail, and you said that there will be no disappointed people. I 
hope that is also going to apply to the communities that are 
going to be disrupted by high-speed rail, but will not be able 
to afford to even ride on it, on the high-speed rails.
    I particularly, you know, of course, focus on California, 
and I believe that this mode of transportation does, in fact, 
have potential for our growing and challenging transportation 
issues in terms of moving people quickly and efficiently.
    However, I have concerns about it, because building a high-
speed rail route along existing highways, or existing rights-
of-way in places like Los Angeles, for example, may minimize 
the negative impact to other communities.
    But the concern that I have that it would add to the 
damages that have already been done decades ago, when the new 
interstate system divided and destroyed poor communities and 
caused lingering health issues for residents. In my district 
alone, for example, communities are dissected by no fewer than 
eight State and Federal highways and several railroads.
    So building a new high-speed rail system along existing 
rights-of-way is far more disruptive and intrusive than 
proponents would like us to believe. And it certainly would be 
in communities like mine where, as I said, the residents in 
those communities aren't going to be able to afford the 
proposed fees or the charge of riding these rails.
    You have listed five elements that are important to the 
reauthorization of surface transportation, and one of them was 
creating liveable communities. I think there has been a little 
bit of discussion about that. I hope that it also means 
protecting existing communities.
    And the question that I have is, what is the 
administration's commitment to ensuring environmental justice 
for existing communities already negatively impacted by transit 
projects? And does the administration have any plans to 
mitigate any of these additional impacts for these communities, 
and will the administration promote fairness and justice by 
making sure that it is not only poor communities that share in 
the burden of high-speed rail, but you know, all communities.
    I am just talking from my experience, for example, growing 
up in Los Angeles, where freeways just destroyed communities, 
took away homes, when the logical route was actually to go 
through an industrial area, but for political reasons and so 
on, that didn't happen.
    So that is the concern that I have. And my question is, 
what is the commitment of the administration to ensure 
environmental justice and liveable communities for all 
communities?
    Secretary LaHood. Well, obviously there would be a 
commitment. I think we would be sensitive to some of the 
concerns that you have expressed here.
    I have talked to lots of people from California about high-
speed rail. There is a lot of interest there. People have been 
working on it for 10 years. But, it will be up to the State and 
the people in California to decide what kind of proposal they 
put together.
    But I think we have to be sensitive to what you have just 
said here. You know, the last thing we want to do is be 
promoting liveable communities and then ruin neighborhoods. We 
are not going to be in that kind of a mode.
    And so what I would commit to you is that we will work with 
you. But I encourage you to also work with some of these high-
speed rail advocates to make sure, when they send their 
proposal to DOT, it is not developing high-speed rail and 
destroying neighborhoods.
    We are not for that. I mean, that goes against what we have 
been promoting.
    And so we will work with you, but I also encourage you to 
work with some of these high-speed rail advocates because they 
are going to be sending us a proposal they they have been 
working on for 10 years. And I know you are well aware of that.
    But I will commit to you that we will be sensitive to this 
idea that these neighborhoods are important.
    Ms. Roybal-Allard. Thank you.
    Mr. Olver. Thank you very much.
    We are expecting to have some votes shortly. I think we can 
manage to finish our round and do so in a reasonable way.
    Mr. Price.

                             TIFIA PROGRAM

    Mr. Price. Thank you, Mr. Chairman.
    Mr. Secretary, I will add my words of commendation, welcome 
and congratulations. We are very happy to have you where you 
are.
    Secretary LaHood. Thank you.
    Mr. Price. I have a question I will try to make brief, 
although it is a little complicated. Like many questions we ask 
on this committee, it is of national import, but it also has 
local and State implications.
    Let me try to formulate this very briefly. It has to do 
with the TIFIA program.
    Secretary LaHood. Yes.
    Mr. Price. I understand the program is somewhat in flux. 
And this may be a particularly timely question because I 
understand your credit committee, DOT's credit committee, is 
going to be meeting tomorrow to talk about this program and to 
review the new policy the Bush administration sought to impose 
regarding subsidy fees.
    The national concern, I would guess, is obvious. This 
program has undergone a good deal of fluctuation and change. In 
North Carolina, it is of interest because one of our major 
projects, I-540, the Triangle Expressway, is at stake. This is 
a $1.2 billion project. It is absolutely shovel ready. Our 
State DOT has completed the ratings process, and is set to 
issue a AAA bond to fund the remainder of the cost.
    But now the goal posts have been moved, and the additional 
subsidy they have been advised they have to cover is 
threatening to delay the bond issue, to require them, in 
effect, to start over. That is why we need to let you know 
about this situation and ask for your help.
    The TIFIA program went from being underutilized in the 
early years, as I understand it, to now being very much in 
demand, and is unable to cover the demand. The Department 
appears to have responded in a haphazard way to this change--
abandoning the first-come, first-served principle at one point, 
dividing the available budget authority equally among projects 
in the pipeline, rather than on a percentage basis, instituting 
a new brand of subsidy fees; and imposing a moratorium on 
projects.
    It is kind of a muddle right now. So it is a good thing 
that you are looking at this. We are caught in the cross 
currents in our State. We are probably a good example of how 
this is not working.
    Our loan application was approved before the moratorium was 
imposed. But now we have been advised that we are going to have 
to pay a substantial subsidy fee under regulations that were 
not in place at the time the loan was approved.
    Initially, the fee was going to be 24 million with 20 
million covered by their equal share of TIFIA and 4 million for 
us to cover out of pocket. But in the spring, following a very 
minor change in the bond portion of the financing plan, which 
in no way affected the loan amount, we were told the subsidy 
fee would be 33 million, which is 17 million out of pocket.
    In the meantime, the ratings process had already been 
completed, earning a AAA score. It really doesn't seem right or 
sensible to have to go through that all over again to come up 
with an additional 13 million.
    This decision to divide the subsidy pot up equally because 
of a lack of funds seems to be fairly dysfunctional. It is not 
holding up well, and I could go into that in more detail, but I 
won't.
    I think you understand the problem and, of course, you have 
inherited it. But there is an opportunity now to get it right; 
and I want to say this is not just a matter prospectively of 
getting it right, but there are some projects in the balance 
that really are going to depend on some timely adjustment here.
    And that is the best I can do for a brief overview, and I 
appreciate your response.
    Secretary LaHood. Well, no, I am familiar with this. You 
have laid it out very carefully. These decisions are 
recommended to me, and the best thing for me to do is take that 
piece of paper that you just read from and take into account a 
number of things that have intervened and do the best that I 
can with it.
    Mr. Price. Well, I am very grateful for that. I will make 
sure you get that piece of paper and everything else you need. 
We are very grateful for your cooperation. Thank you.

                        AIR TRAFFIC CONTROLLERS

    Mr. Olver. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. I am like everyone else. I am sorry 
you are not here anymore. I am glad for your new appointment, 
but I miss you; and we wish you very well.
    Secretary LaHood. Thank you.
    Ms. Kaptur. I will take you through several things fairly 
quickly.
    Air controllers, I don't know if you have a figure with you 
on the number of air controllers that will be hired over the 
next several years, but I would certainly appreciate any 
information your staff could provide us about those recruitment 
efforts and how we, as a community, could better support--we 
have such high unemployment--perhaps recruiting future 
controllers in areas of high unemployment.
    I understand once they are recruited they enter a very 
difficult process where they have to pay their own hotel rooms 
and go out to Colorado and all this other stuff. I want to try 
to understand what happens to people when they go into training 
in this extraordinarily important position, and what we might 
do to support them during their training period, make the glide 
path easier.
    Would that be possible?
    Secretary LaHood. Of course, we will give you a report.
    The other thing is we are in very serious negotiations with 
the controllers right now, and it is going very well. I don't 
know what will happen, but I think we are going to have a 
happier controller group when the negotiations are over than we 
have had in the last several years.
    But we will give you a report on recruitment, how it is 
done, what happens after you are actually offered a job, your 
training and all of that. Some of that may change after these 
negotiations, but we will give you the update on that.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Ms. Kaptur. All right. Thank you, Mr. Secretary, very much. 
Greatly appreciate it.
    Number two, on both MORAD with Maritime Administration and 
with high-speed rail, I am wondering if you could identify 
someone in your Department to work with us, A, on convening a 
meeting of those who represent seaway communities, St. Lawrence 
Seaway communities, and talk a little bit about the--have a 
discussion about modernizing those seaway authorities as we 
move into this new millennium.
    I think people have ideas on energy and intermodal, and 
they need a way to do that. If you can think of a way to do 
that with Members, I would certainly greatly appreciate it.
    Secretary LaHood. We will do that.

                            HIGH SPEED RAIL

    Ms. Kaptur. And then I know both Mr. LaTourette and I, 
anchoring both ends of the State of Ohio, are very interested 
in that high-speed rail from the eastern side of Ohio, the 
greater Cleveland area, west of Toledo into Chicago. We are 
planning on convening sometime this summer in Ohio on that, and 
we would love to have someone from your Department join us on 
that.
    Secretary LaHood. We will be there. And your Ohio 
transportation administrator or secretary was with us 
yesterday, and I had a very good discussion with her. And she 
is right on top of all of this.
    Ms. Kaptur. Beautiful. I thank you.
    And then two final points. One is in the Recovery Act. 
There is $1.5 billion appropriated for discretionary grants for 
capital investments and surface transportation. I wondered if 
in the final moments you could discuss what you are going to be 
looking for as chief criteria in evaluating those.
    And, number two, as you do your work, if I have any 
suggestion for you through the massive programs you manage, in 
a place like I live, it would be great to have incentives or 
directives from DOT to get local communities to consolidate and 
manage their public fleets.
    We have city fleets, transit fleets, county fleets, fleets 
for the mentally disabled, postal fleets. So you have Federal, 
State, county, et cetera, with a green--if you could get them 
to think green and consolidated maintenance facilities with 
consolidated fueling, the amount of money we could save. And 
our garbage trucks only get 3 miles a gallon; the postal 
vehicles, on average, get 10 miles a gallon in regions like 
mine.
    I think that you have an enormous capacity to encourage. 
And I don't think communities are thinking this way. We could 
save a lot of money if we were to do this in a more intelligent 
way and manage our maintenance fleets, those doing the work, in 
a very proactive way. We could bring up the mechanics of the 
future, connecting to our local colleges and so forth.
    And right now in apprentice programs, this isn't being 
done. This is all very haphazard, too much duplication. And, 
frankly, the miles per gallon are proof in the pudding it is 
not working. And I doubt that my community is the only one that 
faces that.
    So if you could encourage, through the expenditure of some 
of these dollars that are coming down, that kind of 
consolidated effort, maybe you could have some prototypes or 
demonstrations or give awards to the communities that have done 
it right. But I just put that on the table as something to be 
considered.
    Finally, I have to ask you, you just returned from Europe 
where you were able to look at high-speed rail systems. I 
wonder if you could discuss that with us for a moment. I am 
particularly interested in the Chunnel between England and 
France. I think it is about 26 miles long or something, but I 
think about a chunnel between Ohio and Ontario and connecting 
two economic powerhouses and what it would take to do that in 
our country.
    Could you discuss high-speed rail?
    Secretary LaHood. Sure. On the 1.5 billion we are asking 
for projects of national significance, and we are looking at 
some port projects, just because there was no money for ports, 
really, in the economic recovery. But it will be more than 
ports--we will be looking at national significance, and 
intermodal projects, and we know that some ports are going to 
apply for expansion assistance.
    And on the high-speed rail, we took a train from Paris to 
Strasbourg. We went 200 miles an hour, state-of-the-art, very 
comfortable.
    In Spain, we went from Madrid to a town I can't think of 
right now, 250 miles per hour. There were 450 people on the 
train, they paid $65 one way.
    If the train does not arrive on time in Spain, the people 
get their money back. So anybody that boards that train is 
hoping it doesn't get there on time as long as it gets there. 
They get their $65 back. I mean, these are state-of-the-art.
    We are not going to have trains going 250 miles an hour in 
America. But what we are going to have is an opportunity for 
America to experience passenger rail service that is 
comfortable, efficient and cost-effective, and provide jobs to 
people to build these, to build the equipment, to build it in 
America.
    The companies that are doing this now in Europe are going 
to partner with American companies. They have the technology, 
they know how to do it. They are ready to do it. They were 
practically running us over in order to get appointments to 
talk to us. They are ready to come to America and share their 
expertise.
    So, people who travel to Spain and Europe and ride on the 
high-speed rail wonder why we don't have it in America. Well, 
we don't have it because it has never been a priority.
    Think if Eisenhower had signed a bill that said ``high-
speed rail in the interstate system,'' do you know what we 
would have? We would have state-of-the-art high-speed rail. But 
we have state-of-the-art interstate and it is the model for the 
world.
    We are going to have high-speed rail. It is the President's 
dream. It is something that he is committed to. He is the one 
that put the $8 billion in economic recovery and another 5 
billion--if you all will go along with that--over the next 5 
years. Americans want this.
    And so--Europe has got it down to a real science, and so 
does Asia. And I encourage any of you on your next visit to hop 
on a high-speed rail line. It is coming to America.
    Ms. Kaptur. Mr. Chairman, I just wanted to ask the 
Secretary. I have heard from so many people, America can't do 
250 miles an hour; you have got a teeny little country like 
Spain and a massive country like the United States.
    I really can't understand technologically why we can't do 
250 miles an hour.
    Secretary LaHood. Well, it goes back to what Ms. Roybal-
Allard was saying. We have communities shoehorned all over. It 
is pretty hard to make a train go from Washington through 
Philadelphia, through Wilmington, to get up to 250 miles an 
hour. I mean, you can't do it.
    Now, in California, you know, they have some dedicated 
opportunities here, but I think we have to be sensitive to what 
Ms. Roybal-Allard said about the communities that it is going 
to go through.
    You know, it is conceivable, you could start in Chicago and 
go to St. Louis and get up-- if I predict a speed here, that 
will be the headlines, so I am not going to do that.
    But, anyway, we are not going to get to 250 because America 
is already built out. If you get on the Spain train, it goes 
across the rural part of Spain. It is direct. You are going 250 
miles an hour, and it is very comfortable.
    Ms. Kaptur. Thank you.

                           FUNDING MECHANISMS

    Mr. Olver. Thank you.
    We are finished with our first round. The votes are holding 
up, so we will at least start again here and see how far we 
get.
    It is my turn now. I just want to go back to where I was on 
the funding issue for a moment.
    The Policy and Revenue Commission, which was part of the 
previous authorization bill, had assessed for the year before 
they made their report that the total expenditure in this 
country, in Federal, State and local funds for the transit and 
highway programs was about $85 billion.
    A major portion of that, more than half of that, is Federal 
money. And none of that came from any of the creative revenue 
solutions--because they offered some creative ideas about what 
could be done, including the ones that you had mentioned, Mr. 
Secretary--but also such things as customs duties and imposing 
fees on vehicle registrations and things of that sort, which we 
basically do not do from the Federal level. Our dedicated 
sources of money have been basically from the gasoline tax.
    And so it has only been the States that have used tolling 
and HOVs and public-private partnerships thus far. And it takes 
a fair amount of time to create those, if we decided to go that 
way at the Federal level, and a lot of competition with the 
States because that has been some of the way that they get 
their money.
    So your question of--your quote of, you have to be creative 
about this, you really are going to have to be creative about 
it to make it all fit together, I think.
    Now, I had wanted to contrast that--and I am going to add 
on just a little bit and go slightly farther than Mr. Pastor 
did on the NexGen issue. In your written testimony, your words 
on the Federal aviation--I will quote them for you. It says, 
``Federal Aviation Administration should move toward a model 
whereby the Agency's funding is related to its costs, financing 
burden is distributed more equitably and funds are used to pay 
directly for services the users need.''
    That sounds very much like dedicated spending, the sort of 
thing that is most likely to be acceptable to people in 
general. I mean, I could relate other sorts of instances along 
the way. And so there--at the moment, we don't yet have a 
problem with our trust fund; that is what it is that is going 
on there.
    So it puts, again, all pressure on the T&I Committee and on 
the administration to come up with something that is going to 
be a funding mechanism that will get the kinds of money we 
need. The Policy and Revenue Commission had stated that we 
basically need twice as much money fairly soon and over a 50-
year period, two-and-a-half times as much money, on average, 
year by year to do the kind of transportation, surface 
transportation system that we really need.
    My comment on the NexGen is this--and I am very pleased; 
you have already said that your new FAA administrator is very 
concerned about it and is going to move more quickly. I would 
hope your goal would be a rather specific one, to cut the time. 
This has been something we have been talking about for all the 
years I have been on this committee, which is most of the 
decade now; and it is now being said that we are headed onto a 
system that will get us NexGen in place by the year 2020. We 
ought to be able to cut that in half.
    Secretary LaHood. I agree.
    Mr. Olver. You agree. Okay. Then we don't have anything 
else. But you can't do it with 865 million. It is going to have 
to be larger once you get up and ready to go and know really 
what we have to do. We really have to put some effort; and the 
money, as Mr. Berry back there said, It comes down to how much 
money do you need to raise to get to where do you want to go?
    You don't need to comment. You have already done very well.
    Secretary LaHood. I want to tell you, at the White House, 
they are committed to helping us try and speed this up. And all 
it takes is money to speed it up, everybody knows--I mean, the 
stakeholders all know and the people that provide the equipment 
know.

                        AIR TRAFFIC CONTROLLERS

    Mr. Olver. Our traffic control system is antiquated.
    Secretary LaHood. It is. It is.
    Could I just comment? Let me just read this for Mr. 
Rodriguez, Mr. Pastor. I am sorry Ms. Roybal-Allard left, but I 
will send her a little note.
    There are four points here that the staff gave me, and I 
will put it on the record.
    Hispanic recruitment will be addressed in the air traffic 
controller organization's workforce diversity plan. The plan is 
currently being finalized and will be delivered to Congress 
June 16. So if Ms. Roybal-Allard's staff is here, I will give 
this to them.
    FAA, to date, has hired 765 Hispanic controllers, 
representing 5.14 percent of the controller workforce. But we 
will have a focus on doing better. But that is sort of the 
state of play right now.
    We will have this report to you in about a week.
    Mr. Olver. Thank you.
    Mr. Latham.

                         ESSENTIAL AIR SERVICE

    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Secretary, as far as the Essential Air Service, there 
is a substantial increase in that; and basically, from what I 
see, it is pretty much to maintain normal services. It is 
important to two cities in my district--probably was for 
Peoria, too, I would guess.
    Secretary LaHood. Sure.
    Mr. Latham. Can you elaborate the reason for the size of 
that increase?
    Secretary LaHood. Because we got the memo on this, and we 
know this is important to Congress, and it is important to 
communities, and it is important to DOT and FAA that we have 
Essential Air Service.
    Mr. Latham. Are there going to be any proposals--and maybe 
this is a question for later on--to change it in any way, so 
that that we don't see these huge increases?
    Secretary LaHood. I will let you know about that. I don't 
know that there is, but I will check that out.
    [The information follows:]

    The Essential Air Service (EAS) program provides a vital link to 
the national air transportation system for many communities across the 
country. The Administration is committed to maintaining small 
communities' access to the national air transportation system, and the 
primary tool to ensure that is the EAS program. In this regard, the 
President's FY 2010 budget request includes $175 million, a $39 million 
increase over the 2009 level of $136 million (including the $13 million 
recently appropriated in the Fiscal Year 2009 supplemental), for the 
EAS program in order to meet the current needs as the demands for 
subsidized air service increase.
    The EAS program has remained fundamentally unchanged since its 
inception in 1978 while the aviation landscape has changed dramatically 
with the spread of the hub-and-spoke system, regional jets, and low-
fare carriers. In order to ensure that the program remains responsive 
to the needs of rural America, we intend to review the challenges 
facing EAS and we look forward to working with Congress in an effort to 
restructure the program into a more efficient and sustainable program.

                                TRANSIT

    Mr. Latham. Okay. I still have, as far as using stimulus 
money for operating in the transit, I mean, I understand where 
you are coming from as far as the difficulties communities and 
entities are having. My concern is, do you ever get that genie 
back in the bottle again afterwards, and will there be 
legislation or a proposal?
    Secretary LaHood. I think this. I think what people ought 
to think about is, during hard economic times we should be 
open-minded about allowing transit districts to do it. And then 
when things improve, then you could set a date certain on it, 
assuming that the economy is going to be better 2 years from 
now, which I think everybody does assume. You could say a date 
certain is the end of the availability of that amount of money.
    Mr. Latham. Is there precedent for any program that started 
up that ever ends?
    Secretary LaHood. Probably, but I can't think of any right 
now.
    Mr. Latham. There is nothing more permanent than a 
temporary government program. You know that. And that is my 
concern.
    Secretary LaHood. Yes.
    Mr. Latham. I don't think we ever get the genie back in the 
bottle again.
    I mean, I have great empathy for your----
    Secretary LaHood. You know, I am taking my cues on this. I 
went to a transit conference where you had transit people from 
all over the country. This is a big deal for them. I mean, they 
are hurting. They can ill afford to pay the drivers of their 
buses and to keep the doors open. I mean, it is a serious 
issue.
    And I think when people like that raise a serious issue, 
you have to be sensitive and try to figure out a way forward 
for them.
    Mr. Latham. No. I understand it, but I am just worried 
about long term. And it is a precedent that could be carried 
over in a lot of different areas, too, and that would be my 
concern.
    We tried in the full committee, or I had an amendment, 
about not supplanting local government shares and things--what 
they are already doing with the stimulus money, and that was 
already rejected in the committee. But this kind of goes down 
that same vein.
    Mr. Chairman, in the interest of time and the bells just 
went, I yield back. Thank you.
    Mr. Olver. Thank you.
    Votes have now been called, which means that we should be 
done here by 12 o'clock, certainly, if we have 15 minutes or 
so. If we take maybe 2 minutes, we can probably finish the 
round for everybody and get everybody one more question in.
    And Mr. Latham and I don't need to have any more time. We 
have had our time.
    I would say that in a couple of days we should pass the 
supplementary budget, which does have a 10 percent allowance in 
that legislation, to my understanding, at least. The problem is 
that the first round of the transit moneys had already been 
obligated before the legal authority is being provided. So it 
would hopefully work for the second round, the second year of 
the transit distributions.
    Mr. Pastor. I am going to go down the line in seniority as 
we go, 2 minutes each.

                            HIGH-SPEED RAIL

    Mr. Pastor. I will ask the question and then maybe in later 
conversation--in October, the railroad administrator or that 
office is supposed to come to us with a national railroad plan, 
as I understood from prior panels.
    In June, I think was it June 16, you are going to come out 
with the guidelines for high-speed rail.
    Secretary LaHood. Right.
    Mr. Pastor. I would hope that as we develop, that this plan 
is presented to us in October, and you have the guidelines that 
there is some kind of connection so that the national plan, if 
adopted, will follow some of the recommendations--which I am 
sure is going to include consideration of high-speed rail.
    So I would hope that when the national plan is provided 
that we are able to at least give you some of our comments.
    Secretary LaHood. Sure. Of course. Of course.
    Mr. Pastor. Because I agree that Amtrak is a great national 
railroad today, but it can get better, and we should do what 
Eisenhower did with our interstates and do a great job.
    Mr. Olver. Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman. I just have kind of a 
brief--in our last meeting we had, we talked about high-speed 
rail. We were talking about, unless I missed it, the rail 
speeds being 120, maybe to 150 miles an hour.
    Secretary LaHood. Yes, sir.
    Mr. Carter. But I am looking at the 200-plus right now.
    Secretary LaHood. No, sir. I mean, after meeting with these 
folks around the country, I think there are very few corridors 
or regions that are ever going to get to that speed.
    Mr. Carter. Well, we happen to have a proposal that might. 
Actually, they are going 200-plus on a proposal.
    Secretary LaHood. Okay.
    Mr. Carter. Dallas and San Antonio, and then Ft. Hood, 
which is our largest military installation down to Houston.
    Secretary LaHood. Okay.
    Mr. Carter. I was telling them we were not talking about 
200--but if there is a 200-mile-an-hour-plus proposal, it will 
be considered?
    Secretary LaHood. Absolutely.
    Mr. Carter. That is all. Thank you.
    Mr. Olver. Mr. Rodriguez.

                        AIR TRAFFIC CONTROLLERS

    Mr. Rodriguez. Mr. Secretary, welcome once again. And in 
the area of air traffic control, probably, I would ask if there 
are--I know there are additional resources. And you said it 
exactly right, the more resources, the quicker we can get into 
some of these areas. And I think we really need to move into 
that new technology as quickly as possible.
    Secretary LaHood. Yes.
    Mr. Rodriguez. And if you can, let us know maybe in the 
future in terms of what might be needed for us to do that. And 
it just seems that right now, since a lot of those new air 
traffic controllers are needed, we might as well come up with 
the new technology and move it up there as quickly as possible.
    Secretary LaHood. Good point.
    Mr. Rodriguez. Thank you very much.
    Mr. Olver. Mr. LaTourette.

                            AUTO TASK FORCE

    Mr. LaTourette. Mr. Secretary, one of the reasons I admire 
you is, in the 15 years that I have know you, you are a 
tremendously loyal person. And I know that you are now on Team 
Obama, and appreciate your loyalty, and I think you 
misunderstood my observations about the President's task force.
    I think the President has done a wonderful job. And my 
criticisms weren't of the President. My observation is that he 
is being poorly served by this nonelected automobile task 
force.
    So, Mr. Chairman, I would ask unanimous consent--and I will 
get you copies, Mr. Secretary--to insert into the record of 
this hearing an e-mail that they didn't want out, Chrysler 
didn't want out, the task force didn't want out, indicating 
that they tried to work this out. A lawyer on the task force 
told Robert Manzo at Chrysler, Forget about it; we are going go 
into bankruptcy.
    I want to submit an article that appeared the Detroit News 
that indicates that the auto task force tried to set the 
advertising budget for Chrysler, the new Chrysler, during the 
course of the bankruptcy.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. LaTourette. I want to submit an article that appeared 
in Automotive News on June 1 that indicates that the task force 
directed--everybody is wondering why the GM bankruptcy is in 
New York. It is in New York, even though it is incorporated in 
Delaware and has most of its stuff in Michigan, because they 
had one poor little guy selling cars in Harlem. And that is how 
they got the hook to create it.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. LaTourette. On the question of who picked the 
dealerships, Mr. Nardelli testified--whom you talked about 
earlier--submit his testimony from the bankruptcy proceeding 
that indicates when he was asked to quantify how much these 
things were costing the dealers, he said, We have never 
computed those costs.
    So it is not a matter of cost.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. LaTourette. I would also submit for the record a 
transcript the Judiciary Committee had 2 weeks ago, a Wall 
Street Journal article where the witnesses testified that the 
auto task force, not one of them has any experience in the 
automotive business, making cars, selling cars, repairing cars. 
And as a matter of fact, the Wall Street Journal goes on to 
report, most of them don't even own cars, and those that do own 
cars own foreign cars.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. LaTourette. The hearing is going on in New York 
currently in the Chrysler case, and the Chrysler dealers are 
testifying that the decisions were made by the car companies, 
not the task force, not based on upon how productive they were, 
how much money they were making, how good their service was; it 
is based upon how many times they got in a fight with Chrysler. 
And the same thing is going on with GM.
    So, Mr. Secretary, I am not criticizing the President, but 
I am now telling you we will own 61 percent of General Motors 
or will soon. The President has the opportunity to rein this 
stuff in and stop it.
    And I am just here to tell you that 300,000 Americans are 
not being treated fairly by these decisions, and they are not 
the fault of the administration. But by aiding and abetting 
this structured bankruptcy, the President has the ability to 
rein it in.
    I will give you these documents and ask you to look at it.
    Secretary LaHood. Mr. Chairman, may I just say this?
    I have told----
    Mr. Olver. Without objection, the items will be placed in 
the record of the hearing.
    Secretary LaHood. I have told Mr. LaTourette this 
privately, but I will say it publicly.
    When I saw him represent Mr. Traficant on the House floor, 
I told him, when I needed a lawyer, he would be the one that I 
would pick. This is the reason right here. He does his 
homework, and he obviously has done his homework.
    I did see your press conference that you held at the 
Capitol; and it, as usual, was very well documented and very 
thorough. And I appreciate that. I appreciate the points that 
you made.
    Mr. LaTourette. Thank you.
    Mr. Olver. Mr. Secretary, you really are good.
    Ms. Kaptur.
    Ms. Kaptur. I would just like to say, I would like to 
associate myself with the remarks of Mr. LaTourette and say 
that I think it is an abomination that the automotive task 
force has not come before this Congress, either Chamber.
    And I would have handled it as we did back in the 1970s 
with the Chrysler warrants and restructuring. The fact that 
this has been handled internally is shocking to me, as a 
citizen and a believer in our Constitution.
    And the automotive industry is in the trouble that it is in 
because of the damage that five major Wall Street banks did to 
this country and it brought down an industry that has been the 
lifeblood of the communities that I represent.
    I am very angry as a Member. I am doing everything I can to 
enlighten what is happening. I think what has been done is 
outside the authority of the TARP. And so I thank Mr. 
LaTourette for putting those items on the record.
    I just wanted to make a comment about a totally different 
subject, and that is the condition of medium-sized communities 
that lose air service because of the prejudice towards the 
large hubs. And Mr. Secretary, though I don't really have a 
formal question to you, I would say there are many communities 
in this country that have been terribly harmed with the lack of 
air service.
    And I see these large hubs getting bigger. Every couple of 
months the names of the airlines seem to change. Now I think we 
have got Delta Northwest or Northwest Delta, and the result of 
that for 1 month is cookies on the flights, but those are going 
to leave in a month.
    And we see this massive--these massive companies. And these 
large hubs get bigger and bigger, and the majority of 
communities across our country being forced to go further to 
have airline business taken from them.
    We haven't seen the robust development of the smaller 
flights serving these medium-sized communities. I would really 
urge you to look at the medium-size communities and the 
research that exists over there at DOT and see what can be done 
to strengthen service to medium-size communities that have lost 
carriers and service. I--just in my service here in the 
Congress, I can't believe the difference in terms of service 
from the communities that I represent.
    So I thank you very much and wish you well in your service, 
sir.
    Mr. Olver. Well, thank you very much, Mr. Secretary, for 
being with us today and for your responsiveness. You really do 
understand what we have to deal with as people who take our 
exams every 2 years.
    Thank you very much for being with us.
    And the hearing is closed. Thank you.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                            Tuesday, June 16, 2009.

   FEDERAL AVIATION ADMINISTRATION FISCAL YEAR 2010 BUDGET AND NEXT 
                  GENERATION AIR TRANSPORTATION SYSTEM

                               WITNESSES

HON. J. RANDOLPH BABBITT, ADMINISTRATOR, FEDERAL AVIATION 
    ADMINISTRATION
HENRY KRAKOWSKI, CHIEF OPERATING OFFICER, AIR TRAFFIC ORGANIZATION, 
    FEDERAL AVIATION ADMINISTRATION
MARGARET GILLIGAN, ASSOCIATE ADMINISTRATOR FOR AVIATION SAFETY, FEDERAL 
    AVIATION ADMINISTRATION
VICTORIA COX, SENIOR VICE PRESIDENT, NEXTGEN AND OPERATIONS PLANNING, 
    FEDERAL AVIATION ADMINISTRATION
NANCY LOBUE, DEPUTY ASSISTANT ADMINISTRATOR FOR AVIATION POLICY, 
    PLANNING AND ENVIRONMENT, FEDERAL AVIATION ADMINISTRATION

                   Opening Remarks of Chairman Olver

    Mr. Olver. Okay. The hearing will come to order. I would 
like to welcome the new FAA administrator, Randolph Babbitt, to 
the subcommittee. Congratulations on your swearing in. You have 
been on the job just a little over 2 weeks, but you are well 
respected, with a long history in the aviation industry. You 
are going to need that.
    It is a pleasure to have you before the subcommittee to 
testify on the FAA's fiscal year 2010 budget request and give 
us an update on the status of the next generation air traffic 
system, so-called NextGen.
    FAA is requesting a $15.9 billion budget, which is a 3-
percent increase over the fiscal year 2009 enacted level. This 
request recognizes that our Nation faces many aviation 
challenges driven by the conflict between explosive passenger 
growth and aging infrastructure. The aviation industry's 
declining performance record is just one symptom of this 
overburdened interface.
    For this reason, I am pleased that your budget rejects the 
previous administration's practice of severely overfunding the 
Airport Improvement Program, the AIP program, and requests $3.5 
billion, which is at or slightly above the 2009 enacted level. 
Over 3,400 eligible airports rely on these funds to invest in 
safety capacity, noise mitigation, and efficiency improvements.
    Additionally, I appreciate the important steps you have 
taken to improve morale within the FAA's workforce. The first 
step was committing to enter mediation with the air traffic 
controllers and move beyond the imposed work rules of the 
previous administration. The budget reinforces this commitment 
by requesting funding to hire almost 250 additional controllers 
and safety and technical staff. The subcommittee will carefully 
examine whether the resources requested in the budget are 
adequate to meet the Agency's operational and safety 
requirements.
    I also look forward to discussing the budget's request of 
$865 million for the NextGen aviation system. This program will 
replace our antiquated air traffic control system. This 
multiyear, multibillion dollar initiative is clearly a complex 
management undertaking, but I believe it is vital to reducing 
congestion, improving safety, and reducing the aviation's 
environmental footprint. So I am looking to you for suggestions 
on how this subcommittee can expedite NextGen's deployment 
timeline.
    The modernization of the world's most sophisticated yet 
outdated air traffic control system is a daunting challenge. It 
will require significant resources. Resources is the 
euphemistic term that we have around here for money. It will 
require diligent management and oversight on the part of the 
administrator and the FAA's senior leadership, and it will 
require careful implementation and coordination among the 
Agency's safety, operational and research lines of business. 
And that is why I see before me this array of important 
operational people that are involved in this. We look to each 
of you to ensure that the program stays on schedule and within 
its planned budget.
    Finally, I hope to hear of your vision for the development 
of renewable jet fuels. As you know, the aviation industry is 
responsible for 3 percent of our greenhouse gas emissions. That 
is expected to go up to maybe 5 percent within a 20-year 
period. Additionally, fuel costs now represent the largest 
portion of airlines' operating costs, about 30 percent. 
Developing a renewable fuel that meets aviation's unique 
operating requirements will be vital to an industry looking to 
provide affordable service in a carbon constrained economy.
    Before I recognize our ranking member, Tom Latham, I would 
like to acknowledge some of the members of your leadership team 
who have joined you at the witness table.
    We have Hank Krakowski, your chief operating officer, who 
is a fellow pilot, previously safety executive at United 
Airlines. And you, of course, as operating chief operating 
officer, are in charge of making all the workforces function 
properly in this process, I think, among other things.
    We have Margaret Gilligan, the Associate Administrator for 
Aviation Safety. We are always very interested in safety. And 
Peggy Gilligan is a 29-year veteran of the FAA and former Chief 
of Staff to four different FAA administrators.
    We have Victoria Cox, Senior Vice President for NextGen and 
Operations Planning, that is a really daunting task, a veteran 
of research and development programs at DOD and NASA.
    And, last, Nancy LoBue, who is the Deputy Assistant 
Administrator for Aviation Policy, Planning and Environment. 
And there, of course, is the area of alternative jet fuels.
    With that, I would like to turn it over to Mr. Latham for 
his opening comments.

                Opening Remarks of Ranking Member Latham

    Mr. Latham. Thank you, Mr. Chairman. And good morning, 
everyone, on the panel here. It is good to have you. It is 
going to be an interesting hearing, I think. And Mr. Babbitt, 
you have had a lot of committees to address in your first few 
weeks on the job, and I appreciate your willingness to 
accommodate us as you continue to work into your role. I also 
thank you very much for coming by and to visit. I appreciate 
that very much. I look forward to working with you in the 
months ahead, and want to make sure that we help usher the 
transformation of our national airspace system in the most 
expeditious and effective way possible. I do have a few issues 
about which we hope to have a dialogue today, and they won't be 
a surprise probably to you or any of your great staff.
    One area, of course, is the strategic plan for hiring new 
controllers, and the succession planning that will ensure that 
able and adequate controller services are always available for 
the public. There are very few agencies in the government that 
are engaged in as large a hiring exercise as the FAA, and I 
think that all of us want to make sure that turns out to be 
successful. I have a few questions about the staffing increases 
for controllers, particularly in light of the renegotiation of 
the union contracts and the additional staff needed to oversee 
aviation safety. Clearly, your efforts in this area will be key 
to our success, or your success, in your tenure as 
administrator.
    I think, like everyone else, I am disappointed at the pace 
of the implementation of the NextGen project, just as I know 
the chairman is also, and I am sure many other people have real 
concerns. The FAA, perhaps, raised expectations unrealistically 
in the beginning, but now I think it is time to reassess and 
determine how we can best reap near- and mid-term benefits 
until waiting until 2020, which is the latest estimate for 
completion. And that delay probably also means higher costs, 
and I am sure the original estimate of $14 billion is maybe no 
longer valid.
    Whether it is NextGen, the upgrading of legacy systems, or 
the placement of controllers, I am concerned about the relative 
treatment of smaller airports compared to large airports. It is 
probably not a big surprise to anyone that is important to me 
that investments in and deployments of capital and human 
resources recognize that rural economies and towns depend on 
the air space system just as much as our urban counterparts.
    You must have a special position down there. I just want to 
point out, as a new member of this subcommittee, I have been a 
bit overwhelmed by the sheer number of acronyms and 
abbreviations in your Agency. Again, you must have an acronym 
czar down there or something, but you hold the record probably 
in government. Last count you had 527 distinct acronyms and 
abbreviations to describe various aspects. What do you pay this 
person? That is just incredible.
    With that, Mr. Chairman, I look forward to the testimony, 
and I yield back.
    Mr. Olver. Thank you, Mr. Latham.
    Mr. Babbitt, your complete written statement will be 
included in the record. If you can give an oral summary in 
around five minutes, then we can move quickly to questions. We 
intend to be out of here within the two-hour period.

            Opening Remarks of the Hon. J. Randolph Babbitt

    Mr. Babbitt. All right, sir. Well, good morning again, 
Chairman Olver, Ranking Member Latham, and other distinguished 
members of this subcommittee. It is a pleasure to be able to 
appear before you this morning to discuss the administration's 
budget request for fiscal year 2010. I want you to know that I 
certainly respect and appreciate the important role in this 
budget process, and I look forward to working with you in the 
short term and for years to come.
    Because aviation safety is my primary duty, and I do not 
take that charge lightly, let me start by saying that this is a 
budget that enables the FAA to pursue its paramount mission, 
advancing operational safety throughout the national Airspace 
system. That being said, I think we are all aware you do not 
have to turn too many pages in the newspaper to understand that 
we find ourselves in a very complicated financial time, and the 
airlines are not excluded from that. I also want to stress that 
this is a fiscally responsible request that will help us 
deliver on all of our performance goals.
    Our fiscal year 2010 budget request of $15.9 billion 
maintains safety and capacity gains while providing investments 
to meet our future system demands. We have made commitments to 
you, to the President, and to the taxpayer about controller and 
safety staffing, aviation research, as well as investments in 
infrastructure, airports, and NextGen. This budget will help us 
meet those commitments while we deliver the aviation system of 
the future. If you will, I would like to take the liberty here 
to detail some of the larger numbers in our Operation's 
submission.
    The fiscal year 2010 request of $9.3 billion includes $7.3 
billion for the Air Traffic Organization, or for those who like 
acronyms, ATO; $1.2 billion for Aviation Safety; and, the 
balance for support staff as well as Commercial Space 
Transportation. The equation for us is simple: Run the system 
safely and look to the future through NextGen and commercial 
space investments. You will be pleased to know that the budget 
also funds the hiring of additional air traffic controllers, 
aviation safety staff, and NextGen staff as well.
    I would also like to discuss our 10-year strategy for the 
air traffic control workforce. It calls for a net increase of 
107 controllers in fiscal year 2010. We are expected to hire 
more than 1,700 controllers over the next year to reach that 
goal, obviously considering retirements. More importantly, our 
controller workforce strategy allows us to put the right number 
of trained controllers in the right place at the right time.
    In the last 4 years, the FAA has hired more than 5,600 new 
air traffic controllers. That exceeded the original goal by 40 
percent. And flying as much as you and I do, knowing that the 
government is taking steps to match the number of controllers 
with traffic volume and workload is reassuring. I have heard 
that there are areas where we do not have the balance right. We 
have plans to make sure that we continue to bring these new 
employees on board, and we hope to carefully manage that 
process to ensure that our trainee program is accomplished in a 
timely manner and that they are hired in the places that we can 
employ them and where we need them.
    I also want to assure you that I intend to consider the 
staffing and training concerns of our controller workforce. 
They are truly out on the front lines. I respect their hard 
work and their input, and I want you to know that we are hiring 
controllers now faster than we ever have. We are providing them 
with quality training. They are making the grade, and that will 
help us to make the grade with them.
    Let me diverge for a second and address labor stability at 
the agency. As you know, labor talks are underway with the air 
traffic controllers. I am fairly optimistic that talks are 
proceeding well. Both sides are at the table and reporting good 
progress, and I think we will reach an agreement with them. The 
best agreements are reached when everybody involved at the 
table wants an agreement. And I believe that is the case now. 
We certainly have everybody there, and there is a good 
atmosphere that is overarching those talks.
    As far as labor stability is concerned, I want you to know 
too that I am not just talking about getting our largest union, 
NATCA, squared away. I am also talking about the other seven 
unions that we have, and I am also talking about the other 
15,000 employees that work at the FAA that are not part of the 
union. We have got to restore the confidence in our entire 
workforce. We need to make sure that we all have accountability 
and credibility within that workforce and across the board. It 
is my goal to see that all 45,000 employees of the FAA move 
with confidence in their skills and pride in their work. We 
have got to get that restored.
    With all of that as context, I appreciate the help that you 
are providing as we make headway with our inspector workforce 
as well. The result of staffing additions in 2007 through 2009, 
we now have 4,245 safety inspectors. This fiscal year 2010 
request maintains this increased level while adding aviation 
safety staffing by 30 additional positions. The requested 
staffing increase is consistent with the updated Aviation 
Safety Workforce Plan.
    Recognizing that the FAA's future workforce may be very 
different than it is today, last year we engaged the National 
Academy of Public Administration to help us identify the skills 
needed to accomplish the transition to NextGen. To respond to 
their recommendations, the FAA included $7 million to hire 104 
new staff in the ATO, the Air Traffic Organization's 
operational service units to support the development and 
deployment of the NextGen and of applications. These additional 
staff will help identify transition requirements, develop 
procedures, coordinate with the industry and stakeholders, and 
perform operational impact analyses.
    For Facilities and Equipment (F&E), this budget maintains 
the capacity and the safety of our National Airspace System 
while keeping our comprehensive modernization and 
transformation efforts on track.
    The request of $2.9 billion does represent a healthy 
increase of 6.7 above fiscal year 2009. The bulk of our 
investment--just slightly above $2 billion--will be spent in 
legacy areas. In many ways, this is the heart of the current 
system's infrastructure, and includes things like power 
systems, information technology, navigational aids, and weather 
systems.
    Looking to the future, the NextGen portfolio for F&E grows 
by 790 million. That is a 24 percent increase. The NextGen 
transformational program, such as ADS-B, Systemwide Information 
Management, Data Communications, National Air Space Voice 
Switch, are funded at $372 million. Approximately $392 million 
is provided for NextGen demonstrations, system development, and 
``enabling'' activities.
    Our Research, Engineering and Development (R,E&D) funding 
request is a 5.3 percent increase. This year, we are increasing 
our emphasis on fire safety, propulsion and fuel systems, 
advanced materials, as well as aging aircraft; we are 
requesting a 15 percent increase for our R,E&D NextGen 
portfolio to about 65 million. This will support the enhanced 
NextGen research and development efforts in the areas of air-
to-ground integration, weather information directly into the 
cockpit, and environmental research for aircraft technologies, 
fuels, and metrics. Our request also takes care of airports, 
which we believe this administration recognizes as an essential 
part of the aviation system infrastructure. As you know, their 
design, structural integrity, and ongoing maintenance have a 
direct impact on safety, capacity, and efficiency. The fiscal 
year 2010 request of $3.5 billion will allow us to continue our 
focus on safety related projects including runway safety area 
improvements, runway incursion reduction, aviation safety 
management, and improving infrastructure conditions.
    In closing, I would like to emphasize that our fiscal year 
2010 budget provides a total of $865 million in support of 
NextGen. That is a 24 percent increase. Step-by-step and 
procedure--by procedure, we are increasing the integration 
between aircraft and ground-based technologies. Both Secretary 
LaHood and I have made the delivery of NextGen one of our 
highest priorities, and I will be looking hard at every 
opportunity we can find to accelerate this transformation and 
the efficiency and environmental benefits it will bring.
    But I must underscore that the drive toward NextGen will 
find only success through collaboration, by bringing all the 
parties to the table, our employees, the industry, and the 
manufacturers to make sure that our focus remains where it 
belongs. The tragic accidents over the past few months are ever 
present reminders that we must maintain our vigilance. My 
testimony this morning is a commitment that we intend to do 
just that.
    So with that, I thank you. In closing, my staff and I look 
forward to any questions. I appreciate the consideration for 
letting me bring a team with me for recognizing my short 
tenure.
    [The statement of Mr. Babbitt follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Olver. Well, under those circumstances, I will 
certainly allow you to use whoever it is on the staff that 
really needs to answer the question that is being brought up as 
this goes on.
    Our usual procedure is to have rounds of 5-minute 
questioning by first myself and the ranking member, and then 
the other members who are present or as they come in.

                                NEXTGEN

    Let me just start, sort of kicking off some words that you 
said earlier. And I won't quote them. But in this issue of 
NextGen, this is an enormous undertaking. Has the FAA involved 
its employees, its controllers, its inspectors, its safety 
technicians and such? Have you involved them in the planning at 
this stage? Can you give me some sense of that?
    Mr. Babbitt. Yes, sir. Let me speak to that, and I might 
ask Vicky or Hank to step in. We have not involved them to the 
extent that I would be comfortable with at this point. I think 
I could best describe it as a distraction with some labor 
concerns. I hope to put those concerns behind us with this new 
agreement that we are negotiating with the controllers. And I 
hope that both of us can focus on getting their participation. 
We certainly have had a lot of other components within the FAA 
deeply involved. But we are sorely missing the involvement of 
the controllers. And I do hope to engage them.
    Mr. Olver. Well, given the earlier words that you used 
about that being good form, at least I am willing to accept at 
this stage that that will be something that will be worked on; 
that will make an effort to engage those people who are very 
much affected by what it is that goes on.
    So we will pass that opportunity for Hank and Vicky to 
weigh in at this point. That is probably the best way to deal 
with it.
    My staff tells me that the NextGen program is expected to 
cost something in excess of $20 billion--I have long since 
forgotten that it was 14--through the year 2025, which implies 
that there is a timeline for the complete implementation of 
NextGen of somewhere around 2025. When Secretary LaHood was 
before us 3 or 4 weeks ago, I had made the comment and I have 
to sort of qualify the comment. But when I first served on this 
subcommittee, the key issues, the key controversies in new 
equipment and so on was STARS and common arts and so forth, and 
that argument went on for quite a while, probably through 2002.
    So probably we weren't really talking about NextGen until 
probably 2003. And I think looking back at the budgets, the 
first time that there are things assigned in the budgets--I 
have a little chart here. The first time that there was 
assigned money is actually 2007. But there was considerable 
talk before that time about the deficiencies of the present 
system, the problems with the present system, and the benefits 
from upgrades that we really needed to do.
    So I had said we have got to do this, to the Secretary, in 
half that time. And he said he agreed. So now I am left with 
the question of how--whether I was completely misunderstanding. 
I don't think he was particularly. He was very careful about 
the words that he uses. But I know you have an implementation 
plan that came before us that was issued in January of 2009. 
You referred to it in your testimony. It was very careful 
testimony about all the different things, all the problems, all 
of the needs and requirements and so forth in your written 
testimony about why we are doing this and what are the benefits 
that we hope to accrue. But I think that that plan actually is 
a sort of a mid-term plan that gets us to about 2018.
    Now, I had in my mind that we ought to be in full 
implementation of NextGen maybe by 2016 or 2017 at the latest. 
So I am out of sync here. I am impatient. But that is, in part, 
because I am older than everybody else at the table, at this 
side or that side of the table. And I had hoped to see NextGen 
in place at some point along the way. So would you like to--are 
you moving this? You said you would like to move it faster. 
What is your sense of a timeline for realistically getting 
NextGen in place? And then we will go from there.
    Mr. Babbitt. RTCA is a company that is allowed to bring in 
all the parties within our industry. We have tasked them with 
bringing in the users, the manufacturers, and the FAA; really 
looking at NextGen for the single purpose of, what are the 
priorities that the industry wants?
    We have two sides to this equation. We have all the 
technical equipment. And that too----
    Mr. Olver. And the $20 billion, that estimate is for the 
work that has to be done at the Agency?
    Mr. Babbitt. Yes, sir.
    Mr. Olver. And then there is another estimate of 20 
billion, which may be inflated.
    Mr. Babbitt. It could be. The other thing----
    Mr. Olver. Done by the industry.
    Mr. Babbitt. What we are doing is finding the areas. We 
know, for example, that many of the carriers have already put 
some of the equipment on board. They are capable of shooting 
these Required Navigation Performance approaches. Many of them 
have Area Navigation (RNAV), which is a very sophisticated 
navigation capability. They already have this equipment. We 
simply need to design the procedures so they can use them. The 
essence of this is that we are going to look back and see what 
they have, what we have, and what could we implement right now. 
I think what we drew out originally, and I will be corrected if 
I am wrong, is more of a linear implementation, and we put 
everything on the same plane we are going to put all the parts 
in.
    But some of the things do not bring us the savings. For 
example, in some of the big congested areas we get a much 
bigger benefit by redesigning the air space, implementing some 
of the technology, and shifting over to voiceless 
communications. So, we want the voiceless communications. It 
will improve safety. But that is not necessarily something we 
want to do first because we will not get the benefit for it at 
that point.
    The other thing that I want to mention in the budgeting is 
that this budget, while it might seem expensive, remember that 
we have to run systems in parallel. We are going to be 
introducing the very first leg of implementation of NextGen, 
which you will be happy to know is actually going live here 
shortly, and we are going to begin to use the first en route 
modernization technique. But, we have to run a parallel system. 
We are not going to shut the old system down and turn on the 
new one and really hope that it works well. We have the highest 
degree of confidence that it will. We are going to back it up 
with our other systems for a while. So there is some overlap in 
that area.
    Mr. Olver. Look, I am way out of time. But that is not your 
fault, it is my fault. In just finishing, and then I will give 
my ranking member similar time. But there are just so many 
moving parts to this. Your budget for this, this year, is $865 
billion. It is divided into more than 25 different line items 
that I suspect cover topics in every one of the people here and 
some other people who have also managerial--I suspect, 
managerial control.
    So the coordination of this is not running in series but in 
parallel. To get out the best that you can out of this and move 
as quickly as possible is an incredibly difficult and 
complicated task for all of you. And I just commend you for 
undertaking it.
    I will stop there and then come back, because I am going to 
try to understand this system a little bit better.
    Mr. Babbitt. All right, sir.
    Mr. Olver. Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman.

                                NEXTGEN

    I am told that a number of NextGen components--I am just 
going to follow up on the chairman's comments. Like the next 
generation enabled weather program and the voice switch, to 
name a couple, their completion dates have slipped by at least 
a year, 2 years, 3 years. And that slippage always costs more 
money, obviously.
    Just to get a handle on it. Is the $20 billion what you 
actually expect this to cost?
    Mr. Babbitt. If you don't mind, I will defer to Hank. They 
have worked with these budget numbers a lot more closely than I 
have.
    Mr. Krakowski. And I will give it also to Vicky for some 
granularity.
    The one thing about the time line I would like to talk 
about, and this is important, we can not think of this as 
strictly a United States only system. Our airplanes fly in our 
border air traffic airspace and their airplanes fly in ours. So 
what we are embarking on is actually truly an international 
effort. There is an awful lot of work here to get this right, 
and we have to be so careful because we are going to be 
implementing the system in layers in a live system with real 
airplanes and people in it. When you think about accelerating 
it, you have to think about it very, very carefully.
    Ms. Cox. Thank you. If I could go to the question of the 
investment delays. Actually, we have transformational programs, 
the Automatic Dependent Surveillance Broadcast (ADS-B) is one. 
The program that you mentioned, the NextGen Network Enabled 
Weather and the NAS Voice Switch are transformational programs. 
Of the five current transformational programs, only two have 
gone to an initial investment decision. So they are not 
delayed. In fact, ADS-B and System-wide Information Management 
are the two programs that have awarded contracts and are 
actually proceeding. ADS-B achieved its inservice decision for 
broadcast services just 14 months after contract award and the 
program has been performing very well.
    For other programs, because we have not even gone to 
initial investment decision, which means we have not completed 
the investment analyses that are necessary for us to move 
forward, it is very difficult to come up with an accurate 
number for the total cost of the system. These five and next 
year's six transformational programs are going to be the bulk 
of the cost of the system going forward. Our estimate of $15 
billion to $20 billion--we think--is a good estimate out to the 
2025 timeframe, but that estimate will get better as we 
complete the detailed engineering studies, prototyping and 
development, and demonstrations that are necessary for us to 
truly understand where we are going.
    Mr. Latham. So you really can't--the problem we have is we 
have to deal with real numbers here rather than guessing out 
there. But that is fine.
    One thing that concerns me, even after certification and 
approval of technologies and ground systems, procedural design 
criteria have to be set by the FAA aviation systems standards. 
And according to your agency, as many as 7,200 procedures 
remain to be developed, and the GAO has identified this as one 
of the largest obstacles for the timely implementation of the 
NextGen.
    What, if anything, do you think you can do to streamline 
activities and the NextGen workload without compromising 
safety? And one question, too. Is there any pushback from the 
industry as far as the costs or the implementation of the 
NextGen?
    Mr. Babbitt. I think the biggest concern of the industry, 
and it is a fair one, is we do not want to do the equipage 
unless we know we can, in fact, use it. And it is a little bit 
of a, I think the responsibility falls on us, as it rightly 
should, but we need to be credible when we say we are going to 
have a system. If you put equipment in your airplane by 2010, 
you are going to be able to go in and out of airports using 
this equipment. That is a responsibility that we are going to 
have to accept. If we make that statement, then we need to be 
sure that we can do that.
    With regard to the high number of procedures, that is a 
very valid point. There is a pretty good history in this 
industry. We have a number of areas where we have broadened our 
ability to monitor and oversee and do various programs by 
authorizing other people. Airlines are a good example. I would 
not even want to guess how many inspectors we would need to 
check all of the pilots and mechanics in this country. So what 
we do, is the carriers send and recommend their bright senior 
pilots, and we certify them, we oversee them, we monitor them, 
and allow them to do some checking.
    I am asking that we look into something similar. We do the 
same exact thing for certification of airlines. We have 
provisions out there. There are companies that meet very strict 
FAA criteria that are allowed to essentially put together the 
certification package for an airline, saving the FAA an 
enormous amount of time. We sign off on it, we review it, but 
we do not do all of the legwork. That is something we are going 
to have to look at here. There are companies today that can 
design very sophisticated approaches.
    We acknowledge that we don't have the manpower, and we have 
to ask ourselves does it make sense to ramp up to build 7,000 
procedures with a lot of staff, and once they are built we do 
not need them. I do not know if this is the wisest decision, 
but we will have to look at it. This is something that we may 
say, look, it will be worth our while to allow companies that 
are qualified and competent to design some of these approaches. 
We would certify their work as opposed to doing the work.
    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Olver. Thank you, Mr. Latham. Mr. Rodriguez.
    Mr. Rodriguez. Thank you very much. And welcome, Mr. 
Babbitt. I want to, first of all, congratulate you in making 
those comments about making sure we don't move to technology if 
they are not going to be utilized. I was a school board member 
one time, and when we moved to computers way back in the late 
1960s and early 1970s, and they sat there for a long time 
because we forgot the training component to it. So let me ask 
you about integrating the staff and making sure that the 
training as we move on--and if you have to refer it to Ms. Cox, 
how are we going to move on that? Because I know Ms. Cox 
mentioned not pilot projects but demonstration projects. How 
far are we from that as we move on that? Either yourself or Ms. 
Cox.

                                TRAINING

    Ms. Cox. Thank you. We recognize that training is an 
integral part of the NextGen development and deployment. 
Training is built into our major acquisition programs, and we 
never introduce a new program just as we are introducing the En 
Route Automation System Modernization system (ERAM) today. 
Training is ongoing now, with Automatic Dependent Surveillance 
Broadcast, training is an integral part of the delivery and 
deployment of that capability just as it will be with all of 
our capabilities.
    We are looking at how we integrate a training plan, because 
we are going to be delivering so many of these new capabilities 
in a very shortened timeframe. We are working with our new 
training vice president in the Air Traffic Organization to 
develop the appropriate approach to that.
    Mr. Rodriguez. I have been working with a junior college 
for about 3 years to try to work with a Federal--the 
controllers. We have had some difficulty getting recognized 
there. And I know that some of your staff, for air controllers 
who were picked from I guess from the field with no training 
whatsoever, for training. So I was concerned in terms of what 
it would make sense that you would start looking at some 
facilities that would, for training, for the future.
    Let me be a little more specific on the demonstration once 
again. Do we have, is it best to approach some of these areas 
to look at specific demonstration projects? Or how do we--we 
don't transfer real quickly from one to the other. But how do 
we make that happen? Have we come up with some conclusions 
there?

                     DEMONSTRATION WITH CONTROLLERS

    Ms. Cox. We are working a number of demonstration projects 
in the field now, particularly focusing on procedures that take 
advantage of capability existing in the aircraft today. We are 
working with active controllers. We can't put a demonstration 
in place without working with the controller workforce. We have 
had a lot of success in several areas.
    LAX is a prime example of developing procedures for 
optimized profile descents. Today, about half of the arrivals 
in LAX take advantage of NextGen procedures called controlled 
descent approaches, and they are saving a lot of fuel there. 
The controller workforce is very supportive of those. There are 
400 flights a day utilizing that. We are looking at expanding 
that and are working in other airports and areas around the 
country for that.
    Mr. Rodriguez. As the chairman indicated, we want to move 
quicker on this. What do you need to do in order--from us in 
order to make that happen in some of these areas? I know there 
were a variety of six or eight areas that you have identified 
in moving forward. What do we need to do to--you know.

                            AIRSPACE DESIGN

    Ms. Cox. We are looking at areas that we can advance. The 
procedures area is one. We need an integrated national approach 
to both airspace design, putting in place routes that take 
advantage of satellite-based navigation capability in the 
aircraft today. These approach procedures allow us to get 
higher capacity at our most congested airports. We are looking 
for industry to make the recommendations through the task force 
that Mr. Babbitt referenced. We will be getting recommendations 
in August about which airports they would like for us to 
concentrate on and prioritize our efforts. We are looking at 
acquisition programs that we may be able to significantly 
advance in terms of delivery timeline without introducing 
significant risk to the programs. We are looking at what 
additional funding would be required to get us to that because 
the funding requests that we have in place today supports the 
implementation plan for NextGen that was published in January.
    Mr. Rodriguez. Quickly, as you look at that, how do you 
view the rural America in terms of this whole process? Can they 
play a major role in that implementation?

                             RURAL AMERICA

    Mr. Babbitt. Absolutely. Let me add, that is one of the key 
components I think we may have overlooked. We focused on the 
key congestion areas. This is what NextGen will bring us, for 
example, if we are focused on probably the top 20 airports, we 
have commercial service into another roughly 400 airports. 
There are thousands of other airports in this country, and a 
lot of our commerce depends on getting in and out of those 
airports. Currently, we need equipment on the ground. If we are 
going to have an approach facility into any airport, it is 
required that we put facilities on the ground to give the 
airports horizontal and vertical guidance to runways.
    With NextGen, all of that comes from space. All we need to 
do is design the approaches. I have asked that at a minimum we 
should be able to design approaches that would give visual, 
horizontal and vertical guidance to the primary, prevailing 
wind runway of the next biggest airports of the country. If 
nothing else, the same people that are going in there under 
visual conditions will be able to go in there under safer 
visual conditions. The next step would be to give them an 
actual approach procedure in there, so when the weather is not 
good they have an approach to shoot into those airports. The 
only cost of doing this is designing the approach. We need no 
facilities. The equipment is in the aircraft. The navigation 
capability comes from the sky and the satellites.
    Mr. Rodriguez. Thank you.
    Mr. Olver. Thank you. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman. Mr. Chairman, in 
your opening remarks you mentioned renewable jet fuels, and it 
hasn't come up in testimony today, but my understanding is the 
Air Force is changing their RFP on jet fuel to take out the 
word ``petroleum'' to permit renewable competitors. If the 
chairman has a minute, Ms. Kaptur and I would be happy to take 
the chairman to Ohio where we are growing algae that is being 
turned into jet fuel. We used to grow algae by mistake in Ohio; 
now we are growing it on purpose, for that specific purpose.
    Mr. Administrator, I want to congratulate the President of 
the United States, Secretary LaHood, and now you, for the 
approach that is being taken with the air traffic controllers. 
I have been a pretty vocal critic of the previous administrator 
and administration when it came to imposing a contract. I don't 
think you have a happy workforce when people don't get there 
and believe that their contract has been reached fairly. Mr. 
Forey is a constituent of mine, and he reports that you are 
down to three or four issues, and I congratulate you on that.
    Mr. Babbitt. Thank you.

                     AIR TRAFFIC CONTROL FACILITIES

    Mr. LaTourette. On the issue of air traffic controllers, 
though, now that I have thanked you, I am going to spank you. 
The Ohio Congressional Delegation sent a letter earlier this 
year asking that there be a moratorium on some of the 
realignments relative to air traffic control facilities. We got 
a nice letter back from the acting administrator saying that 
the review process is going to be transparent. We hear that a 
lot this year, transparent. But despite that, and despite the 
fact that when the FAA reauthorization bill that has passed the 
House and one day will pass the Senate, has a review process, 
it is my understanding that there is a continuation to the 
moving forward on the realignment on air control facilities and 
services in Ohio without the stakeholder input and some of the 
things that Mr. Oberstar's bill talks about.
    So I guess my question is--and I should also mention such 
notables when they served in the United States Congress as Ray 
LaHood, Rahm Emanuel, and Barack Obama, all supported the 
notion endorsed by the Inspector General. So I just would ask 
you where you fall now.
    Mr. Babbitt. Sure. We find ourselves in an odd situation. 
You know, we want to do everything possible. We talk about the 
amount of money that we are spending toward and the 
implementation of NextGen. That also contemplates a different 
deployment of the workforce and how we deploy the workforce. 
For example, we need to be somewhat flexible and scalable. The 
example that I have used recently and I think everyone is aware 
is Pittsburgh Airport came to us with a rather ambitious 
forecast. One of their primary subsequent airlines there 
forecast flight operations up to 400 flights a day. So we built 
a very robust air traffic control facility there. We staffed it 
completely, but because of a corporate realignment, instead of 
400 flights a day, I think they operated 35 flights a day. We 
now have a giant facility there, and a lot of people that 
simply are not needed. Any other business in the world, if this 
was a company that you and I owned, you would not leave the 
people in the empty factory. So how we realign those people, we 
can do these things digitally today.
    For example, it does not surprise anyone that we have 
events happen in the country, Super Bowl would be a good 
example, where air traffic just blossoms for two weeks. We are 
forced to fly literally hundreds of controllers into some of 
these facilities and put them up in hotel rooms to handle the 
overload. Under NextGen, we can do this digitally. We do not 
have to sit under the airplanes we control. For example, we are 
currently controlling all of the air traffic in Afghanistan 
from the Miami Center.
    Mr. LaTourette. I understand that. My observation would be 
and my request to you would be what the inspector general has 
endorsed. It is in 915. It calls for stakeholder input. And you 
really don't impress me, a guy from Cleveland, when you talk 
about Pittsburgh, I want to tell you. But we are just looking 
for stakeholder input.
    Mr. Babbitt. Sure. Hopefully, to round that out, when we 
get the controller contract, we will get their input. I would 
welcome their input into how we move with these facilities.

                        BURKE LAKEFRONT AIRPORT

    Mr. LaTourette. I appreciate that. While the yellow light 
is on, I just want to bring up a parochial issue. A former 
member of this committee, Lou Stokes, served 35 years and now 
he is representing a bunch of folks that want to put some 
windmills near Lake Erie in a place called Euclid, Ohio, which 
is in Marcia Fudge's district. And the FAA has issued a noticed 
of presumed hazard, and we are arguing about windmills being 
450; the FAA has indicated that they can be 403. It is 
impacting--the potential impact is on Burke Lakefront Airport 
in the city of Cleveland. And I would ask you and your staff to 
take a look at that, and if we could take a dialogue about 
whether or not we can get the extra 47 feet for our windmills 
so we can produce electricity.
    Mr. Babbitt. Yes, sir. I am very familiar with that regime 
and Part 77. I have actually done some work there myself. So 
absolutely, we will get back to you and coordinate.
    [The information follows:]

               Windmills Near Burke Lakefront Airport, OH

    The Federal Aviation Administration has conducted an aeronautical 
study (2009-WTE-933-OE) of one wind turbine generator (WTG) at a height 
of 450 feet above ground level (AGL), 1,083 feet above mean sea level 
(AMSL), approximately 2.13 nautical miles (NM) northwest of the 
Cuyahoga County Airport (CGF) reference point and 8.1 NM southwest of 
the Burke Lakefront Airport (BKL) reference point.
    The study has found that the structure exceeds Title 14, Code of 
Federal Regulations, Part 77 obstruction standards and would require an 
increase in the Minimum Descent Altitude (MDA) at BKL from 1,400 feet 
AMSL to 1,500 feet AMSL.
    The FAA has determined the proposed WTG could be erected today at a 
height of 403 feet AGL, 1,036 feet AMSL. Further, if the proponent 
agrees to submit a ``2c'' survey, the FAA could approve a WTG at that 
location at a height of 417 feet AGL, 1,050 feet AMSL.
    A Notice of Presumed Hazard letter serves as the FAA's first 
attempt to negotiate with a proponent the height at which a structure 
would not have an adverse impact to air navigation. Further discussion 
with the FAA can be initiated at the proponents' request by contacting 
the FAA obstruction evaluation specialist or the office of System 
Operations Airspace and Aeronautical Information Management, 
Obstruction Evaluation Services Team.
    While further discussion cannot guarantee a resolution favorable to 
the proponent, the FAA will consider all mitigation proposals in an 
attempt to allow for a structure on the ground that would not adversely 
impact aviation.

    Mr. Olver. Ms. Kilpatrick.

                          CONTROLLER TRAINING

    Ms. Kilpatrick. Thank you very much, Mr. Administrator and 
team. Good to see you this morning. How close are we--let me 
start over. Former Administrator Garvey has been appointed to 
continue the negotiations. In my own town of Detroit and 
surrounding areas, we have mold, a mold problem in my new 
airport, number one. If you could get back with me on the 
status of that. They say it is one way. I want to hear from you 
all on the mold in the new Detroit metro towers for the 
controllers. Mr. Administrator, you mentioned earlier that you 
have hired 5,600 controllers over the last 4 years, and the 
budget, I think, is 1,702 or something like that that we are 
asking for. I am worried about the safety and the training. 
When I was on this committee before, they were retiring at a 
large rate and I know that is why you have the big influx of 
new employees. Are we safe? Is the training going well?
    Mr. Babbitt. Yes, we are. I think there is a little bit of 
a misunderstanding, and I am going to let Hank expand a great 
deal on this because he knows a lot more. But one of the 
things, I want to assure people that we certainly are safe. 
There is a misunderstanding when people say, well, there were 
trainees in the tower. Everyone starts somewhere. Everyone 
picks up a microphone and speaks for the first time once. But 
when they do that, they have a qualified controller with them. 
They are being mentored and monitored and so forth. So, yes, 
the system is safe.
    We did have the issue that a lot of the controllers were 
hired in a very short time span, which is unusual in business, 
because those people are all about the same age, and of course 
they all age together. And we are seeing a big retirement 
bubble that we are faced with. And so, Hank, you may want to 
expand on how we are dealing with that.
    Mr. Krakowski. I can tell you that a year and a half ago, I 
think we were in quite a bit of trouble trying to keep up with 
the system. But I think we are over the hump right now. I am 
going to give you some statistics.
    Right now we are seeing controller retirements lower by 
about 35 percent. Perhaps it is a function of the economy right 
now, but the controllers are not retiring as fast. So that adds 
some stability to the system. The ratio of new people, new 
hires in the system right now is at 26 percent, and that is 
kind of like a 40-year average of what we have always had. We 
have had it as high as 52 percent right after the PATCO strike.
    The other thing that is different is how we are training. 
Vicky alluded to a new Vice President for Technical Training. 
This is a new position just filled over the last two months. I 
will tell you that when I came into FAA a year and a half ago, 
coming from the airline industry like Randy, where we were used 
to high-fidelity flight simulators and distant learning and 
electronic training techniques, we were still training 
controllers in very old-fashioned ways.
    Ms. Kilpatrick. Antiquated.

                            TOWER SIMULATORS

    Mr. Krakowski. Absolutely. So we are in the process of 
acquiring 24 high-fidelity control tower simulators. About half 
of those are deployed right now. We will get the rest of them 
out this year.
    Ms. Kilpatrick. Are they in the 2010 budget?
    Mr. Krakowski. Yes, they are. They are already budgeted. 
But to a budget question, we have asked Mr. Sean Clark, our new 
Vice President for Technical Training who comes to us from 
industry, to take a look at everything we do with training, 
because we want to be leading edge. Not just training the 
people for the current system that they have to operate. We do 
have to get them ready to train NextGen as it comes on line. 
And as we sit here right now, I do not think my training 
organization is ready yet. That is why we brought Mr. Clark on.

                         TRAFFIC CONTROL SYSTEM

    Ms. Kilpatrick. I am convinced that you are moving in the 
right direction. I think you have a yeoman's job to do yet, 
though, to get them trained. In the reading in the briefing for 
the committee, it said that the traffic control system will be 
paid for by direct user charges levied on users of the system. 
Is that revenue adequate? Which users are we talking about? How 
much do you hope to gain from that?
    Mr. Babbitt. Having inherited that phrase, let me talk to 
it a bit. One of the problems that we have in this industry, 
and it has been around a long time, and that is we have a fixed 
budget that is established, and you do that for us and help. 
But the other side of it, where the money comes from, is highly 
variable. And we saw a downturn in the aviation industry. 
Traffic is off 15, 18 percent. When we tax those tickets, 
obviously our revenue goes right down with it. Ironically, the 
lower fares get, the lower the monies that we collect in fees 
get. So we are suffering the double whammy of airlines 
drastically reducing fares to try and keep traffic, and the 
reality is that they are even reducing traffic.
    The other side of that, not nearly as big an impact, but we 
collect and tax fuel. In general aviation, we tax the weigh 
bills in the cargo world. All of those are going the wrong way 
for us.
    Ms. Kilpatrick. Just came on. But Mr. Chairman, one last 
point. Because of that, and I think I woke up this morning that 
the airline industry is about to come to Congress and ask for a 
bailout like the autos. I am from auto country. Please don't do 
that. I don't know if that is the right answer. And your last 
comment, is that how we are moving?
    Mr. Babbitt. That would be a different group. I mean, that 
would not be our issue. I think it is important how we move our 
goods and services around, and the airlines are a key part of 
that. But that is not an FAA direct issue.
    Ms. Kilpatrick. Thank you.
    Mr. Olver. Thank you. Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman. I apologize that I was 
not here earlier. I had another subcommittee I had to meet 
with.

                    3-D PATH ARRIVAL MANAGEMENT TOOL

    In fiscal year 2010, FAA plans to identify a second 
location to demonstrate the 3-D path arrival management tool, 
which is designed to enhance the arrival efficiency and reduce 
fuel consumption, we have already talked about that, and 
emissions. It is my understanding that Bush Houston 
Intercontinental Airport was the original site selected for 
this demonstration, but the FAA moved the demonstration to 
another location because of other projects going on at Houston 
at that time. Will Houston be selected for the second 
demonstration location? If not, why not?
    Mr. Babbitt. I am going to plead a little ignorance on that 
one and get a little staff support here, if I may.
    Ms. Cox. As you know, there was a lot going on in the 
Houston area with the airspace redesign that was in place then, 
and we moved the 3-D path arrival management to Denver where we 
have been doing the demonstrations.
    Once we have gained confidence, and the demonstrations are 
about gaining confidence around the process, we will be doing 
an assessment for other areas that we can move that to. And 
certainly, Houston will be an area that we will look at in 
making that determination.
    Mr. Krakowski. And if I may add, we are deploying ADS-B in 
the Gulf of Mexico controlled from Houston for the helicopters, 
which is a real leading edge NextGen capability, which will be 
coming on line this year.
    Mr. Carter. Thank you, Mr. Chairman. That is all I have.
    Mr. Olver. Mr. Pastor.
    Mr. Pastor. Thank you, Mr. Chairman.
    Good morning. Congratulations. I join my colleagues for 
your work with the air traffic controllers, I think that is the 
right thing to do.
    On the wildlife hazard mitigation, at the suggestion of 
Brendan Kenney, about 5 years ago, we--I think about $800,000 
was allocated to do a study and I am sure that study is there 
somewhere. You may want to dust it off and see what that study 
showed, because obviously birds and planes, particularly 
engines sucking up birds is a problem.
    Mr. Babbitt. Yes, sir.
    Mr. Pastor. But that study is there. So you may use that to 
implement whatever needs to be implemented.

                                NEXTGEN

    We recently went through a television converter box to go 
from analogue to DH, and it has been one hell of an experience 
because we have been on, we have been off. Personally, for me, 
I think there are two converter boxes. But television is not 
that important because it only deals with entertainment. But 
NextGen deals with my life, so it is very important. And that 
is why, I guess, you sense that the members are concerned that 
it comes on time and hopefully not too much above budget. But 
you made a comment that the airlines are giving some pushback 
because of credibility, whether or not the system is going to 
be utilized.
    Well, Next-Gen kind of reminds me about the converter box. 
I am not going to buy the converter box because I don't know if 
it is going to work. Similarly, I sat here for a number of 
hours dealing with STARS. The air traffic controllers came in 
and said the mouse was not the type that gave them the 
efficiency, the screen was not what would give them the 
efficiency. And I am saying, what the hell am I doing here 
worried about a mouse. And those concerns are being voiced 
today on Next-Gen. The airline industry is voicing them. I know 
there are some pilots that you have--pilot projects that you 
have out there. The air traffic controllers hopefully will come 
on board soon. And I think it is very important to get 
credibility from the airlines, and to make sure that the users, 
the air traffic controllers who will be using the equipment are 
happy with it. They are going to be happy with their contract, 
and now they are going to be happy with their equipment. So 
somehow you have to integrate these concerns. And I don't know 
whether this task force is the right way to do it.
    Not too long ago, I had Secretary Chu and he says we have 
to look at Mini Bell. Maybe what you need to do is bring in 
some of the industry, such as the air traffic and the 
technology people, to see if they are going in the right 
direction. Because I hate to see all this money, and then at 
the end we are here talking about whether or not the mouse is 
one that they like, and the industry is telling us it doesn't 
fit our aircraft and we didn't have a role. And so maybe what 
you need to do is kind of think out of the box and, say, 
bringing people in because the users, people are going to pay 
for it. I am very interested because of my safety. We can all 
see the progress made and be supportive. So I encourage you to 
do that the best you can and under the rules and regulations.

                              RTCA PROJECT

    Mr. Babbitt. We are hopefully doing something very close to 
that with this RTCA project, where we have just that. We have 
the folks of the industry, the users, the manufacturers of the 
equipment. We have folks from Mitre to look at the science. 
And, again, I hope when we get the controller contract, we will 
get a lot higher level of involvement. I look to them for their 
input. We do look at these things. The human interface, we have 
learned a lot of things in science.
    NASA has been a wonderful source for us in how you design 
controls. Things like a mouse and the screen that you look at. 
We learned hardware, with the first generation of digital 
aircraft. The analogue displaying were better in depicting 
information to you. So we redesigned them. So we do learn. You 
are absolutely correct, and I take very seriously that we need 
to be accountable and credible to the industry, and I take that 
as a serious priority.
    Mr. Pastor. My time is up. And I appreciate and I look 
forward to working with you.
    Mr. Babbitt. Likewise.
    Mr. Olver. Ms. Roybal-Allard.

                        BACKUP PLAN TO SATELLITE

    Ms. Roybal-Allard. Thank you, Mr. Chairman.
    I am going to try and get in three quick questions. But 
first, I want to know exactly if there is a backup plan to once 
you move to satellite. When satellite loses a signal, is there 
a backup plan? For example, I have satellite TV. During the 
storm, the signal was lost three times. So what is that backup 
plan?
    Mr. Babbitt. You are right to ask. There are several layers 
of it. We are not going to do away with radar completely. We do 
not need as robust coverage, but we do need to separate the 
airplanes. But I will let Hank and/or Vicky add to that.
    Mr. Krakowski. And just for clarity, the satellites that 
are used around television transmission are very different than 
the GPS satellites. The GPS satellites are well proven in all 
kinds of weather and atmosphere and conditions. So we are at a 
high level of confidence that it will be okay.
    As Randy said, we will keep radars running. We are going to 
keep a lot of the radio technical infrastructure running. We 
are not going to turn it off, turn any of that legacy system 
off until we are absolutely assured that we have a level of 
safety necessary in NextGen.

RECRUITMENT EFFORTS IN MINORITY COMMUNITIES FOR AIR TRAFFIC CONTROLLERS

    Ms. Roybal-Allard. Administrator, in June of 2008, the FAA 
produced a report detailing its recruitment efforts in minority 
communities for open air traffic controller positions. The good 
news is that African Americans are nearly about 34 percent of 
the incoming applicant pool. The bad news is that Latinos are 
only 6.3 percent of the applicant pool. So it appears that the 
FAA has had a very successful outreach in the African American 
community but was considerably less successful in the Latino 
community.
    In fact, I have been told by several people that the 
outreach in the Latino community was not seen as an aggressive 
outreach program. So in reviewing the report, I notice that 
there was no mention of using local Hispanic news media or 
national Hispanic television networks such as Telemundo and 
Unavision, both of which are both highly viewed by the Latino 
community.
    Could you just elaborate to what you about tribute to this 
lack of response in this Latino community, and what steps are 
being taken to correct it so that you can develop a more robust 
and effective program?
    Mr. Babbitt. Sure. I will be happy to do that. I cannot 
really look back and tell you why it did not, but I can tell 
you looking forward what we are going to try and do. I did see 
a report, and I know that the outreach programs were a focus of 
that concern. Apparently we were not looking in the right 
places. So I have been assured that we are evaluating. I take 
your input very constructively and what I would like to do is 
suggest that we might have staff get back in touch with you if 
there are better ways to communicate. I might even employ my 
wife, who was born in Puerto Rico, to add to the case. But what 
we would like to do is utilize every vehicle. And the numbers, 
candidly, as you pointed out, are showing us just exactly that. 
We are not reaching into the right places. We are not asking in 
the right places, and we need to fix that. So what I would like 
to do is get back with you and your staff, if you would not 
mind, and maybe you could help us.
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    Ms. Roybal-Allard. I am sure there are other members of the 
Hispanic Caucus who would also want to be helpful in that area.

                  HUMAN INTERVENTION MOTIVATION STUDY

    Funding for the human intervention motivation study, which 
is an air safety program, is going to expire this year. And 
this is an ongoing FAA program which provides substance abuse 
education and intervention to the airline industry, and it will 
be up for renewal in 2010. And according to the Pilots 
Association, this is an important and very valuable program and 
one which they would like to see expanded to cover the flight 
attendants as well. Yet, the administration budget has no 
funding for the HIMS.
    Making sure that pilots and flight attendants are not 
abusing alcohol and drugs is certainly an important safety 
issue, and so I am just wondering why there is no funding in 
the budget for this program. And if Congress were to put money 
into the program, what are your views in expanding it to flight 
attendants?
    Mr. Babbitt. First, we are funded through 2009. I do 
understand that. I found out myself, with my second week here 
on the job that the HIMS was missing. In my background as 
president of the Pilots Association, I appreciate what the HIMS 
program does. I was around when it was formed. I am a big 
advocate of it, and I would strongly support putting that in, 
and all safety related employees. We do not have any tolerance 
for alcohol abuse in this industry and this is a program that 
has been proven to be very effective. So I would be quite 
supportive of finding a way to put that in our budget.

                                  LAX

    Ms. Roybal-Allard. I have one more question that is more 
specific to LAX. And I have been told that the FAA-imposed work 
rules on controllers have eliminated incentives to work in high 
density facilities like LAX. And the one example that is given 
is that to work at LAX, most experienced controllers have to 
take a pay cut, and this has forced the FAA to hire controllers 
with limited experience to work at LAX and other busy radar 
facilities like the Southern California TRACON. It is also my 
understanding that, to date, not one of these trainee new hires 
assigned to LAX was certified, and that there are similar 
problems at the radar facilities. And also, facilities are very 
short-staffed, with the increasing wave of experienced 
controllers requiring.
    In testimony before our subcommittee, Secretary LaHood 
stated the FAA budget request includes funding to increase the 
number of new air traffic controllers. What is being done to 
address the more immediate and most serious problem of 
attracting and retaining experienced controllers at the most 
busy airports like LAX?
    Mr. Babbitt. If you do not mind, I will defer to Hank.
    Mr. Krakowski. We know Los Angeles has been a challenge for 
us, particularly with the fact that we got into the hiring 
program late some years ago. We had the large number of 
retirements that occurred. Some of it was the labor relations 
situation, which is starting to stabilize. I am encouraged that 
the retirement rate is going down right now and the new hires 
are qualifying. I am not familiar with your point that nobody 
is getting certified over there. That sounds inaccurate to me. 
I would like to get back to you on that.
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    Ms. Roybal-Allard. Let me just explain. My understanding is 
that while they are at LAX they are not certified. They haven't 
been able to pass the test to be certified. So then, they are 
moved to a less busy airport and they get their certification 
there. That is what we have been told. So I would appreciate 
your looking into it, because we really need to make sure that 
those that work at LAX are certified to work at such a busy 
airport. And also, if you would look into the incentive and the 
rules that are discouraging experienced people to go. Thank 
you.
    Mr. Olver. Thank you very much. Ms. Kaptur.

                           CONTROLLER HIRING

    Ms. Kaptur. Thank you. Thank you, Mr. Chairman.
    Welcome. Great to have you here today. Thank you for your 
work and your service. I wanted to, Mr. Babbitt, address the 
issue of employment levels. In your testimony--I am interested, 
coming from a region with double digit unemployment and rising, 
I am interested in the hires that you have here in your budget. 
You indicate a net increase of 107 controllers. You are going 
to hire 1,702. Does that mean that those people are retiring?
    Mr. Babbitt. I will let Hank talk about the staffing 
levels.
    Mr. Krakowski. The 1,702 that we are hiring will be 107 
more additional head count for controllers. So it takes into 
account those people who are not just retiring but other 
typical attritions that you have.
    Ms. Kaptur. So, essentially, how many more new interviewees 
would you have come through your door next year? 1,702?
    Mr. Krakowski. That is what we will end up hiring. You 
typically have two or three times as many actually go through 
the process of going through the interview. As an example, 
right now we have over 7,000 applicants in the pipeline for 
those jobs; 400 or 500 people are in process right now for the 
current hiring. So it is just a matter of going through the 
interviews and getting them out to the academy.
    Ms. Kaptur. So the window is still open for people to 
apply?
    Mr. Krakowski. It will always be open. We put out bids 
continuously. We have preemployment processing centers which 
travel around the country to actually process applicants 
faster. And that is all on the FAA web site and that is all 
available.
    Ms. Kaptur. It is interesting, because I ran into somebody 
the other day, quite a well known military person from our 
region who is retiring from one position and tried to get a 
job, was looking for Federal work and went to the government 
web site and so forth and ended up now working for DIA, Defense 
Intelligence. But that wasn't on the U.S.A. Jobs web site. That 
individual had to go into the DIA web site and dig around and 
so forth.
    All I want to know, I want to have an announcement in my 
area that basically says who you want to hire for next year in 
every category. How do I get that?
    Mr. Krakowski. We can take that back to HR.
    Mr. Babbitt. You mean throughout all government?
    Ms. Kaptur. No. Just FAA. I see you have got aviation 
safety, you have got technical staff here. So I am sure that--I 
would just like--any job in my region now, it is like a golden 
egg. And they are not connected to the Federal Government for 
the most part. We are not a government center like this place, 
Washington, D.C., where the top employers are all government. 
We live in the free market, and it is really hurting. And I 
feel part of my responsibility is to bring information. One 
thing I can do is to let people know where positions are 
available, The people who might not have families who work at 
the FAA or might have no connection to the union or anything 
else. But just to let them know. So I would greatly appreciate. 
Any position for which the FAA will be hiring, assuming you get 
this budget and even based on your 2009 budget, any information 
you can give me would where be greatly appreciated.
    The other question I have on the controller piece is, I 
understand from talking to individuals who have applied for the 
comptroller program, some of the difficulties that they have 
had in going through the academy out, where is it, Colorado or 
somewhere. Oklahoma City. And it is very difficult. They have 
to pay their own hotel bills and everything, and then they 
don't know whether they are actually going to be hired or 
something after that. What is the process for somebody that 
wants to be a controller? How difficult is it? If you are 
unemployed and you get in the line to get this job, and you try 
to get it, what happens to you?
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    Mr. Krakowski. Just like with the pilot career, which Randy 
and I had to go through, you start down a career path. But not 
everyone is successful. It is a tough, challenging job, and we 
have to make sure that the people who apply for this kind of 
work are prepared to function in it correctly. So just because 
we hire you as a new hire, and your first year is probationary 
as well, which is typical in the airline industry with pilots, 
it is a pretty tough rigor of work that you have to go to prove 
that you can do this work.
    Ms. Kaptur. I am not worried about that. What I am worried 
about is that they have to take their own money. And if you 
come from Toledo south end and you graduated from high school 
and you went into the military and came home, and now you need 
a job and there are no jobs, you are interested in maybe being 
a controller. What happens to you? And I am asking myself, can 
our community do anything to support them if they have to pay 
their own hotel bills while they are over there in Oklahoma 
City. What happens to them economically as they try to do this?
    Mr. Krakowski. They make per diem, so it pays their lodging 
and expenses, about $132 a day. Their base salary is about 
$17,000 while they are at the Academy. And then when they get 
deployed out to the field, it typically jumps on the average up 
around $30,000.
    Ms. Kaptur. Could you provide me with that information as a 
part of this effort?
    Mr. Krakowski. Yes.
    Ms. Kaptur. Thank you very much I truly appreciate it.
    Mr. Olver. Thank you. Mr. Berry.
    Mr. Berry. Thank you, Mr. Chairman.
    Mr. Administrator, congratulations. You have probably 
wondered in the last few weeks whether you won or lost.
    Mr. Babbitt. I have actually reached a conclusion.

                            MEMPHIS AIRPORT

    Mr. Berry. And we thank all of you for your service. And 
forgive me for being parochial. Even though Memphis is not in 
my district, I fly in and out of there, and it serves a good 
portion of the State of Arkansas that I represent.
    I can't imagine a worse situation than we have had for the 
last several years between the staff and the administrators of 
that facility. The administrators are arrogant, dismissive, and 
completely unresponsive, as far as I can tell, to anyone, their 
employees, me, or anyone else. And the morale there is 
horrible.
    Now, the decision has been made by the FAA to separate the 
tower and the TRACON. One of them, I can't remember which but 
one of them contains most of the experience in that operation, 
and now they are going to separate them where most of the 
experience is going to be in one place, and the inexperienced 
people, whether they are certified or not, I don't know, in 
another. But they are not going to be available to help 
somebody out when trouble arises.
    And I know that there would be no great loss if I perish 
because of a failure in the air traffic control system in 
there, but I have got a lot of constituents that don't deserve 
that. And so, I would ask you to reconsider that separation, at 
least until there can be some progress made between the workers 
and the bosses in that situation. And somebody needs to go down 
there and get somebody by the hair of the head, if it is 
available, and see if we can't get that mess straightened out. 
Because it is not a safe situation. Those people go to work mad 
every day, and I don't think that is a good thing.
    Mr. Babbitt. No, sir, it is not. I think you may recall in 
my opening statement, or if you were not in here one of the 
things I want to focus on is getting labor stability back. 
Again, I am not looking in the rearview mirror, I am looking 
forward. But I can tell when things are not quite right, and we 
have got a difficult atmosphere right now. We are going to try 
to start off and fix the controller contract. There are other 
agreements. There are a lot of other people that work for the 
FAA, and we want to change their attitude and their outlook and 
the culture here.
    Secondly, you will be, I hope, encouraged to know that I am 
meeting with some representatives from the Memphis facility and 
the president of the union to look at this. Having that out 
there, one of the issues that we discussed earlier with one of 
your colleagues, is that there is a rationale behind the 
separation of the TRACONs and the towers. Part of it has to do 
with adapting to get ready for NextGen. I think Hank may know a 
little more information and some of the fundamentals behind 
reductions in overtime and staffing. I can assure you that the 
level of safety was not compromised. Hank.
    Mr. Krakowski. I think that is the big point. I come from a 
strong background in safety, and we would not do this if we did 
not think it was safe. Safety has been enhanced at Memphis with 
the split, and here is why. Prior to the split, you had 45 
controllers who were certified and 19 trainees. When we did the 
split, we went to 62 certified controllers and only two 
trainees. Over time, it went down 77 percent. So the experience 
in the tower, the certifications, plus the mandatory overtime, 
that Memphis, Orlando, and a lot of the other facilities were 
struggling with because of this big churn of retirements and 
new hires coming into the system, we felt we needed to do some 
things to stabilize the overtime, the fatigue, and all those 
sorts of things. Memphis was part of that.
    I am hoping that, with this new labor agreement, if we can 
achieve it with NATCA, we can work out a heck of a lot better 
process than what we have been using.
    Mr. Berry. With all due respect, you are the only person I 
know who thinks it is things are any better in Memphis. And I 
don't know about the separating them and all that. That is your 
job. And I respect your obligation and expect that you will do 
it responsibly. But that is still a mess down there and it 
needs to be cleaned up. And I thank you for listening to me.

                                 TRACON

    Mr. Olver. Thank you, Mr. Berry. We will start a second 
round here. I would like to get a little bit better picture of 
what we are doing here. Are we going to end up--when NextGen is 
fully implemented, are we going to have a legacy program that 
is there for backup? Or have we been building more TRACONs, 
more TRACONs, tearing them apart or putting them together and 
so on? Are we going to have all those things that are 
necessary?
    Mr. Babbitt. No, sir. I will use an example to show where 
the system gets more efficient and while everybody has concerns 
in their own area. We look at a state that has maybe 10 
TRACONs. We could operate perhaps with two TRACONs. They would 
not necessarily be sitting under the----
    Mr. Olver. That is going to be quite an interesting job for 
you to get these stakeholders involved in that process. Every 
time you try to change the--I wanted to ask--let me just get a 
sense of what is going on here without really any of the 
examples of details, because the examples just get to one more 
place.
    Vicky, you talked about the Houston air space redesign. How 
long did it take to do that?
    Ms. Cox. It was a multi-year effort.

                           AIR SPACE REDESIGN

    Mr. Olver. How many of the 20 largest airports now have 
airspace design complete? Is it done in L.A., Southern 
California? It's not done in New York. That will be a big one. 
Multiyear effort, too, probably?
    Ms. Cox. Absolutely that one is. The Chicago airspace 
redesign is virtually complete.
    Mr. Olver. Which?
    Ms. Cox. Chicago.
    Mr. Olver. And which are the major ones that are complete 
now? Maybe Chicago and Houston?
    Ms. Cox. We are operating with new procedures in Atlanta 
that take advantage of satellite-based navigation.
    Mr. Olver. Is that the three that are farthest along in 
this process?
    Ms. Cox. I would say those are the top three.
    Mr. Krakowski. Those are the ones that are operational.

                                 ADS-B

    Mr. Olver. And how many of these airports have ADS-B in 
place now?
    Ms. Cox. Well, ADSB is not scheduled to be delivered with 
the ground stations that are required for full implementation 
until 2013. And the rule does not----
    Mr. Olver. For all places?
    Ms. Cox. For everywhere. It will be fully implemented 
domestically in 2013 in terms of ground stations.
    Mr. Olver. And we haven't done the rulemaking, and the 
nearest base design is the delivery of the ADS-Bs of any 
particular value at that point? Some values I get that you can 
get right away?
    Ms. Cox. We should be able to get value right away from 
equipped operators. So as soon as operators begin to equip, we 
can start to take advantage of the capability that ADS-B 
provides. So by 2013--and even next year in the Gulf of Mexico, 
we will have surveillance services with ADS-B where we never 
had any before.
    Mr. Olver. And the 20 largest places are likely to be the 
places that you have the most international involvement. But we 
do have to have the backup at least for a while. I am not sure 
the backup ever goes away.
    Ms. Cox. The backup may change. The nature of the backup 
may change. We are looking at about 50 percent of current 
radars as backup for the near term. In the far term we are 
looking at other capabilities such as multi-lateration as 
backup which won't require the radars.
    Mr. Olver. You see, I am still thinking in terms of how 
could one do by 2018 full implementation of what is only a 
partial, a mid-term implementation in the route to 2025? 
Because it seems to me we ought to be able to make some 
progress here. But what you are telling me is all of these 
features, all of these moving parts, all of them have to be 
moving at the same time. This is a horrendous job that you are 
involved in.

                             AIRLINE DELAYS

    Mr. Babbitt. One thing that I think we should point out is 
we can focus on key areas. For example, if we fix the delays of 
the 10 largest airports in the country, we have essentially 
eliminated most of our end route delay.
    Mr. Olver. Of your delays. That would be great. There are 
problems that you can probably focus upon, but we aren't going 
to be fully implemented anywhere nearly as quickly as I would 
hope would be the case. That is a little depressing for me. But 
so be it. I am learning here a little bit. I wanted to ask 
Nancy LoBue on the fuel issue, what do you think are the most 
promising research programs that are going on? A couple of 
those. Could you describe very briefly a couple of those that 
are very promising?
    Ms. LoBue. Certainly. Right now, for aviation, we have a 
commercial aviation alternative fuel initiative. It is a 
cooperation by industry, manufactures, and the FAA. We have 
participation by DOE, NASA, and DOD. So it is a place where we 
can pull together a lot of the different initiatives. We have a 
number of demonstrations using different types of renewable 
fuels.
    Mr. Olver. Using them?
    Ms. LoBue. Actually using them in demonstration flights. 
Correct. Using feedstock----

                            RENEWABLE FUELS

    Mr. Olver. Where and by what mechanism are we producing 
renewable fuels that are--these are also carbon based fuels, I 
take it.
    Ms. LoBue. Right now we are in the process of----
    Mr. Olver. Of renewables.
    Ms. LoBue. Renewable fuels. Correct. We have a 
certification process ongoing as we speak. We are hoping to 
have certification by the end of the year on something that is 
a 50 percent petroleum, 50 percent Fisher-Trope system. By 
2012, we should have 50 percent biofuel, 50 percent petroleum. 
By 2013, 100 percent biofuel, certified to use drop in in the 
current engines of airplanes. That certification process is 
ongoing as we speak and the first piece of that when we get 
this 50/50 with the Fisher-Trope fuels----
    Mr. Olver. Let me just ask you. The Fisher-Tropes is making 
syngas and then putting together things again from the sin-gas 
that has been produced.
    Ms. LoBue. Correct.
    Mr. Olver. But it starts with fossil fuel.
    Ms. LoBue. 50 percent, 50 percent can be biomass.
    Mr. Olver. The other route is the biomass, which is 
probably oxygen pure pyrolysis that gets you some green oils 
essentially out of the biomass trying to get to ethanol.
    Ms. LoBue. No. Ethanol does not work for aviation.
    Mr. Olver. Fine. I will stop. I just wanted to get a sense 
of where--you have indicated the two procedures that you seem 
to be working on.
    Mr. LaTourette. Mr. Chairman, did you say pyrolysis?
    Mr. Latham. Did you know that he is a chemistry professor? 
A long time ago.
    Mr. Olver. Not in this field at all.
    Mr. Latham. I am becoming a little--being from Iowa, a 
little sensitive. Maybe your feeling about ethanol or something 
here. Soybeans are the answer. Soy diesel.
    Ms. LoBue. Yes, sir.

                         FAA COMPUTER SECURITY

    Mr. Latham. I am going to change the subject a little bit. 
Mr. Administrator, on May 7, the IG reported that hackers broke 
into the FAA computer several times in recent years, gaining 
access to personal information, including the Social Security 
numbers of 48,000 FAA employees, and took control of critical 
network servers. The report goes on to say that malicious codes 
were installed, passwords were stolen, and that the problems 
could have easily spread from operation support to mission 
control and operational networks.
    My question, I guess, would just be, what has been your 
response, the agency's response in trying to fix these 
problems? It is obviously of extreme concern to a lot of folks.
    Mr. Babbitt. You are absolutely correct. I am aware that we 
have a fairly robust review. I also know that we are meeting 
with Mr. Shapar who was recently confirmed. I am not quite sure 
of his technical title, but Chief Information Officer 
essentially.
    Mr. Latham. I am sure you have an acronym for it.
    Mr. Babbitt. I am sure we will come up with one. We will 
work on it. By the way, I am just as lost in there as you are. 
We really want to make sure and there is a very in-depth review 
going on. We would be happy to share with you. I also have a 
meeting scheduled next week with the Inspector General to 
review that report and to give him the track that we are on and 
make sure that he is comfortable that we are doing the right 
thing.
    Mr. Latham. Would any one of your able staff here be able 
to speak to it?
    Mr. Krakowski. I actually testified with our Chief 
Information Officer at a roundtable by the T&I committee last 
week on the IG report and the things we are doing.
    We concurred with all of the IG recommendations, and they 
express that they are satisfied with our commitments and our 
time tables for it. One thing I would like to say though is one 
of the advantages of an old crusty air traffic system is it is 
almost impenetrable.
    The systems that were attacked do not directly relate to 
controllers talking with pilots or what can happen on the radar 
screen. It is this old, hard-wired system. Some of the support 
things that do ground delay programs and things like that that 
had vulnerabilities.
    Mr. Latham. So the stovepipe thing actually works in this 
case.
    Mr. Krakowski. Yes.

                        AIR TRAFFIC CONTROLLERS

    Mr. Latham. On another subject. The budget submission makes 
no allowance at all for any kind of additional funding that 
will be needed relative to any air traffic controller 
negotiations. If fiscal year 2010 costs increase or materialize 
because of new contracts, are you going to come back with--and 
submit a budget amendment? Or how do you expect us to handle 
that?
    Mr. Babbitt. We are trying right now to work within the 
confines of the budget, and I think that we have, based on the 
numbers that I have heard. And interestingly, the majority of 
the negotiations--while anybody who says it is not about the 
money, it is probably about the money. The majority of these 
negotiations have not been about the money. They have been 
about work rules and about some professional things that 
concern the controllers and how they relate with their 
supervisors and their accountability and a lot of things that I 
find interesting were at the core of some of these issues. I 
would not say, however, that I could expect that we could 
achieve this and not face any increase.
    I would like to think that we could handle it, but to be 
candid with you, if we could not, I would tell you precisely 
where we went over and come back. Hopefully we would be 
finished with these negotiations and know the full impact 
before you are actually finished with this appropriation. So I 
would not want to delude anybody and say that we could do this 
all for free. I do not think that is realistic.
    Mr. Latham. If there is a plan, we would like to know about 
it, I guess. In the negotiations, is there any discussion at 
all about how you ensure--again, coming from a state of small 
regional airports--that there is a blend of the new and the 
seasoned controllers and the mix, for both small airports and 
the larger ones. Is there any discussion or is that part of any 
negotiation going on?
    Mr. Babbitt. I will defer to Hank. He has been a little 
closer to these negotiations. He has been briefing me on a high 
level.
    Mr. Krakowski. And I can give you the list of what those 
mixes look like in those facilities. Typically, we try to put a 
little higher level of training in the smaller facilities 
because that is where the apprenticeship starts. But, quite 
frankly, we have had some new hires, literally off the street 
hires who qualified at O'Hare Tower in a year, year and a half, 
who are just naturally good at what they do.
    So I think the difference is with a 26 percent trainee 
ratio across the country, some are a little higher, some are a 
little lower but that feels good to me, because you have got 
about 75 percent of the old guard mentoring the new people into 
this profession. That is what Randy and I are used to from our 
airlines career.
    Mr. Latham. Very good. Thank you, Mr. Chairman.
    Mr. Olver. Thank you. Mr. Rodriguez.
    Mr. Rodriguez. Real quickly. You mentioned earlier the 
design approach that would be something that we could take care 
of fairly quickly, and especially in rural America and 
throughout. Is that something that could be done nationwide in 
terms of just designing the approaches that would help I guess 
for future encroachment and that kind of stuff that could--and 
why not? So do you have a phase-in of that?
    Mr. Babbitt. We are looking at it right now. We haven't 
made the decision. I need to have a better understanding. I 
think all of us need to have a better understanding because 
there are certain parameters and guidelines that would have to 
be created to certify people that could do this. Other folks 
are going to be involved. Is this a road we want to go down to 
farm out some of the work traditionally done within the FAA?
    Mr. Rodriguez. You mentioned yourself, and I would ask you 
to not to--because you said that the rural America is kind of 
like an afterthought. I would ask that you take into 
consideration--not in those words, I know, but something that 
you need to prioritize also as we bring them in and how 
important that is.
    Real quickly, just on the fuel, and in talking about the 
fuel and cyber and air traffic control training. Has there been 
any collaboration with the Department of Defense, DOD? Because 
I know there is some new fuel research and I don't know how 
long it is going to take before it comes from the research to 
the actual implementation that doesn't burn, for example, that 
is being looked at for Afghanistan and Iraq. When it is hit, 
the gasoline--it is a new fuel that--some research that where 
it doesn't burn. And so is there any collaboration with the DOD 
in terms of some of the stuff that they are doing?
    Ms. LoBue. Absolutely. DOD is spending quite a bit of money 
obviously on fuels. The Air Force has a commitment that by 2016 
they will be using 50 percent alternative fuels. We have 
actually been able to leverage a lot of the work they are doing 
on the commercial side for a lot smaller amount of money. So 
they have been working with us in this CAFE initiative that I 
mentioned.

                        AIR TRAFFIC CONTROLLERS

    Mr. Rodriguez. And on the training face of it for the air 
controllers, they do a pretty good job of training their air 
controllers. I know I have Laughlin Air Force Base that does 
the training; I have Randolph Air Force Base that the pilots 
that come in, thousands, hundreds of them. Is there any 
coordination being done with the type of training that they do 
to the air controllers?
    Mr. Krakowski. It is all trained to standard, because 
civilian controllers control military traffic and military 
controllers control civilian traffic as well through their 
airspace. The concept works very, very well. However, I 
actually think there are opportunities to work closer with DOD 
in our approach to training and savings for the government.
    Mr. Rodriguez. Whatever you can do for us to help. Because 
I know how difficult it is. We have been trying to get the VA 
and DOD to work together for the last 15 years. It has just 
been like pulling teeth. So whatever you can do to make that 
happen, you know, and not reinvent the wheel in some of those 
areas where they might be doing a better job.
    And let me ask you a quick question on cyber. Have you done 
any cyber exercises on anything? You wouldn't know, but any of 
you?
    Mr. Krakowski. There is penetration testing and things like 
that have gone on.
    Mr. Rodriguez. Any cyber exercises that have actually 
taken--you know. We had one in San Antonio, a dark screen 
exercise where we actually went through a two-year process of--
have you all done any exercises?
    Ms. Gilligan. Yes, sir. Traditionally, we coordinate with 
the Department of Homeland Security and TSA. We do tabletop 
exercises as well as exercise our continuing operation of 
government facilities. So we do a lot of that integration. I do 
think the experience FAA had will become a part of one of the 
exercises that we will go through to assure that we have 
addressed all the gaps.
    Mr. Rodriguez. Because as you go into the new system, you 
will probably open yourself up more to more vulnerability.
    Mr. Krakowski. It is a concern.
    Mr. Rodriguez. Make sure you keep that in mind from the 
cybersecurity perspective. Thank you.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman.

                   REGIONAL JETS AND THE SCOPE CLAUSE

    Mr. Administrator, I want to rely on you and Mr. Krakowski 
because of your experience as pilots, and talk to you about two 
things that are driving me crazy. And that is regional jets and 
the scope clause. Maybe you can educate me. I think the scope 
clause is one of the things where the industry and the pilots 
are in cahoots with each other. The pilots like it because it 
guarantees slots for the type of aircraft that they carry. The 
airlines like it because they can fly people on little planes 
and don't have to pay them so much. I think a lot of us were 
shocked that the co-pilot on the Culligan flight on the 
Bombardier crash in Buffalo was making $18,000 a year.
    I guess I am wondering if the scope clause hasn't seen its 
day. And the reason, I was recently in Brazil. And not to diss 
Boeing or Airbus, but I was visiting Embry Air, and they have 
come up with this new generation of regional jets, the 170 
series and the 190 series. Cleveland is a hub to a great 
airline, but flying in their 140 series is like flying in a 
hypodermic needle. It is ridiculous. These 170s and 190s are 
nice, comfortable jets comparable to a 737 or a 300 series for 
Airbus. And I said, how come you don't fly some of these 
around? And they said the scope clause prevents them from 
coming into new markets, with things of that nature.
    I saw you on TV with Secretary LaHood talking about some 
new training for people who fly regional jets. And so I guess 
that is sort of a rambling question, but how do we--if we are 
going to update to NextGen, how do we update and treat pilots 
fairly, treat the airlines fairly, but also treat the traveling 
public fairly and get them nice, new comfortable planes? 
Basically, it should be a market-based decision. I mean, if you 
can fill 80 seats, you fly an 80-seat plane. If you can fly 140 
seats, you do that. So I throw that out to you because you two 
are pretty experienced pilots.
    Mr. Babbitt. Well, it is something I think you are aware 
that would not be under FAA's jurisdiction, neither the pay nor 
the scope clauses. Those are derived between negotiations in 
the carriers.
    Mr. LaTourette. I am just asking what you think about it.
    Mr. Babbitt. Well, ironically, I was a signatory to one of 
the very first scope exceptions. Because the term scope clause 
is actually not reflective of what it is. It is the reverse. It 
is----
    Mr. LaTourette. Lack of scope clause.
    Mr. Babbitt. Exactly. The original agreement was the pilots 
of one carrier agreed to do all the flying for that carrier. 
What they signed was exceptions to that rule to allow them to 
go outside and contract with other people.
    What I said yesterday in direct answer to that question to 
the press was, this is something that is a concern. I think it 
has been expressed by a couple of pretty seasoned pilots, the 
two gentlemen that did a marvelous job landing in the Hudson, 
just an absolute stellar performance of professionalism, 
cockpit discipline. Both of them were quoted--and I don't 
disagree with their quotes--that if you as an industry want to 
continue to attract the best and the brightest, you are going 
to have to do better than offer somebody $22,000 or $24,000 a 
year.
    I can look to my own--Hank. I am probably a few years older 
than Hank. When I was hired, probably half the pilots that I 
was hired with came from the military, and half of them were 
trained from military academies. If you had offered them a 
career that paid about $30,000 or $40,000, they would have gone 
and done something else. Even though they might enjoy flying 
and they enjoy this professional career, if there is no 
compensation, they will find another career path.
    Mr. LaTourette. And I think that leads to turnover, too. I 
mean, three times I have flown into DCA and we have touched 
down and taken back off. Making discreet inquiries, I was lucky 
enough to be on training flights from Cleveland to DCA. I am 
all for people getting training, but I like it when we land, we 
stay landed, and we don't leave again.
    Mr. Babbitt. So do the pilots.
    Mr. LaTourette. But you know, I have to tell you, they 
don't tell you anything. While the plane is shuddering and the 
plane is you are going back in the air, they don't talk to you 
for about five minutes. Then they come on and say, well, we 
couldn't land because a big gust of wind took us. And I got off 
the plane and there was no wind. So that wasn't it.
    Mr. Krakowski, how do you feel about the scope clause and 
sort of the----
    Mr. Krakowski. So, I agree with my boss, number one.
    Mr. LaTourette. Nice.
    Mr. Krakowski. But I think the effort that was started 
yesterday is going to be important, because I can tell you that 
the hardest flying that I have ever done in my life was flying 
turbo props for a commuter airline, the most fatiguing flying. 
The easiest flying I did was a DC-10 to Honolulu. The real 
rigor of intensity is in the regional carriers, and I think the 
steps started yesterday are going to help identify that.
    Mr. LaTourette. Thank you very much.
    Mr. Olver. Mr. Pastor.
    Mr. Pastor. It used to be that the pilots would blame the 
air traffic controllers.
    Mr. LaTourette. I know.

                       ALTERNATIVE FUELS RESEARCH

    Mr. Pastor. I guess you don't do that anymore.
    I basically have three questions. One deals with research 
and development. In a report that I have it says that 
alternative fuels research. We have the USDA, we have DOE, we 
have EOD, and you guys. And I wonder, do the four of you get 
together? And where are we on developing a fuel that will be 
nonpetroleum based? For example, algae, which I think we use in 
Arizona. The second question I have is, what are the priorities 
of the FAA on the AIP program? And, thirdly, we recently passed 
a law that said that we would inspect foreign aircraft repair 
locations at least twice a year. How is that going to affect 
your budget? Those are the three questions. And you can start 
either way.
    Ms. LoBue. Sure. So, for alternative fuels, we have a 
commercial aviation alternative fuels initiative. It is done in 
conjunction with all those other departments. We meet 
regularly. We have quarterly meetings. All of the different 
initiatives being done in many of the different organizations 
are talked about and coordinated. For instance, agriculture has 
money they got through the farm bill for biorefineries and 
green jobs. That is going to feed from things that the FAA is 
doing to create and certify the types of fuels that could be 
used for commercial airplanes.
    The reason that you have pieces of this broken up is the 
FAA is responsible for certifying and the safety of aircraft 
engines. We have that piece of the expertise. A lot of things 
like ethanol do not work at high altitude because it has a 
tendency to freeze.
    So there are some differences between the different types 
of fuels and the different types of things being produced. That 
is why we coordinate a lot of these efforts. We are, as I 
mentioned, this year going to get a certification of the first 
50 percent regular fuel, 50 percent Fisher-Trope, which is just 
really the first step. What we are really looking for to get to 
carbon neutral growth in aviation is that 100 percent renewable 
fuel or a biomass based fuel that will have a life cycle of 
less carbon. We are looking at in that the 2013 timeframe.
    In the meantime, when you get this first piece, then 
biorefiners will start producing and building up to be able to 
create the types of fuels we are going to need by 2013, 2014, 
2015.

                                  AIP

    Mr. Babbitt. The other two questions. The AIP, I can't--if 
you are looking for specific, I can get those to you. But in 
general terms, they are based upon the priorities of, you know, 
any particular airport's needs. Have they made their case? How 
do they contribute to the national transportation system? And I 
think to the most part my understanding is that we can 
accommodate the majority of those requests. Obviously, you want 
to see that that money is well spent and they are contributing.
    The last----
    Ms. LoBue. If I could mention something on that too. About 
60 percent of AIP goes to maintaining the current system, and 
you see a lot of the jobs there. About 40 percent goes to new 
capacity projects. So things like O'Hare Airport modernization 
and Philadelphia has new runways. We opened three new runways 
last November. That is that kind of other 40 percent of AIP.
    Mr. Babbitt. In the last year, the foreign repair station, 
that is under consideration. Actually, this has not been 
enacted yet. But we are prepared, and Peggy may want to speak 
to that. We have anticipated that, if it happened, we will be 
prepared to deal with it.
    Ms. Gilligan. We have estimated approximately 60 additional 
inspectors, 40 that would be based here domestically and would 
travel to do the oversight, and probably about 20 that we would 
put overseas. Positions overseas are quite expensive, as you 
know, and we are estimating somewhere around $16 million. That 
is not in the 2010 request, because when we built our budget 
the provision that is under consideration now had not gone 
forward. We will begin that process and probably look to add 
that into 2011 or 2012, whatever the appropriate budget level 
or year would be.
    Mr. Pastor. Thank you. Thank you, Mr. Chairman.

                               INSPECTORS

    Mr. Olver. Are we also getting into the business of having 
foreign inspectors working here in this country? We are not 
paying for them. That, I take it, is their interests or their 
airlines interests?
    Ms. Gilligan. Yes, sir. The Europeans indicated that if FAA 
goes to two inspections a year of their repair stations, they 
will do the same for the 1,600 repair stations in the U.S. that 
hold their certificate. Right now, we do the oversight at those 
stations and we provide that information to the Europeans. They 
instead will come in and do their own inspections.
    Mr. Olver. Ms. Roybal-Allard.

                                  HIMS

    Ms. Roybal-Allard. I would just like some clarification on 
my previous questions. Am I correct in understanding that you 
have no objection to expanding the HIMS program to flight 
attendants?
    Mr. Babbitt. No, I do not.

                        AIR TRAFFIC CONTROLLERS

    Ms. Roybal-Allard. And Mr. Krakowski, you, as I understand, 
will be looking into what I have been told are imposed work 
rules on controllers that take away the incentives to work at 
places like LAX. And, secondly, the issue about trainees 
being--that fail at LAX, fail getting certified at LAX, then 
being sent to less busy and smaller airports to get their 
certification.
    Mr. Krakowski. That one is of interest to me because I was 
not aware that there is a lot of that going on. My perception 
is it happens occasionally.
    On the first point though, the current contract 
negotiations we are doing with NATCA, is having discussions 
with them on a plan that does reward the people at the intense 
facilities better. I think the old incentive concept that we 
used to use to get people to work at O'Hare or New York or Los 
Angeles got diluted over the years, and there are some 
refocused discussions going on right now.
    Ms. Roybal-Allard. Great. Thank you.
    Mr. Olver. Would you like to make another round?
    Mr. LaTourette. I would love to.
    Mr. Olver. Go ahead. I promised we would close around 
11:30.

                        FOREIGN REPAIR STATIONS

    Mr. LaTourette. I thank the Chair for the courtesy, and I 
will attempt to be brief. This foreign repair station question, 
I understand that you are ready to go. I also understand that 
the European Union and others have indicated that it is going 
to start a trade war, and basically they are going to insist on 
the same thing. And full disclosure, my brother is in the 
repair station business for General Electronic.
    I guess to you and Mr. Krakowski, what is your opinion of 
this? I mean, I will tell you it is--we all know it is a labor 
issue. You can call it a safety issue if you want to. I happen 
to like organized labor. But this is job protection. But it is 
being billed as a safety issue. So I guess, based upon the 
experience that all of you have around this table, is it really 
a safety issue? Are we seeing shoddy repairs at foreign repair 
stations, and will two FAA inspections at foreign repair 
stations on an annual basis make us safer?
    Mr. Babbitt. Well, I will give you my personal opinion.
    Mr. LaTourette. That is what I was looking for.
    Mr. Babbitt. The current system is covered by a bilateral 
arrangement. All the stations are inspected. If I understand 
the full ramifications, we would just switch inspectors and 
create a lot of additional travel and expense to create the 
inspections.
    I personally have not seen any degradation or any signs 
that the repair stations, regardless of where they are, are 
doing less than work that is up to the standards. Now, I am 
certainly open to people's review or if people have information 
that would suggest that we could improve the safety, it is 
worth looking at. But currently, I have to candidly say I have 
not seen any sign of that.
    Mr. LaTourette. Mr. Krakowski.
    Mr. Krakowski. Actually, you are looking at someone who was 
head of quality assurance for maintenance for my airline when 
we outsourced to Korea and to China. We had to put our stamp of 
approval on it, not only to us, but to the FAA that the quality 
of work there was equal to or better than what we had in the 
United States. I can tell you unequivocally we found that.
    Mr. LaTourette. Okay. And anybody else have a thought on 
foreign repair stations? I don't want to exclude anybody. I 
thank the Chair. And I thank all of you for your testimony.

                   CLOSING REMARKS OF CHAIRMAN OLVER

    Mr. Olver. I think, if I don't close out, we aren't going 
to get closed out. So I am going to do that. Nothing that has 
been said here today changes my view that we need to move away 
from the radar based system which we have been doing now for 
some time and putting in a certain amount of money. We will 
with your appropriation, if we give you that full appropriation 
this year, we will have spent almost $2 billion in moving in 
that direction. I have been interested that under ADS-B, the 
largest sum of money--the larger sum of money was last year's, 
the 2009 appropriation there. The 2010 is asking less. It sort 
of implies that we are farther along on ADS-B and we don't need 
big sums of money as what is viewed as the key backbone of this 
whole NextGen operation. I thought we would be moving on to 
ever higher numbers for ADSB. But nothing has changed my view 
that we need to move away from the radar-based system which had 
its genesis in the bon fires that were--I am told, to my great 
surprise, that were part of the first transcontinental air 
flights, so forth, that sort of thing. And to move on to a very 
important new technology for a whole series of reasons, you 
have all alluded to in your comments the benefits that one can 
get from that in terms of congestion and on-time performance 
and handling a much greater capacity through the NextGen 
system.
    I am disappointed that I am going to have to change my 
preconception that this was something that we would be--that 
would be possible to complete in a time frame I thought by 
maybe 2017 or thereabouts. And so the idea that we are--and I 
do recognize that you are talking about how careful one has to 
be; you have to make certain that each of these moving parts 
fits together and the gears are running. It is going to be a 
really daunting task and for all of you to take it on. There 
are just so, so many moving parts to this process. We have 
touched on a lot of them, and briefly here, but we are going to 
have a lot.
    Is there any way that we can get that, move that? It means 
very much with, very careful coordination. And I think if you 
are going to be able to move more quickly you are going to have 
to have the acquiescence of the workforce, in essence. Because 
if you end up--to go back to the first question I asked you, 
Mr. Babbitt, that if you don't have that, then there is sand in 
those gears all the way along.
    So thank you very much for being here. Thank you for doing 
this. This is an important, important project that we are 
involved in. And it is going to be costly. But there are I 
think really critical savings and benefits down the road. So 
thank you very much. We are adjourned.
                                           Tuesday, March 10, 2009.

 DEPARTMENT OF TRANSPORTATION OVERSIGHT: TOP MANAGEMENT CHALLENGES AND 
                            HIGH RISK SERIES

                               WITNESSES

HON. CALVIN L. SCOVEL, III, INSPECTOR GENERAL, U.S. DEPARTMENT OF 
    TRANSPORTATION
KATHERINE SIGGERUD, MANAGING DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, 
    U.S. GOVERNMENT ACCOUNTABILITY OFFICE

                    Opening Remarks, Chairman Olver

    Mr. Olver. This hearing will come to order. My new Ranking 
Member, Tom Latham, has told me he is always ready to go, so we 
are all ready to go.
    The Subcommittee is in order. Today's Subcommittee meeting 
begins our Fiscal Year 2010 hearing schedule for the Fiscal 
2010 budget.
    First, I do welcome the new Ranking Member, Tom Latham. I 
look forward to working with him during this 111th Congress, 
and I trust we can have a good bipartisan relationship that 
builds over time out of working together.
    I also would like to welcome a new Member to the Committee. 
As other new Members come into the meeting today, I will 
welcome them and introduce them to everyone who is here. Steve 
LaTourette from Ohio is the new Member. You are the last of the 
line. You are there, the end of the line. I thought you were 
one before the end of the line. Steve has had a long time on 
the T&I Committee, so he brings a real understanding of the 
transportation issues with him, so we are very pleased to have 
him with us.
    Calvin Scovel, the inspector general of the Department of 
Transportation, and Kate Siggerud, managing director of 
physical infrastructure at the Government Accountability 
Office, are with us for today's hearing. Both the IG's Annual 
Top Management Challenges Report and the GAO's High Risk Series 
continue to highlight the nation's ongoing transportation 
challenges.
    The 110th Congress and the new administration will have to 
tackle many of these issues, so it is particularly important 
that we bring attention to the challenges that you have 
identified.
    The IG issued his Fiscal Year 2009 in November, and, as 
with previous years, the newest report continues to identify 
and make recommendations to enhance aviation safety, develop 
next-generation improved mobility, reduced congestion, and 
address surface transportation budget shortfalls, among other 
challenges.
    The GAO updated its High Risk Series in January and only 
lists one high-risk area related to transportation, that being 
funding the nation's surface transportation system, and that is 
a big area.
    The FAA's air traffic control modernization, which has 
appeared on the high-risk list since 1995, was removed this 
year, though it still remains, to a degree, because of next-
gen, on the IG's, so we may have questions in relation to that.
    While I hope you will be able to spend time exploring the 
challenges in your reports, I will be particularly interested 
in an issue that does not appear in your published work; 
namely, the challenges associated with efficient and 
appropriate expenditure of the funds provided in the recently 
passed economic recovery package. There is over $40 billion 
provided for transportation programs in the new recovery law, 
and, within the 75 percent that will be distributed through 
existing formulas, we are requiring grantees to move rather 
quickly, 120 days to obligate for highways, 180 days to 
obligate for transit. It is imperative, with such short 
timelines, that funds are being used as intended.
    In addition, there are a couple of sizable new grant 
programs: $8 billion for high-speed rail and inner-city 
passenger rail and one and a half billion for surface 
transportation grants, taken in a very broad kind of a way, 
discretionary fund, in a very broad kind of way, whereas the 
earlier two are associated with extensive authorizations that 
were passed last year.
    The Recovery Act included $20 million for the IG to conduct 
audits and investigations, and I will be interested in how you, 
the IG, will be using those funds. I am also interested in any 
work that the GAO may do on the recovery package.
    So, in addition to the management challenges we both 
identified, I hope you will share your insights in these and 
other areas during the course of today's hearing.
    With that, I will introduce another new Member to the 
Subcommittee. Judge John Carter from Texas is here with us 
today. Thank you very much for being here.
    Mr. Carter. Chairman, thank you.
    Mr. Olver. And with that, I recognize the Ranking Member, 
Mr. Latham, for his opening remarks.

                 Opening Remarks, Ranking Member Latham

    Mr. Latham. Well, thank you very much, Mr. Chairman. Having 
never served on this Subcommittee before, there is going to be 
a learning curve, but I really look forward to working with 
you, and doing this on a bipartisan basis. We will probably 
have disagreements, but I pledge, I will never be disagreeable 
about it.
    I am very excited about the opportunities. We are at the 
epicenter, I think, of what is going on, when you look at 
transportation needs and the housing crisis that is out there. 
There are a lot of very important issues that we will be 
dealing with, trying to find the proper level of funding for 
the initiatives that we oversee. We are going to have real 
challenges in making sure that the funding that has been 
provided is spent wisely, and that is why I think this is a 
very appropriate and important hearing this morning.
    I look forward to the testimony, and I, too, would like to 
welcome our two new Members to the Subcommittee, Mr. Carter 
from Texas and Mr. LaTourette, who gave up 14 years on T&I, 
Steve, to come to the Appropriations Committee. I look forward 
to working together and to a very productive year, so thank 
you, Mr. Chairman.
    Mr. Olver. I appreciate the comments. Now, we would like to 
hear from the panel. Your complete written statements will be 
included in the record, and if you could keep your oral remarks 
to somewhere close to five minutes, within shouting range of 
five minutes, then we can move on to questions, and we will 
start with you, Mr. Scovel.

                Opening Remarks, Hon. Calvin Scovel, III

    Mr. Scovel. Thank you, Chairman Olver. Good morning. 
Ranking Member Latham, Members of the Subcommittee, we 
appreciate the opportunity to testify today on the top 
management challenges facing the Department of Transportation.
    Each year, DOT spends about $70 billion on a wide range of 
efforts to enhance mobility and safety. The American Recovery 
and Reinvestment Act infuses an unprecedented additional $48 
billion for departmental programs, presenting new challenges on 
top of longstanding ones that we have identified over the 
years.
    To achieve the goals of the economic recovery program, it 
is important to recognize that an inherent tension exists 
between spending quickly and making sure that contracting and 
business practices are sound and that expenditures maximize 
efficiencies. To this end, we are encouraged by the initial 
steps DOT is taking to promote accountability, efficiency, and 
effectiveness over the recovery program; namely, its creation 
of a DOT-wide TIGER team.
    Secretary LaHood has expressed his commitment to these 
efforts, and my staff stands ready to do its part to further 
protect these funds from fraud, waste, and abuse.
    Today, I would like to discuss the Department's top 
management challenges across three cross-cutting areas.
    First, we need to ensure accountability, effectiveness, and 
efficiency in federal funding for transportation projects. Our 
work identifies four broad areas of potential vulnerability 
that DOT will need to address.
    They are, first, an effective acquisition workforce at the 
Department and with grantees to ensure that the goals of the 
economic recovery program are achieved.
    Second, effective contracting and grant mechanisms and 
financial processes that result in timely and sound decisions 
while avoiding wasteful spending.
    Third, proactive actions to combat fraud, waste, and abuse 
in an environment of significantly increased funding to state 
and local levels.
    Four, sustained oversight of highway and transit 
investments.
    DOT has initiates underway to address some of these 
vulnerabilities. In addition to the creation of the TIGER team, 
DOT managers are taking actions, such as modifying financial-
management systems to track recovery funding and report on 
results and working with potential grantees so they can quickly 
submit proposals that will meet federal requirements.
    My staff has been working with DOT officials to support 
their efforts, and we have assembled cross-cutting teams to 
further review each operating administration's management of 
recovery program funds. We expect to issue the first in a 
series of reports by the end of this month.
    DOT's second top challenge is to improve oversight of 
aviation and surface safety. Our work has shown that DOT needs 
to focus on three vulnerabilities: maintaining public 
confidence in FAA's ability to oversee a dynamic aviation 
industry; addressing obsolescence in the nation's aging surface 
infrastructure and enhancing surface safety programs; and 
protecting against cyber security risks.
    DOT has taken actions this past year to improve safety on a 
number of fronts, including launching an industry-government 
partnership to improve runway safety and committing to data-
driven, risk-based oversight of bridge safety.
    We have a significant body of ongoing work to identify 
risks in aviation and surface safety programs and will issue 
reports covering these topics in the next several months.
    DOT's third top challenge is to ensure the solvency of 
transportation trust funds, thereby improving mobility and 
reducing congestion. Specific challenges our work has shown in 
these areas include maintaining the solvency of the Highway and 
Aviation Trust Funds; operating and maintaining the National 
Airspace System while developing and transitioning to next-gen; 
and continuing efforts to reduce aviation and surface 
congestion.
    We will continue our ongoing work to report on DOT's 
efforts to address these challenges.
    In summary, it is critical that DOT reassess its business 
practices and investment-management portfolios to mitigate the 
inherent risks associated with a substantial increase in grants 
and procurement actions that will result from the recovery 
program. Such assessments should include a focus on building an 
effective acquisition workforce to hold grantees accountable 
for effectively managing their programs; establishing efficient 
contracting and financial-management practices to prevent 
fraud, waste, and abuse of new Recovery Act programs; and 
developing comprehensive oversight strategies to maximize 
highway and transit investments.
    These actions, together, are critical for successful 
implementation of the recovery program and advancing the 
Department's primary mission of transportation safety.
    That concludes my statement, Mr. Chairman. I would be happy 
to answer any questions you or any other Members of the 
Subcommittee may have.
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    Mr. Olver. Thank you have them, Mr. Scovel.
    I will move on to Kate Siggerud.

                   Opening Remarks, Ms. Kate Siggerud

    Ms. Siggerud. Thank you, Mr. Chairman, Ranking Member 
Latham, and Members of the Subcommittee. Thank you for your 
invitation to testify about the challenges facing the 
Department of Transportation and the Congress as we work to aid 
economic recovery and address reauthorization of surface 
transportation and aviation programs.
    We appreciate the opportunities we have had to work with 
this Subcommittee on this and other important issues. This 
hearing comes at an important time for the Department and the 
nation. We know that a safe and efficient transportation system 
is critical to the nation's economy and affects the daily life 
of most Americans, but the system is under strain, and 
estimates to repair, replace, and upgrade aging 
infrastructure--as well as to expand capacity to meet increased 
demand--top hundreds of billions of dollars, and there are 
growing strains on traditional funding for transportation 
projects exacerbated by the economic downturn.
    My statement today covers the efforts required of DOT, 
under the American Recovery and Reinvestment Act of 2009, and 
GAO's decisions regarding high-risk programs at DOT. I will 
also discuss the funding, safety, and mobility challenges 
facing DOT and the Congress in reauthorizing surface and 
aviation programs.
    With regard to the Recovery Act, DOT received about $48 
billion for investments in transportation infrastructure, with 
many of these dollars flowing through established programs with 
known strengths and weaknesses. The Act also established 
several new grant programs. For these, the Department will be 
challenged to create new criteria and new mechanisms.
    The Act gave GAO the immediate responsibility of reporting 
bimonthly on how states and localities are using the recovery 
funds, and, of course, it is at that level where projects are 
already being selected and where the results will be measured. 
Additionally, we will work with Congressional committees and 
cooperate with the Inspector General to determine other 
important areas needing oversight, using a risk-based approach.
    GAO's Biannual High Risk Report identifies federal programs 
at high risk for waste, fraud, abuse, mismanagement, or in need 
of a broad-based transformation. In our January update, GAO 
removed FAA's air traffic control modernization from the list 
and retained surface transportation financing. We removed ATC 
modernization because FAA demonstrated a strong commitment to 
resolving the underlying causes we had identified of cost 
overruns, schedule delays, and performance shortfalls. However, 
the next phases of the modernization include transition to the 
Next Generation air transportation system, which involves 
cooperation and investments by many stakeholders outside of DOT 
and for which the Department is requesting $800 million just 
for next year. We will monitor the projects closely and apply 
our high-risk framework in evaluating them.
    For surface transportation, the need to transfer $8 
billion, on an emergency basis, to the Highway Trust Fund last 
fall is a symptom of a larger problem. As shown in the graph to 
my right, under ``SAFETEA-LU,'' the decisions to spend down the 
Highway Account's balance and change methods meant to maintain 
a sufficient balance led to a crisis when revenues failed to 
meet projections. Even with the rescue last fall, today's 
Highway Account balance is lower than at this time last year.
    As Congress considers this crisis and the larger question 
of reauthorization, it will need to make important decisions 
about the size of these programs, whether and when to seek 
alternate sources of funds, and how to align users and 
benefits.
    We recently observed that improving or restoring mechanisms 
intended to preserve highway account solvency could help DOT 
better manage the account balance. Also, DOT could better 
monitor and communicate key indicators of revenue and spending 
to anticipate sudden changes in Highway account balances.
    With regard to reauthorization, besides the trust fund 
issue I just mentioned, DOT and the Congress will need to face 
decisions about how to maintain an appropriate balance in the 
Airport and Airway Trust Fund that funds FAA operations and 
airport-improvement projects. This graph shows that the balance 
declined steadily in recent years.
    Safety will also be a key issue as the number of crashes, 
injuries, and fatalities on the nation's roads have declined 
slowly, as shown on this graph, and the level remains 
unacceptable. DOT has effectively implemented programs aimed at 
the most intractable problems: unbelted driving and impaired 
driving. Nevertheless, fresh thinking is needed for these 
stubborn areas.
    For aviation, key concerns we have identified are the 
ability to continue the generally high level of safety, given 
problems with collecting and analyzing data, data that are 
called ``precursors,'' or indicators of safety risks in the 
absence of a crash. Regarding precursors, runway incursions 
remain an important focus of our work. The Inspector General's 
work on FAA's oversight of air carriers raised important issues 
about the quality and independence of this oversight.
    Improving mobility continues to be a difficult challenge. 
DOT and its partners struggle with steadily growing congestion, 
as shown here for highways, over the past two decades, even as 
we made significant investments in transportation. The need to 
maintain existing infrastructure often crowds out new capacity 
or efforts to make better use of existing infrastructure. The 
resulting congestion wastes time and fuel, impacts air quality, 
and, for freight traffic, constrains economic growth.
    In reauthorizing the key aviation and surface statutes, 
Congress and DOT have the opportunity to address systemic 
issues with current approaches, including tying funding to 
performance-related outcomes, addressing modal storepiping, and 
obtaining better data on performance.
    Finally, Mr. Chairman, DOT faces all of these challenges, 
including assisting this Committee and other committees with 
Recovery Act and reauthorization issues, with few officials 
named or confirmed to appointed posts.
    I am happy to answer any questions you may have.
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    Mr. Olver. Thank you very much.
    Well, I note from this that, Ms. Siggerud, you have now 
laid out GAO's interests as recovery and the FAA's trust funds, 
the funding issue there----
    Ms. Siggerud. Right.

                          GAO HIGH RISK SERIES

    Mr. Olver [continuing]. And then congestion and safety, as 
those going above and beyond your high-risk issue of the 
Surface Transportation Trust Fund and the funding of the 
Surface Transportation program.
    So you have expanded your high risk to four subs, I think, 
which are virtually the same ones that I give as the litany of 
things which the IG does face. So it suggests that the IG and 
the GAO are already working very closely together, and that 
sort of goes along with the new deputy IG, who comes out of 
GAO.
    So I am glad to see that working relationship is already 
there, and we will see how closely you work and how 
independently you work. There has to be some independence, but 
also some clear collaboration, I think, in the process for it 
to work truly well.
    For Mr. Scovel, you have laid out a series--I have tried to 
write them out as fast as you were speaking--a series of 
points, which started out with four points about the program 
for recovery, which I did manage to get down ``acquisitions 
workforce, contracting and granting, proaction to avoid waste, 
fraud, and abuse''--that is a series of words that I know we 
use often rather loosely, and I cringe, to a degree, every time 
the whole phrase is used--and then ``sustained oversight.''
    But then you went deeper into a series of three or four 
that bound the pyramid in threes and fours. After a while, I 
kind of got just a little bit lost in the series.
    So, in any case, I get from both of you that you are 
committed and will work collaboratively and cooperatively on 
issues, where it is possible, related to the recovery to make 
certain that that happens.
    I would like to just ask, we also have a 2009 budget, which 
is out there in process, and we are trying to prepare a 2010 
budget. The regular operations of all of these agencies that 
are a part of the transportation system have got to go on, and 
so we have imposed on top of the regular workings of the 
agencies a system of very fast, expedited kind of things which 
we have been focusing on for the issues of acquisitions and 
contracting and the avoidance of what could happen in there 
with that long phrase, and the kind of oversight that is 
needed.
    Do you see any problems with having these two? Are we going 
to run into problems with having these two tracks going on 
simultaneously? Either of you, would you care to comment on 
that?

                       USE OF RECOVERY ACT FUNDS

    Mr. Scovel. Mr. Chairman, I will take that on first.
    I think there is a risk. The Department, of course, is 
responsible for significant duties in the areas of safety, 
primarily, and the Department has long viewed that as its 
primary mission, as well as successful stewardship of sizable 
amounts of funds devoted to surface and aviation programs.
    The Recovery Act, of course, has infused an additional $48 
billion on top of that. Much of that Recovery Act money is 
going to flow through existing programs, but the staffs that 
will administer those existing programs in the various 
operating administrations are limited. On top of everything 
they have been doing before, they are now being asked to do 
much, much more, and, of course, it has the attention of the 
nation, from the president on down.
    I know Secretary LaHood and others at the Department--I 
certainly do--worry that attention, to some degree, will be 
focused on recovery matters, and we may lose sight of other 
serious interests like safety. So there is a risk.
    Mr. Olver. All right. Clearly, we need to keep an eye on 
that.
    Mr. Scovel. Yes, sir.
    Mr. Olver. I will take that as a suitable answer: There is 
a risk.
    Let me ask each of you if you quickly can tell me, what do 
you think are the two things that you would tell the 
secretaries, the new secretary of transportation, are the most 
pressing things that they should be concerned about? Would you 
like to answer that, two, just broadly, quickly?
    Ms. Siggerud. Absolutely. I am going to answer that in two 
ways.

                           HIGHWAY TRUST FUND

    First, on top of everything else that Mr. Scovel mentioned 
is the stress on the Department. Right now, we also have a 
Highway Trust Fund issue and the need to reauthorize the 
program by the end of the fiscal year, and that will require 
significant brainpower and support from the Department for the 
Congress to do that.

                            GRANT MANAGEMENT

    With regard to the Recovery Act, though, and handling that 
well, I think Mr. Scovel had the focus on the grant management 
and the acquisition workforce right on. That is an extremely 
important issue for this Department and for every other 
department in the government, to make sure that this Recovery 
Act is successful and that the projects that are funded are 
ones that the American people have faith will have the results 
that the Act intended.
    Mr. Olver. Do you wish to add to that a different one in 
your two than the two that the GAO has just identified?

                                 SAFETY

    Mr. Scovel. I would certainly agree with Ms. Siggerud, but 
I would ask the Committee's permission to add a third, if I 
could, and, of course, that has to be safety.
    We have got solvency of the trust funds, we have got proper 
administration of Recovery Act programs, but the Department has 
to keep its eye on safety.
    Mr. Olver. Thank you very much. Mr. Latham?
    Mr. Latham. Thank you, Mr. Chairman. In both of your 
testimonies, and, actually, I read the testimony--my wife was 
shocked last night that I was doing that--you both identified 
the trust funds as being a major concern, and I assume you are 
monitoring as to when it is going to be depleted again and will 
give us fair notice on that.

                    SOLUTION FOR HIGHWAY TRUST FUND

    What solutions do you have for the trust funds? Is the 
concept obsolete? Should we find a different way of funding, as 
far as structurally inside the government? Do you have any 
suggestions?
    Ms. Siggerud. I think there is a big-picture answer and a 
small-picture answer to what you said, and I will start with 
the big picture.
    Assuming, as we reauthorize these programs, we want to keep 
with the trust fund concept, it is very clear that decisions 
made in SAFETEA-LU to spend down the balance had a very 
disastrous effect when, in fact, revenues did not live up to 
the projections that were made, back in 2005, when the economy 
was in a different place.
    Both of the commissions that were assigned to study this 
issue have also talked about the importance of looking at 
alternative sources and the erosion of the value of the gas tax 
over time, and I think we need to take those thoughts and those 
recommendations very seriously, moving forward.
    The small-picture answer is that we have also taken away 
two mechanisms that were meant to monitor and try to keep the 
account in a solvent status over time, and that was changes to 
the way the Revenue Aligned Budget Authority concept worked, as 
well as changes to the Byrd test. That meant that, in fact, 
when we approach a very low balance in the highway account, 
there were not the kinds of alarm bells that would normally 
have been provided to the Department and the Congress with 
regard to the situation, and we have made recommendations in a 
report yesterday as to some technical fixes on that issue.
    Mr. Scovel. So we have assumed that the advantages to the 
Congress and to the Department and, of course, the nation of 
maintaining a separate trust fund for purposes of funding 
transportation projects would continue to be paramount and that 
we would prefer to continue with that system.
    It is clear that the bottom has fallen out of the Highway 
Trust Fund. I spoke, last week, with the Department's acting 
CFO, and, last night, with the secretary. They are keeping a 
very close eye on it. They have plans for meetings with OMB, in 
the very short term, to get it up on their radar scope. They 
anticipate being able to predict with much greater specificity 
this year than last year when we will be in the danger zone, 
and it is going to come quicker, sooner, than it was last year.
    Mr. Latham. Can you give us that projection today?
    Mr. Scovel. Well, I cannot today, but they are looking at a 
matter of a couple of months, certainly, and not mid-to-late 
summer, as happened last year.
    Ms. Siggerud. On that issue, I can say, the numbers we have 
seen indicate that revenues are lower than last year at this 
time, outlays are higher than last year at this time, and the 
overall balance is lower than last year at this time.
    Mr. Latham. In your testimony, Ms. Siggerud, you talk about 
the economic stimulus package and say that it is designed to be 
timely, temporary, and targeted, but you say it is a difficult 
challenge. First, they require lengthy protocols for 
transportation initiatives through lengthy planning and design 
periods. According to the CBO, even the projects that are on 
the shelf generally cannot be undertaken quickly enough to 
provide a timely stimulus to the economy.
    Second, spending on transportation infrastructure is 
generally not temporary because of the extended timeframes 
needed to complete projects.
    And, third, because of differences among states, it is 
challenging to target stimulus funding to areas with the 
greatest economic and structural needs.
    First, can you elaborate on that, and tell us if there is 
anything in place where we can make these dollars meet the 
needs, economically and infrastructurally, more quickly and to 
have them actually do what they are intended to do?

                          RECOVERY ACT FUNDING

    Ms. Siggerud. A couple of observations. This Act, unlike 
past acts that focused on infrastructure as an economic 
stimulus, does set specific deadlines for the major formula 
transit and highway programs by which states must obligate 
funds. So the Act does try to address the concept of spending 
this money in time to actually have an effect while the 
recession goes on.
    Mr. Latham. Does that compromise the other side about 
targeting where it is needed?
    Ms. Siggerud. Well, the decision made in the Act was that 
we would use existing formula programs rather than target the 
dollars based on, say, unemployment rates in states, so the Act 
was not responsive to that concern, yes.
    We will be in states, as I said, in 16 states, starting 
next week, looking at what procedures states are putting in 
place to spend this money, what their internal controls are, 
and how they are selecting projects. Our first report to the 
Congress on that issue will be April 17th and every two months 
thereafter.
    Mr. Latham. I see my time has expired.
    Mr. Scovel. Just to add, sir, the natural tension between 
the speed that the Congress and the president have instructed 
the Department to get the money out and the need for proper 
accountability.
    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman. Mr. Chairman, I am 
very much looking forward to working with you and Ranking 
Member Latham. In 14 years on the Transportation Committee, we 
always had an expression that ``There is no such thing as a 
Republican road or a Democratic bridge,'' and we did not find a 
lot of partisan bickering, which is why I enjoyed that service 
so much.
    Thank you both for being here. I want to talk a little bit 
about the trust fund and its solvency.

                HIGHWAY TRUST FUND AND BUDGET AUTHORITY

    Mr. Scovel, you are aware that the president, in his budget 
submission, has requested not dissolving the Highway Trust Fund 
but moving to budget authority and removing the firewalls that 
were established in T-21 and continued in SAFETEA-LU. I think I 
heard you say that you thought that the idea of a separately 
dedicated Highway Trust Fund continued to be important. Is that 
a fair?
    Mr. Scovel. I did. It was simply a practical observation 
that, to the extent there are designated revenues coming for 
this particular purpose, it certainly eases the burden on the 
Congress year to year.
    Mr. LaTourette. Do you agree with that, Ms. Siggerud?
    Ms. Siggerud. We have not looked at the details of what the 
president is proposing, so until we have had a chance to do 
that, I am not sure exactly what the effect of the president's 
proposal is.
    Mr. LaTourette. I think I have a pretty clear picture, and 
I think that the study that was authorized in SAFETEA-LU, when 
the report came back, and I can tell you, some of the 
recommendations are never going to be implemented. A 40-cent-
per-gallon federal tax increase is probably a nonstarter, 
particularly during an election year. There was also emphasis 
on tolling, and then the whole notion of vehicle miles traveled 
has caused the resurface of the Black helicopter guys who talk 
about invasion of privacy and everything else.
    Clearly, we have to figure out how to get more money into 
the Highway Trust Fund, whether President Obama is successful 
in using budget authority or we continue with contract 
authority, as we have in the past.
    During the Bush administration, on SAFETEA-LU, we had a 
pretty big dust-up, in that his Department of Transportation 
recommended that we needed $375 billion over the six-year 
period to do maintenance and maintain our system in good 
repair.
    O.M.B, based upon looking at where the revenues were, said, 
256, and, as a result, we delivered SAFETEA-LU two years late, 
and we all agreed on about $300 billion for the six-year 
program.
    Secretary Peters repeatedly came to Capitol Hill and 
indicated that it is not a funding problem; it is an incursion 
problem, in that there are things that are paid out of the 
Highway Trust Fund that have nothing to do with highways, and 
probably the biggest one is transit. We all love transit, and 
we all know that mass transit is the key to the future, but 
mass transit does not participate to the Highway Trust Fund, 
and it siphons off about $58 billion a year over the six-year 
period.
    Would we be better to work with the new administration to 
say that the Highway Trust Fund is for highways and the things 
related to highways, and put offline some of the incursions, 
like transit, and the responsibility would be upon the federal 
government, this Committee, and the United States Senate to 
find a way to fund transit that did not invade the Highway 
Trust Fund? Mr. Scovel?
    Mr. Scovel. Sir, we have not had a chance to look at that. 
I can certainly see advantages to the position that you 
outlined, but, in the absence of work by my office, I would be 
remiss if I expressed an opinion here today.
    Mr. LaTourette. Ms. Siggerud.
    Ms. Siggerud. We also have not made that kind of specific 
recommendation you are talking about, Mr. LaTourette, but let 
me make a couple of observations where we have done work.
    What we have said is that the growth of the programs funded 
out of the Highway Trust Fund, starting from back in 1956, when 
we began the Interstate Highway program, have grown from a 
couple of programs to over 105 different programs that are 
funded--transit, safety, motor carrier safety, and a variety of 
others--all of which have important constituencies and 
important interests.
    We have said, nevertheless, in a time where we have 
constrained resources, it is important for the Congress to 
decide where it wants to focus those dollars most specifically 
and then determine where the federal government needs to make 
an investment in order to have the kind of transportation 
system that we would like.

                                  RABA

    Mr. LaTourette. You mentioned RABA. After the passage of T-
21, we were pretty fat and happy here because, under RABA, 
revenue was exceeding our expectations in T-21, and extra dough 
was flowing out the door. When those revenues decline, you 
begin to see the fact of these incursions, if you will, and it 
is easy. People sort of treated it as a private slush fund.
    I happen to come from the covered-bridge capital of North 
America, and there is a Covered Bridge Fund that comes out of 
the Highway Trust Fund. I think that the concrete and asphalt 
guys would effectively argue that that has nothing to do with 
highways, it has nothing to do with safety, and perhaps the 
Congress should sort of step up to the plate and say, ``This is 
a Highway Trust Fund funded by an 18-cent gas tax, and this 
other stuff, if you want to do it, find the money someplace 
else.'' Does that sound reasonable?
    Ms. Siggerud. As I said, we have not made specific 
recommendations in that area, but we do think that the upcoming 
reauthorization provides an opportunity to rethink the goals of 
this program and the federal role in financing it.
    Mr. LaTourette. Mr. Scovel, anything?
    Mr. Scovel. I would agree. What you and Ms. Siggerud have 
been talking about are the tough policy calls for the 
administration and Congress.
    Mr. LaTourette. Which is why it will never happen.
    Mr. Latham. Just a point of personal privilege: I have the 
covered bridges in my district. The Bridges of Madison County 
are in my district.
    Mr. LaTourette. With no disrespect to the Ranking Member, I 
have the longest covered bridge in the United States of 
America. I also have the shortest covered bridge in the United 
States of America.
    Mr. Olver. Mr. Carter.
    Mr. Carter. Thank you, Mr. Chairman. I am looking forward 
to working on this Subcommittee.
    It is a real current issue where I come from, and I have, 
to my knowledge, no covered bridges.
    To get back to what we were talking about, the stimulus 
package that we have got, I spent a lot of time, back in my 
early years of practicing law, working with people who built 
roads, and these are supposed to be shovel-wet-ready projects, 
but the reality of the building of highways is, even if you 
have done everything ready for the movers to be out there, 
there are contracting issues and other issues that have to be 
dealt with before you are going to be pushing dirt.
    Do you all have in place, or as part of your four-point 
things that you were talking about that you are looking at on 
these projects, that makes sure that the quickness of pushing 
dirt is part of the formula, to try to get this into the 
stimulus? Are you working on that?

                        FAST ACTION ON STIMULUS

    And as you do that, I am very proud to see you are looking 
at oversight as at least two of your four formulas because when 
you get in a hurry, it is my experience, in almost anyplace you 
go, when you get in a hurry, there is an easy possibility of 
waste, fraud, and abuse becoming a major part of what happens. 
Would you like to comment on some of those things?
    Mr. Scovel. Certainly, Mr. Carter. Right now, we are 
working on the first phase of our Recovery Act work, in terms 
of trying to proactively identify for the Department what the 
risks and challenges are with Recovery Act funding and some of 
the best practices or lessons learned from the work that we 
have already completed. We are trying to highlight that for 
them so they will go in, eyes open, knowing what the problems 
might be.
    Phase 2, for us, will be a more in-depth examination of how 
each of the modes executes its programs with Recovery Act money 
and, at that point, sir, we will certainly be looking, not at 
every single project, but we will be trying to sample those 
projects and determine where the Department executed its 
responsibilities properly and where it might have fallen short 
in terms of maybe funding projects that were not shovel ready, 
were not generating the jobs that the Act is intended to 
accomplish and so forth.

                               TIMEFRAMES

    Mr. Carter. Are you looking at timeframes to try to see how 
quickly you can get them in there, being secure that, in the 
Recovery Act, you are going to be doing the proper spending?
    Then also, there is talk of eliminating e-Verify, and part 
of this issue, in my part of the world, is jobs on the 
highways. Most of the contractors that are on the highways use 
e-Verify very extensively, and, with the elimination of e-
Verify, this could be an issue in the State of Texas. Would you 
have any comment whatsoever on the use of or the elimination of 
e-Verify as it relates to jobs for Americans?
    Mr. Scovel. Well, my office has not yet had a chance to 
embark on this particular phase of our work, so I cannot 
comment on that. It is certainly a topic that we will consider 
as one of our objectives.
    Mr. Carter. I noticed, when we asked, how are we going to 
fund the trust fund, there was a lot of real nice talk, but 
nobody said, ``Well, this idea is thrown out there, or this 
idea is thrown out there.'' You just want to stay away from 
that. Is that what it is?
    Ms. Siggerud. I would be glad to talk about that. There 
have been recommendations from a number of commissions in this 
area, and they fall into a couple of categories.

                                GAS TAX

    The first one, of course, is maintaining or increasing the 
gas tax. The gas tax has certain attractive properties that we 
need to think hard about in making decisions to move away from 
it. It is a well-established tax that is collected at low cost 
with low enforcement costs from a small number of excise 
taxpayers, and, over time--that is starting to change now--it 
has been a reliable tax. But that is starting to change, and 
so, hence, the look for other opportunities.
    There is a lot of talk about a vehicle-miles-traveled tax. 
As Mr. LaTourette pointed out, there are privacy issues. There 
are several demonstration projects going on that are testing 
how these privacy issues can be dealt with in the VMT arena, 
and I think we will see results from those soon that should 
help us determine how to move forward in that direction, if 
that is where the Congress wants to go.
    Finally, there are a number of debt proposals that people 
have made with regard to infrastructure bank funding, et 
cetera. From GAO's point of view, we are always concerned about 
whether that is the most cost-effective way to provide the 
infrastructure investment dollars.
    Mr. Carter. You are going to find that I am new on this 
Committee, and I do not know some things that I ought to know.

                            NATURAL GAS TAX

    On the use of natural gas, which is one that T. Boone 
Pickens has thrown out there for the public, to the tune of 
about $60 million of his own money, do we put a tax on natural 
gas that runs in cars?
    Ms. Siggerud. I have no idea what the answer to that 
question is.
    Mr. Carter. Neither do I. That is why I asked you.
    Mr. Scovel. I do not either, sir, but the advocates of the 
VMT fees would say that whether you are running with natural 
gas or any other alternative fuel, that would capture the use 
of the roads and more closely link use with cost to build and 
maintain the infrastructure.
    Mr. Carter. That is going to be a pretty unpopular thing to 
do. Thank you. Thank you, Mr. Chairman.
    Mr. Olver. Thank you, Mr. Carter.
    Well, I am going to continue for a moment. Let me just, 
before I do, recognize Carolyn Kilpatrick, who is returning to 
this Subcommittee after a two-year hiatus. She thought it was 
such a nice thing to go someplace else, that she decided to 
move, but now she is coming back, and we are very glad to have 
her back.
    Carolyn Kilpatrick is from Michigan, and she has decided 
she will wait one round, but go ahead.
    Ms. Kilpatrick. Yes. Thank you, Mr. Chairman, just for the 
opportunity. I was at another 10:00 meeting. I cannot do two at 
once, but thank you for your service, and I will yield for the 
second round.
    Mr. Olver. All right. Then I am going to continue, to a 
degree, where my colleagues that I should have to say, ``on the 
left,'' but ``on your right,'' were here.
    I am going to follow up a little bit since both of you have 
spoken cogently about the needs of the trust fund, and just in 
answer, you covered two issues--the gas tax and the VMT--with 
Mr. Carter, and neither of those shows up in the president's 
budget. In fact, it would appear that, in his budget, he has 
carefully avoided stepping on anything which would be the 
normal purview of the authorizing committee to decide how these 
monies are to be raised, but, Mr. Scovel, you were bold enough 
to actually list several options in your Management Challenges 
Report, and I will just list several of them.

                       VEHICLE MILES TRAVELED TAX

    One was increasing the current fuel tax. The second was 
imposing fees on vehicle miles traveled, and then imposing fees 
on vehicle registrations or sales, new tolls, and customs 
duties. I think the list might have gone on.
    Well, let me start with the vehicle-miles-traveled issue. 
Ms. Siggerud already made some comment on that, but this is not 
something that gets by on brief comment. How long might it take 
to implement such a thing, and what kind of demonstration 
projects have we had, here or elsewhere? Can you give us sort 
of a description of those sorts of things that are now going on 
here or in other countries? Where is the source of opposition 
to that mechanism?
    Mr. Scovel. I could take a stab at some of your questions, 
sir, we do not have work on that would permit me to address all 
of them. I am not familiar with what may be done in other 
countries regarding VMT. I am familiar with the demonstration 
project in Oregon involving a limited number of vehicles, and 
the report that I heard was basically an anecdotal report from 
the administrator of the program that thought it was feasible 
and fairly easily administered.
    In my testimony, I had instructed my staff to put together 
for this Committee a list of funding options, just kind of 
brainstorm it. So, of course, we came up with increasing the 
gas tax, VMT fees, heavy vehicle user fees, additionally, 
customs duties, tolls, registration, sales tax. Those are 
policy options for the Congress and the administration to 
consider.
    The key number of sticking points with regard to VMT, 
specifically, have to do with the privacy concerns that have 
already been mentioned. There is an equity concern as well for 
low-income, long-distance drivers, and the initial 
administrative startup fees for a VMT system, we believe, would 
be higher, certainly, than what we encounter now with the gas 
tax.
    The advantages, as I outlined earlier, with VMTs: It is 
simply a closer link between use and cost and the ability to 
incentivize drivers with the desire to use the resource (the 
road) efficiency and wisely.
    Ms. Siggerud. May I add, with regard to the Oregon Project 
and privacy, there were a number of steps taken there to 
protect the drivers' privacy, including having the transponder 
not retain a record of where the person had driven and also 
have it not be in a broadcast mode.
    The ongoing project at the University of Iowa that was 
funded in SAFETEA-LU is national in scope in a number of 
localities and tests. It tests how data can be collected, how 
the fees can be collected, and what are the different options 
for protecting privacy, and that is an ongoing project.
    Mr. Olver. Well, I guess this is more in the purview of the 
authorizing committee, but if either of you have more extended 
lists of the sorts of things that one might do in any further 
assessments of the relative merits, advantages, disadvantages, 
reasons for opposition, and public benefits versus private 
concerns, the issue of privacy is one, as you have pointed out, 
an issue there, and there are those who think, I understand, 
that that can be covered fairly easily.
    We would be interested, for the record, and we will put 
this in a question for the record in a broader way. Okay? Thank 
you very much. Mr. Latham?
    Mr. Latham. Thank you very much. I was interested in 
testimony earlier about the new programs that are brought forth 
in the stimulus package, and the supplemental grants for the 
surface transportation programs. I think there is $1.5 billion 
in transit set aside, transit improvements, plug money set 
aside for green transit. For rail, I guess, another $8 billion.
    How long does it take to set up, in this stimulus package, 
set up the rules and get the programs up and operating? What is 
the timeline?

                            OPERATING RULES

    Mr. Scovel. Well, sir, the timeline is running, and it is 
contained in the bill. The Department is working flat out in 
order to make those deadlines.
    Mr. Latham. Do they not have to write new rules and go 
through the whole process?
    Mr. Scovel. Yes, sir. They certainly will. Much of the 
money that flows through existing programs can be more easily 
accommodated in those timelines than will the new money, and 
high-speed rail is probably the biggest question mark on the 
Department's scope right now because it will be administered by 
the Federal Railroad Administration, which does not have a 
great deal of experience in this area.
    So they are talking about the need to write the criteria 
and the requirements to work with potential grantees to train 
their own workforce to properly administer that program in a 
very short period of time without an experience base.
    Mr. Latham. What is their timeline?
    Mr. Scovel. On that one, it is, if I am not mistaken, 90 
days in order to set out the criteria with applications 
required to be received within 180 days.
    Ms. Siggerud. That is correct. With regard to the 
recipients' use of the funds, there are not the same 
requirements to spend the dollars within a specific amount of 
time that apply to the formula money flowing out through the 
highway and transit programs.

                         STATES AND LOCALITIES

    Mr. Latham. I was interested in some of your testimony 
where you talk about supplanting funds from the states, and you 
say evidence suggests that increased federal highway grants 
influence states and localities to substitute federal funds for 
state and local funds they otherwise would have spent on 
highways.
    In 2004, we estimated that the states used about half of 
the increases in federal highway grants since 1982 to 
substitute for state and local highway funding, and that rate 
of substitution increased in the 1990s. I had an amendment to 
prohibit supplanting, basically, the states' projects that they 
would have done anyway with the federal funds, which was not 
made part of the bill. Would you elaborate on that?
    Ms. Siggerud. I think there are two important points there.
    The first is that the Recovery Act does require the 
governor to certify that he or she is not, in fact, supplanting 
federal dollars for state dollars. We will be focusing very 
specifically on that issue in the bimonthly reviews we are 
doing at the state level to see exactly how that concept is 
being implemented and what it means in various states.
    The concern about substitution is not quite as strong when 
we are in a severe recession, and states are facing very severe 
revenue crunches. It is really more when there are more dollars 
available to states that you see a higher substitution effect, 
but it is a concern, and we are working it into our plans for 
use at the state level.
    Mr. Scovel. I would agree with Ms. Siggerud. Particularly, 
GAO has the statutory responsibility to examine use of funds at 
the state and local levels, so they will be pursuing that.
    Mr. Latham. I find it interesting that some states have put 
up websites asking their constituents or citizens of those 
states to give them suggestions as to how to spend the money. 
Is there that much extra here or something? Have you been made 
aware of any of these projects?
    Ms. Siggerud. We are going to send our first teams out to 
states next week, and that looks like something that we ought 
to put on our list of things to check.
    Mr. Latham. Anyway, so everyone has a chance, I think I 
will be quiet.
    Mr. Olver. Thank you, Ms. Kilpatrick, would you like to 
pass again?
    Ms. Kilpatrick. Thank you. Thank you very much, and, again, 
AG and ALG, who are really crucial to what we do here.
    I am from Michigan, and I just met with the director and 
his team last week as it relates to a vision for 
transportation, and some of the dollars that are put into the 
recovery package, Michigan, of course, needs it, and really an 
ailing infrastructure all over America. I do not see that there 
will not be a shortage of funds sitting around, hopefully, 
which is one of the discussions we had as we passed the 
Recovery Act.
    Chairman Oberstar and Chairman Olver thought that it needed 
more and could do better. It is a quick stimulus. It does put 
people back to work quickly. One of the specifications was 
``travel-ready projects''--that is the word being used right 
now--in 90 days, you all are going to do the criteria, and, in 
180 days, you must have shovels in the ground.
    I heard you say, ALG, that next week you all will be 
sending people to states to monitor and see what they have. 
What will be that process?
    Ms. Siggerud. That is right. In fact, Michigan is one of 
the states that we will be going to, either this week or the 
next week.
    Ms. Kilpatrick. Good. What kinds of things will you be 
looking for as we come for the resources?
    Ms. Siggerud. This will be a broad-based review, focusing 
on the various funds that are flowing to states, not only 
transportation but education, energy, and other programs that 
are going out to states.
    We will start with a look at the governor's office, of what 
the plans are for coordinating and putting in place ways of 
tracking these dollars, a key criterion for decisionmaking, and 
what kinds of internal controls are being put in place.
    We will then work with individual state departments to 
understand their approaches for selecting projects, monitoring 
projects, and making sure that they are delivering on the goals 
of the Act.
    Ms. Kilpatrick. Okay. And the timelines--it is in the law--
let me just reiterate them again. Now, you will be making sure 
that whatever they put forth can adhere to those timelines as 
well?
    Ms. Siggerud. That will be one of the things we will be 
looking for, yes.
    Ms. Kilpatrick. Okay. And any projects that do not meet 
that; is there something in place where you would eliminate it 
or not let them do it or something to that effect?
    Ms. Siggerud. Well, GAO does not have the power to tell 
states what they can do, but we could certainly bring it to the 
attention of the Department and to the Committee as well.
    Ms. Kilpatrick. And the same for you, sir?
    Mr. Scovel. Yes, ma'am.
    Ms. Kilpatrick. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman. Since I have 
already incurred the ire of the Ranking Member by claiming the 
covered capital of the world, I am going to go all in and talk 
about ethanol.

                                ETHANOL

    Have either of you done an analysis? In Ohio, for instance, 
40 percent of the fuel we burn is ethanol based. Ethanol is 
federally taxed at 10 cents; conventional gasoline is at 18 
cents.
    As we look to the solvency of the trust fund, have either 
of you looked at the impact on the trust fund if the ethanol 
subsidy were eliminated?
    Ms. Siggerud. Mr. LaTourette, we have work that is several 
years old on that issue, so I do not have the numbers right at 
my fingertips, but we could certainly submit that to your 
office.

                          AVIATION TRUST FUND

    Mr. LaTourette. If you would, I would appreciate that.
    I want to talk about the Aviation Trust Fund for just a 
second. In the last Congress, the House did its work on the FAA 
reauthorization, and the Senate--no big surprise there--did 
not, and my understanding is that the T&I Committee marked up 
the FAA modernization last week or the week before, and the key 
ingredient of that is the way that we are going to fund the 
Aviation Trust Fund for Next-Gen and some of the other things.
    Have either of you done an analysis of if the House T&I FAA 
bill became law, the impact that it would have on the funding 
stream and the balances in the Aviation Trust?
    Mr. Scovel. Our quick look at it, sir, and it is not based 
on lengthy research, is that the Aviation Trust Fund is going 
to decline, continue to decline, somewhat in balance, and there 
may be the need for a larger contribution from the general fund 
in order to make up that difference.
    Mr. LaTourette. Okay. And, Ms. Siggerud, you have not done 
that yet?
    Ms. Siggerud. What our work shows is, of course, there is a 
decline that we talked about, driven, in part, by the concept 
that spending amounts are based on revenues estimated early in 
the year. I believe that the House marked-up version has a 
requirement that, in fact, the Department should spend 95 
percent of anticipated revenues, which should help to avoid the 
problems we have seen in the past with balances at the end of 
the fiscal year.

                         COLLECTIVE BARGAINING

    Mr. LaTourette. Okay. Then the last couple of things are 
related to collective bargaining and things of that nature.
    One of the things that held up the FAA reauthorization in 
the last Congress was the dispute between the air traffic 
controllers and the Bush administration.
    Both of you have emphasized safety, and there are some 
people in this Congress that think that air traffic controllers 
make too much money and that we should pay them less and have 
less-experienced people.
    Have either of you done any work on the issue of the 
importance of a well-trained air traffic control workforce, 
and, in conjunction with that, my understanding is that about 
7,000 of them are retiring a year, the most experienced people. 
Just from my perspective, I do not think it is a job where you 
can just wake up and go in and say, ``I am going to guide 20 
aircraft today.'' It seems like pretty intensive work. Have 
either of you looked at the issue of the air traffic controller 
contract relative to the safety issue?

                    AIR TRAFFIC CONTROLLER STAFFING

    Ms. Siggerud. Not directly at the contract and its relation 
to safety. My office has done a lot of work, sir, regarding air 
traffic controller staffing levels and training requirements. 
We have ongoing work with fatigue and facility-level training.
    Clearly, it is a job that does require extensive training, 
and, in fact, it takes about three years for a controller to 
move from zero to the certified professional controller level, 
where he or she is able to work the scopes at all of the 
positions at his or her location. To the extent that the 
contract affects that, it is critical.
    Mr. LaTourette. I think it is demoralizing. What happens 
when you have a demoralized workforce is you get goofy things 
to happen.
    There was a report, a couple of years ago, that a 
controller was sent home because he was wearing gender-
inappropriate pants, and so then, in retaliation, some other 
TRACON controllers came in wearing dresses. So that is the kind 
of stuff you get when you do not deal with people in good 
faith.

                              DAVIS-BACON

    Last question before the red light goes on: Davis-Bacon. 
After the hurricanes in the Gulf Coast, the Bush administration 
suspended Davis-Bacon, and, to President Bush's credit, and 
also to his chief of staff at the time, Mr. Card, they did an 
analysis that showed that taking away Davis-Bacon did not save 
them any money on reconstruction, and, in fact, because of the 
anti-kickback provisions that are in the Davis-Bacon statute, 
it actually gave greater accountability and reliability.
    Have either of you done work on the effect of Davis-Bacon 
relative to efficiencies, cost, things of that nature?
    Ms. Siggerud. We recently issued a report looking at 
several federal requirements and how they apply to highway 
programs and the extent to which they are essentially pain 
points for state DOTs and whether, in fact, state DOTs are then 
opting out of using the federal highway program to avoid some 
of those requirements. This includes NEPA, Davis-Bacon, the DBE 
program, and a few others.
    The Davis-Bacon program was not among those that the state 
officials viewed as problematic in terms of their ability to 
comply with it or significant cost driving when compared to the 
other federal requirements that I just mentioned, and I can 
send that report to your office, if you would like.
    Mr. LaTourette. That would be great. Thank you so much, and 
thank you, Mr. Chairman.
    Mr. Olver. Mr. Pastor.
    Mr. Pastor. Thank you, Mr. Chairman, and sorry for being 
late, but other hearings get in the way.
    What I am going to do is go into the air traffic control 
system. I know that you pulled them off the high risk January 
of this year, and I do not know why, and I would hope you would 
continue to put them in the high-risk area because we still 
have great problems.

                                 STARS

    You took them off the list, but you say they have great 
challenges, and one of them, you talk about sustaining the 
current air traffic system and maintaining the facilities 
during the transition to Next-Gen. I have been here long enough 
to see the problems of STARS, and last year I got caught where 
one of the radar centers went down, and controllers were 
calling each other, on their cell phones trying to figure out 
what the hell was happening.
    What is the status of STARS? Have we solved some of those 
problems because they are going to be in place for 2025 is the 
anticipation it will be in place.
    Ms. Siggerud. Well, Mr. Pastor, if I can address the issue 
of the high risk decision that we made.
    Mr. Pastor. Sure. Right.
    Ms. Siggerud. It was not an easy decision, and we looked to 
our aviation experts, along with our IT experts in GAO, to make 
this decision. But the fact was we had identified a series of 
management and acquisition issues in the nineties that were 
leading to cost overruns, schedule delays, and a variety of 
other mismanagement problems.
    The Department has addressed those particular issues, and 
we felt that because the Department had addressed those issues, 
it was the right time to take those issues off the high-risk 
list. Moving to a new set of challenges really would have been 
moving the goal post in the middle of the game for the 
Department.
    We will continue to monitor the Next-Gen system very 
closely and look for particular issues, things like schedule 
slippage, whether the various stakeholders that need to 
participate in Next-Gen for it to be successful are, in fact, 
doing that, as well as the cost of the projects, in making a 
decision of whether this would, in fact, meet our high-risk 
criteria the next time we issue a report.
    Mr. Pastor. And your fourth one, challenge? You do. I read 
it to you.
    Ms. Siggerud. Okay.
    Mr. Pastor. It is basically that you have to sustain a 
system on the current system, and I have to tell you that what 
we saw last year when one of those radar centers went down, we 
went into chaos. Planes could not land, planes could not take 
off, and people were calling airports wondering what the hell 
was happening.
    Ms. Siggerud. That is a very, very important issue.
    Mr. Pastor. Well, I know it is, and STARS still has 
problems. So are we going to stay with the same system until 
2525 and then hope Next-Gen is transitioned in and will not 
have any problems?
    Ms. Siggerud. We have an ongoing request from the House 
Transportation Infrastructure Committee to monitor Next-Gen on 
an ongoing basis. The issue that you just raised will be an 
important part of what we are doing.
    Mr. Pastor. I understand. I know it is an important part. 
It has to be because for the next 15 years, the current system 
is what is going to keep the air traffic system afloat.
    So I will go back to the question. We had major problems 
with STARS. What are we doing for the next 15 years to ensure 
that the current system is going to keep planes up in the air 
with safety?
    Mr. Gerald Dillingham. Mr. Pastor, my understanding is that 
STARS is in place at 50 sites. A system called ``Common Arts'' 
is in place at about 100 other sites. Together, those two 
systems are responsible for controlling traffic at the terminal 
radar approach control facilities, the TRACONs. Those are going 
to form the basis, in part, for Next-Gen, and FAA is going to 
have to modernize those TRACON systems at the same time they 
are imposing Next-Gen on top of it. It is going to be a tall 
order, but they are aware of the challenge.
    Mr. Pastor. Where is the money going to come from? Because 
that is your third point: To reconfigure, to enhance runways, 
to reconfigure facilities; that is another ton of money. So 
what are we doing in anticipation for 2025 so that the runways 
are extended, and the facilities are reconfigured so that Next-
Gen can come in, and that is if it is even in place to come in?
    Mr. Gerald Dillingham. I know FAA has had a program of 
runway construction. In late 2008, they commissioned three 
runways, including one right out here at Dulles, and they have 
four or five others underway. They would argue that runways are 
the most efficient way to increase capacity.
    Mr. Pastor. I understand, but here you point out to me that 
runway construction is key to Next-Gen being part of it. Now, 
did Dulles consider Next-Gen when they were doing the runways? 
Are other airports using the stimulus money going to consider 
Next-Gen in doing their runways? There has to be some order to 
this thing.
    Ms. Siggerud. Yes. A couple of things. With regard to how 
it is funded, clearly, in reauthorizing the FAA statute, 
decisions about taxes and the general fund contribution will be 
an important part of what the Congress needs to think about.
    With regard to the runway issue, Next-Gen really depends on 
a partnership with airports, with airlines, and with a number 
of other federal departments, in addition to the Department of 
Transportation, to make it work, and to the extent that those 
partners are working together, it will be successful. To the 
extent that they are not, it will have problems.
    Mr. Pastor. Could I just finish one more question, Mr. 
Chairman?
    I guess what I am getting at, everybody is anticipating 
Next-Gen coming in by 2025. According to you, how we 
reconfigure the facilities and how we enhance runways is very 
important to bringing in the system and making sure it is 
successful. Is anybody paying attention, as runways are being 
built, and airports are asking for airport-improvement money to 
deal with runways and to reconfigure their facilities to say, 
how does this fit with Next-Gen?
    Ms. Siggerud. I would like to ask my colleague, Gerald 
Dillingham, to answer that question, if he could. He is our 
expert on Next-Gen.
    Mr. Pastor. I will ask my chairman here.
    Ms. Siggerud. Or we can submit a question for the record.
    Mr. Olver. Let him answer; otherwise, we will just have it 
for the record.
    Mr. Gerald Dillingham. Mr. Pastor, FAA's capital 
improvement plan and its operational evolutional plan include 
factoring in runways and the transition to Next-Gen. Next-Gen 
will not turn over at 2025. It is a transformation and 
transition that includes all of those kinds of things, and it 
is part of what they have submitted to Congress.
    They are watching to make sure that what you have pointed 
out as a serious issue is, in fact, addressed because, as you 
say, what we have now will, in fact, be a part of our system 
for the next 10 to 15 years and has to be integrated into with 
the new kinds of systems.
    Mr. Pastor. Thank you, Mr. Chairman.
    Mr. Olver. Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman, and, again, I 
apologize for being late. We had a concurrent defense 
appropriations hearing this morning.
    Thank you for your work. I have four short questions.
    One is, on the $48 billion in the recovery bill, as those 
are distributed to the country, will all of that money go 
through the states, or is any of it slated to go directly to 
municipalities or other transportation-related organizations?

                      FEDERAL-AID HIGHWAY PROGRAM

    Ms. Siggerud. For the Federal-Aid Highway Program, much of 
that money will go to states, but there is a requirement to 
suballocate to lower levels of government.
    However, when it comes to the programs for transit funding 
and for airport funding, that money will go to organizations 
like transit authorities and airport authorities to carry out 
the programs.
    Ms. Kaptur. All right. I thank you for that. The vast bulk 
of the money will go through the states.
    Ms. Siggerud. Because the largest part of the money to DOT 
is through the Federal-Aid Highway Program, yes.
    Ms. Kaptur. My question areas, in any of the formulas 
related to transportation in the recovery bill, is need or 
unemployment a factor, or is it merely funds distributed to 
COGS? In other words, if I look at the distribution for Ohio 
thus far, a region like ours, which has 14 to 17 percent 
unemployment and rising, gets a rather small slice compared to 
other places in the state.
    Our understanding, at the local level, is that is the case 
because the formula being used is a COG formula, not impacted 
by other factors, such as unemployment or need. Is that a 
correct understanding? Do I have a correct understanding?
    Mr. Scovel. That is my understanding as well, Ms. Kaptur.
    Ms. Kaptur. Thank you very much. How can we assure that the 
state is giving us everything we are due?
    Ms. Siggerud. In terms of the Recovery Act?
    Ms. Kaptur. Yes.
    Ms. Siggerud. Well, there is a fairly unprecedented level 
of reporting and transparency built into this Act, in terms of 
states needing to post their investment decisions, contracts 
let, et cetera. So the amount of information available will, in 
fact, be far more than is available through typical 
transportation spending at the state and local level.
    In addition, the Inspector General and GAO have both 
received specific funds for the purpose of monitoring and 
reporting on the implementation of this Act.
    Ms. Kaptur. If I were to ask you to compare areas of high 
unemployment in a state like Ohio, taking the COG districts, 
versus the distribution of funds, could you do that?
    Ms. Siggerud. I suppose it would be possible. Among the 
questions that we are going to be asking the states, and, in 
fact, Ohio is one of the states that we do plan to visit, is, 
how is the state making the decisions, once it has the money, 
with regard to the Federal-Aid Highway Program, and certainly 
among the criteria that the state could consider would be 
unemployment levels in different parts of the states, but those 
decisions are, right now, at the state level.
    Ms. Kaptur. At the state level. I thank you. That is very 
important information to us.
    The next question deals with green energy. Just really 
quickly, of the $48 billion, does DOT have a mentality about 
green energy and the expenditure of these dollars. The reason I 
ask the question is, whether it is our airport in my region, or 
whether it is a major bridge that is an I-280 bridge that spans 
one of our major rivers, the hardest job I have had with the 
transportation people at the state level and, frankly, at the 
federal level, is getting them to think about green energy 
powering our airport, our bridge projects. It has been 
unbelievable.

                              GREEN ENERGY

    So my question is, is there a green energy mentality over 
at the DOT regarding facilities and how one integrates new 
green energy into the expenditure of funds?
    Mr. Scovel. Ms. Siggerud has been answering some of your 
questions as they pertain to the state level. You have just 
asked a question that has to do with the Department's 
implementation of Recovery Act funds.
    That would fall under my purview, and that is a topic that 
we could take on as one of our audit objectives----
    Ms. Kaptur. Oh, great.
    Mr. Scovel [continuing]. To determine if that is a 
criterion that any of the modal administrations are considering 
as they allocate money.
    Ms. Kaptur. I can tell you, you are going to run into a 
wall, and I do not understand it, but I know it exists. So I 
thank you for that. That is very good information.
    Finally, my last question is, high-speed rail, which is 
very important to us--I am so happy this is in the bill. I know 
Congressman LaTourette is on the eastern end of Ohio. I am on 
the western end of Ohio.
    What I want to know is, in terms of what you said about 
FRA's ability to really muscle up here, what do we do at the 
state level to assure right-of-way is available?

                                 AMTRAK

    I see, in your testimony, you talk about Amtrak's schedule. 
The problem with Amtrak in northern Ohio is they are on the 
same track as freight rail, and freight rail gets priority. So 
we need separate right-of-way so we can move those trains fast, 
not 70 or 80 miles an hour. I think, in the bill, it is 110 
minimum. Hey, I want to go 300.
    So we are nowhere on the same page, but we have to have 
that right-of-way. How do we work with FRA to help us do that 
quickly in Ohio? What do we do?
    Ms. Siggerud. Ms. Kaptur, I do not have an easy answer to 
your question. There are a number of high-speed rail corridor 
groups around the country that are working to try to plan 
corridors and to acquire right-of-ways. I am not sure of the 
status of the project in Ohio.

                            HIGH SPEED RAIL

    We do have a report coming out next week on high-speed rail 
issues that I think will be helpful to the Department, looking 
at, essentially, what is it that can make a successful high-
speed rail project, in terms of its ability to deliver 
ridership to be cost effective and to compete with other modes 
of transportation?
    Ms. Kaptur. What do we have to do between now and 90 days 
and now 180 days to be ready on the FRA money in a state like 
Ohio on the high-speed rail? And that will be my last question, 
Mr. Chairman.
    Ms. Siggerud. At the state level, I think the corridor 
needs to be working with the Department to understand the 
criteria that the Department will develop, in terms of funding 
projects.
    Ms. Kaptur. The state department or the federal department?
    Ms. Siggerud. The federal department, the Federal Railroad 
Administration will be developing these criteria and submitting 
a strategic plan that will inform the funding decisions that 
follow for the $8 billion.
    Ms. Kaptur. I cannot speak for Mr. LaTourette, but if you 
could give us the name of the person we should meet with, we 
would sure appreciate it. Thank you. Thank you, Mr. Chairman.
    Mr. Olver. Thank you, Ms. Kaptur. On the last one, yes, Ms. 
Siggerud has pointed out that the law requires a strategic plan 
to be created by the Department of Transportation by the end of 
April for how the $8 billion for high-speed rail and inner-city 
passenger rail is to be laid out for the states to apply for. 
Then there is another longer period as well.
    So it is understood that those monies are not going out for 
ready-to-go projects, for shovel-ready projects.
    Ms. Siggerud. That is right.
    Mr. Olver. It is a long process involved in that.
    Ms. Siggerud. That is right.
    Mr. Olver. So after that strategic plan, then we will 
define what kind of guidance may go to the various places that 
could use high-speed rail, which, under the law, are the high-
speed rail corridors that are already designated under 
authorizing law, and yours fit into that.
    So it is understood to take quite a period of time before 
the states can actually operate them, but then you should try 
to anticipate clearly the process because it will move 
eventually. Mr. Berry?
    Mr. Berry. Thank you, Mr. Chairman. I realize you guys do 
not run agencies that you are representing, but I just think it 
needs to be said, we have got so many areas in transportation 
that are way behind the curve, and for a great nation to allow 
itself to get into this situation, I think, is just 
inexcusable.
    Having said that, this situation between the FAA and the 
air traffic controllers is idiotic. Now, when they make a 
mistake, we cannot sit here and have you all or someone else 
sitting in those chairs saying, ``Well, gosh, that was a top 
priority, and we were really concerned about that, and we 
talked about that many times, and we are sure going to try to 
do something about that because somebody is going to already 
have gotten hurt real bad.'' And I hope that you will take this 
back to the agencies and, for crying out loud, get that fixed.
    We should not be talking about that the next time this 
Committee comes together. It should already be fixed. I have 
never seen anything to compare with the way that the 
controllers were jerked around by management in some of the 
towers that I represent, or represent an area awful close to 
them.
    To be on a plane going into one of those airports, knowing 
that everybody that was looking at a screen was mad, and they 
were mad when they woke up that morning, and justifiably so, in 
my opinion. This has got to be fixed right now. We cannot keep 
studying it, talking about it, or anything else, and it is just 
a matter of simple recognition of the dignity and having 
respect for your fellow workers and your fellow man. Thank you. 
Thank you, Mr. Chairman.
    Mr. Olver. I guess there is no answer required for that, so 
it goes back to me.
    I want to go back to Mr. Scovel. When you were given the 
opportunity to indicate what you thought were the critical 
questions for the new secretary to take up, you added to the 
list safety, in a general kind of way, and that, of course, is 
always a concern of our agencies, and we, in the Congress, are 
continually stressing safety in all aspects, whether it be 
highways or rail operations or air operations.
    Your office has identified aviation safety as a top 
management challenge year after year, and your most recent 
report highlights the need for FAA to exercise vigilant 
oversight of the aviation industry in three key areas, and 
those key areas, I think, are inspection and certification of 
air carriers, the inspection procedures for outsourced aviation 
repair facilities, and the implementation of technologies and 
systems to improve runway safety.
    Now, I want to examine one case of last year. I do not 
remember particularly the radar case that my colleague from 
Arizona was mentioning, but, last week, the FAA did announce 
that Southwest Airlines would pay a large civil penalty, seven 
and a half million, which could double if Southwest does not 
accomplish specific improvements.
    This is a case from last year. You must know the situation 
well. What is your assessment of their enforcement actions with 
regard to that, and has the FAA implemented adequate procedures 
to address the systemic problems beyond just one airline that 
they uncovered in that particular case? It probably has some 
carryovers in other situations. Would you care to assess that 
case a bit? If Ms. Siggerud wishes to comment, that is fine, 
too.

                           SOUTHWEST AIRLINES

    Mr. Scovel. Thank you, Mr. Chairman. We are, of course, 
familiar with the FAA civil penalty against Southwest Airlines. 
It originally started about a year ago at the $10 million-plus 
level. It has since been settled through negotiations at $7.5 
million.
    A key component, as you outlined, is the fact that 
Southwest must take compliance actions in order to bring its 
own maintenance practices fully up to FAA standards under the 
settlement, and the penalty can double, should the airline fail 
to do that.
    I think that is a prudent measure, on FAA's part. While 
$7.5 million may not strike many as a large sum of money, in 
the world of civil penalties for FAA violations, it is large. 
It is one of the largest on record, in fact.
    For FAA to build into the settlement the requirement for 
the airline to take further compliance measures, I think, is a 
wise one, rather than simply settling on trying to squeeze 
money out of the carrier.
    The much broader question is one that you mentioned as 
well, and that has to do with system-wide FAA measures to 
correct what certainly did happen at Southwest. Our work from 
last year shows that FAA's administration of its oversight, 
specifically at Southwest, was deficient. We recommended a 
number of measures that the agency should take in order to 
correct those.
    To its credit, the agency has moved out on a number of 
them, particularly concerning the voluntary disclosure 
reporting program, implementing a cooling-off period for 
inspectors who are leaving FAA before they can work for the 
airline that they used to supervise.
    They have also begun steps to put in place a national 
program to review inspection efforts at the local level. We 
think those are all commendable.
    However, we did have two other recommendations that FAA 
continues to study and that we continue, frankly, to push them 
on, and that has to do with creating a separate investigatory 
body to handle safety complaints raised by safety inspectors. 
Under the current method, such complaints are investigated 
largely at the local or regional level. We think that there is 
the danger that has happened at Southwest for those 
investigations to lack objectivity and credibility.
    We also recommended, in order to deter what we labeled ``an 
overly collaborative relationship'' between a couple of 
inspectors at Southwest and the carrier itself, that FAA rotate 
or transfer certainly supervisory inspectors at designated 
periods at three years, four years, whatever might be feasible.
    F.A.A has informed us that, for budgetary reasons, they do 
not consider that feasible, and they have proposed, as an 
alternative, further assessing or inspecting the climate 
between the inspection office and the carrier.
    We are evaluating that. We have some reservations. We will 
continue to work through those with the agency.
    Mr. Olver. Do you think that the actions and the back and 
forth between the IG and the FAA, as public as this one 
obviously has become, that that has caused other carriers to 
examine those very same issues? Have you sensed that that kind 
of movement is occurring so that those kinds of things will not 
happen with the others?
    Mr. Scovel. We have work underway for the House Aviation 
Subcommittee along those lines, and we are looking at the air 
transportation oversight system implementation at other 
carriers besides Southwest.
    We have found problems with the timeliness, largely, of 
inspections that are required under this ATOS system at other 
carriers as well.
    Mr. Olver. Thank you very much. Mr. Latham.
    Mr. Latham. Thank you very much, Mr. Chairman.
    Ms. Siggerud, I see Iowa is going to be one of the 16 
states that you are going to be monitoring, auditing, whatever.
    Ms. Siggerud. Yes.
    Mr. Latham. Can you tell us what factors you are going to 
be looking at? How do you measure the success, and are there 
some things different that you are going to be doing with the 
stimulus package than what you would normally do under regular 
programs, or are there some things that maybe we should think 
about incorporating into regular programs that you are going to 
be looking at?

                                  GAO

    Ms. Siggerud. Sure. What we have done at GAO so far to get 
ready to do this is look among the various parts of the 
package, including the transportation parts of the package, 
where are the large dollars, in terms of money flowing to 
states and localities, and where might there be risk based on 
past IG work on these programs.
    We are then putting together an overall program at the 
governor's office and the controller or state auditor office to 
look at internal control concepts across the state in all of 
the different departments and drilling down on specific issues 
related to the goals of the Act and how the individual 
departments in the state are setting up their programs to 
deliver on those goals and then reporting on it bimonthly. That 
is really what is different for GAO, is that rather than 
taking, say, a year to do the work, which we often do, and then 
reporting any problems we find at the end, we will be reporting 
to the Congress and the Department on a very real-time basis on 
issues as we identify them.

                             CYBER SECURITY

    Mr. Latham. Very good. Mr. Scovel, on cyber security, last 
month, the FAA informed the Congress that they discovered a 
breach of security at one of their servers. It did not affect 
safety and operation of the airspace, but a lot of the 
employees were exposed, from a personal information standpoint.
    One of the issues that was identified by the IG, as far as 
your cyber security risk, was a need to enhance protection of 
personal identity information--basically, everything you warned 
Congress about, I guess, previously. Is there any way the FAA 
could have prevented the attack? Go ahead and answer that.
    Mr. Scovel. Well, FAA, as well as other agencies in the 
Department and other agencies across government, in fact, 
suffer from the same vulnerabilities when we are talking about 
implementing Internet-protocol-based software programs instead 
of proprietary programs developed for use in a closed system. 
That increases the vulnerability, and FAA has moved in that 
direction.
    Many of FAA's systems are interconnected, meaning that if 
there is a breach in one system, other systems can also be 
compromised.

                             ADS-B PROGRAM

    Finally, to the extent that FAA has outsourced, that, 
naturally, too, increases its vulnerability, and FAA has 
outsourced some functions. The ADS-B program, which is a 
cornerstone of next-gen, has been outsourced and is under 
contract now, and the ground stations are being built, but that 
is not under the direct control of the agency, again; that is 
outsourced, and so there is further risk there.
    We have ongoing studies concerning Web application 
security, specifically as it pertains to air traffic control 
systems, and we have also been requested to look at the 
agency's security precautions with regard to the medical data 
it holds for pilots and others who have FAA licenses.
    We will be in a position to comment in detail on the 
agency's precautions once we finish that work.
    Mr. Latham. How many people were exposed, as far as their 
personal information?
    Mr. Scovel. Mid-40,000 is my recollection, 45,000, 48,000, 
or thereabouts, in the most recent breach at FAA last month.
    Mr. Latham. Did you wonder if the Department is putting 
enough emphasis on the issue? I see that they no longer have a 
designated senior official responsible for managing the 
information security program because that official was 
reassigned to Operations, apparently. You state that the chief 
information office has only issued a final policy on 11 of 52 
topics that require IT security policy.
    Mr. Scovel. Right.
    Mr. Latham. Is there anybody actually minding the store 
there? It does not look like there is the emphasis it should 
be.
    Mr. Scovel. Right. The Department suffered over the last 
couple of years when it comes to information security, and our 
annual FISMA report last year really called them to task for 
that.
    I know it had the attention of Secretary Peters last year 
and the deputy secretary as well, and it was one of the 
highlights from us to Secretary LaHood when he was coming in.
    The Department, as you know, does not now have an approved 
CIO, so we have an acting official in that capacity, as we do 
in a number of other key roles in the Department.
    Mr. Latham. But that has nothing to do with the transition, 
as far as the administration.
    Mr. Scovel. No, it does not. What we highlighted last year 
in our FISMA report was an ongoing problem, and when it comes 
time for the Department to get its grade from Congress, it 
probably will not be good this year.
    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Pastor.
    Mr. Pastor. If you hear us with great concern about air 
safety, it is because we are on a plane twice a week, so, for 
us, it is very important.
    During the hearings with the FAA, we were told, and I think 
we have been told for the last three years, about the great 
number of air traffic controllers who are retiring, and this 
Committee, through the Chairman and Ranking Member, has been 
providing more money so that we can go out and recruit and get 
people into training.
    What is the balance, in terms of the retirement, and where 
are we on the recruitment so that we will not find ourselves 
short?
    Mr. Scovel. I can comment on that, Mr. Pastor. We have done 
extensive work on that in my office.
    You are absolutely correct. Air traffic controllers are 
retiring in large numbers. These are the controllers who were 
first hired after the 1981 PATCO strike.
    Since 2004, about 5,000 controllers have left the Service, 
not all of them due to retirement; others simply due to more 
routine attrition, but large number of them were retirees.
    To its credit, FAA has managed to hire up to fill those 
gaps, and, in fact, today, FAA has on its air traffic 
controller rolls more controllers than it did four or five 
years ago. What has changed, though, is the experience level 
across the workforce. In 2004, 15 percent of the controllers on 
the rolls were new. Today, it is 26 percent.
    A rule-of-thumb in the field in air traffic control is they 
can accommodate generally at most facilities a rookie level of 
about 25 percent. That means they can train them up at the 
facility level in fairly good confidence. Above that, it gets 
dicier. My office has studied a number of air traffic control 
facilities. Some are upwards of 40 percent in terms of the 
number of new controllers assigned to those facilities.
    It is a worrisome point because of the extensive training 
that is required when a new controller reports to a facility in 
order to bring him or her up to the certified professional 
controller level, and that entire process can take up to three 
years.
    Ms. Siggerud. Mr. Pastor, our analysis is very much in 
agreement with what Mr. Scovel said, and we have actually 
characterized FAA as being ahead of the curve, in terms of 
hiring up and staffing up to deal with the situation.
    Mr. Scovel. We are ahead of the curve, but by being ahead 
of the curve in the facilities themselves, we may be, in terms 
of training and experience, at more risk. I will put it that 
way.
    Ms. Siggerud. Right.
    Mr. Pastor. What is your assessment? As I understand, you 
have a decentralized system of training. You have various 
facilities, and at least, in my opinion, it may lead to unequal 
training, stressing different priorities.
    Now, what is your assessment of the current training, and 
is the decentralization something that we ought to look at, or 
is it working well?
    Mr. Scovel. We are looking at that, at the request of 
Chairman Costello on the House Aviation Subcommittee, and we 
will have a report on that later this year.
    A certain extent of decentralization is necessary because 
facility-to-facility conditions change, and requirements 
change, and the controller workforce at each facility needs to 
be trained to the local conditions.
    We have recommended, based on our past work, that FAA pay 
closer attention to lessons that can be applied nationwide 
across the entire air traffic control facility body, but we 
will be taking a look further to see whether FAA has attempted 
to implement that recommendation.
    Mr. Pastor. I guess you are using simulators more than they 
did in the past. Have you had a chance to evaluate that?
    Mr. Scovel. We have, and it is part of our ongoing work as 
well. Simulators have been in use fairly extensively for the en 
route centers and for the TRACONs for a number of years and 
successfully. What is new for FAA most recently is the use of 
simulators for the tower facilities. FAA and the controllers 
that we have spoken to are enthusiastic about the success of 
that program. We are taking a close look at it, but we think it 
holds great promise.
    Mr. Pastor. As I recall, and maybe you can correct me if I 
am wrong, but, as I recall, the contract that was negotiated 
with FAA and the air traffic controllers was a two-tiered 
system where basically the benefits and salaries of the 
experienced controllers that were in place were one way, as the 
new recruits come in and are put in the towers, or TRACONs, 
that they had differential pay, meaning that it was less, and 
also a difference in benefits and retirement, et cetera. So 
there is a two-tiered system.
    Have you had a chance to evaluate how effective that has 
been or how ineffective that has been?
    Mr. Scovel. We have, and we are, of course, aware of the 
most recent contract work arrangements provisions for a two-
tiered system, but we have not been asked, and we have not been 
able to undertake any kind of study of its effectiveness, in 
terms of perhaps recruiting or retention.
    We do know, from talking to controllers, that the state of 
the contract is a matter of great concern to them. Some have 
indicated that that is a primary reason for the large number of 
retirements. We have found that controllers anecdotally have 
told us, in some cases, it is a reason. We could not peg it 
certainly as the prime reason. There are just so many 
individual reasons why controllers do retire.
    Mr. Pastor. That seems to be one that pops up and gets your 
attention.
    Mr. Scovel. It does, in terms of their satisfaction with 
the general work quality environment.
    Mr. Pastor. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Berry? It was my intent to ask one more 
round of questions.
    Mr. Berry. Thank you, Mr. Chairman. Can you tell us where 
those centers are that had 40 percent new people?
    Mr. Scovel. Mr. Berry, I was thinking specifically of the 
Southern California TRACON. I am also aware of at least one 
other that has upwards of 40 percent. I can get you the list, 
as we have it, based on our current work after the hearing.
    Mr. Berry. That would be someplace Mr. Pastor and I would 
not want to go.
    Mr. Scovel. [Laughter.] I understand.
    Mr. Berry. Thank you.
    Mr. Scovel. Sure.
    Mr. Berry. Thank you, Mr. Chairman. The question is very 
important.

                                 MARAD

    Mr. Olver. Kate Siggerud, I want to cover one item here.
    Last April, I and the former ranking member, Mr. 
Knollenberg, along with the chair and ranking member from the 
Senate, wrote a letter to the GAO asking you to do an audit of 
past and present financial practices at the U.S. Merchant 
Marine Academy, which came after MARAD's acknowledgement of 
some troubling financial practices there.
    That final audit, my understanding is, it is supposed to be 
done within the next month or so, sometime next month. That 
gives about six weeks or so, to the end of that time.
    Is there anything you can tell us about that review, at 
this point, about any of the key findings of the audit, and do 
you find that there has been an Antideficiency Act violation in 
the process? Are we on target for the actual release of that 
report on time?
    Ms. Siggerud. Our accounting division in GAO has put a lot 
of work into that project, and what they have told me is that 
you can anticipate a mid-April report on this topic.
    I can give you a high-level overview of what they have 
found so far, and there are some significant concerns. 
Specifically, they have identified significant internal control 
weaknesses at the academy and some inappropriate activities 
between the academy and its affiliated organizations. In 
particular, this had to do with parking funds in inappropriate 
accounts at the end of fiscal years and those sorts of 
activities.
    The report will cover a couple of things: academy policies 
and procedures, as well as oversight that MARAD has conducted, 
and, as well, it will highlight selected activities and 
expenditures that we viewed as problematic.
    We have reached out and made senior MARAD and academy 
officials aware of some of these issues and are starting to see 
some action on them.
    Mr. Olver. But you are not, at this moment, ready to say 
that there is or is not an antideficiency violation?
    Ms. Siggerud. I would like to get back to you, for the 
record, after we talk to our accountants on that. What they 
have told me is significant internal control weaknesses.
    Mr. Olver. And you think the report is still on track.
    Ms. Siggerud. Absolutely.
    Mr. Olver. All right. Well, we will expect that.
    You were, at least, aware of this program, though I think 
the audit was certainly being done there. Do you have anything 
to add to that, Mr. Scovel?
    Mr. Scovel. Thank you, Mr. Olver. I do. As you know, the IG 
is responsible for auditing the Department's financial 
statements each year. In 2007 and 2008, we identified the 
payrolls at the Merchant Marine Academy as potential ADA 
violations.
    The Department, last year, undertook a study of that, a 
review. That was underway at the time GAO was asked to conduct 
its audit.
    I was informed, last night and this morning, that the 
Department has determined that there were, in fact, three 
Antideficiency Act violations, and the secretary, I am 
informed, has signed a letter to OMB to that effect.
    Mr. Olver. I see. I see. Well, of course, what the penalty 
is for that, whether it is hanging or something else, I do not 
know, but if the corrections are made, that is, of course, 
important.
    I thank you for that. We will follow up when we hear more 
about that.
    This has been a very good hearing. I am very pleased that 
you were able to join us today. We have had at least two rounds 
of questions from everybody who wished to have two rounds of 
questions, and I thank you very much for being here, and, with 
that, we will declare the hearing closed. Thank you very much.
                                          Thursday, March 12, 2009.

               TRANSPORTATION CHALLENGES OF RURAL AMERICA

                               WITNESSES

JERRY FRUIN, Ph.D., ASSOCIATE PROFESSOR, DEPARTMENT OF APPLIED 
    ECONOMICS, UNIVERSITY OF MINNESOTA
FAYE MALARKEY BLACK, VICE PRESIDENT, LEGISLATIVE AFFAIRS, REGIONAL 
    AIRLINE ASSOCIATION
DALE J. MARSICO, CCTM EXECUTIVE DIRECTOR, COMMUNITY TRANSPORTATION 
    ASSOCIATION OF AMERICA
ROBERT SCHWARZ, EXECUTIVE VICE PRESIDENT, COMMUNICATIONS, PETER PAN BUS 
    LINES

                   Opening Remarks of Chairman Olver

    Mr. Olver. This hearing will come to order.
    I have found the written testimony that you testifiers have 
provided extremely interesting, and I must say that it has made 
my mind--I could hardly sleep last night--the mind was working.
    In any case, I am expecting we will have a very interesting 
discussion.
    There are about five or six other Subcommittees of 
Appropriations that are holding hearings at the same time. 
Earlier this week, there was a time when 10 of the 12, I think, 
were all running at the same time. It makes things very 
difficult. So we will have people coming in and out, as others 
of their responsibilities take them elsewhere.
    I thank you very much for being here. Today's hearing will 
focus on the transportation challenges facing rural America, 
and I think, from the discussions, it would be fair to say that 
much of rural America is in, or close to, crisis at the present 
time.
    According to the Census Bureau, 21 percent of the U.S. 
population lives in rural areas. That comes to some 60 million 
people.
    Now, two years ago, my staff and I prepared this map that 
is shown here on your right to illustrate the disparate growth 
between the urban areas and the rural areas, the swiftly 
growing green areas, and the pink is not all of the rural 
areas, but it is the areas, the counties, that are actually 
losing population, have lost population, between the 1990 and 
the 2000 Census. That map is actually the genesis for today's 
hearing and discussion of the transportation challenges facing 
rural America.
    Those rural counties, as they lose population, are aging, 
and that is likely to result in a steeper drop in population in 
the next census, which is only a year and a half or so from 
now, as people of child-bearing age move, migrate, in order to 
get to opportunities, to education, to better medical services, 
and so forth. So that is why I suggested we may be close to 
crisis.
    Every Member on this side has communities and counties that 
are losing. We have two Texas Members, and if you look at the 
map and realize where New Mexico ends and Texas starts, there 
is a lot of territory there that is losing population. If you 
look up farther north, we have Dr. Fruin here, who comes from 
Minnesota, and if you take Minnesota, you will note that some 
of that territory is in southwestern Minnesota, and it is 
dramatically in the States of Iowa and South Dakota and North 
Dakota. My Ranking Member is from Iowa.
    So it affects all of us. Even I have areas. We do not have 
strong counties in Massachusetts, so we go by communities. I 
have lots of communities that are losing population in 
particular areas.
    In North Dakota, there are 53 counties; 47 of them lost 
population between the last two censuses, and 40 of those that 
lost population, counties with 1,000 square miles, have fewer 
than 10,000 people, and they are probably going to lose some 
more.
    Iowa, my colleague's home state; nearly half of its 
counties have lost population in the same census, and the same 
thing is likely to go on there. Not so many of them are under 
10,000 in total; only about 20 of them are under 10,000. So 
that sort of is a backdrop.
    Our topic is really the transportation issue, but it goes 
much more broadly, as you, who will be speaking to us shortly, 
have already indicated in your testimony. Rural transportation 
needs are often overshadowed by the transportation and mobility 
challenges in metropolitan areas, yet the rural areas also face 
unique transportation and mobility challenges that should not 
be overlooked by policymakers.
    Out of the 2.9 million miles of public roads classified as 
rural, less than 25 percent of these rural road miles are on 
federal-aid highway systems and, therefore, eligible for 
federal resources. Access to public transit within and across 
county lines; bus or rail service to metropolitan areas; and 
air service is also limited in most rural counties.
    While the vast majority of rural residents rely on cars to 
commute to work or school, some rely on public transportation 
where available, and where it is not available, they rely on 
Shank's mare or family and friends for where they need to get 
to.
    So, today, there is a handful of major federal programs 
that improve rural transportation access within federal 
highways. Urban and rural roadways and bridges compete for 
resources under the Federal-aid Highway program.
    The Federal Rural Transit Formula program provides transit 
capital and operating assistance to communities with fewer than 
50,000 people. Within that program, states are required to 
spend at least 15 percent of their formula funds for rural 
intercity bus services access, but that is waivable, it turns 
out.
    The Essential Air Service was created after airline 
deregulation, in 1978, to preserve air service into small 
airports in rural and small urban areas. The program provides 
assistance to more than 100 communities in the Lower 48 States 
and more than 40 communities in Alaska. Alaska is a bit of its 
own story.
    Regional airlines serve more than 600 airports across the 
nation and provide the only scheduled air service to 470-plus 
airports, and the general aviation community, while not 
scheduled, serves thousands of other small and rural 
communities. Each of these providers is essential to our 
national transportation network and critical to our ability to 
move people and goods to communities of all sizes.
    Now, our panelists today have a range of experiences using 
federal and state programs to provide transportation in rural 
areas or, in the case of Professor Fruin, someone who has done 
extensive research on rural issues and rural transportation. I 
hope that they will share with us what they see as major 
transportation challenges in rural America, and I am sure they 
are going to tie it to other matters that are part of the rural 
scene and the crisis that I say that we are at or near in those 
areas.
    Let me introduce the panel. Dr. Jerry Fruin, on my left and 
the audience's right, is an associate professor of applied 
economics at the University of Minnesota and has written 
extensively on the broader, road-related challenges in rural 
communities.
    Ms. Faye Malarkey is vice president of legislative affairs 
of the Regional Airline Association and has experience with the 
Essential Air Service program.
    Dale Marsico is the executive director of the Community 
Transportation Association of America, also known as `CTAA,' 
and, through their member organizations, they are expanding 
mobility and transit options for people in rural and urban 
America, but they think deeply about a lot of other issues 
related to rural America.
    Bob Schwarz is the executive vice president of Peter Pan 
Bus Lines, which provides intercity bus service throughout the 
Northeast.
    With that, with the introductions, let me recognize my 
Ranking Member, Tom Latham, for any comments that he would like 
to make.

                Opening Remarks of Ranking Member Latham

    Mr. Latham. Thank you, Mr. Chairman; I appreciate your 
having the map up here to show the changing demographics that 
we have in rural America today.
    In my district, I have 28 total counties, some of which are 
losing population. The elderly population is increasing, 
percentage-wise, quite dramatically, but I also have what could 
be considered to be rural counties that are some of the 
fastest-growing counties in the country. Dallas County, just 
west of Des Moines, was number 10 in the nation, as far as 
growth.
    So we have got a real problem, as far as trying to figure 
out the best way to look at both the change in demographics, as 
far as decrease in population, but also in more rural areas 
where there is actually some growth going on, and to balance 
those needs. I think, as you point out, it is extremely 
important.
    I, too, want to welcome the panel here this morning and 
look forward to your testimony. I am particularly pleased to 
see that my part of the country is represented here, with Dr. 
Fruin from Minnesota. We can get into some Iowa-Minnesota 
jokes, if you would like. We have a history of doing that, as 
Deena from Minnesota here will attest to, but I think you can 
speak to the unique transportation needs, certainly, that we 
have in rural America.
    Throughout this hearing and, I think, other forums that we 
will have in the Subcommittee, I hope that we really are 
focused on the needs of my rural constituents in areas such as 
the safety of rural roads, the efficient movement of 
agricultural products, including the renewable products, which 
are offering such an economic boost to rural America, and the 
importance of maintaining the vast road structures that we have 
today in rural America.
    The State of Iowa is number 12 in the country in terms of 
the size of the road system. You may not believe that, but we 
have market-to-market roads. Every four miles, we have hard-
surface roads in the State of Iowa. It is a pretty incredible 
system that is needed to get products from point to point, 
including the intermodal transfer areas, on points from which 
we need to ship not only within the state, and to other parts 
of the country, but internationally. So our needs are really a 
lot different than the more urban areas, and we have got to 
take that into consideration, I think, in the reauthorization 
of the new highway bill and looking at funding levels.
    On the rail side we really need to focus on the needs of 
states like Iowa, agricultural states, where we have got to 
maintain the connectivity. The short-line rail infrastructure 
is extraordinarily important to us for the smaller communities, 
as far as economic growth.
    I am the youngest of five boys, and when we were 10 years 
old, we each got a bicycle, and I remember, when I was 10 years 
old, that my bicycle was delivered in Alexander, Iowa, in a 
town of 160 people on the rail. We would buy from Montgomery 
Ward through mail order.
    Certainly, that system has been gone for a long, long time. 
There is no rail service there, and the whole thing has 
changed, but the change that has occurred in my lifetime is 
amazing.
    In aviation, certainly, we need to continue a dialogue. The 
importance of the rural airports, the small airports, general 
aviation--all very important, as far as attracting businesses 
and growth in those smaller communities. At the same time, we 
need to make sure that we are fiscally responsible, as far as 
what we do in aiding the rural areas.
    I look forward to this hearing, Mr. Chairman. Thank you.
    Mr. Olver. I hope I do not have to referee between Iowa and 
Minnesota.
    I do want to point out that, the current authorization 
bill, the SAFETEA-LU Authorization Bill, I was the author of an 
amendment, which was to be a three-part pilot program to put 
broadband down three different interstate highway rights-of-
ways, one in your area being Route 90 westward from Madison all 
the way across South Dakota. That was supposed to go close 
enough to the Iowa line so that the build-out, by way of cell 
towers or something like that, from fiber optics that would be 
laid down the interstate right-of-way was supposed to help 
either of them. I do not know whether that has moved forward. I 
know some studies have been done about it, in the meantime.
    Anyway, I think I have mispronounced your name previously.
    Mr. Fruin. It is Fruin.
    Mr. Olver. It is Fruin.
    Mr. Fruin. It is Fruin.
    Mr. Olver. Okay. I thought it was perfectly reasonable. I 
thought that Tom knew something better when he said `Freun.' 
That was what I heard, in any case, so I was going to correct 
myself.
    In any case, now to our panel. Your complete written 
statements will be placed in the record, including, I think, 
each of you may have some glossy booklets or whatever that you 
want to put in the record. If you could keep your oral summary 
to around five minutes, then we will have a better discussion 
up here.
    So, with that, Dr. Fruin.

                      Opening Remarks of Dr. Fruin

    Mr. Fruin. Thank you. Mr. Chairman and Members of the 
Subcommittee, thanks for inviting me here to this hearing. I am 
Jerry Fruin. I am an associate professor of marketing, 
transportation, and logistics in the Applied Economics 
Department at the University of Minnesota. I have been studying 
these agricultural and rural transportation issues since 1975. 
My comments and opinions expressed here today are my own and do 
not represent an official position of the University of 
Minnesota.
    I want to cover, in this five minutes, if I can, six 
topics: first, the rural roads and rural road financing; a 
little bit about the effects of ethanol; something about the 
financial needs of the regional railroads and the need for 
container service throughout the rural areas; concern about the 
monopoly returns to the Class 1 railroads in some of the areas; 
and, finally, finishing transportation deregulation, and a 
little bit on the importance of water transportation for rural 
America.
    Rural roads. Because of the advances in technology, rural 
residents need better and safer rural roads. Because of the 
faster speeds of vehicles, there is a need for wider roads and 
safer intersections.
    Some of our roads today do not meet reasonable standards 
for today's use; other roads are adequate but will deteriorate 
if funds are not available for the required maintenance.
    A little bit about the reasons:
    First, the number and mileage of rural roads in some areas 
is excessive. Technological advances in transportation, 
agriculture, and related industries have eliminated the need 
for many roads, but habits, customs, and institutions have 
hindered the rationalization of this rural road system.
    Secondly, the traditional methods of funding rural roads 
and all roads have not kept up with inflation and the new 
demands, especially as programs to reduce gasoline consumption 
become effective.
    The traditional sources of highway funding have been 
gasoline taxes, vehicle operator license, and general taxation 
in rural areas, especially the property tax.
    As technology evolves, I know that road funding sources 
should include vehicle mileage taxes that would place hybrid, 
biofuel, and electric autos on the same basis as conventional 
gasoline vehicles.
    I am an advocate of congestion pricing, but that will not 
help the rural counties very much. On the other hand, I think, 
in the long run, it should be possible for commercial vehicles 
to develop weight, distance or ton-mile fees that we can use 
for truck user fees, and, in fact, the truck user fees should 
probably be able to be varied depending on road surface so that 
the appropriate agency can be reimbursed for road damage by the 
various-sized vehicles.
    And I might mention that, in the railroad system, we should 
be very careful about connectivity. In the 1980s, after the 
increase in truck weight limits on the federal highway road 
system from 73,000 pounds to 80,000 pounds, Minnesota made a 
commitment that all Minnesota towns would be served by at least 
one highway with an 80,000-pound road outlet. Meeting this 
commitment was then a priority of the Minnesota DOT and was 
accomplished.
    Now, I expect that the favorable economics of larger, 
heavier trucks, and the heavier weight limits allowed in both 
Canada and Mexico, will eventually lead to regulations allowing 
heavier vehicles on the U.S. truck highway system. When that 
happens, we will need to carefully design the rural road 
network so that communities will continue to have year-round 
access to whatever that newer weight system is.
    Ethanol. Corn ethanol and biodiesel had the advantage of 
fitting into the existing agricultural transportation system. 
Most, if not all, corn ethanol plants have been sited with 
adequate transportation, both in and out, although some of the 
earlier plants lack good access to rail service.
    The additional transportation needs were primarily for 
handling liquids; that is, tank trucks, tank cars, and so 
forth, liquid barges, and, in the near future, pipelines. But 
there have been changes in the pattern of corn shipments from 
farm to market. These were probably no greater than those we go 
through when farmers shift from a local elevator to a more 
distant, unit-train loading terminal.
    However, there is a big difference here. When we switched 
from a local movement to ethanol plants, the benefits stay in 
the community. When we are forced to haul grain long distances 
to the unit-train facilities, the benefits accrue primarily to 
the railroads and not the local community.
    Cellulosic ethanol. Biomass feedstocks for cellulosic 
ethanol will present transportation problems. Feedstocks such 
as wood chips and dry land grasses will have to be hauled from 
areas that frequently lack adequate farm-to-market roads. Even 
where adequate roads exist, many potential feedstocks are 
light, or less dense, than corn and soybeans. An efficient 
collection system will require larger vehicles, which will 
increase road hazards and have a safety impact on rural roads.
    Something about the financial needs of the regional 
railroads: The current system of short-line railroads is 
composed of discarded branch lines that were uneconomic. The 
equipment on the short lines was obtained and inherited from 
the older things and were obsolete at the time. Many of these 
railroads have not been able to generate the funds needed for 
further rehabilitation, for faster speeds, and the replacement 
of aging and obsolete bridges. Many of the short lines need 
funds to obtain more modern equipment, like jumbo hopper cars, 
to get favorable rates from Class 1 railroads.
    We should also do away with the paper barriers that tie the 
branch lines to their original parent railroad. A road should 
be allowed to exchange traffic with any railroad and not just 
the one it came from. Twenty years of servitude to the old 
master is too long.
    Mr. Olver. May I? I was a professor at one time, and I am 
still sort of--but you need to spend not more than a minute or 
so on each of your last three items, on each of them.
    Mr. Fruin. Okay. Containers. We need container yards in 
rural areas. The mainline railroads have closed the rural 
container yards, and we need the containers.
    Capitalism and monopoly returns to railroads. A portion of 
the mainline railroads' capital return is not unique technology 
management but the monopoly ownership of the lines. I do not 
advocate reregulating, but captive shippers should be 
protected, one way or another, including the possibility of 
allowing access by sophisticated shippers to the lines.
    Deregulating transportation. Finally, ``economic 
deregulation'' means allowing the free entry of firms into a 
business and the freedom to set prices. We think that free 
entry and the freedom to set prices will allow competition to 
keep prices in line. We do not look at economic deregulation as 
having anything to do with the states' need to set safety 
issues and things like that.
    Finally, water transportation. Any survey of agricultural 
and rural transportation would be remiss if it did not include 
water transportation. The majority of U.S. corn and soybean 
exports are barged down the Mississippi River. The Great Lakes 
and St. Lawrence Seaway connect the corn and wheat belts and 
the industrial heartland with the Atlantic community.
    Water transportation is the lowest-cost, safest, and most 
energy efficient, and environmentally friendly method of moving 
large quantities of bulk commodities.
    In my opinion, we are underinvesting in our nation's 
waterways, thereby contributing to transportation logistical 
inefficiencies, both in rural America and in the U.S. economy.
    So thank you, and I will answer questions you may have.
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    Mr. Olver. Thank you. Ms. Malarkey Black.
    Ms. Malarkey Black. It makes me feel like a newlywed.
    Mr. Olver. Okay.

                 Opening Remarks of Ms. Malarkey Black

    Ms. Malarkey Black. Good morning, Mr. Chairman and Members 
of the Subcommittee. My name is Faye Malarkey Black, and I 
represent the Regional Airline Association.
    On behalf of RAA, thank you for the opportunity to share 
our thoughts with you today.
    For the past 30 years, regional airlines have played a 
critical role in our nation's air transportation system, 
providing safe, efficient, cost-effective, and convenient air 
service to every corner of the country.
    As you noted, today's regional airlines serve more than 600 
airports and provide the only source of schedule airline 
service at just about 75 percent of our nation's commercial 
airports.
    The drastic fuel cost fluctuations of recent years, 
alongside the severe downturn in our nation's economy, have 
created a very challenging operating environment for regional 
airlines. Capacity is down across all segments of the 
commercial airline industry, yet regional airlines are 
experiencing the deepest cuts.
    In 2008, regional airlines suffered a net loss of 243 
nonstop routes. That is compared to a net loss of 101 mainline 
routes.
    The Essential Air Service program, designed to provide 
continued air service to smaller communities in a deregulated 
airline market, has been underfunded and, frankly, under attack 
in recent years. In fact, more than 80 years of air carrier 
operational experience was lost when EAS providers Air Midwest, 
Big Sky, and Skyway stopped providing service last year.
    Simply put, these airlines were no longer able to tolerate 
the financial losses forced upon them by EAS program policy. 
When these carriers shut down, more than 40 EAS airports lost 
all of their scheduled air service. Although other airlines are 
stepping in to restore the service as quickly as they can, some 
of these routes remain without air service today.
    As a result of these disruptions, DOT experienced 
substantial cash savings in 2008. This makes forecasting the 
EAS budget a complex undertaking. Many of the EAS carriers who 
went out of business were operating in sizable financial 
losses. It is just not feasible for replacement carriers to 
profitably serve the same markets at the same rates.
    Significant carrier cost increases further complicate 
forecasting. In some instances, fuel costs have more than 
tripled in current DOT rate-making procedures compared to 
previous years.
    These factors are substantially increasing EAS program 
costs overall. This means Congress must look beyond historic 
spending levels when projecting current funding needs.
    Despite these challenges, EAS carriers remain firmly 
committed to the program. While we agree with other 
stakeholders on the need for reform, RAA urges Congress to make 
only those changes that would truly enhance air service under 
the program.
    To this end, we applaud this Committee for prohibiting 
troublesome community cost-sharing proposals that have 
threatened this program in the past.
    In order to restore health to the program, RAA urges 
Congress to implement a number of simple reforms.
    First, if the EAS program is to succeed, it needs funding 
of at least $200 million annually. This represents the absolute 
minimum funding level necessary just to continue service to 
current EAS communities. It does not account for newly 
qualified communities, and it does not allow for expenditures 
on things like marketing or other programs.
    Second, we advocate an increase in the air carrier profit 
margin allowance from five to 15 percent. This modest 
adjustment would not represent a windfall to EAS providers but 
would simply provide insulation against cost fluctuations and 
reduce instances of service termination notices being filed as 
the sole means of a carrier's survival. Eliminating these 
service termination notices would go a long way towards 
restoring faith in the program.
    Third, we urge Congress to increase the per-passenger 
subsidy cap to $300 and index it for inflation.
    Fourth, we advocate lengthening DOT contract life spans 
from two years to five. Longer contracts help airlines finance 
aircraft and would stabilize air service, from both the carrier 
and community perspectives.
    Finally, we encourage Congress to embrace the commitment 
made to communities back in 1978, when it promised they would 
not lose their air service in a deregulated airline market. I 
can assure you, you will find the EAS providers to be your 
engaged and committed partners in this important effort.
    Thank you for the opportunity to testify on this important 
issue today. I look forward to responding to your questions at 
the conclusion of the panel.
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    Mr. Olver. Thank you very much. Mr. Marsico.

                     Opening Remarks of Mr. Marsico

    Mr. Marsico. Good morning, Mr. Chairman, and thank you for 
your invitation to be here. I am Dale Marsico from the 
Community Transportation Association.
    I would begin by saying, as usual, I agree with your 
observations on many things but, particularly, your observation 
that there is a crisis in rural America's mobility. I think 
that as best we could sum this current situation up is that we 
have been fighting a holding action, for many years, on the 
subject of mobility in rural America, and we are losing ground.
    Although all of the modes have great difficulty, we are 
most concerned about the ones that affect people and their 
movement, and in the glossy piece of, I guess, attachment that 
we did mention, we talk about that in some great length. But 
let me just say that we have four priorities in rural 
transportation that we feel are absolutely essential for this 
year and the years ahead.
    One of them is improving surface mobility in rural America 
by strengthening regional and intercity connections that rural 
residents and communities require.
    The second thing is that we think that we need to continue 
to guarantee adequate transportation resources in the 
healthcare field for medical patients, especially those who 
live in rural areas that participate in Medicaid and Medicare.
    The third: We think we need to invest more resources in 
helping local communities design transportation programs that 
help rural residents work outside the areas that they call 
home, and we think that there are special needs of our veterans 
and their families, especially those in the veterans' medical 
care area that also require attention.
    First, about connecting rural America. For 30 years we have 
been trying to stave off disaster in rural America by using a 
new definition of ``public transportation'' to serve 
communities and people that live in rural America. These are 
often identified as the Section 5311 programs that are 
currently administered by the U.S. Department of 
Transportation.
    As you mentioned, Mr. Chairman, 15 percent of those funds 
are set aside for intercity buses, but 15 percent, when you 
consider the size of the rural program, is insufficient to 
maintain the connectivity between communities. We think that 
the next reauthorization needs to identify new ways to connect 
those communities, either by rail or by intercity bus, to 
create a flexible, cost-effective network to connect 
communities so that people in rural areas have the same option 
as those in urban areas to go from place to place.
    We think that the decreasing size, in the last 10 years of 
our intercity bus system, as well as our intercity rail system, 
has been extraordinarily hard on the rural communities who are 
on the lines of those services and makes it very difficult for 
people to go from place to place in a cost-effective manner.
    On the healthcare side, we would just point out that almost 
every one of the healthcare solutions that has been offered and 
the discussions that have taken place on healthcare reform are 
always about outpatient medicine, and outpatient medicine 
clearly requires strong transportation, especially for our 
seniors, who are now participating in very complex medical 
strategies, like dialysis and outpatient chemotherapy, that 
often mean that they cannot drive themselves or have a friend 
take them back and forth for these continuous treatments, and 
we were very concerned about proposals to dismantle the 
transportation benefit provided for dialysis patients and other 
seniors in Medicaid.
    I want to thank you, at this time, Mr. Chairman, for your 
work in H.R. 7122 to continue those benefits for our seniors 
and for people who are low income in our Medicaid program, 
especially in rural areas because without that access, they 
can, obviously, not maintain the quality of their health, or 
their lives, when it comes to chemotherapy or dialysis, really 
hang in the balance.
    We also think that it is time that Congress took a look at 
this from the Medicare perspective because Medicare currently 
has no nonemergency transportation benefit for people living in 
rural areas, and people who need the kind of service, like we 
talked about for dialysis, often dial 911 when they have no 
alternative, costing the taxpayers a lot more money than if we 
had a benefit to help people who have those special needs.
    We know that Congress has been very busy trying to address 
the employment situation in rural America. We think that the 
programs and ideas that take place in the stimulus bill were 
good, but we think that our efforts in JOBLINKS are important 
because communities cannot design transportation programs to 
serve special populations without help, and we think that the 
technical-assistance opportunities that we have provided with 
others in JOBLINKS in the last several years have been 
important ways to stretch those dollars further.
    As you mentioned about our numbers of people living in 
rural America, 40 percent of our veterans live in rural America 
today, and, as you know, the complications of outpatient 
methodologies for them, the kinds of specialized equipment that 
they often need to come back and forth for outpatient 
treatment, especially our younger veterans with very 
complicated, outpatient methodologies for recovery, is at a 
critical level by a lack of good service in rural communities 
for lift-equipped vehicles and specialized vehicles and 
services that help veterans and their families stay at home and 
also help the returning wounded warriors by providing the kind 
of help that they can get closer to home, as opposed to being 
institutionalized.
    All of these issues affect the transportation of people in 
rural areas, and almost every one of the issues, whether they 
be transportation related to economic situations or healthcare 
situations, all have transportation as an important ingredient 
which needs to be addressed.
    We have no national strategy for moving people in rural 
communities. We think the reauthorization is a good idea in 
transportation, to take a look at it, but we must have a much 
broader, national strategy that addresses these problems so 
that we can just stop fighting that rear-guard action and 
actually work with rural communities in rural states to solve 
these problems.
    So we hope that your Committee, Mr. Chairman, will continue 
to address these basic needs that are absolutely necessary for 
everyone who calls rural America their home. Thank you.
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    Mr. Olver. Thank you very much. Mr. Schwarz.

                     Opening Remarks of Mr. Schwarz

    Mr. Schwarz. Good morning, Mr. Chairman, Congressman 
Latham, Subcommittee Members. It is a pleasure to come before 
you today.
    It is a little scary to be sitting here, particularly in 
front of Congressman Latham, because Iowa offers the best rural 
intercity bus program in America, and I would probably be well 
advised to listen to you, sir, and hear why rather than try to 
offer my suggestions to you, but I will do my best.
    Perhaps if Peter Pan was located in Iowa, we could have 
delivered your bicycle in our baggage bays, or, certainly, we 
could have delivered the seed from your family business to 
major markets.
    Peter Pan Bus Lines is the largest independent bus company 
in the United States. We provide fixed-route, intercity bus 
service throughout New England and partner with Greyhound Lines 
to provide bus service throughout the Northeast Corridor.
    Although Peter Pan continues to operate numerous rural 
routes in New England, we have had to reduce that service 
because of its increasing unprofitability and the lack of 
government support for it. Our experience mirrors the decline 
in rural service provided by Greyhound and other intercity 
providers throughout America.
    Although the spread of the private automobile has been the 
main reason for the decline, the imbalance in federal support 
has also been a major contributing factor.
    Nathan Associates did a comprehensive study of net federal 
subsidies to public transportation entities and found that over 
the 45-year period, 1960 to 2005, intercity bus received only 
three-tenths of one percent of total federal subsidies, 
compared to 43.6 percent for mass transit, 22.3 percent for 
commercial airlines and 9.8 percent for intercity rail.
    Motor coaches are the most affordable transportation mode. 
When subsidies are needed for rural services, intercity buses 
can provide those services at the least cost. Peter Pan and 
other bus companies are very interested in expanding their 
rural services. In fact, Congressman Olver, I think, by looking 
at your map, maybe Peter Pan should consider relocating. But 
this can only be done in conjunction with government programs 
that encourage and even remove impediments to the provisions of 
these services.
    Here are our recommendations on how those government 
programs should be structured or modified.
    Section 5311[f], rural intercity bus program. Congress 
established this program in order to strengthen and enhance 
rural intercity bus service. The program has not been 
successful in providing essential operating subsidies for rural 
routes. This is because of the requirement that subsidies be 
limited to 50 percent of net operating costs, which means that 
a local community must come up with the other 50 percent. That 
rarely happens in the context of intercity service.
    FTA proactively addressed this problem by establishing a 
pilot program. The private-matched pilot program is already 
producing results. At least 10 states have started, or are 
planning to start, a new federal feeder service under the 
program, but there are many other states that are hesitant to 
do so until the program is made permanent.
    Thus, we recommend that the Congress enact legislation 
making permanent the FTA private-match program.
    Another issue with the Section 5311[f] program is that if 
the governor certifies that there are no unmet intercity bus 
needs in his or her state, the state may use the 5311[f] funds 
for local transit. Some states have certified without any 
meaningful examination of rural intercity bus needs. I have 
personally experienced this situation.
    SAFETEA-LU attempted to fix this problem by requiring 
states to engage in a public-consultation process prior to 
making any determination about the adequacy of rural bus 
service. We recommend that the Committee oversee FTA's efforts 
to enforce this requirement and require FTA to withhold or deny 
funding to any state that fails to comply with the requirement.
    Intermodal terminals. I know, Congressman Olver, intermodal 
terminals are very important to you. You have been a leader in 
this field, and we appreciate it very much.
    In order for rural intercity bus services to succeed, they 
must be linked, not only to trunk line bus services but also to 
the services of other modes, such as air, rail, and local 
transit. This enables people in rural communities to move 
seamlessly to and from the national transportation network.
    SAFETEA-LU took a significant step towards the inclusion of 
intercity buses and intermodal terminals by making the 
intercity bus portion of those terminal facilities fully 
eligible for FTA funding. However, we believe much more needs 
to be done to enhance the development of intermodal terminals.
    In too many communities, there is no intermodal 
transportation center, and the intercity and local modes of 
public transportation are not linked in a manner that 
facilitates their usage. This is largely due to the stovepipe 
nature of federal transportation funding, which makes it very 
difficult to plan and fund intermodal terminals.
    Thus, we recommend that Congress enact an intermodal 
transportation center fund for the purpose of constructing 
intermodal passenger terminals that link all transportation 
modes, including intercity bus.
    I have other suggestions, but I have exceeded my time, and 
I apologize.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Olver. Thank you very much. I think you have laid out 
quite a table of thoughts here, and so I think we will have a 
good discussion as we move along.
    We will take five minutes per person. I get to define who 
speaks next, and it is basically in the order of how people 
came in.
    So let me take my first five minutes here. Really, there 
are so many things that I could now discuss, but I want to get 
to one thing.
    Dr. Fruin, in the time that I was already constraining you, 
you pointed out that you wanted to complete--in fact, the 
subtitle of one of your sections is ``Finish Deregulating 
Transportation.''
    Here, we have three folks who are saying and defining what 
greater needs there are because of what we did in air service 
to try to ameliorate the problem of the loss of service that 
would have occurred if there had not been anything done to the 
Essential Air Service.
    We have Mr. Marsico, who is talking about the enormous 
needs in rural communities for healthcare issues. I will use 
that one, but it is all of the issues along the way that there 
needs to be considerable federal input in that, and we have Mr. 
Schwarz also.
    And I might point out that you, just before the comments on 
finishing deregulation, had pointed out that, in the short-line 
rail systems, there was much too little being done by the 
federal government to keep them viable so that the rural areas 
could themselves be viable.
    Now, I do not know. Is there a contradiction here, or would 
you like to explain yourself, and I will let them comment?

                     DEREGULATION OF TRANSPORTATION

    Mr. Fruin. Basically, I said deregulate. I did not say stop 
subsidizing. I did not say stop aiding. I was pointing out that 
we still have areas that are not served because we have 
regulations that prohibit it. My experience recently in that 
has been taxicab deregulation and deregulating household good 
movement, things like that that are holdovers.
    When I say ``deregulation,'' I mean freedom of entry and 
freedom to set prices. I do not mean put people out of 
business. Let them be there. If they can make a case for 
subsidies, then we will spend the money, but do not let them 
stand up and say, ``That guy should not come into business 
because he will take business away from me,'' or, ``I do not 
want that new service because that will interfere with mine.'' 
That is the sort of deregulation that I am talking about.
    Before that, I think I was talking about the returns on 
capital that go to the mainline railroads because of the legacy 
positions and no competition. I believe in competition and let 
two competing modes compete on the basis of their service, and 
if there is a need that we cannot fill, then subsidize them.
    Mr. Olver. So could I summarize that? I am beginning to 
understand your sense that, yes, you want to deregulate, but 
you do not have a problem with subsidies, and the subsidies 
that are being suggested are significant. Both Mrs. Black and 
Mr. Schwarz were saying that, and, obviously, one has to make 
certain that you have a balanced transportation.
    So would you agree that we need a balanced transportation 
system for the rural area that covers rural needs, if they are 
to be viable, and that the government really will have to step 
in in places to make certain.
    Mr. Fruin. Absolutely.
    Mr. Olver. That would suggest that some modes might not be 
appropriate for particular areas, and they would have to be cut 
off perhaps in this mixture.
    Mr. Fruin. Well, in the long part of my testimony, I am 
saying that we should cut back on the number of rural roads 
because that system has not yet been rationalized. We 
rationalized the railroad system, and we have the branch lines 
that are providing service but are not generating sufficient 
funds to rehab their track and to buy the sort of equipment 
they need to be able to exchange traffic with the mainline 
railroads.
    Mr. Olver. Okay. I think we will have more time to talk 
about that later. Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman, and I guess I would 
kind of follow up on that.
    How do you suggest that we address the connectivity on the 
rail? There is a proposal in Congress, to use tax credits for 
the companies to help improve their rail lines with the spurs, 
but what do you suggest?

                       TAX CREDITS FOR RAIL LINES

    Mr. Fruin. I have no problem with the tax credit. I 
actually think it would be more efficient if we were able just 
to allow grants to those railroads that need it to maintain 
their track and to modernize their fleets. It is a matter of 
the mechanism, and I think that outright subsidies are probably 
more transparent and may be better designed than a general tax 
credit that relies on the tax code rather than specific, proven 
needs.
    Mr. Latham. Okay. I am not sure if I totally agree with you 
on that because I do not know if the government is then picking 
the winners and losers rather than allowing a market solution.
    Mr. Fruin. Yes.
    Mr. Latham. Did you see a similar problem in the rural 
roads, as far as connectivity? You mentioned that you do not 
think some of the rural roads are necessary. I can tell you 
from where I grew up, there used to be, on every section of 
land in Iowa, four families living there. Today, though you 
have one family that is actually involved in agriculture, that 
land is still there, and you still need to move the product off 
the land itself. So what do you say?

                              CONNECTIVITY

    Mr. Fruin. I say that that system was designed in the 
1850's for 160-acre farms, and I wrote this paper originally in 
1977 and said 320-acre farms. If you look at my text, I say it 
was 160-acre farms. Now, it should be adequate 1,000-acre 
farms. So close down those roads and put it back in farmland, 
four acres for every mile of roads you close.
    Mr. Latham. You would go over big at home. [Laughter.]
    See, that is why the wind comes from Minnesota down through 
Iowa. I have a big argument whether Minnesota blows or Iowa 
sucks. [Laughter.]
    Anyway, here we go. At least we are not doing Norwegian 
jokes.

                          HIGHWAY CONSTRUCTION

    I guess I will ask you this question, too, about highway 
construction. It is often described as a local economic 
stimulus. Can you tell me, how many of those jobs are actually 
taken by people in rural America versus how many are filled 
from urban areas, employees who come out? Are there any 
particular types of road projects that maybe would be more 
effective, as far as job creation in the rural parts?
    Mr. Fruin. Well, when we let road contracts, I cannot 
guarantee that any local guys get jobs, but, remember, all of 
the subcontractors, if you build a road, you are going to get 
local gravel, you are going to go to the local asphalt pit, and 
they will be spending money in the small towns. So there is a 
big stimulus there.
    There might not be too many jobs that are apparent, but 
asphalt, gravel, truck drivers, and the spending in the 
community have definitely a stimulus impact.
    Mr. Latham. Are there any particular types of projects that 
are better, do you think, than others? Do you have any thoughts 
on that?
    Mr. Fruin. I think the shovel-ready concept is the fastest.
    Mr. Latham. Okay. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Carter, having been here at the time that 
the Big Apple came down.

                         GOVERNMENT REGULATION

    Mr. Carter. Thank you, Mr. Chairman.
    I had other questions, but, Doctor, you said something that 
tweaked my memory of something we are dealing with in my 
district, so I am going to ask you about it because it is 
basically a government-regulation situation.
    I live in one of those green areas, but, as far as our 
neighbors to the south, Austin, Texas, are concerned, we are 
still the rural folks up north. Now, we are almost as big as 
they are, but they do not realize that.
    So they regulate their taxi service in Austin, Texas, and 
they determine who gets to provide taxi service.
    Meanwhile, they would never come up to our county, which is 
35 miles away, in their taxis. So we have had an entrepreneur 
that has come into our county and put in a taxi service, a very 
good taxi service.
    Now, the City of Austin, when he takes people to the 
airport, is trying to prevent him from being able to stop or 
park at the airport because he is not part of their approved 
taxi service. I like the idea that everybody ought to be able 
to freely provide transportation services, if they can compete.
    Would you like to comment on that, that I can take back to 
my folks back in Austin?
    Mr. Fruin. These are the exact reasons that we deregulated 
taxicab service in Minnesota because a suburban cab can go to a 
hotel and take somebody downtown, but they are not allowed to 
pick them up and take them back, and all of those other sorts 
of things. That is why, for the very same reasons, we 
deregulated, and we are very happy.
    Mr. Carter. Well, that is an issue that I am constantly 
getting phone calls over.
    Mr. Fruin. Uh-huh.

                          RURAL TRANSPORTATION

    Mr. Carter. I want to talk, one more question, about rural 
transportation. I believe it was Mr. Marsico. You were talking 
about the veteran transport. Well, that is a real issue in my 
district.
    Like I say, I am the big green spot in the middle, but all 
of the surrounding counties around that green spot are rural 
counties, and there are some pretty good miles out in Texas, 
and so it is like 160 miles from the top of my district down to 
the bottom of my district.
    I have vets that live 130 miles from the nearest vet clinic 
that they can get to. They are very unhappy about the fact that 
it costs them a lot of money, especially when the gasoline went 
up through the roof on us, just to go get ordinary healthcare 
services for vets. Would you like to comment on that and what 
solutions are out there?
    Mr. Marsico. Well, actually, I would like to comment that 
there is an innovative demonstration that is going on near you, 
in Lufkin, Texas, that was originally started by a former 
member of Congress, working with the local community transit 
system, Charles Wilson, who has got a contract situation that 
was put together between the transit folks, the local 
community, and a private bus company to provide fixed service, 
specialized for veterans, from Lufkin to the VA centers in 
Lufkin and also further down toward Houston, but it is a 
scheduled service where everybody came together, and the local 
transit providers provide feeder service to get those veterans 
there.
    The problem that has occurred over the last year, I mean, 
we had a tremendous fight that we worked with to help people 
get the reimbursement raised for veterans on the mileage. I 
mean, we were down around 14 cents a mile, but the other side 
of that is that our veterans, especially the younger ones, 
require lift-equipped vehicles, which drives the cost of 
service up.
    We have not had much luck dealing with the Veterans 
Administration about these kinds of services because they say, 
``That is not our issue or concern. People will get there.'' 
But it does not recognize the tremendous burden that families 
also have to provide that care, and, aside from that, we have 
this mentality over there that everybody who participates in 
the VA healthcare system looks like they did in maybe 1945, 
where everybody has got a car in a one-person family, and they 
can take a whole day to drive somebody for their treatment.
    The truth is, and we have held hearings around the country 
with our friends in the veterans area, that we have people, 
especially by themselves--single, elderly people--young people 
by themselves--who cannot imagine it. So we think it needs a 
comprehensive review, and we also think it needs, you know, 
more looking at demonstrations, like the one in Lufkin, that 
seems to work. Until we get that, we are going to continue to 
have difficulty, and I hope that we could talk to you further 
about supporting our efforts.
    The whole issue of whether it is veterans or Medicare is 
that our government does not see the transportation as 
essential, even though they believe that all outpatient 
methodologies are better for the patient.
    Mr. Carter. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Rodriguez.
    Mr. Rodriguez. I happen to represent a district that is 
probably the largest in the nation. I have 785 miles that 
stretch through the Mexican border, from El Paso to San 
Antonio, so I have both urban and rural, and I know I have a 
great deal of difficulty with my veterans getting access. Some 
of them go 300 to 400 miles in order to get access, and so a 
lot of them do not get access.
    So the need, in terms of transportation, is something that 
we need to continually work on. I find some difficulty, in 
terms of the road closures. I still have areas that do not even 
have any roads.

                                GAS TAX

    Anyway, I was going to ask you about, on the rationale for, 
at least, when we pay for gas now, for every gallon, we pay 
taxes on it, and the mileage on it. We had a vehicle that put 
60,000 for the office in just less than a year, and they do not 
want to lease them out to us anymore.
    You made some comments on the veterans, in terms of how 
best, because I have communities that have to travel hundreds 
of miles before they get to healthcare and to go to the grocery 
store. People in Sanderson, Texas, have to go a good distance 
to find the first Wal-Mart, you know, and so they do not exist 
in those areas.
    But I wanted to see how we can expand on not only the bus 
system but also air travel. I can hardly wait for me to be able 
to take the flight that even a smaller plane that will take us, 
and I thought we were moving in that direction, in terms of 
with the new air-control systems and all of that.
    What do we need to do, number one, for getting flights, 
Mrs. Black, in terms of for small, and maybe some feedback on 
whether we ought to look at rail or bus or alternatives because 
my small towns are connected through rail--Sanderson, Alpin, 
and all of those communities--but we do not see them go through 
there that often, and that creates a problem.
    So, Mrs. Black, if you could help me, in terms of what we 
might need to do to enhance?

                                CARRIERS

    Ms. Malarkey Black. Sure. From the carrier perspective, one 
of the most important things that a carrier looks at when 
assessing the community aside from traffic and obviously 
whether or not they can profitably serve the market is the 
commitment of the community. We have a lot of communities that 
are very committed, but they do not have the funding or the 
airport facilities. So, you know, the first step, I think, is 
to have the committed community and to look at your population 
and do some assessments and figure out who would be traveling, 
what would be the use, and make the case to the airlines.
    One thing with regional airlines is to the extent that they 
are interlining and co-chairing with the majors, we do not 
always make scheduling decisions for those smaller communities. 
So the best approach is to talk to a mainline carrier and 
demonstrate to that carrier that this is a profitable market; 
that you would provide speed in terms of traffic to the airline 
system, and once you make that case, there have been some 
examples where there has been new air service. There are 
programs out there.
    I am not an expert on the small community air service 
development pilot program, but that is a program that is in use 
by smaller communities in the past as well for the community 
partners either with an airline or another factor, and is able 
to get some grant money to set up that service so you can 
perhaps have some incentives to the airlines to come do a 
marketing program, things like that. But I think the bottom 
line is the committed community and the fact that the community 
is willing to put some funding in a partnership with the 
airline is one of the best steps that you all can take from the 
community perspective.

                               BUS SYSTEM

    Mr. Rodriguez. On the bus system, let me ask you, I would 
think that in some cases I see these huge buses and a lot of 
them are sometimes less than half full. Does a mini-bus make 
any difference in terms of use of gas? I guess the staffing 
looks good, you know, as an expenditure.
    Mr. Schwarz. Congressman, I think that it does not become 
necessarily a question, a lot of people think that a mini-bus 
versus a normal regular motorcoach, there is a big difference 
in the economics. The answer is no, quite frankly, and also, 
quite honestly, if you are a young person that is a soccer 
player that is traveling with your team to go play soccer, a 
mini-van is a great experience, but perhaps someone of my age 
would not appreciate riding in a mini-van.
    But I would like to share an experience with you that I am 
very encouraged about. As I visited this distinguished building 
this morning, I was introduced to Congresswoman Brown from 
Florida, and Congresswoman Brown said when she found out I came 
from a bus company, Peter Pan, she said, ``why do you not 
provide bus transportation to veterans?'' and, sir, I have to 
tell you I am very proud to say Peter Pan Bus Line provides 
free transportation to veterans.
    But she is going to be holding hearings that she invited us 
to come to on testimony because she feels that there should be 
a transportation program transit as well as intercity bus that 
provides free bus passes to veterans. And why I think bus 
companies, intercity bus companies such as Greyhound, which is 
obviously very prominent in Texas, is perfectly suited for 
this. Those of us that obey the law and are ADA compliant, 
motorcoaches have wheelchair lifts, and therefore it is easy 
for us to accommodate those veterans that need to ride in 
intercity buses. In fact, it would be great if this committee 
could help oversee the continued funding of the OTRD 
accessibility program so that those of us that try to obey the 
law can continue to make sure that our buses are wheelchair-
lift equipped.
    Mr. Rodriguez. Thank you.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman, and Mr. Schwarz, I 
had the pleasure of having Congresswoman Brown as my Ranking 
Member when I was Chairman of the Railroad Subcommittee, and 
she is from Jacksonville, Florida, and is a passionate advocate 
of all forms of transportation.
    Dr. Fruin, I do not want to pick on you, but I promised our 
Ranking Member I would not talk at all about the ethanol 
portion of your testimony, and instead I want to talk to you 
about the Class 1 railroads and your observations, and I wrote 
down that you are not for re-regulation, so being from 
Minnesota, I assume you are familiar with the distinguished 
Chairman of the Transportation Infrastructure Committee, Mr. 
Oberstar.
    Mr. Fruin. Yes.

                             CARE COALITION

    Mr. LaTourette. Are you familiar with his efforts and the 
CARE Coalition to re-regulate the railroads?
    Mr. Fruin. When we say ``re-regulate''----
    Mr. LaTourette. Right.
    Mr. Fruin [continuing]. I am not quite sure what we are 
saying because I think what I am saying is that there are 
routes that we do not have competition.
    Mr. LaTourette. Right.
    Mr. Fruin. And that it has been impossible for the shippers 
to get rate relief even though in the law we are supposed to 
continue to provide moderate--shipments at moderate cost, and 
my philosophy is that transportation is a public good, and the 
mere fact that I have a monopoly position and no competition 
does not give me the right to get monopoly profit, and it is 
the law of our government, not necessarily to regulate, but to 
ensure that the rules are there so that the shipper gets a fair 
deal.
    Mr. LaTourette. Fine, and I think we are all with you on 
that, but are you aware of the recent rulings and adjustments 
by the Surface Transportation Board in that area relative to 
captive shippers, small shippers?
    Mr. Fruin. Well, the one I am aware of recently was a very 
large shipper, a major one, and it was a $300 billion ruling, 
but that does not protect the--the small shipper cannot afford 
to roll the dice and spend two or three million dollars trying 
to get a $500,000 back.
    Mr. LaTourette. Right, I get you on that, but you know, 
sometimes when I ask people in this coalition--I have a box 
manufacturer in my district that is a member of the coalition. 
I said, well, why do you not put it on trucks, and they say, 
well, it is more expensive. So what is the deal? I mean, if it 
is more expensive, then why is not the train transportation 
that exists in the area, there is competition. It just does not 
happen to be from another railroad.
    Mr. Fruin. There are areas of the country that are in 
commodities like coal and grain that are just very expensive, 
and in fact in some cases are shipped anyway, and we pay for it 
in our utility bills, and we should not be. In other cases, the 
grain just is not grown there because the rates would be 
prohibited.
    Mr. LaTourette. Let me talk to you about financing and the 
short lines in particular. You are familiar with the RIF 
program, Railroad Investment Funding that was made available 
and really beefed up in SAFETEA-LU, I think it is about $40 
billion?
    Mr. Fruin. I am not that familiar with it.
    Mr. LaTourette. Okay. In addition to what Mr. Latham was 
talking to you about relative to tax relief, the RIF program, 
as a Republican, I had a great deal of disappointment in the 
Bush Administration, and it made it almost impossible for any 
short-lines. I do not think they approved any applications 
except DME up by you. You are familiar with that?
    Mr. Fruin. Yes.
    Mr. LaTourette. And it seems to me that the blending of tax 
relief that Mr. Latham was talking about together with a robust 
utilization, hopefully the Obama Administration will utilize, 
was not free money as you advocated, but it was very, very low 
interest money to make significant improvements on short-lines 
in particular to create an improved connectivity is the way to 
go. Would you agree?
    Mr. Fruin. I would agree with that, and now that you 
mention the program and explained it, that is the one that we 
never got any money out of it.
    Mr. LaTourette. That is what I am talking about. One person 
did. I think the only new railroad that I am familiar with in 
the country was DME.
    Mr. Fruin. But did they really give it?
    Mr. LaTourette. DME?
    Mr. Fruin. Yes.

                              RIF PROGRAM

    Mr. LaTourette. Well, I think they did, but I will tell you 
I am aware of a lot of short-lines in other parts of the world 
that made application, and for whatever reason, even though we 
had this--I know what the reason is. OMB scored it poorly, and 
they made the determination it was not cost-effective. But I am 
going to tell you that I hope that now, you know, the new 
sheriff is in town. I keep hearing that, the new sheriff is in 
town. I hope the new sheriff decides that the RIF program is 
worthwhile and his OMB permits those funds to flow forward.
    Mr. Fruin. Well, many of the cost benefit analyses we do 
are inadequate because we are not really looking at all the 
benefits or all the costs.
    Mr. LaTourette. Well, I am a big believer. I think we 
should build railroads all over the country because it not only 
helps the railroads, it puts people to work as well.
    So thank you for this round, Mr. Chairman.
    Mr. Olver. Thank you. This is going very well, but I wish 
we had invited the whole of the rural caucus to listen to this 
set of conversations. It would have been quite interesting, I 
think.
    What have I done? I have forgotten what I wanted to ask. 
Mr. Marsico--well, I think maybe I would like this to go to 
all. The President has as one of his key initiatives in this 
stimulus bill the expansion of broadband to rural areas around 
the country. Given what we have talked about, and let me make a 
comment here that I forgot to make in my opening statement, if 
you can believe that. While our major metropolitan areas are 
just continuing to grow, over 60 percent of all rural counties 
have lost populations in the period between 2000 and 2007, and 
such de-populations usually carries with it disinvestment in 
all kinds of public services, not just transportation, but 
education and medical services, and job opportunities all up 
and down the line.
    So can the broadband initiative, if it really reaches 
ubiquitously to all parts of the country, can it stem the tide 
of disinvestments in job opportunities, can it be used to stem 
that for medical purposes and such? I ask it first to you, 
Dale, and then comments from the others.

                          BROADBAND INITIATIVE

    Mr. Marsico. Well, you know, that is the kind of question 
you answer by saying I am not so sure that all of our futures 
will be solved by the Internet. But I would say that based on 
the kinds of issues that I addressed in our testimony and the 
kinds of needs by the people, for instance, we talked about 
whether they would be our veterans or our health care issues, I 
do not think the expansion of broadband is going to solve their 
problems.
    Their problem is in direct relation to what you were 
speaking about, that we know that health care facilities move 
further and further away from rural communities because all 
public health expenditures have to have a high rate of return 
and they have to have a large mass of people to maintain their 
efficiency.
    So just having medical records easily available or 
activities related to the web will not solve that problem 
because we have declining facilities, and many of the job 
opportunities that still exist will always be in more urbanized 
areas where work will be created, so we will not be able to 
reverse it with one single item.
    Quite frankly, as you look at the employment situation, 
maybe that has an impact longer term, but in the short term 
unless that would generate a lot of jobs in rural America, I do 
not think it is going to affect any of our primary concerns.
    Mr. Olver. Okay, let me ask Dr. Fruin. Do you have a 
feeling about the benefit of broadband ubiquity?
    Mr. Fruin. From a rural development point of view, 
broadband is important, but just as important as the 
transportation infrastructure, the labor force, the education 
of the workforce and things like that, broadband will help a 
community maintain its position, but it has got to have those 
other things there also.
    Mr. Olver. Broadband can also have an effect upon those 
very things--the education aspect and doing things by distance 
learning, of course.

                     VETERAN LIVING IN RURAL AREAS

    Let me ask you, Dale, you have talked about veterans and 
the Census Bureau says 20 percent of Americans live in rural 
areas by their definition. You say 40 percent of veterans live 
there. Now, that may not be the same areas, but it sounds to me 
as if there is a disproportionate number of veterans living in 
the rural areas. Would you give me why you think that is?
    Mr. Marsico. Well, I think that is essentially true, and if 
you think for a second about some of the ways, particularly the 
army has reorganized, especially that relates to our National 
Guards, you will find, for instance, that almost a huge 
percentage of the support elements that provide logistics come 
out of South Dakota, and you will find that other guard units 
in our states, especially in the rural areas, are specialized. 
You will find a lot more of those people who have been called 
up in the last war having a rural base.
    So, I think that is where we start to get that issue, and 
also, quite frankly, we from time to time have lots of strange 
discussions with the Veterans Administration about the status 
of our National Guard people who come from rural areas and are 
called up for military service overseas not getting the same 
level of benefits, and, of course, transportation as well.
    So, that kind of plays into our vision and the numbers that 
we get from the VA that, you know, 40 percent of them are 
living in rural communities.
    Mr. Olver. I think you have touched on--I think it is 
broader in that sense. I think that people in the military have 
disproportionately come from rural areas in the first place in 
order to get--because there were no job opportunities or poorer 
educational opportunities, and they get educational benefits, 
and some push forward on the job opportunities when they come 
back, but a lot of them want to go back into those areas so 
they are there, and that is where they came from and that is 
where they are likely to go for awhile.
    Mr. Marsico. Well, that is particularly true----
    Mr. Olver. Anyway, I have overused my time.
    Mr. Marsico. Right. The older people who are retired, and, 
you know, cost of living being what it is.
    Mr. Olver. Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman.

                           DISABLED VETERANS

    Just talking about transportation for veterans. Would you 
get major pushback from DAV, the Disabled American Veterans 
Association, because I know that they take great pride in what 
they do and offer a lot of--in Iowa, the transportation 
services to the VA hospitals. I mean, is there a lot of 
pushback with that?
    Mr. Marsico. I think what actually we gather is a lot of 
fear. We do have examples, as I mentioned, in Texas. We have 
had--we did a major demonstration and it is currently working 
in the Pacific Northwest, around Seattle, where we try to 
explain that these services can be integrated but not 
displayed, and I think if you talked with our friends at the 
DAV or the DVA, you will see that most of their transportation 
needs are directed towards ambulatory individuals and not those 
in wheelchairs. So, there is a special subculture of service 
needs that they cannot address.
    So, we have been dialoguing with them about that, and, 
quite frankly, we have had a difference of opinion with them 
from time to time, that the mileage reimbursement program is 
not the solution, especially for the people who need 
specialized care.
    But I think in lots of places we have been able to 
demonstrate that this can be a working coordinated partnership 
and we need to continue to discuss that with them.

                     IOWA SYSTEM OF TRANSPORTATION

    Mr. Latham. Mr. Schwarz, you mentioned earlier, and I 
appreciate the compliment--you said Iowa had the best system in 
the country. Would you explain why that is the best or what 
makes it the best?
    Mr. Schwarz. Mr. Chairman, excuse me.
    Congressman, I do not know why that is. But in preparing 
for this hearing----
    Mr. Latham. Well, you are honest anyway. [Laughter.]
    I like that.
    Mr. Schwarz. Thank you. In preparing for this assignment, 
we did research and it said Iowa had the best rural intercity 
bus program in America. You can rest assured, sir, I would be 
happy to follow through on this and I will be happy to send you 
my thoughts as to why. It just came to our attention that for 
some reason Iowa has these programs and it is very successful, 
but at this point I cannot tell you exactly why. I was kind of 
hoping you would tell me.
    Mr. Latham. Well, I can assure you we have a very active 
group of people involved in transit in Iowa, and every county 
and every community is very much involved with it; not that we 
ever get any requests for funding or anything from those folks, 
but----
    Mr. Marsico. I could help in that category.
    Mr. Latham. I am sure you could.
    The essential air service. I have got two communities in my 
district where it is absolutely critical to maintain. They are 
in the lower end as far as per passenger boarding, with over 
$600 in per passenger subsidies, and several in the three-four 
hundred dollar category.
    Have you ever done any study in which you compare with 
Amtrak? There are some Amtrak subsidies that are several 
hundred dollars per passenger, also. I mean, is that 
sustainable? How can we use it? Can we justify that?

                          COMPARISON TO AMTRAK

    Ms. Malarkey Black. We have not done a direct comparison 
with Amtrak. We would like to have the resources to do that 
kind of research, but lack them, unfortunately. But we do think 
that it is justifiable, and it just comes down to whether you 
think philosophically it is an important program or not.
    When the program, during its inception in 1978, we never 
really envisioned that it would cost this much to provide the 
service, but the realities are that fuel costs have just 
skyrocketed in some recent years. There are other issues--the 
cost of operating a 19-seat aircraft has gone up quite a bit, 
and the market realities are such that these costs have 
increased.
    For those communities that are within 210 miles, there is a 
subsidy cap now of $200. We think it is appropriate--it has not 
been looked at in--I do not have it in front of me, but I think 
about 17 or 18 years, and we think it is appropriate to make 
adjustments to that given the cost increases facing the program 
and carriers. We think it should be indexed for inflation. We 
think that is appropriate.
    But some sort of a cap is realistic on the closer-in 
communities. That said, when you are far out, that is what you 
need. You need that air service. It really is essential, we 
believe. It is an economic driver of the communities. We make 
the argument that there is no better stimulus to the rural 
economy than air service because if a business is looking to 
relocate there, one of the first things they ask is, can I get 
there. So we think it is very important, and we do justify the 
expenditures.
    Mr. Latham. Okay. Very good. Thank you, Mr. Chairman.
    Mr. Olver. Mr. Carter.
    Mr. Carter. This may be a totally philosophical question, 
but I thought about this. As we see transportation start to 
have major issues about change, fuel usage, conversions, 
electric cars, and all these things, we are a state that is 
bound by the automobile and the pickup trucks. I mean, that is 
the nature of being in Texas.
    But in truth, as my colleague Ciro points out, we also have 
distances that need air miles, need train miles, and other 
things because we are using cars to cover those miles, and as 
the world looks like it is going to make a change on that, if 
you are designing the perfect world for a large rural area, and 
when I say large, you can look at ours, I mean, it is large, 
what kind of combinations would you put together that would be 
a good system that would allow people to move to the critical 
medical areas, to the VA services areas and so forth, because 
you get out around Sanderson or some place like that in Texas 
and you just do not have any choice but to drive 300 miles.
    If you had your perfect world, how would you design it? 
Doctor, I will start with you, and let everybody talk about it.
    Mr. Fruin. I would expand two things: the bus service, I 
would not expand rural rail service for passengers because that 
just does not mix because of the need for speed and stops, but 
I would emphasize the bus service, and in my perfect world we 
would have a lot of point-to-point pickups. I am talking about 
taxi service and stuff like that. I am not at all sure that I 
want to spend the $200 to go on an airplane. Why do I not spend 
$150 and have a limousine service to go from one airport out 
actually to where the person's home is.
    Now how I would pay for that, I do not know, but I think it 
would be cheaper than maintaining airports, airplanes and 
things like that for the few people that do that traveling.
    Mr. Carter. Air service?
    Ms. Malarkey Black. You know, that is the issue Dr. Fruin 
brings up, and regional air service, in particular our short-
haul service, we compete against the cars and trucks and buses, 
and so that is something that we have to keep in mind.
    That said, again, the businesses do not want to necessarily 
have to take that long car ride, and so I think investment in 
the area is important. But there are some other factors. 
Airport access is critical in some of the more remote 
communities getting into an airport.
    You know, two years ago or last year we had some talk of 
spot auctions and things like that at the hub airport. So one 
of the things we find important is to make sure the spokes can 
actually get into the hubs. We start talking about limiting 
access there, and that has a real effect on rural 
transportation.
    Highway safety is important so that you can get to the 
airports and airport access and development there, so that is 
an intermodal concern of ours, and I guess the final thing is 
to remember that the airlines are competing against the car and 
the automobile, and in many cases we are taxed at much higher 
levels than they are. So one of the things that the government 
can do is to watch those taxes and fees because they do have an 
impact on how much the airlines can reinvest in the system and 
provide that important access to air service.
    Mr. Marsico. I think that states like Texas and the rest of 
our country need a balanced system where we have options for 
local communities to help them make the best decision of how 
they need to meet their service needs, but we also need a 
system that is fair in the allocation of resources.

                         INTERCITY BUS PROGRAM

    My colleague discussed this intercity bus program, that is 
a DOT program, the 53.11[f] program. It is 15 percent of the 
smallest programs in USDOT, and obviously if you believe, as we 
do in our efforts, and I agree with the Doctor, the intercity 
bus program is absolutely vital to solving the connectivity 
problem. You cannot do it by setting aside 15 percent of the 
smallest program and then say that we are going to have a fair 
and balanced system for rural America, and I think that is the 
issue that is in play for all of the issues as it relates to 
transportation.
    It costs more money to provide service in rural America and 
it does not matter about the number of people sometimes. For 
instance, in Congressman Oberstar's district, we have less 
rural transportation money than we had in the last 
reauthorization because of a population change. But it cost 
just as much money to provide the service from point A to point 
B as it did before, and that now that we have less people 
aggregate does not solve our problem. It still costs a lot of 
money to go from point A to point B. And when those people are 
older and they cannot drive and there is no intercity bus for 
them, it is an extraordinary issue. It is a resource 
allocation. So I think we have enough experience to solve the 
problem. We do not have enough resources and we do not have 
enough fairness.
    Mr. Olver. Would you like to add briefly to this? Because 
you are down the line near the end of the line here.
    Mr. Schwarz. I would only say I should probably not add 
much more comment after what this gentleman said. I think he 
said it all. Except I would just simply say, Congressman, I 
really believe that intermodalism is the way to go. It is a 
tremendous asset to bringing all modes of transportation, 
whether it is the taxicab, whether it is the train, whether it 
is the railroad or the airlines or intercity bus. It does 
provide, and you can set up, intermodal facilities. They can be 
large or they can be small.
    I was really encouraged when I read recently that Vice 
President Biden and the new Secretary of Transportation were in 
Miami, Florida, and they allocated a tremendous new intermodal 
facility that is going to take old dilapidated bus terminals 
and other modes of transportation, and it is going to breed new 
life into that mode of transportation, and I just think it is 
the way to go. And as you begin to look at allocating resources 
and making things available, I think that is going to begin to 
contribute.
    One other thing that I think, particularly for Congressman 
Olver, that we need to be concerned about if you think there is 
a crisis on the horizon now, you come from a community or a 
state such as Massachusetts that has huge fiscal problems with 
the transportation infrastructure. Apparently the way we are 
going to get out of it is by fuel tax; raising the tolls. So 
those people that depend on automobiles, quite frankly, and 
that have economic constraints will no longer be able to use 
their automobiles to get from rural communities to whatever 
major city or tertiary city that they choose to go to. It 
simply will no longer be an effective mode of transportation.
    Mr. Olver. Mr. Rodriguez.
    Mr. Rodriguez. Let me just--I know we have talked in terms 
of some of the needs. Maybe I will direct a little more 
question in terms of--because I know the funding, how do we go 
about that because when I heard about the mileage figure, well, 
that is going to discriminate against rural communities, and so 
I wanted to see if maybe you can give me some feedback on 
vehicle mileage, you know, as to why--you know, would you not 
believe that that would hamper rural communities?

                         VEHICLE MILES TRAVELED

    Mr. Fruin. No more than high gasoline taxes have in the 
past. I mean, if we look at how we fund things now, we rely 
primarily on the gasoline tax and other taxes. There is a major 
concern about--well, we reduced fees for green automobiles, so 
that is less money coming in. So my feeling is that a well 
designed mileage tax would basically impact people on how many 
miles they drive, and also you would put the weight/distance 
tax back in the position of being on the goods that are shipped 
these distances.
    So, yes, if you are too far away from some place you are 
going to pay more, but you are now and I do not know how you 
ever get around the problem of distance and----
    Mr. Rodriguez. Yes, because they are already paying more 
because of the number of gallons that they are utilizing, and 
you add in on top of that, and so they still have to travel 150 
miles to go see a doctor or go get groceries.
    Mr. Fruin. No, I am not really adding that on top. I am 
saying change the gasoline tax system today to a mileage tax 
because now you have a gasoline tax that is related to fuel 
consumption.
    Mr. Rodriguez. The possibility of going back to rail and 
bus and air travel, I know that they told me if I wanted to do 
some--a train that is already going, I think it goes every 
three days from L.A. to New Orleans, through a bus in San 
Antonio, and a lot of my communities, but it only does it every 
three days. They almost become self-sufficient if you do it 
daily because people are able to go to San Antonio and come 
back in the same day.
    Does some of that make sense in terms of moving and 
initially subsidizing some of that for the long term?
    Mr. Schwarz. Well, relative, sir, to intercity bus, I think 
absolutely. You have the road network connecting closer places. 
Providing subsidies to intercity bus service is the cheapest 
form of transportation. You certainly could provide it on a 
continuous basis so that people become familiar with it and 
plan their lives around it to utilize it, whether it is to buy 
their groceries or go to Wal-Mart or get medical care, 
certainly, and it is the easiest form of transportation to set 
up and get going quickly. The road network is there. The 
infrastructure is there. You can do it.

                              TUBULAR RAIL

    Mr. Rodriguez. There is some new technology also, the 
tubular rail, you know, because the first thing I encounter is 
property rights and things like that, but does the new concept 
of tubular rail go on top of the existing roads on that, and 
sometimes it makes it a little more--I do not know whether it 
makes more sense to look in terms of long term and seeing those 
transportation modes might need to change. Any of you have any 
comments on that, not only just tubular, but also--you know, 
because I am looking forward to small planes that I can just 
get on actually in San Antonio without having to go through 
Dallas or Houston.
    Mr. Schwarz. I will offer a comment on that, sir.
    In Massachusetts, there has been talk of similar devices 
with commuter rail or types of rail service to follow, for 
example, the turnpike system, and I think it is fair to say the 
cost of providing sets of service is just impossible, quite 
frankly. It is just impossible.
    Ms. Malarkey Black. Speaking to your interconnectivity 
issue, that is very important to airlines, having the other 
forms of transportation to get to that city airport, to bring 
passengers to the airport is important. That would create 
traffic on the routes, particularly on the regional routes 
where we need more passengers, and so that is very important.
    So philosophically we think subsidizing programs like that 
are important. I think the caution I would counsel is to be 
very careful that you do not set up a competitive environment 
between the programs. The essential air services are 
underfunded as it is, so talking about taking some of the 
subsidy dollars available for that program and spending it on 
intermodal access would not be appropriate because you simply 
would run out of the money just to provide the air service that 
you have. So that is the caution that I would throw out there.

                                FAIRNESS

    Mr. Rodriguez. Let me just--you mentioned something about 
the unfairness, Mr. Marsico. Do you want to elaborate a little 
bit more, any of you, in terms of the way we have it structured 
now in terms of how it might be unfair?
    Mr. Marsico. I would just say that in the last three major 
reauthorizations we have waged vigorous campaigns to change the 
allotment on the public transit side for rural transportation 
and the intercity bus, and again, just looking at the map, we 
need to figure out how we arrive at a system that provides more 
than 15 percent of the rural program, which is the smallest 
program in the public transit budget, for transportation needs 
of all of the communities that are in rural America and build a 
process of connectivity.
    I think, you know, until we have a better way of doing that 
or better applications we are not going to get there.
    Mr. Olver. I think that may be a case where we are going to 
need to send our ambassador to the TNI committee to carry that 
case this time. Thank you.
    Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman, and Dr. Fruin. I 
am just going to make one observation and get off you and talk 
to the other witnesses.
    This whole issue of the railroads and regulation and rates 
and everything else, it has long been my view that everybody 
has got to put everything on the table to get there from here. 
You just cannot take the skin out of the hide of the Class 1 
railroads.
    By that I mean if you talk to the railroads, they have a 
common carrier obligation. So if you look at what happened to 
Minot, North Dakota, they will tell you that it is only one 
percent of their business but it is probably about 90 percent 
of their liability and risk and everything else, and a chlorine 
spill can shutdown or bankrupt the short line and another 
railroad.
    So if we are going to talk about pricing and taking care of 
the captive shippers, we have got to get the lawyers out of it. 
They cannot continue to make a ton of money. We have to 
consider, I think, the same system that we have with the 
airlines where there is a capped responsibility in case of a 
disaster. They have to have some predictability so they can get 
insurance, and if you are going to make them carry chlorine, 
you should recognize that has a responsibility cost and 
everything else, and then we could have a rate adjustment.
    So if you, since you are from Minnesota, if you could go up 
there--go up to Duluth and beat on Mr. Oberstar just a little 
bit, maybe we can get some of these things resolved.

                           PASSENGER SUBSIDY

    Ms. Malarkey Black, did you say that you were advocating 
say a $300 per person customer subsidy?
    Ms. Malarkey Black. Well, there is a cap right now----
    Mr. LaTourette. Right.
    Ms. Malarkey Black [continuing]. On the per passenger 
subsidy. So the DOT does not go down and give money to the 
passengers. They obviously make payments to the airlines. That 
is broken down so $200 is the subsidy cap. But that has not 
been adjusted for inflation.
    In the meantime, air carriers have had, as I mentioned, 
tremendous cost increases, not just the fuel, but with other 
places. And so DOT has been flexible actually in recent years 
with its exercise of that per passenger subsidy cap, and we 
think that is appropriate and absolutely necessary because 
otherwise you would have communities who really needed the 
service not getting the service because the outdated subsidy 
cap does not reflect the current market reality.
    Mr. LaTourette. I am all with you, and the Chairman and I 
have been on the same side of the Amtrak discussion. There are 
some people around this town that do not think that Amtrak 
should have any federal subsidy, and they point to the fact 
that if you are going to travel a long distance on Amtrak it is 
pretty expensive. I mean, the subsidy part is pretty expensive, 
but I think to provide service to people that do not have 
service you have to recognize that is just like the postal 
service. When we require them to go to every address no matter 
where the address is, it has a cost that is different than 
others.
    How many members are in your association? How many 
different airlines?
    Ms. Malarkey Black. Well, we only have maybe four that do 
essential air service.
    Mr. LaTourette. Okay.
    Ms. Malarkey Black. But we have maybe three dozen airline 
members.
    Mr. LaTourette. What is the biggest aircraft that any of 
your members fly?
    Ms. Malarkey Black. I think we have, and that is a moving 
target----
    Mr. LaTourette. Right.

                               EMBER AIR

    Ms. Malarkey Black [continuing]. Because we have got 
manufacturers that are bringing larger aircraft online. I think 
the 90-seat passenger aircraft manufactured by Ember Air----
    Mr. LaTourette. Yes. Apparently there is a 170 series that 
is new.
    Ms. Malarkey Black. Yes.
    Mr. LaTourette. That is a beautiful plane, by the way. And 
do your members get into the SCOPE clause discussion at all?
    Ms. Malarkey Black. They sure do. We do not at the 
association level, but our members do inasmuch as--let me 
rephrase that. Our members do not necessarily get involved in 
SCOPE clauses. As you know, that is a major airlines' issue 
with their organized labor, but it is certainly something that 
impacts regional airlines, and it sounds like you are alluding 
to the type of aircraft.
    Mr. LaTourette. Right.
    Ms. Malarkey Black. The size of aircraft that they can 
operate. So that has been a factor. We have seen some 
relaxation in SCOPE. Certainly it had to happen after the 
terrorist acts of 9/11, but SCOPE is still a factor and it is 
still impacting the aircraft choices of some of our members.
    Mr. LaTourette. I will tell you that I was just at Ember 
Air last month, and looked at the 170 series and the 190 series 
that they are coming up with, and I said--my major airline is 
Continental, and I said, why fly these hypodermic needles that 
they have. These RJ-140s are horrible, and the 50 seaters.
    Ms. Malarkey Black. We like those too.
    Mr. LaTourette. I am sure you think they are swell, but as 
a customer, I think it is like flying in a hypodermic needle. 
So I said, why cannot, you know, since Continental really 
helped Ember Air take off in the mid-nineties, why can you not 
help them sort of roll out and divert from the 140 series, give 
them to other airlines that find them to be good for those 
markets, and they said it was the SCOPE clause. They said you 
cannot permit an 80-seater or a 90-seater or an 188-seater to 
come into and compete with others, and that seems like 
something that came about as a result of--well, it seems 
outdated to me, and perhaps we should revisit it.
    Mr. Chairman, I think I am going to ask you and Mr. 
Oberstar to do that.
    To the bus and transit gentlemen, Mr. Marsico, I think it 
might have been you that mentioned regionalism, and if it was 
not you, I apologize, it was you, Mr. Schwarz.
    One of the problems that we have from my outlook with rural 
transportation is it is twofold. Some people move to the 
country because they do not want buses and airplanes and 
things. I can remember when I proposed a water line in one of 
my rural areas, there is still an effigy hanging from a tree if 
you drive down State Route 528, because they do not want a 
water, they do not want a sewer because that means development, 
that means city folk, that means a whole lot of other things.
    But regionalism, I think, is key. When you talk about not 
only intermodalism, but regionalism, and one of the problems 
that we have is we have all these local bailiwicks, and so I 
have a county that has a bus service that is supported by the 
sales tax, but you cannot take that bus out of the county. It 
stops at Ashtabula, it cannot go into Lake County. Got one in 
Lake County, it cannot go into Cuyahoga County.
    So it seems to me as we look at efficiencies, and we have 
this problem no matter what the service is. Talk about the 
police service, for instance. They used to be in charge of the 
crime lab when I was prosecutor, and every police chief wanted 
their own bomb kettle, you know. And I said, well, we only have 
one bomb a year, so how about if we buy one bomb kettle for the 
county, and when you have got a bomb, we will bring it to you. 
But you know, every police department wanted their own to put 
in the 4th of July parade.
    It is the same way with a lot of this other stuff. And so 
as we look at efficiencies and if, Mr. Marsico, we take your 
observation to heart and say that you need to be bigger than a 
15 percent set aside, do you think it is unreasonable that we 
also demand that you and your members are regional in scope, 
and maybe if we are going to buy a bus at a rural agency, they 
should have to team up with the rural agencies around them and 
make sure that you can actually get from point A to point B.
    Mr. Olver. That should be a simple answer.
    Mr. Marsico. No. How could you disagree with that?
    Mr. LaTourette. That is what I am thinking.
    Mr. Marsico. I think that some of the examples we pointed 
out as well as in the glossy material that was cited says that 
around the country that does work well, but it requires 
leadership, and also some of the dynamics that are involved 
also about the future of the intercity bus systems because we 
think instead of just giving the rural people, you know, 
additional equipment to build more rural service, that kind of 
displaces the intercity bus system. We need to develop, as I 
pointed out in the Lufkin example, a system where you integrate 
intercity bus with those local services for the connectivity 
that is missing in our current transit vision and looking at 
that as an unmet need.
    That can actually be met, we believe, by working strongly 
with our partners in the bus industry primarily for all the 
reasons, including cost effectiveness. We had a very good 
intercity bus system linking and stopping in rural America 
until it became uneconomically infeasible to manage from the 
Fairbock.
    Mr. Olver. Okay.
    Mr. Marsico. That issue is a little bit different but I do 
believe that on the other side, you are absolutely right, and I 
think we have a good record to show for it, and I think our 
longer testimony discussed it. But we do not want to displace 
the good work that is currently being done in the intercity 
area because that has its basic advantage to rural America that 
could be lost forever.
    Mr. Olver. Okay. We are getting close to time here. I would 
like to get one more round which may put a little bit of 
pressure of three or four minutes per person on the round as we 
go. I would like to engage all of you. We have had some 
discussions here that I think could be integrated. In fact, Mr. 
Carter kind of started.

                           RURAL DEVELOPMENT

    I am wondering if there is room somewhere here, we all 
worry about rural development, and it seems to me we have done 
little bits and pieces, and maybe we ought to think in a 
broader kind of a way. There are some places here where there 
are such large blocks of territory where the crisis in rural 
America is at its worst, I think, where there might be room for 
big demonstration. I am wondering, for instance, Doctor, 
whether there are a group of counties that might get together 
and think about your idea of creating more useful land by not 
having so many roads. Maybe it is even four miles apart rather 
than two miles apart down the road, and in that process you 
take into account the need for short-line railroad, and its 
role in a comprehensive kind of a system that carries that, 
that in a group of counties you might have one essential air 
service that allows--you might take 10,000 square miles or 
something like that in a group, and think about it in a block.
    There are places where that could be done in those big 
blocks of areas. There are a couple of huge Indian reservations 
out in--connected Indian reservations which have the worst 
unemployment, the worst kinds of opportunities, the worst 
house, the worst medical services, and anything you can think 
of, were to try to do something that would be beneficial for 
the whole of them over time; that you could get into the bus 
issues, the medical issues, and the service kinds of thing all 
in some kind of relationship.
    I would like to see if there is not some way that the kinds 
of things we have been talking about this morning could educate 
us and allow us to get a more comprehensive look at rural 
development in general, not just transportation, but to 
integrate these other issues. The transportation, obviously you 
can deal with it. If you have others, cover it quick; thoughts 
from anyone of you.
    Ms. Malarkey Black. I think from the airline perspective 
what you are talking about is regionalization. We have heard 
this before. The GAO has come up and said things like you ought 
to just consolidate a couple of EAS airports and it would 
increase your traffic and so on. Two observations.
    The first is that we would just ask consideration that the 
airlines have made investments in these airports where they are 
currently serving, and the service is incumbent upon connecting 
to a hub. So it does get to be logistically challenging to try 
and put all----
    Mr. Olver. We have computers these days. We can challenge--
we can do planning. We can figure out--I have not been able to 
figure out how you get water transportation in most of the high 
plains regions. You need a navigable river unless you are going 
to let your Corps of Engineers build to Oklahoma City with a 
navigable waterway or something again.
    Ms. Malarkey Black. That is certainly frightening. The 
other side of it is that there are some members of Congress, 
senators, who might have a primary opposition on that.
    Mr. Olver. Really?
    Ms. Malarkey Black. Yes.
    Mr. Olver. Well, that is okay. I would not be surprised. 
Judge Carter is leaving. He is. [Laughter.]
    Mr. Olver. Quick comment, quick comment so I can get onto 
the other two?
    Mr. Marsico. I would like to make a quick comment. One, 
there are such efforts going on across the country now. There 
is a very good one which we participated in last year that is 
called the Yellowstone Business Partnership where they bring 
local elected officials, community leaders, economic 
development people together to talk about trying to prioritize 
areas within their region to develop an economic strategy that 
would address some of the issues that you do, and I think I can 
find you a list later and send you some, but I think they are 
worthy of taking a look at.
    Mr. Olver. If we could get groups like this to talk with 
them and raise all the issues that are of great importance to a 
group that was intending to do something like that, or willing 
to, that might work.
    Do either of you need to say anything more?
    Mr. Schwarz. Mr. Chairman, I would just say when do we 
begin.
    Mr. Olver. Okay, that is a good answer.
    Mr. Fruin. Regionalization brings efficiencies in many of 
these areas, and how do we do it. That is what we have got to 
do.
    Mr. Olver. Okay. All right. Mr. Latham. I will not speak 
again.
    Mr. Latham. I am enjoying it. It is wonderful. [Laughter.]
    You mentioned Iowa's transportation system or bus system, 
that has been one of the key elements. In Iowa, we do not talk 
about this community as a bus system or whatever, but it is 
usually multi-county system orientation in Iowa, and that is 
what we have really worked on as far as economic development.
    The rural communities have finally figured out that they 
cannot fight the one next to them, and have them both succeed, 
so what they are trying to do is figure out each of their own 
roles and to work together on a regional basis, and that really 
has been much more successful. But that is I think a model we 
have all got to look at, but I do think there are some 
different issues as far as the air service.
    Dr. Fruin, in the local governments, you know, in rural 
areas, we are facing a lot of things such as out-migration 
obviously, population, lower education levels oftentimes as far 
as independent colleges, and immigration issues, which are 
manifest. Postville, Iowa is in my district: It has obviously 
gotten a lot of publicity as has the consolidation of the 
farms.
    How do the communities and counties on a regional basis 
make good economic decisions as far as transportation or 
infrastructure investments with this kind of changing? Is there 
a formula? Is there some way for them to really know what they 
should be doing and what is a waste of money?
    Mr. Fruin. I have not seen any formula.
    Mr. Latham. Is there best practices or best ideas?
    Mr. Fruin. Well, basically, I think one has to study the 
transportation patterns and put the resources into improving 
the infrastructure where it is used. We cannot afford for a 
road every place. We have to say, okay, where are our 
population centers, and what are our connectors. Connectivity 
is the key, not a perfect uniform system all over, I think 
together with good infrastructure, and let the rest of it go to 
pot. [Laughter.]
    Mr. LaTourette. Would that be all of Iowa? [Laughter.]
    Mr. Fruin. I do not want to answer that.
    Mr. Latham. Closing the roads sounds like a really great 
idea unless you live in the area. [Laughter.]
    Mr. Fruin. But, Congressman, some of those roads nobody 
lives on. Some of them are not even----
    Mr. Latham. What they are called is dead roads.
    Mr. Fruin. Yes.
    Mr. Latham. Certainly. They are not maintained as it is, 
there is very little cost.
    Mr. Fruin. Well, when the bridge goes out, that's 30 to 100 
thousand dollars.
    Mr. Latham. But if it is low, we call it dead roads. They 
do not fix it. Maybe you do in----
    [Laughter.]
    Mr. Fruin. I am afraid we sometimes do. [Laughter.]
    Mr. Latham. Well, you have Mr. Oberstar. [Laughter.]
    I am going to quit there unless anyone has any comments or 
if you have the golden plan for the communities.
    Okay, thank you, Mr. Chairman.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman. The Ranking Member 
chastised me for not knowing about the light system, so maybe 
at the next hearing you could turn it just a little bit and I 
can----
    Mr. Latham. We will put a light in front of you.
    Mr. LaTourette. Thank you. I appreciate that very much.
    Just some clean up from the last question. Mr. Schwarz, I 
heard you say that SAFETEA-LU perhaps has fixed the 5311 
governor certification problem from your perspective, at least 
the tools are in place and now it is a matter of enforcement. 
Is that right?
    Mr. Schwarz. Yes, sir. That is absolutely correct.
    Mr. LaTourette. And then, I had a lot of my transit guys in 
last week, and they indicated that, and I understand, Mr. 
Marsico, that 15 percent is too small in the smallest program, 
but are you experiencing the same difficulties that are 
relative to capital versus operational ability to allocate 
funds?
    Mr. Schwarz. Absolutely, and quite frankly, originally in 
the stimulus discussion there was some possibility of having 
some operating cost and it began as a process about a year ago 
setting aside 1.6 billion in the TNI committee at least to try 
to offset the energy cost that local transit systems 
experienced during the high energy period, which really wiped 
out a great deal of the reserves for operating and forced 
people to make these very severe decisions in raising the fares 
that are very much a penalty for a lot of low-income workers 
who left the transit in high numbers.
    Yes, it is a big issue. We could not get it into the 
stimulus bill. Our recommendations for safety is that the 
current system says that if you are in a community of 199,999, 
you can use your federal funds for transit, for operating if 
you need to, or for capital. But if you have 200,001 people, 
you are automatically excluded.
    Mr. LaTourette. Right.
    Mr. Marsico. And when local transit agencies had such a 
write-off on the cost of energy, it seems crazy to us to pursue 
that, and one last thing is we think that people can decide 
that at the local level, and, you know, there are some 
proposals that, well, maybe 10 percent could go for this, 10 
percent for maintenance, 5 percent for this. We do not believe 
that we need any more boutique programs. We think people ought 
to be able to decide that based on their needs. But yes, that 
is a huge issue, and quite frankly, we have these significant 
service cuts that are going on now. It is only going to 
increase because local and state governments that fund the 
operating costs of transit are going to be the last to recover.
    Mr. LaTourette. Right. And I am a big fan of flexibility 
and I hope that TNI committee gives additional flexibility on 
operations versus capital because the observation was we can 
buy buses, but we have no one to drive them.
    Mr. Schwarz. That is right.
    Mr. LaTourette. So that is your experience as well on the 
rurals?
    Mr. Marsico. At all levels.
    Mr. LaTourette. Okay. Then last, Dr. Fruin, I will come 
back to you. I mean, as we talk about rail and everything else. 
One of the problems that some of us have in this country with 
the whole transportation funding mechanism, regardless of 
whether it is tied to vehicle miles traveled, is that we 
continue to have this disparity between donor and donee states, 
and I think that, again, back to the rail discussion: If we are 
going to talk about fixing things, I think that if we are going 
to fix the 1956 model based on gasoline excise tax, we should 
perhaps not be rewarding states like Massachusetts that have a 
tremendous amount of interstate highway system, and so they get 
a greater percentage of the funds, and it is not really based 
on what they pay into the system.
    How do you feel about that?
    Mr. Fruin. We have a national highway system.
    Mr. LaTourette. Right.
    Mr. Fruin. And we should collect the funds for the entire 
system and allocate them to where they are needed.
    Mr. LaTourette. Right.
    Mr. Fruin. And I will not make any judgment about 
Massachusetts. [Laughter.]
    Mr. LaTourette. Fine. You are a much smarter guy than I am.
    Mr. Fruin. We need a national highway system.
    Mr. LaTourette. Right.
    Mr. Fruin. And we do have that donor/donee problem.
    Mr. LaTourette. Right.
    Mr. Fruin. And we have got to overcome it, and have the 
interconnection and all that stuff that goes into it.
    Mr. LaTourette. Thank you. Thanks, Mr. Chair.
    Mr. Olver. Well, thank you. I am going to close. Thank you 
all very, very much for the comments. You may want to 
communicate with us and where we need corrections, correcting 
or whatever it happens to be, or education.
    To Mr. Marsico, I trust you have about a dozen or so copies 
of your glossy----
    Mr. Marsico. Yes, I have.
    Mr. Olver [continuing]. So that at least each of our 
members can have a copy of your glossy. If you have other such 
things of that nature, that would be great.
    Mr. Marsico. Okay.
    Mr. Olver. And with that I very much appreciate your 
comments this morning. I really intended to explore that last 
one that I was starting on a little more thoroughly, but we 
will not do it now. So thank you very much, and with that the 
hearing is over.
                                          Wednesday, April 1, 2009.

  THE FUTURE OF HIGH SPEED RAIL, INTERCITY PASSENGER RAIL, AND AMTRAK

                               WITNESSES

SUSAN FLEMING, DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES, U.S. 
    GOVERNMENT ACCOUNTABILITY OFFICE
JOLENE M. MOLITORIS, DIRECTOR, OHIO DEPARTMENT OF TRANSPORTATION
MATT ROSE, CHAIRMAN, PRESIDENT, AND CEO, BURLINGTON NORTHERN SANTA FE 
    RAILWAY
JOSEPH BOARDMAN, PRESIDENT AND CEO, AMTRAK

                   Opening Remarks of Chairman Olver

    Mr. Olver. The subcommittee will come to order.
    My apologies, but sometimes those bells go off at odd 
times, and we have left all of you sitting like starlings on a 
line here for quite a period of time. But I think we will 
probably not be disturbed now, so we can go on to 5 o'clock, or 
later.
    Today's hearing is about the future of high speed rail, 
intercity passenger rail, and Amtrak. On March 10th this year, 
our Nation lost Robert Nelson, who headed the Northeast 
Corridor Project for President Kennedy and the Office of High 
Speed Ground Transportation for President Johnson. Dr. Nelson 
was the father of the Metroliner in the Northeast Corridor, 
precursor to Amtrak's Acela service, and accomplished much for 
high speed rail. Yet over 40 years later we are still trying to 
accomplish the greater rail speeds that Dr. Nelson and his 
researchers envisioned for the United States.
    Travelers on intercity passenger rails in industrialized 
parts of Europe or Asia experience high speed trains on 
dedicated track with top speeds of nearly 200 miles per hour. 
As the GAO found in their most recent report on high speed 
rail, about which we will be hearing shortly, the national 
governments in those countries funded the majority of the 
capital costs for these high speed lines.
    Within the current budgetary climate, the U.S. Government 
is unlikely to pursue the type of funding arrangement and cover 
the capital costs for the types of dedicated intercity high 
speed rail systems found in the rest of the world.
    Yet, with a modest capital investment, we could implement 
higher speed rail in a number of intercity corridors. The 
Passenger Rail Working Group which was part of the National 
Surface Transportation and Revenue Study Commission issued a 
report that showed a $7 billion investment per year over 8 
years would maintain and upgrade the existing Amtrak system, 
continue the development of planned new rail corridors, and 
create new routes to link major urban areas.
    And now, for the first time since Dr. Nelson established 
the Metroliner service in the Johnson administration, the 
United States under the leadership of President Obama is again 
recognizing the economic and environmental benefits of a robust 
intercity rail program.
    The recent recovery law contained $8 billion for the 
development of high speed and intercity rail in the United 
States. The President will also include an additional $1 
billion for this initiative in the fiscal year 2010 budget 
request with a total 5-year commitment of $5 billion for high 
speed rail. These are modest investments that will help reduce 
train travel time between major metropolitan areas, but even 
with these commitments, challenges will remain.
    Building true high speed rail with dedicated lines would 
require billions more, and increasing speed on existing lines 
must be reconciled with freight rail usage and ownership in 
many cases.
    In the case of the Northeast Corridor, where Amtrak owns 
the majority of the line, funding may not be available directly 
to Amtrak because the Northeast Corridor is not technically a 
designated high speed rail corridor, though it is the only 
corridor which operates at commonly accepted high speeds. This 
is particularly troublesome, as a number of needed capital 
improvements would reduce travel time in what is our most 
heavily traveled corridor.
    We have a distinguished panel today to help us understand 
these challenges. Susan Fleming is the Director of Physical 
Infrastructure Issues at the GAO, the Government Accountability 
Office, and was in charge of the GAO's new report on high speed 
passenger rail.
    Jolene Molitoris is the director of the Ohio Department of 
Transportation and former Federal Rail Administrator under 
President Clinton, and has some big projects in Ohio to tell us 
about.
    Matt Rose is the chairman, president and CEO of Burlington 
Northern Santa Fe Railway and former member of the National 
Surface Transportation and Revenue Study Commission.
    And finally, Joe Boardman is the President and CEO of 
Amtrak and, before joining Amtrak, was the Federal Rail 
Administrator under President Bush.
    With that, I would like to recognize our ranking member, 
Tom Latham, for any comments that he would like to make.

                Opening Remarks of Ranking Member Latham

    Mr. Latham. Thank you, Mr. Chairman.
    And I, too, apologize for being late because of the votes 
we had on the floor, but welcome the panel.
    Mr. Boardman, I wasn't a member of the subcommittee last 
year, but I guess you were testifying on behalf of the budget 
for Amtrak, and this year, you are Amtrak. So it is kind of a 
different position to be in.
    But the topic of the high speed intercity rail really got a 
lot more interesting this last year with the final stimulus 
agreement that came down with the never-seen-before $8 billion 
in it. Add to that the fact that we as a Nation have not 
entirely come up with a plan or program for rail while everyone 
was speculating as to who got the $8 billion in the bill--is it 
L.A. To Las Vegas or the Northeast Corridor or the Midwest--a 
lot of questions out there.
    I think the assumption that this $8 billion had to be some 
sort of an earmark is a testament to how much work needs to be 
done in the area of planning and vetting and negotiating and 
implementing a passenger rail investment policy. While the $8 
billion is a lot of money, when we look around at a list of 
hopefuls out there, it is plain to see that it is not a lot of 
money and is not going to go very far with high speed rail 
today.
    I also want to say that I am supportive of passenger rail, 
and I think there are a lot of areas of the country where it is 
the best solution. I actually wish Amtrak would go through some 
of the more populated areas in Iowa rather than skirt through 
all the rural areas. I think we could have a lot better 
ridership.
    But I do think that there are a number of communities that 
really dream of having rail today, but the local investment 
climate probably just isn't there, and it is going to be very 
difficult to get it in place.
    But I look forward to the testimony and the questions.
    And I thank you, Mr. Chairman.
    Mr. Olver. Thank you.
    We will now turn to the panel. Each of you has written 
testimony, which will be included in its entirety in the 
record. If you can summarize your testimony within 5 or 6 
minutes each, that would be fine. I would appreciate that.
    And we will start with Ms. Fleming, with your statement.

                  Opening Remarks of Ms. Susan Fleming

    Ms. Fleming. Thank you, Mr. Chairman, Ranking Member 
Latham, members of the subcommittee.
    Thank you for the opportunity to discuss the economic 
viability of high speed rail in the United States.
    As we have all experienced firsthand, existing capacity 
limitations on the highways and in air travel have caused and 
will continue to cause severe congestion and delay. Adding 
physical capacity in these modes has proven difficult, and the 
dependence of these modes on fossil fuels raises significant 
environmental concerns.
    This has led to new interest in examining how high speed 
rail systems can fit into the national transportation system. 
My testimony today has three parts. I will discuss corridor and 
service characteristics that suggest potential for a viable 
high speed rail system; key challenges in developing high speed 
rail; and actions the Federal Government must take to maximize 
the investment of stimulus and other Federal funding in high 
speed rail.
    First, high speed rail tends to attract riders in corridors 
of up to 500 miles in length, with high population and density 
along the corridor, and heavy travel demand and strained 
capacity on existing transportation modes. In addition, 
corridors where right-of-way is available for rail purposes and 
that are relatively flat and straight can help lower the 
substantial upfront construction costs.
    Characteristics of the proposed high speed rail service are 
also important as high speed rail attracts riders where it 
compares favorably to travel alternatives with regard to door-
to-door trip times, frequency of service, reliability, safety 
and price.
    Project sponsors typically must trade off some level of 
ridership to reduce the substantial costs. For example, most 
domestic projects under consideration are incremental projects 
on tracks shared with existing passenger and freight rail, a 
choice that limits the travel time, competitiveness, and 
reliability attainable on more expensive dedicated track or 
guideway.
    Moving on to my second point, I would like to highlight two 
of the key challenges to the development of high speed rail. 
The biggest challenge cited by all of the project sponsors and 
stakeholders we interviewed both here and abroad is securing 
the upfront investment to fund the substantial construction 
costs. High speed rail systems, whether they constitute 
incremental improvements or new dedicated tracks, are 
expensive.
    In our study, incremental projects ranged from $4 million 
to $11 million per mile, while projects on dedicated track 
ranged from $22 million to over $130 million per mile. While 
the $8 billion in stimulus funding is a major down payment for 
high speed rail, given the high costs of the proposed projects, 
it may not stretch very far.
    Second, while corridors may exhibit characteristics of 
economic viability, decision makers face challenges in 
obtaining accurate forecasts of ridership, costs, and public 
benefits. Uncertainties regarding these forecasts can undermine 
confidence in proposed projects' claimed benefits, erode public 
and political support, and exacerbate challenges in securing 
public and private financing.
    Finally, we believe that the Federal Government must 
develop a strategic vision and plan for how high speed rail 
fits into the national transportation system. This step is 
critical in order to establish a clear Federal role, clearly 
identify expected outcomes, and establish performance and 
accountability measures.
    The Federal Government also must develop incentives, 
methods, and analytical tools to ensure that credible and 
reliable ridership, costs, and public benefits are developed.
    In conclusion, it is important to recognize that high speed 
rail does not offer a quick or simple solution to relieving 
congestion. High speed rail projects are costly, risky, and 
take years to develop and build.
    Given the rare opportunity for the Nation to invest 
substantial sums in these projects, it is imperative that we 
establish a framework to invest this money wisely and ensure 
that the Nation reaps the benefits of a more integrated and 
performance-oriented transportation system.
    Mr. Chairman, that concludes my statement. I would be 
pleased to answer any questions you or any members of the 
subcommittee might have.
    [The prepared statement and biography of Susan Fleming 
follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Olver. Thank you, Ms. Fleming.
    Ms. Molitoris.

                Opening Remarks of Ms. Jolene Molitoris

    Ms. Molitoris. I will try to follow that 4.5-minute lead.
    Thank you, Mr. Chairman, Ranking Member Latham.
    And if you permit me to recognize Congressman Kaptur and 
Congressman LaTourette, my colleagues and advisors from your 
committee to Ohio. They have been so very helpful to us.
    I want to thank you so much for inviting me here today, and 
to describe Ohio's vision about passenger rail in Ohio.
    And it might be noted that, as we speak, Mr. Chairman, the 
Ohio General Assembly is voting on Ohio's transportation 
budget. And for the first time, it includes a statement of 
support and encouragement on passenger rail in Ohio.
    And during the last few weeks, during the discussion and 
sometimes debate on this issue, it has been remarkable the kind 
of outpouring that has come from every part of Ohio, from 
university students and developers and contractors and 
environmentalists and city leaders, mayors and so on. It is 
remarkable, but yet it is understandable because the result, 
the return on investment for investing in passenger rail and 
rail of all kinds, is definable and important. And it would be 
interesting if, perhaps later, with regard to the words 
``expensive'' and ``investment climate,'' it might be a topic 
that could be discussed.
    The Governor of Ohio, Ted Strickland, included in his State 
of the State the importance of beginning our process with the 
beginning of service on the 3-C Corridor, as it is called, 
going through the heart of our major population centers, 
touching more than 60 percent of our population, and reaching 
almost 6 million of our citizens.
    At the same time, we are doing what we call parallel 
tracks, if you talk in rail lingo, and we are pursuing the 
institution of service, which has not been on that corridor 
since 1971.
    And we are working hand in hand with critical partners, and 
that is the freight railroads and Amtrak. These are critical 
partners to be successful in establishing the first step 
towards high speed rail.
    It is also important to note that in the 14 States where 
passenger rail is sponsored by State investment, none of the 
higher speed services ever started at 110 or 120. They started 
at the 79-mile-an-hour speed.
    So the 3-C Corridor is one track, and the Ohio Hub Study is 
the other track. That is the Regional High Speed Plan, which 
was passed by the legislature in 2007. And we are using 
stimulus money to do the beginning engineering work on that 
multicorridor study, and it will include corridors like Toledo 
to Pittsburgh, Toledo to Columbus, and Cleveland to Cincinnati.
    I want to mention the freight partnership, because I think 
it is very important. And I am not mentioning it just because 
Matt Rose is sitting next to me. The fact is, Matt Rose doesn't 
come to Ohio, unfortunately, but we have two remarkable major 
Class I railroads, CSX and Norfolk Southern. Our Governor has 
spoken to the CEOs of both railroads, and the lead passenger 
people from each railroad have begun to come several times 
already to Ohio because that partnership is crucial. And we 
have made a commitment that any investment in passenger will be 
a win-win for both passenger and freight.
    Let me just mention that our stimulus funds are multimodal 
in investment, and we have invested in freights there. For 
example, we have approximately $119.8 million invested in rail 
projects and intermodal projects, and our State stimulus has 
$100 million in logistics investment because we recognize the 
importance of freight to our economy and that of our country.
    In terms of my closing comments, Mr. Chairman, I would like 
to encourage a couple of things. First of all, this country 
needs a transportation plan. We are coming up on our 
authorization, and we still, after almost 20 years of talking 
about one Transportation Department, still have silos that 
separate us. And until we understand how each investment can 
leverage the benefit for not only the initial investment but 
the other transportation modes, we can't get the best bang for 
our buck.
    That is why, in the Department of Transportation in Ohio, 
we are in the midst now of what we call a transportation 
futures plan. And even though departments traditionally around 
the country spend perhaps 80 percent of the dollars on highways 
and bridges--because, for example, in Ohio State transportation 
dollars, gas tax money can only be used for that--we must be 
able to leverage those other dollars and integrate our systems 
to get the best return on investment. And that is what we are 
all about at the department.
    We believe that it is crucially important that passenger 
service and high speed rail become a recognized investment, a 
recognized part of our system. And we are excited about the 
fact that, bipartisanly, in Ohio, that is the statement that is 
being made.
    Finally, I would like to recommend that the $8 billion have 
some recognition of the importance of service that is 
beginning, like the 3-C Corridor would be, or maybe 
reintroduced could be said, since it has not been there since 
1971, because although there are 14 other States with wonderful 
opportunities to go faster, startup service in Ohio and perhaps 
elsewhere can really affect the map. And if you look at map of 
this country, there is a void right in the middle, and it is 
the State of Ohio.
    So we hope that we can present a compelling message to our 
Secretary. We thank you very much for bringing forward this 
opportunity to discuss this critical issue. And we believe 
that, with the leadership of the President and this Congress, 
that high speed rail and rail passenger service will come to 
the map in the center of the State, and Ohio will be part of 
the connected system in our country.
    Thank you very much, Mr. Chairman.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Olver. I can't help but say, having come from the 
eastern part of the country and been a mountain climber, I 
always thought the void was everywhere from the Appalachians to 
the Rockies, and you defined it as Ohio.
    Ms. Molitoris. Only for rail passenger service.
    Thank you.
    Mr. Olver. Mr. Rose.

                    Opening Remarks of Mr. Matt Rose

    Mr. Rose. Good afternoon, Chairman Olver, Ranking Member 
Latham.
    As a freight railroad CEO and member of the National 
Transportation Service Revenue Study Commission and an early 
supporter of the One Rail Coalition, I have had a lot of time 
to think about what the national vision for passenger rail 
ought to be.
    In my testimony today, I would like to outline the vision 
that the commission embraced for intercity passenger rail and 
also give you a technical view of high speed rail from the 
perspective of a freight railroad.
    In sum, the commission's model for intercity passenger rail 
in America is to develop several regional corridors for high 
speed rail--110 miles per hour and above--where feasible and 
economically viable, coupled with a more reliable 79-to-90-
miles-an-hour passenger rail service in other key corridors 
where it will continue to make sense from a density, 
utilization, and cost perspective. We believe this vision could 
generate the public support and the political will necessary 
for a successful passenger rail system in this country.
    Hopefully the Federal Government, in partnership with the 
States, can operationalize this vision, given the strong 
support for intercity passenger rail signaled by Congress and 
the administration.
    Since you have my written testimony, let me state my 
conclusions and recommendations to you and then discuss some of 
the technical elements of passenger rail that I think are 
relevant to them.
    First, develop a realistic national vision for passenger 
service that works for all stakeholders, including freight 
railroads and the Nation's shippers, and fully fund it. The 
commission model I just mentioned is a good starting point.
    Second, in developing passenger rail policy, I urge you to 
observe some of the basic principles of fairness for passenger 
use of freight right-of-way and be realistic about the kind of 
passenger service that can be achieved given the limitation of 
joint use. Generally those limitations are based on the laws of 
physics and the consequences that flow from them.
    During the commission's deliberations, the Wisconsin DOT 
Secretary and chairman of the States for Passenger Rail, Frank 
Busalacchi, and the late great Paul Weyrich and I spent a lot 
of time debating the issue of freight and passenger rail 
interface. It is a worthy exercise because we came to a good 
understanding of these issues which formed the basis of trust 
for the development of a One Rail Coalition, a group consisting 
of passenger, freight, and environmental interests which 
advocates for the public benefits of both freight and passenger 
operations.
    We agreed on certain key principles, the same ones that 
have assisted BNSF and many other communities on our network, 
including Seattle, Chicago, Albuquerque, St. Paul, Minneapolis, 
and L.A., which realized a partnership that achieves 
outstanding commuter rail service without degrading the present 
or future freight service. These communities rightly recognize 
their stake in both passenger and freight rail service.
    You have outlined in more detail in my testimony, but in 
sum, they are to negotiate with the freight railroads at an 
arm's length, protect the Nation's present and future freight 
rail capacity, ensuring that the liability indemnification is 
comprehensively addressed.
    Speaking as a freight railroad CEO, let me turn to the 
issue of passenger service operations. I want to make three 
points about train speeds. First, increasing reliability, 
example on-time performance of current 79-miles-per-hour Amtrak 
service, is often the best use of public funds and enough to 
meet market demand in certain corridors.
    Second, increasing Amtrak speeds from 79 to 90 miles per 
hour is possible in some corridors, although not all because it 
can be costly and complicated in joint freight-passenger train 
environments. Track would need to be upgraded from Class IV to 
Class V, which would lead to a step level increase in 
maintenance with related outages needed for work. But 
increasing passenger train speeds to 90 miles per hour can be 
done in some freight tracks.
    Third, sustained train speeds of 110 miles per hour and 
above require separating passenger from freight operations. 
Further, I believe that these high speed passenger rail lines 
should be grade separated from the highway interfaces as well.
    At these higher speeds, freight and passenger rails don't 
mix for the following reasons: First, maintaining track 
surfaces to very high passenger rail engineering standards, 
given the damage done by heavy freight trains; second, managing 
the traffic flow of superfast trains overtaking slower trains; 
and finally, engineering the different curve elevation 
requirements at 110 miles per hour.
    Where it is possible for the public to purchase freight 
railroad right-of-way, we must assure sufficient capacity 
remains in the corridor to operate safely and protect the 
ability to serve current and future rail shippers.
    I would like now to address an issue important that has 
become very important in the discussion of passenger and 
freight interface, Positive Train Control, or otherwise known 
as PTC. Congress has placed a multibillion dollar mandate to 
install PTC on what effectively could be 90 percent of the 
freight railroad network. The unprecedented costs, which we 
estimate could be in excess of $1 billion when fully 
implemented just on BNSF in 2015, is driven by the requirements 
in the mandate that are mostly outside of our control, namely 
passenger trains where passenger trains utilize the network and 
where, pursuant to our statutory common carrier obligation, we 
haul toxic chemicals.
    BNSF began developing this train control technology in 
1984, which led us to create what we now call Electronic Train 
Management, or ETMS. It was never intended to be implemented on 
the scale envisioned by the 2015 mandate included in the Rail 
Safety Bill passed by Congress last year.
    It represents a tremendous financial burden to the freight 
railroads, but also on Amtrak and commuters on jointly used 
lines, and the costs will have to be fairly allocated between 
all participating parties. If you have not heard about this 
from these constituents, you soon will.
    In response, you should consider a variety of funding 
sources to assist the rail sector in meeting the PTC mandate. I 
urge you to fully fund the PTC grant program created in the 
Rail Safety Bill and use intercity passenger and high rail 
speed programs funded in the American Recovery and Reinvestment 
Act to fund PTC, since these kinds of programs have previously 
been paid for, for safety technology investments.
    In addition, Congress has made train control tracking and 
communications systems eligible for Department of Homeland 
Security rail security grants, given the mandate's inclusion of 
rail lines carrying these highly hazardous materials.
    Finally, the freight railroads continue to support a rail 
infrastructure tax credit which makes PTC eligible for the 25 
percent tax credit for the rail infrastructure expansion 
activities.
    I look forward to your questions.
    [The information follows:]

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    Mr. Olver. Thank you, Mr. Rose.
    Mr. Boardman.

                  Opening Remarks of Mr. Joe Boardman

    Mr. Boardman. Mr. Chairman, Mr. Latham. This morning, I 
thought the best place to start was to talk about where we are 
today in terms of higher speed transportation or higher speed 
rail.
    First of all, we are America's intercity passenger 
railroad. We operate in 46 states, 310 daily trains, and we 
serve 515 stations.
    Our central operation, though, for high speed is on the 
Northeast Corridor. Even though we do many of the shorter 
corridors and some of them at a higher speed, the real high 
speed for us is on the Northeast Corridor. And I think what I 
picked up from your original comments was that this was about 
an incremental process. And as I listened to the other three 
presenters here today, GAO is really talking about this as a 
very high speed or a high speed rail at 150 miles an hour. What 
Matt is talking about is a rail at an incremental increase to 
90 or to 110 miles per hour. And then beyond that, you have 
significant costs. And what Jolene was really talking about is 
there are lots of things we can leverage to get to 110 miles 
per hour.
    So, to me, there is a deal here today to be talked about. 
And that deal is what you talked about up front, and that is 
that what we need most to do with the $8 billion that is out 
there today is take that incremental step to 110 miles per hour 
for high speed rail. It is the safer way to go. It is Positive 
Train Control as needed. We don't need to change or close grade 
crossings at 110 miles per hour. We need to make changes in the 
grade crossings and install four quadrant gates, perhaps.
    All railroads are resistant to increasing beyond the 79 
miles per hour, whether it is 90 or to 110. But there is no 
requirement in that range of speeds to make such changes. And 
we are now in a situation where we have to do Positive Train 
Control on all intercity passenger routes and HAZMAT as well.
    So I think there is an opportunity here to see this 
incremental improvement, which I think is what is most 
important for America for energy self-sufficiency, for the 
environment, and for our future mobility.
    If you look at slide 3, and you can look very quickly to 
see what happens when you get to high speeds, especially beyond 
110 miles per hour, because what you see in the south end of 
the service that we do Acela on, which is generally speaking 
New York City to Washington, today we have 63 percent of the 
combined air-rail ridership.
    On the north end, you can also see, which is closer to your 
heart, Mr. Chairman, that we have picked up percentage 
increases every single year, 2006, 2007, and 2008; up now to 49 
percent going by rail as opposed to air.
    And slide 4 just gives us a quick history of where this 
really was all pulled together from, from 1935 to 1971, but it 
wasn't until the DOT invested large sums of money that we could 
get the service at 125 miles per hour and extend the 
electrification on the north end of that line and raise our 
speeds really to 135 to 150 miles per hour.
    And in the next slide, it really talks about, what did we 
do to get that done? Where were we pre-1976, and now where are 
we today? Where we had signal and train control, we now have 
universal Automatic Train Stop, and ACSES is now available on 
the Northeast Corridor. ACSES is the Positive Train Control. 
That is operating today, and it is the only place that positive 
train control is operating today, with the exception, Matt, of 
your ETMS systems that you are testing out in the West.
    So when you look at our interlockings, our grade crossings 
or electrified segments, we are now an electrified railroad on 
the whole corridor. That is where we need to be once we are 
above 110 miles per hour. We see that as something that we can 
continue to improve.
    In slide 6, it gives us--and you and I talked about this a 
little bit--an idea or snapshot of, where are the pinch points, 
the difficulties for us on the Northeast Corridor? And I just 
picked out one particular section from Newark into New York 
City, and can you see we have a 90-mph territory where we have 
to slow down to 70 mph for Portal Bridge, which is one of our 
pinch points, and a major investment is needed there. The back 
up to 90, down to 75 as we go into the approaches to the 
tunnel, and then 60 miles per hour as we go into the tunnel 
itself. So we see lots of bottlenecks on the south end of this 
operation.
    When you get to the north end, the first thing--and I think 
we talked about this privately as well--the first thing we 
could do is to look at the fact that Amtrak doesn't control the 
whole line. There are about 60 miles that Connecticut and New 
York actually operate. And in many cases, we are down to as low 
as 30 to 45 miles per hour. And it is really a section that 
could change immediately if Amtrak controlled and operated that 
particular section of the railroad. We could reduce time almost 
immediately with no investment.
    When you look at how would we make investments, we talked 
about a couple different ways to do this. Right now we operate 
between New York City and Washington in 2 hours and 45, or 2 
hours and 50 minutes. If we were going to take 15 minutes out 
of that time, the cost today is a little over a half a billion 
dollars, $625 million. And the breakdown for that, in terms of 
what we would have to do, is up on the slide.
    If you take the next 15 minutes to get down to 2 hours and 
15 minutes, the total cost is at $5 billion because every time 
you add to the reduction in time for us, we have huge costs. 
And I identify some of those on slide 9. For example, the B&P 
tunnel, the Baltimore tunnel built right after the Civil War, 
to really make the changes we would need to make there and you 
could probably save 8 to 10 minutes, you are talking about over 
a billion dollars to rebuild that tunnel.
    We have other bottlenecks. I talked about the Portal 
Bridge. We are talking about $1.5 billion to replace the Portal 
Bridge. As some of the other folks here have said here today, 
for us to find the dollars to make the real changes that are 
out there today, we have a backlog of projects that need to be 
done to stop those kinds of bottlenecks.
    But there is hope, and there is an opportunity, because 
when you look at what was done for the Keystone Corridor, for 
example, one of the only corridors that is still growing in 
ridership at a double digit, 14 percent a year, we were able to 
cost-share with the State of Pennsylvania for $145 million, and 
Amtrak upgraded that particular line. And that service now has 
allowed us to cut 15 minutes off the Harrisburg-to-Philadelphia 
trip and about 30 minutes off the Harrisburg-to-New-York-City 
trip. We replaced nine diesel-powered locomotives and round 
trips to 12 electrified round trips, and ridership has grown as 
much as 20 percent and nearly 20 percent again in 2008. And we 
are still seeing it grow at 14 percent, even in the environment 
we are in today.
    So we know making these investments in the state of good 
repair and increasing the speeds, and I think when you really 
look at, again, that incremental speed, when you look at really 
what does 110 miles per hour do? It uses that existing freight 
railroad right away. We need to make some changes in capacity, 
but it diverts passengers mainly from their autos, so we are 
trip-time competitive with autos to a large extent over a 200-
to-250-mile range.
    It doesn't attract quite so many air passengers, except in 
the case of Harrisburg because they stopped air service. So it 
definitely does in that particular case. It produces congestion 
relief, especially in the urbanized areas. It requires Positive 
Train Control, but we require that now all over the county, or 
equivalent signaling and control systems. And it allows highway 
and rail grade crossings to remain in place, but it upgrades 
their safety, and it is one of the things again that Jolene 
talked about the section 130 program and the highway program, 
the surface transportation reauthorization. This is where 
highways can help rail and reduce congestion on the highways by 
making rail safer and allowing us to run faster. And it uses 
conventional rolling rail stock.
    On slide 11, rail is an inherently efficient smaller 
footprint, greener. It has lower fuel costs overall, and it is 
a clean operation, whether you look at it for the Hiawatha 
service, and I think that is one where Matt talked about, in 
some cases, you don't need to increase the speed. And Hiawatha 
would be one of them, and Frank Busalacchi would tell you that 
they can make the increases in passenger ridership at 79 mph 
between Milwaukee and Chicago. And the San Joaquin in 
California is a great model for communities and States, like 
New York State, that need to increase the kinds of connectivity 
that is necessary to make rail passenger service work. And then 
we have a Southwest Chief that really talks about the fact that 
the real benefit for Amtrak is the thread that it provides on 
surface transportation coast to coast, border to border, for 
connectivity for anybody on the surface transportation mode in 
the United States.
    Slide 12 is the picture that GAO painted, and that is that 
we have, and I think Matt painted this to some extent, this is 
the trillions model. This is the model of getting to the very 
high speed rail. This particular rail is what we look at for 
Europe and other kinds of locations. Where there is a need to 
do that, and an opportunity to do that, and you have the 
investment potential for a straight line rail in an area that 
you don't have to--and I think Susan said it right--where it is 
flat and where you can really build this at a reasonable cost, 
there are places for that kind of rail in this country. It is 
not on the Northeast Corridor, and it is not the incremental 
process that we can see for the future, because what we really 
have and we are very good at is adaptive reuse.
    This bridge on slide 13 was built by Whistler's father, and 
I myself looked up George Washington Whistler--I guess his wife 
was Whistler's mother in the famous painting--and this 
particular bridge in the north end of our service was built in 
1835. It was double-tracked in 1860. It was widened with a 
cantilever in 1910, and electric catenary in 1999, and Acela 
operated on it in the year 2000. It is a 125-mile-per-hour 
bridge in a 150-mile-per-hour railroad, but it is adaptive 
reuse. And that is what we are dealing with so much of the 
investment out there today.
    But aging really is an irreversible process. And I 
particularly liked this AEM-7 locomotive on slide 14 since it 
has 911 on the front of it. This particular slide was meant to 
identify equipment types, and you started out with a tribute to 
somebody that was around at the time that our baggage cars were 
built. Our diners were built over 60 years old. We are talking 
about locomotives that are over 30 years old. The newest 
category of cars on this line are between 15 and 20 years old. 
We need to replace equipment. And that is a large part of what 
we need to do to improve high speed rail or reliability in this 
country for all railroads.
    We have got several corridors that have strong 
developmental potential; an extension and perhaps 
electrification between here and Richmond. It is a natural 
feeder to the Northeast Corridor. It can be a 110-miles-per-
hour corridor with less investment than many corridors, but it 
needs to be electrified.
    There is the Michigan-to-Chicago corridor where we are 
already running some service at 95 miles per hour. There is a 
strong interest by the State as there is a strong interest by 
Ohio and a strong interest by New York and many other States to 
improve their service, but there is not a great deal of State 
money these days. They are in very difficult situations all 
across the country, and that drives a different discussion on 
policy and how we spend this $8 million that is available for 
high speed rail or higher speed rail in the United States.
    Even Amtrak in slide 16, you can almost see if you look at 
this slide, and this is just Amtrak's annual capital needs, 
what was requested and what was received or appropriated over 
the last several years. This is the first year in 2009, where 
the appropriation was greater than the requested funding. And 
if you went back through the years, you could begin to see that 
the areas that were short or scarce of the funds that were 
requested have a large part to do with the state of good repair 
backlog. To address that backlog, we need to make the 
improvements that are necessary for the Northeast Corridor and 
other projects throughout Amtrak.
    But we have a great opportunity today, I think, because the 
stimulus request that came out was a request that we took very 
seriously, very quickly; $850 million for our capital projects; 
and an additional $450 million for security that we also 
included for safety programs, especially for the tunnels in and 
out of New York. It was to preserve and create jobs and 
stimulate the economy.
    We will finish these projects, totaling $1.3 billion, 
within the 2-year period that we have been given to do that. We 
have received most our approvals from the FRA on the projects 
at this point in time. And they are projects like the Niantic 
River Bridge that was on one of my earlier slides, like ACSES 
on the Northeast Corridor and the ITCS line in Michigan, which 
is part of the Positive Train Control, and additional 
investments in Positive Train Control to support what Matt was 
talking about earlier in terms of his ETMS system and the 
interoperability between all the PTS for the future, and ADA 
compliance, and a frequency converter to make our electricity 
more reliable on the Northeast Corridor, and maintenance 
facility improvements and smaller fixed bridges. Nearly more 
than half of the dollars that will be spent will be outside the 
Northeast Corridor to improve what we know is necessary across 
this country.
    We think that, if there is any future stimulus, we need to 
talk about equipment. And I think Matt put his finger right on 
it that we need to talk about how we roll out Positive Train 
Control across the United States and take advantage of more 
travel at the 110 miles an hour.
    And with that, I will end by saying that we see it as an 
improvement in a safer, greener, and healthier system to make 
these things happen. Thank you.
    [The information follows:]

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                            HIGH SPEED RAIL

    Mr. Olver. Well, thank you very much, Mr. Boardman.
    Toward the end of your comments, I had been wondering where 
the timer was that flashed red at a particular time. You spent 
almost as much time as the other three together, I think, in 
going through that presentation. But yours is one train that 
actually runs, as I commented earlier, within the range of high 
speed rail.
    So what we will do now is go 5 minutes, myself, and then 
the ranking member. And then questions by the other members of 
the subcommittee. We have a good turnout today. This is a 
matter of greater interest, not just because we have two 
members from Ohio, one right on the edge of Ohio and Detroit, 
Michigan. And so it goes.
    We are in quite an interesting time here. My staff has 
given me questions, and I usually don't think much about those 
questions. So you will have to bear with me. I am ad-libbing in 
a sense here. They sort of understand that that happens and is 
likely to happen.
    We are in a very interesting time. We have rail advocates 
all over the country, everywhere around the country, who want 
passenger rail to come back. They haven't thought about all of 
the different levels of problems that you four have seen and 
worked with along the way.
    But we have had probably 50 different proposals for high 
speed, for higher speed rail, improvements to passenger rail in 
various places around the country. All the way to Maglev 
projects which didn't go. We never had any money for them. And 
now, with the PRIIA authorization last fall, there are 
authorizations for high speed rail of a billion and a half and 
for intercity passenger rail of roughly a billion and a half, 
and for Amtrak improvements, mostly to be distributed, but much 
of it on the Northeast Corridor, totaling something like $7 
billion or thereabouts, roughly $11 billion of authorizations 
there.
    And it started out with the request for a plan. A plan 
which was to be done by the Secretary of Transportation, or the 
Administrator of the Federal Railroad Administration, I am not 
quite sure, that would take until 1 year after the enactment of 
that, which would take us into October.
    Now, we went out of session, so Members of Congress had 
much time to think about that shortly thereafter. And then in 
February, we have also an $8 billion amount which appeared not 
quite out of the blue--well, maybe out of the blue in the sense 
of ``blue'' versus ``red'' in the Presidential campaigns and so 
forth. And that one comes up with $8 billion for high speed 
rail, but for both the high speed rail and the intercity 
passenger rail program combined, and further, it calls for a 
plan within 60 days of the enactment, which for a much larger 
sum of money is now asking for the plan to be done within 3 
weeks from now, 60 days from the enactment.
    Now each of the first three testifiers have pointed out 
that there ought to be a national plan, and my guess is that, 
at this point, the plan is whatever is the sum total of all--
the floodgate is open. All that money has been thrown there 
with the expectation that there is going to be more coming in. 
We will be working within authorizations on the intercity 
passenger rail and the Amtrak arrangement most likely on high 
speed rail. They are already well beyond the authorization 
levels in last year's PRIIA bill--of the last fall's PRIIA 
bill, and the President has indicated that our budgets are 
going to have an additional $1 billion each year for the next 5 
years. I suspect we are headed up to $5 billion to $10 billion 
per year in this bunch of combinations.
    But the plan now becomes the dreams and aspirations of 
every Member of Congress, every man, woman and Member of 
Congress or the Senate put together in a combination in sum 
total. Here we are in a startling position of where we might go 
over the near future.
    Ms. Fleming has indicated that we can be concerned at least 
if we are going to go to the high, the really high speed rail 
kinds of things on questions of topography and questions of the 
accurate estimation of ridership and potentials along those, 
and very much an indication of where really high speed rail for 
the kind of investments, as she has pointed out, are between 
$22 million and $130 million per mile, whereas the incremental 
approach from starting out with Class III at 59-miles-per-hour, 
60-miles-per-hour road and getting up to Class IV and then on 
to the Class V, which Mr. Rose, you have talked about, gets you 
up to the 90 miles an hour. I don't know whether it is Class VI 
that gets you to the 110, but something along those lines; that 
these are incremental, and you may be able to make grand 
progress in those areas between $4 million and $7 million per 
mile.
    And I must say, Mr. Boardman's estimate of what is needed 
to bring up above the 110-miles-per-hour range--they are able 
to operate in much of the area, but to do so safely and 
reliably and so forth, even the $5 billion of the 200 miles of 
the south end, essentially, is--I am already on red. I am 
already on red.
    But I just wanted--my last comment was going to be, because 
I am not going to ask you a question, I am going to let you 
think about that and see what may come out of it and then turn 
to my ranking member.
    But the number of billions of dollars for the little over 
200 miles is already in the $25 million per mile just for the 
improvements on what is already a much improved kind of a 
program that is running in substantial parts of it up in those 
higher speed ranges.
    So we have a problem. And the States don't have any money 
now. The feeding frenzy that is developing basically, it is 
developing because it is 100 percent Federal money. I don't 
know that anybody thinks that there can be 100 percent money at 
the Federal level over the long haul in the ranges or sizes of 
money that are needed.
    I lay all of that out, and I turn over to my ranking 
member, Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman. That was a great 
question.
    Anyway. I just like you to know, I really respect my staff. 
They are all wonderful.
    Okay. Mr. Rose, in Iowa, we have a lot of railroad, and it 
is very important as far as moving our agricultural products or 
manufacturing goods; also, a lot of coal goes across the State. 
Extremely important. Your vision as to the idea of cooperation 
in having freight and passenger rail on your lines, is that 
shared universally by your other associates or counterparts in 
the railroad industry?

                         FREIGHT/PASSENGER RAIL

    Mr. Rose. I think there is probably a little bit of 
difference. At BNSF, we have been successfully out executing 
these agreements. We have what we call commuter principles. The 
first one is ``Do no harm to the freight side of the 
business.'' The second one is, ``Do no harm to the freight side 
of the business.'' The third one is, ``Do no harm to the 
freight sides of the business.'' You get it.
    If you do it right, it is a benefit for the public to be 
able to provide this passenger service. If you get it wrong, 
then you have really harmed your State in terms of industrial 
development and economic commerce to move things around. I have 
been in my job now for 9 years, and I will tell you, 9 years 
ago, that every railroad almost was against this type of 
public-private partnership in passenger rail. And in 9 years, 
we have moved a long ways. We realize that there is a lot of 
interest for public need, public good to make accommodations. 
We just have to make sure that we don't mess up the freight 
railroad side of it as we do these kind of things.

           BALANCE OF TRANSPORTATION AND ENVIRONMENTAL POLICY

    Mr. Latham. One of the really large complications such as 
where I live in Ames, Iowa, is the mainline of the UP that goes 
east to west across Iowa and going right through downtown; 110 
trains a day, mostly coal trains going through. And it would be 
very difficult to intersperse passenger rail in that. But it 
would be great, also, if we could do that. We have a great 
depot at which nothing stops in Ames, Iowa.
    Is there anything that we can do? I suppose money, but as 
far as incentives to change that equation? And also, the Amtrak 
in Iowa goes through southern Iowa. It doesn't go through any 
populated county.
    Mr. Boardman. My family is from Clarinda County--Clarinda 
in Page County.
    Mr. Latham. Easy for you to say.
    Mr. Boardman. I never lived there.
    Mr. LaTourette. He doesn't write them so much.
    Mr. Latham. He knows how to spell it, but not how to say 
it. I am sorry, go ahead.
    Mr. Rose. So I think the biggest thing that could come out 
of there is a national vision which would include a national 
priority. One of the things we have not done well in the past 
is tie together our needs for our energy policy, as well as our 
transportation policy. And I would submit that we really do 
live in a different world today than we did just 10 years ago.
    And if you take a step back and think about the energy 
needs, the climate issues in our country, and transportation, 
and start to think about what the future could be. So my point 
is that, right now, you are exactly right; every State is 
calling us saying how--this is free money. Manna from heaven. 
How can we get some of this? And quite frankly, you all are in 
very difficult positions.
    I traveled to China, and they do it differently there. It 
is called communism. One guy makes a decision; this is where we 
are going to put a high speed passenger rail or Maglev, and I 
am planning my society, and I will have my people here, and 
they will take this train to their work location, and don't ask 
any questions. There is only one guy in charge. And it is 
pretty effective. But I know that is not the reality here that 
we live in.
    And so--but what is going to happen is, during this time, 
we are going to get a lot of people saying, I got to have 
passenger rail and probably what, unfortunately, will happen 
from this is that there will be dollars thrown at passenger 
rail operations and lanes that won't make any sense.

                           AGENCY NEGOTIATION

    Mr. Latham. If I could ask, in your statement, ``a 
negotiation has to be at arm's length,'' can you tell me what 
that means between the passenger and freight? And who is going 
to start this negotiation?
    Mr. Rose. It is really where an agency, typically a State 
commuter agent, comes to us and says, we would like to run a 
commuter operation. So at arm's length, instead of Congress 
getting involved and mandating, we have shown that we have been 
successful. These are very difficult. We just recently 
completed one in Minneapolis with the North Star where we were 
able to come to agreement on liability, services and costs. And 
that was through using outside or modeling and using capital 
costs that everybody could agree upon the methodology and the 
liability.
    Things are very, very difficult. This is, again, the 
freight rail; on our freight rail, 99 percent of all of our 
revenue comes from freight; 1 percent comes from passenger.
    Mr. Boardman. Could I comment on that? Amtrak is the arm 
for intercity passenger rail. The arm that he is talking about. 
It is Amtrak legally and in terms of what we are responsible 
for.
    Mr. Latham. Thank you, Mr. Chairman.
    Mr. Olver. In order of arrival here, next would be Mr. 
Rodriguez.

                    POSSIBILITIES OF HIGH SPEED RAIL

    Mr. Rodriguez. Thank you.
    Let me thank you for being here with us. I think the 
Chairman talked a little bit I guess because we don't have I 
think a vision in terms of where we want to go. And I think 
each area and each sector has their own group.
    I know, in Texas, we talked about fast rail from San 
Antonio to Houston, Houston to Dallas. Back to Austin and San 
Antonio in the 1970s, and as you well know, that has not 
materialized.
    But in the report that GAO had talked about the importance 
of coming up with a strategic vision in terms of high speed and 
that kind of thing. And nationally as well, as you know, the 
importance of looking at intercities. Houston has moved with 
some intercity types of thing. Dallas. San Antonio is looking 
at that.
    The potentials, I am not sure in terms of the funding. 
Maybe some of you can talk about that, because we have a major 
area medical center where a lot of concentration as well as the 
intercity where we could possibly have some rail back and 
forth. And I would want you to comment on how we go about 
looking at funding those aspects.
    I also represent a lot of rural area and for freight. I 
have actually a rail that is owned by the State that goes from 
Presidio to San Angelo that travels about 10 or 15 miles per 
hour, but it has a lot of potential because it comes from 
Mexico, from the Pacific side. Usually we get it from the 
Atlantic side; this is from the Pacific side, and the potential 
there. Can you elaborate on the possibilities of what might be 
viable not only in terms of rural but urban areas?
    I will just throw it out. And I know from the strategic 
plan, maybe from the GAO first?
    Ms. Fleming. You want me to kick it off?
    We recommend that the Department of Transportation work 
with Congress and other stakeholders to develop a vision and 
clear goals linking it to the national transportation system in 
terms of rail. This has been done in other countries. I think 
it is an important step. It is very critical in order to 
establish what the clear Federal role is; to determine what 
expected outcomes are; as well as setting up some performance 
and accountability measures. And again this is learning from 
folks who have been doing this, this is kind of the first 
lessons learned.
    Mr. Rodriguez. We don't have a requirement now from the 
States or on the national on that vision?
    Ms. Fleming. No.

                            STATE RAIL PLANS

    Mr. Boardman. Can I comment on that, please?
    The FRA does have a requirement for all States now to have 
a rail plan. It is not the entire process, but there is a 
requirement.
    And the kinds of things that you were talking about, 
Congressman, would make it into the rail plan. And the reason 
the rail plan was put together was to make it the same as the 
highway system, because the highway system today in every State 
has to have a State Transportation Improvement Program, or STIP 
as they call it. And once you make a project on that STIP, you 
have to find a way to finance or fund that project.
    Rail projects did not traditionally make it on that list. 
And part of the thing that you did in the last two 
authorizations is, the first year you put I think about $30 
million out that would provide assistance to the States and now 
about $90 million, I think, this past year on a different 
program, and it requires there to be a State rail plan. On the 
stimulus, that requirement doesn't exist at this point in time. 
But in terms of getting the kinds of projects that you are 
talking about, the States are required to do that if they want 
that funding.
    Ms. Fleming. Can I just add one more thing? Again, it is a 
plan for a national vision and linking in terms of the overall 
national transportation system. But then the next step is 
coming up with clear procedures for evaluating the various high 
speed rail projects and proposals to look at costs and 
benefits. So I think it is a several-pronged approach; you need 
basically a framework in order to be sure that your money is 
being spent wisely and it is a worthy investment.

                      NATIONAL TRANSPORTATION PLAN

    Ms. Molitoris. Mr. Rodriguez, I would like to comment the 
need for a national transportation plan. As Joe mentioned, the 
State rail plan is a requirement. However, there is State 
highway plan requirement as well. I think it is critical that 
we understand as a Nation how those investments affect the 
entire system. And right now there is no such requirement. That 
is why our department in Ohio has begun a transportation 
futures plan.
    And the cost-benefit analysis is very important, because if 
you only look at bottom-line investments and do not value the 
impact on the environment, the impact on the availability of 
this kind of transportation choice, the impact by getting 
people off the highways, those are all very important. Because 
the more autos you get off the highways, the more trucks that 
can go to the intermodal yards where they connect with trains, 
and we need to understand all of that. Right now, without a 
total integrated transportation plan, we don't really know the 
cost and benefit of what we are investing and what we are 
getting in return.
    Mr. Rodriguez. And I gather that also includes both 
freight?
    Ms. Molitoris. Yes.
    Mr. Rodriguez. Thank you very much.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman.
    And thank you all for your testimony. And it is nice to see 
all of you.
    I didn't meet you before, Mrs. Fleming, but it is nice to 
meet you.
    And when you two got dressed this morning, did you consult 
with each other? I am talking to you, Jolene.
    I have to tell you, and let me say something nice about the 
director of the Ohio Department of Transportation. I met her 
when she was the FRA administrator in the Clinton 
administration, and in our part of the world, Conrail's assets 
were acquired by CSX and Norfolk Southern. If it had not been 
for Commissioner Molitoris, we would have had a larger mess 
than we wound up having, and I am eternally grateful to her 
assistance for that.
    The problem with this, and I invite your observations, 
without a national plan, we are not going to get this done. And 
I would point to the last highway bill, SAFETEA-LU, where we 
had designated the projects of regional and national 
significance, above-the-line funding, and each thing had to be 
half a billion dollars. And we behaved ourselves in the House, 
and I know that Chairman Olver and Ranking Member Latham will 
behave themselves over here. But when it got over to the other 
body, they were just pigs. What they did, they divided that $17 
billion up, and everybody got $150 million so they could go 
home and put out a press release. But you can't build anything 
significantly for $150 million, and the reason that that 
program was initiated was so that you could really build 
something. Like the Inner Belt in Cleveland and the Inner 
Harbor in Toledo and like the Spence Bridge in Cincinnati. But 
we have money just sitting there.
    If we don't approach this universally, and by that, I mean, 
not only do we have to have a national plan, I think all the 
interest groups have got to have some skin in the game. And by 
that, I mean, if I were Matt Rose or if I were CSX or I was 
Norfolk Southern, I would never let a passenger train on my 
system until you solve a bunch of problems. You have to get the 
lawyers out of the situation. You have to have a way to 
determine what liability is going to be, like we have in the 
air travel system. That is, if we have an accident, you know 
what it is, so you can buy insurance and adjust the risks.
    I don't know what your liability agreements are, Matt, but 
the lawyers are smart enough, that if they are your tracks, 
they will run through the State's budget; they will run through 
Amtrak's budget; and then they will come get you. And until we 
include them in this process, I think you are going to have a 
problem.
    The other thing you mentioned is your common carrier 
responsibility. A lot of people don't recognize that you said 
99 percent of your revenue is from freight; 1 percent is 
passenger. How much of your revenue is from carrying chlorine?
    Mr. Rose. One-tenth of 1 percent.

                               LIABILITY

    Mr. LaTourette. One-tenth of 1 percent. How much of your 
liability is tied to carrying chlorine and hazardous materials?
    Mr. Rose. Sixty to 80 percent.
    Mr. LaTourette. Can you decline to carry?
    Mr. Rose. No.
    Mr. LaTourette. Because of your common carrier 
responsibilities. So if you are talking about taking a train 
that goes 79, in Jolene's case, or 90 or 110, and against 
trains that are going 35, 40 miles per hour, and they are 
carrying chlorine, we have to do something about the freight's 
common carrier responsibility as well. And so that is what I 
mean by, this has to be a universal solution. We just can't 
come to the freights and say, give us a bunch of right-of-way, 
and we will pay you a little bit of money, and yes, you can 
still be sued and, yes, you have to carry all of this bad 
stuff. Anybody have an observation about that?
    Mr. Rose. I would just say, in the GAO report, I think they 
identified the issue of the liability question that needs to be 
clarified, and it has got to be clarified right here in 
Washington, D.C. We are very much in support of that.
    And the liability issue, Congressman, is really at heart of 
this issue, because the railroads, the way that these commuter 
arrangements work, the railroads really will make de minimis 
amounts of money on these. The railroads the get some 
additional capacity, which will be good, but that pales in 
comparison to the potential liability.
    Mr. LaTourette. This government made a decision in air 
transportation that we are going to have a national air system. 
When you make that decision, we have to do certain things. If 
we are going to have a national passenger rail system, we are 
going to have to do the same things relative to liability and 
common carrier, and I would throw in the FRA and other 
agencies.

                          TRAIN SPEED AND BULK

    Mr. Boardman, the reason that your Acela train doesn't go 
as fast as it could is because it is like an elephant on roller 
skates. They junked it up so much with weight and restrictions 
and everything else that it couldn't handle the curves on the 
existing infrastructure that you have; isn't that correct?
    Mr. Boardman. No, I would say--I understand what you are 
saying in terms of the size and the buff strength. But I think, 
in a mixed freight corridor, you have to do that to adjust the 
risk. And that is the same with a lot of locomotives that we 
operate. But I think today, between New York and Washington, it 
takes 4 to 5 hours to drive. It takes 4 hours and 45 minutes. 
We are already high speed in terms of that.
    Mr. LaTourette. It is a great system, but am I wrong, 
because of the configurations that was required by some of the 
regulations, you got a bigger set of cars than you needed and 
the brakes broke and fractured under the stress and you had to 
slow down on curves because the car was too wide because the 
yaw--or whatever you engineers talk about when you go around 
the corner--it was yawing this way, it was running into stuff 
potentially, right?
    Mr. Boardman. I think we would not buy another set of 
trains in a consortium the way we did it.
    Mr. LaTourette. There you go.
    Thank you, Mr. Chairman.
    Mr. Olver. Ms. Roybal-Allard.

                         ENVIRONMENTAL PLANNING

    Ms. Roybal-Allard. Mr. Boardman, first of all, let me take 
this opportunity to thank you for working so closely with 
California to maximize the State's significant capital 
investments in passenger rail service so that we can meet our 
transportation needs.
    There are many Americans who are familiar with the Amtrak's 
Northeast Corridor from Washington to Boston. But I think there 
are many that are not aware that the Southern California 
Corridor is Amtrak's second most popular route. So, on behalf 
of my constituents and my State, I want to thank you and your 
employees for working so well with California. And there are 
many that believe that that partnership is really a model for 
others to follow.
    Mr. Boardman. Thank you. I have suggested to my friends in 
New York upstate that they go to California and look at that 
model.
    Ms. Roybal-Allard. I have for some time listened with keen 
interest to conversations about high speed rail in our Nation 
and in California in particular. And I believe that this mode 
of transportation has the potential to meet our growing 
challenges of moving people quickly and efficiently.
    Nevertheless, I have noted with concern that presentations 
on proposed routes in, for example, my State have focused on 
using existing rights-of-way along our freeways and our 
railroads. Now this may seem less intrusive and disruptive than 
creating new routes in already heavily urbanized areas, and I 
know that cost also is probably a factor. However, we cannot 
ignore the historical fact that many of the existing rights-of-
ways for freeways and for railways disrupted and divided poor 
and minority communities.
    In my Los Angeles district alone, communities are dissected 
by no more than eight State and Federal highways and several 
railroads. Building a high speed rail route along existing 
rights of way in Los Angeles may minimize the negative impact 
to other communities, but I fear that it will add to the 
damages already done decades ago when the new interstate system 
divided and even destroyed poor communities, one, for example, 
where I was born, and has caused lingering health issues for 
children and residents who today are still suffering from those 
environmental impacts.
    Therefore, building a new high speed rail system along 
existing rights-of-way is far more intrusive and disruptive 
than many proponents will have you believe. And it certainly 
would be to my constituents, many of whom probably won't even 
be able to afford the price of riding the high speed rail that 
is being proposed for the Los Angeles area.
    And so I just felt that it was important, because in none 
of the discussions that I have heard, regardless of where I am, 
has any attention been paid to the fact that some of these 
proposals are going to again impact poor, minority communities 
that have had historically and even now do not have the 
influence or political clout that more affluent areas have to 
fight these projects.
    So my question is for Ms. Fleming and also for the 
panelists. In your experience, is adequate weight given to 
environmental justice issues such as the ones I have described 
in the review and planning process of new transportation 
infrastructure projects?
    Ms. Fleming. I think you raise an important issue. One of 
the things that we recommend is that there needs to be better 
methods and analytical tools to quantify costs as well as 
benefits. And that is something that is not currently done in 
this country as well as in some of the other countries that we 
visited. So it is an area that is very critical and important, 
because determining viability for high speed rail is really 
looking at those particular factors.
    So you absolutely raise an important question, and it is an 
area that we feel needs to be further explored and have better 
methods and tools.
    Ms. Roybal-Allard. What weight do your agencies give to 
environmental planning when you are planning major new capital 
projects?
    Ms. Molitoris. Representative, the whole NEPA process 
really is very important as it looks at the impact on people 
and neighborhoods. And we give it a very high priority. One of 
the difficulties is that, in the history of our country, much 
of our population centers built up around railroads, rivers, 
and ways of transporting goods. And--
    Ms. Roybal-Allard. And historically, through the poor 
minority communities, who were not able to fight those 
projects. I mean, I think that is an important point that has 
to be recognized.
    And with these projects that are being proposed, then it is 
just continuing the harm and the damage that has been done to 
these communities. And in the case of high speed rail, if the 
cost of a ticket is what I am hearing for Los Angeles, I 
guarantee you that those who are going to be the most 
negatively impacted are not going to be using it.
    Ms. Molitoris. Well, may I just say that I believe--I can 
only speak for our department, but our administration is 
focused on an involvement process that is real, where all of 
the participants who are going to be affected have an 
opportunity to be part of the decision-making.
    One of the challenges is, where else can you go? Mr. Rose 
mentioned sort of the Chinese model, and you know, they kind of 
put a string between here and there where they want to go, and 
they just take out everything. And we can't do that, and we 
won't do that. And so the opportunity for these kinds of 
systems sometimes can be something that can bring economic 
viability to communities as well.
    If you look at some of the State-sponsored systems--I will 
just mention Maine as an example--with a small population and 
few cities, and they did institute service in 2001 or 2002, and 
they have realized 8,000 new, or will realize by I think 2020, 
8,000 new jobs and investments equaling $3.3 billion. So this 
can bring opportunity for work and have a positive impact. I 
don't think it is an easy equation. It is a very important part 
of the process of bringing these to fruition.
    And I would say that our goal in starting at the 79-miles-
per-hour level is to work with people all along that corridor. 
In fact, the process is going on right now. And I have gotten a 
lot of good feedback from these very populated meetings by 
many, many different parts of our society. And there is great 
interest. We just have to do it right. And I think 
understanding that this is service that should be serving the 
people is really our first priority.

                                OUTREACH

    Ms. Roybal-Allard. I would like to talk to you about the 
outreach because, historically, the outreach done in these 
kinds of communities, it really doesn't reach the people 
themselves, the ones that are going to be impacted, and you 
hear from those that mostly will benefit. So I would like to 
talk to you further about the kind of outreach that needs to be 
done.
    Ms. Molitoris. I would be very pleased to do that.
    Mr. Olver. Mr. Carter.

                             RAIL IN CITIES

    Mr. Carter. Thank you, Mr. Chairman.
    I am new at all of this and this is all very interesting. I 
guess I have to fall back on the experiences that I have got. 
It seems to me, listening to what Louise was talking about over 
there, I kind of agree that existing track issue is, of course, 
the easy way to do it. But it has also got problems.
    We have a transportation institute at Texas A&M, and when I 
first came to Congress, I represented Texas A&M. And I went 
there, and they told me the solution for moving everybody and 
everything is to get out of the cities. And so we came up with 
this brilliant idea to create the Trans-Texas Corridor to get 
everyone out of the cities. Sort of the Chinese model with a 
Texas flavor. The Chinese model with a Texas flavor is just 
about as popular as terminal cancer in Texas. There are people 
who are arming themselves to stop the Trans-Texas Corridor as 
we speak, and everybody thinks it is going through their 
backyard, and they are very unhappy with it.
    So, I guess I would really like to ask Mr. Rose, because 
when I went to visit you folks, we also talked about getting 
the trains out of the cities, as far as freight is concerned. 
That is a model that you all would like to see, right?
    Now, but the passenger trains are going to have to go to 
the cities. So would the better solution be, they keep your 
tracks and pay for moving you out of the cities?
    Mr. Rose. Okay, so you have said a couple of things. I 
think, first off, when we do build rail lines, it is always 
hard. It is just different degrees of hard.
    I would say, though, if we today were trying to build the 
interstate highway system back that we built in the 1950s and 
1960s, we would find the same issue. And until we have a 
national priority to say that we are going to focus on energy 
conservation, to change our mode of transportation in this 
country, and there are going to be huge sacrifices, done right 
and remediating the environmental impact to people and 
communities, then we are always going to be stuck and nobody is 
going to want to do anything.
    As far as your specific question of freight railroads and 
cities, there are probably half a dozen cities on our railroad 
that would like for us to move out of the city, and we are more 
than willing to do that. But we don't get the economic benefit 
of that that accrues to the city. So the issue always comes 
back to cost.
    And I can go through, whether it is downtown Denver or 
downtown Fort Worth or Houston rerouting around the city or San 
Antonio, or you can just go on and on and on, and when you 
think about rerouting around a city, it probably starts with 
$100 million and goes up from there.
    Mr. Carter. I guess my question is, if you are going to 
start a passenger rail system for the United States, and 
obviously, Texas is probably last on the list--you have got 
California and the East Coast that are going to be where all of 
this is going to be done. But my question is, if we are going 
to have to build new tracks, you also mentioned in your 
testimony that the solution may be a new track for high speed 
rail. If they want to get to 150 miles per hour, it is going to 
be a new track. Wouldn't you agree?
    Mr. Rose. Correct.
    Mr. Carter. Even if it is Amtrak operating it, they are not 
going to do 150 miles per hour with the tracks running through 
Taylor, Texas, I promise you that. If they are going to build 
new tracks, wouldn't it be better, because they have to go into 
the city, wouldn't it be better that the rural tracks be built 
for you rather than for them?
    Mr. Rose. I understand your concept, and if you think 
about, for passenger, you have to go to the main area of 
population. You have got to get to the population 
concentration, and that is why the European service works so 
well, because you go right downtown London, right downtown 
Paris.
    But we have to--one of the things that we all talk about, 
gee, we would really like the European rail network; why can't 
we do that? We have taken two different paths. Europe taxed 
their gas significantly. Back when gas was a buck-25, which 
seems like a long time ago, gas in Europe was $4.50 a liter. 
Gas today, you add up all these little bottles of water, these 
bottles of water are still more expensive than gas. And until 
we recognize a national environmental, national energy policy, 
which then butts up to a national transportation policy, this 
is all going to be really frustrating for everybody. Europe has 
done it.
    Mr. Carter. I agree we are not talking about the energy 
issue right here.
    Mr. Rose. But we should.
    Mr. Carter. Because it is part of the problem.
    Mr. Rose. It is part of the equation.
    Mr. Carter. I am not going to get into that. But I wanted 
to make sure that I understood that you still think you all 
ought to be outside of town.
    Mr. Rose. Yes, it is just a matter of dollars.
    Mr. Carter. So the truth of the matter, what we need to do 
is rebuild the freight system and the passenger system?
    Mr. Rose. Not so much. The vast majority of freight systems 
really do operate outside of the major cities. But there has 
been a number of cities that would like for us to relocate out, 
and again, we have got to figure out how to pay for it.
    Mr. Boardman. Just a comment, if I could. First, I would 
like to correct the idea around here that we don't have a 
national passenger rail system. That is why we exist, or we 
think one of the strongest reasons why we exist. And we think, 
also, that it has a large part to do with what the strategic 
plan is, if you look at how you connect to that system for the 
future.
    Matt, I didn't know you had a downtown Texas. You have a 
downtown in Texas? No, I am kidding.
    Mr. Carter. Come to Dallas. We will show you a downtown.
    Mr. Boardman. The idea is that railroads still need to get 
their products to where the people live. If you fill up the 
roadway with trucks, Jerry Nadler would argue with you that 
what he wants to do is get a tunnel in New York so that rail 
gets back into New York, so they don't have as many trucks 
downtown. So it is a bigger problem than just deciding to 
operate rail outside of the city.
    And part of the difficulty with the growth of the 
interstate system is that we have had this spread-out 
development, so that it is hard to serve that population base 
with anything but a truck or automobile, and that is trouble 
for passenger and for freight rail.
    Mr. Carter. I know my time is probably up, but one more 
question. If you looked at Houston or Los Angeles, bringing 
something into downtown Houston, you are a long way from your 
destination. And from my limited experience in Los Angeles, I 
think you are there, too. And that is other issues that you are 
going to have to move people inside the city to get them to 
where they need to go.
    Thank you, Mr. Chairman.
    Mr. Olver. Ms. Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman.
    And thank you all for your testimony.
    Michigan will spend $5.8 million next year to Amtrak to 
assist us as we move forward. I was happy to see, under page 
15, of the low-hanging fruit, because we are there. I think 
when President Obama put in the recovery package the $8-plus 
billion for intercity rail, high speed passenger corridor that 
we are talking about today, high speed rail, that it may have 
been a little premature just in terms of the discussion that we 
are having now.
    Everyone doesn't need it. Everyone doesn't want it. Certain 
corridors of the country do. In Michigan, one of our main 
problems now that we have everybody on board, and it is high 
speed rail from Chicago and about 75 miles into Michigan; we 
are trying to build the next 75 miles that will take it across 
to Detroit. There are a lot of things that are happening there. 
We want it, but I do believe, too, that we need a plan.
    I think we do ourselves a disservice, with limited funds; 
$8 billion sounds like a lot, but it is not a lot of money for 
these United States of America, number one. Nor does everybody 
want or need it. And there needs to be, as you said, GAO, some 
parameters, and that has not happened yet.
    I don't know if this committee, Mr. Chairman, probably not, 
the authorization committee or maybe our new Secretary. But 
there needs to be something before we start chipping away, as 
Congressman LaTourette said earlier; it is sporadic and we 
don't have a plan.
    Where I come from, we want high speed rail. As a matter of 
fact, when it leaves to Chicago, it goes to high speed, and 
then it gets to Michigan and stops, and then it gets to the 
university level; Kalamazoo is the city where it changes.
    Amtrak, we love you. I have been on this committee a couple 
of other times, and you are in a positive environment now. I 
have been on this committee when they hated Amtrak. I am happy 
to see you have a role to play, and we support you, and so does 
the Chairman at the time, too.
    The plan, that is number one. We need a national plan, a 
vision. I think the President putting the money out there is a 
carrot, because many of the States are broke, Michigan anyway. 
What else? This $8 billion plan that we talk about, the use of 
the railroad lines that you mentioned, sir, that is one of the 
prospects.

                       PASSENGER AND FREIGHT RAIL

    We are having--I used to want to help with this line I am 
talking about and use the rail lines. I am convinced, after 
working with North Carolina and Houston and the others, that 
freight needs to be used just for freight. Your concern is that 
the passenger trains may take your schedule. I am trying now to 
look for new lines that would parallel, and it is 100 lines, 50 
to be exact and then another 50 that would make it possible. 
But from the railroads point of view, would you rather not use 
passengers on your rail? Would you rather keep it freight? You 
and other rail lines?
    Mr. Rose. No, I mean, I think, generally, if we had to 
choose one or the other, we would rather keep them pure for 
freight. But that is not the alternative we were offered.
    Ms. Kilpatrick. That is not what you were offered? Right. 
Well, they will if we think it will mess with your freight 
lines. Much of your revenue is from freight, and this mixed, 
whether it be one or the other or both, I think it is 
problematic. At least what we see now. And we have been on for 
like 5 or 10 years, just trying to get to that.
    I see that Norfolk Southern has some lines in our area that 
they may want to sell. We would rather buy them from them, our 
State and Federal Government, and let them do the freight and 
us do the line, and it would run parallel. It is a great 
opportunity.
    Mr. Rose. Yes, in some cases--we sold a line to the State 
of New Mexico, and then we run our freight lines back on their 
line. There are different configurations of what we can do.
    Ms. Kilpatrick. Right. And in all of that, Amtrak has a 
role to play. I like your vision, and you get it, and you are 
the director, and you better get it.
    Mr. Boardman. Or I am going to get it.
    Ms. Kilpatrick. I look forward to working with you.
    We do need a plan. Every part of the country doesn't want 
it or need it. And with the limited dollars that are 
available--they can grow over the next decade. And we look at 
other countries. They do it in their sleep. There is no reason 
we don't. Except the automobile, which unfortunately is in a 
different situation now, and people are now looking at rail 
lines.
    I look forward to working with all of you, and Mr. 
Chairman, as we put the budget together and some foresight, we 
might initiate the discussion about, what is the vision, and 
what is the plan, and who does get it and who doesn't? 
Everybody doesn't want it.
    With that, I yield back. Thank you.
    Mr. Olver. Thank you. We probably we are supposed to see a 
plan in another 3 weeks.
    Ms. Kilpatrick. Yeah, right.
    Mr. Olver. Mr. Pastor.

                       DESIGN OF A NATIONAL PLAN

    Mr. Pastor. Good afternoon.
    It is very interesting. Sometimes when you are on a 
committee long enough, it is deja vu all over again, but in a 
different sense. For the past 10, maybe 8, years, my goal up 
here, and I wasn't affected by it personally because the Amtrak 
line runs 200 miles south of; me--was to protect Amtrak because 
it was our national passenger system. And I remember one year 
the President zeroed it out. It was just a matter of trying 
to----
    Mr. Olver. Not the Amtrak President.
    Mr. Pastor. Not the Amtrak President. The Decider, the 
Decider decided. And we were talking about how many peanuts in 
a bag that we would sell, and whether or not we would have 
plastic containers for the food and how many times you would 
clean the train. It was very interesting.
    Two years ago, the Chairman and the Ranking Member at the 
time decided that they were going to set up a fund for $30 
million for intercity rail system, and we all said hallelujah, 
we are now going beyond Amtrak and looking where other needs 
are.
    But as I sit here, and I took advantage of it. I called the 
administrator and said, we have a line between Phoenix and 
Tucson, and send me a guide, and we applied. I don't know how 
many cities applied or how many States applied to get that 
initial grant. So we were going along.
    But I am persuaded today that, even in the authorization 
and in the appropriation, it depends on a member's initiative 
and drive to develop whatever they can for their particular 
State or their district. And yet we have lingering questions 
that we will never develop a national plan.
    So where is Eisenhower when we need him? I am told he 
decided as a decider to do an interstate highway plan, and it 
was laid out, and we were motivated to do that plan, and I 
guess we have accomplished it. We have added to it.
    But in all reality, who has and who should have the 
responsibility of designing or coming up with the national plan 
that would accommodate passenger and freight rail, and deal 
with the issues?
    The ones I have seen in Europe, they are dedicated lines. 
Dedicated lines to passenger. I asked them, where is the 
freight? Freight is over there. Why do you do that? Well, 
because having freight and passenger is a conflict. And we 
decided that we were going to have a dedicated passenger line 
and a dedicated freight line. You go to the Chinese in Shanghai 
with Maglev and the lines they are putting in, and they said we 
decided as a country, freight, if they have a freight system, I 
don't know, but passenger was very important to us, and this is 
where the lines are. I imagine same thing happened in Japan. 
And it was a political determination of the nation as a people 
to say it is what we want, and we will provide the resources to 
do it.
    And I agree with my friend, Steve LaTourette, that until we 
have the political will to say we want to have a national 
passenger line, to make sure that Amtrak goes throughout the 
Nation and connects these metropolitan areas, because it saves 
the environment, the congestion you don't have, et cetera, et 
cetera, that we will be discussing, Mr. Rose, how much of your 
line do you want to give up between here and there, and do you 
want to give it up or not?
    And somehow, I think I agree with Steve that we need to sit 
down and say, hey, let's have the political will. If we want to 
do it, do it. Amtrak is there. How do we build with Amtrak? And 
not put the issue to the freight lines saying, you have to 
share or else, you know it is not at arm's length.
    And every country I have seen where they have a national 
line that does passengers, it is because they had the political 
will to do it, and they were willing to pay for it. And until 
we get to that point, I think we are here counting this, that, 
and the other, and we will not move forward in creating. And I 
think our country should have and has and should continue to 
improve the national passenger line that we have and just have 
the political will to separate where we can, and where it makes 
sense, the freight and the dedicated lines for passengers. But 
I am glad we are not talking about how many peanuts in a bag.
    Mr. Boardman. Just to comment back on that, because I think 
one of the things I am seeing here, and I think, Mr. Pastor, I 
hope our planning the--I can't say ``our'' anymore--FRA's 
planning process is working well on your line.
    Mr. Pastor. It shouldn't be my line; it should be our line.
    Mr. Boardman. This is not a strategic plan that we can deal 
with. And I have thought about this in terms of a strategic 
plan and thought about the different strategies. This is a 
tactical plan. And while we might have a desire to have a 
strategic plan, and in some senses we do, strategic plan to 
implement Positive Train Control across the United States, but 
now it becomes tactical. It becomes, how do we get this done?
    We have a sense of urgency, or at least I do. I have got to 
get $1.3 billion spent right in the next 2 years, by February 
of 2011, period. We have got to get it done. We were already 
deciding before this came out, how would we spend this? How do 
we get the right projects there, and how do we know it is going 
to get done?
    What I am most worried about, and I would think, Jolene, 
that you might be the most worried in this process, because in 
order for us to get the $8 billion spent within the 3 years, 
which is what we have been given, we have got to decide right 
now what needs to be done.
    And if you are going to run a new service from Cleveland to 
Columbus to Cincinnati, you have to figure out, how do you pay 
for it later on operationally? That is not in the cards right 
this minute at all. It is only capital.
    So when you go out to look at, what do we do, from my 
perspective, and you look at the national map where Amtrak 
operates, or the national map where the high speed rail pieces 
are and how they fit together, we have in a sense, without 
having it written, a strategic plan that needs to have the 
pieces of tactical ability or tactical resource adopted to it. 
And we don't have much time to do that.
    So Matt Rose and Joe Boardman and Jolene or whoever else 
from the State have to go in together to the FRA and say, this 
is what we are going to do to reduce travel time, to improve 
the reliability of the track in the next 3 years; can we get 
this to 90 miles per hour? Can we be 90 percent on time? Can we 
take 30 minutes out of the schedule?
    Right now is beyond right our ability for us to get the 
larger thinking done. And I believe that the larger thinking, 
in many ways, has been done in bits and pieces all the way 
along.
    When the commission was put together--I know this is a long 
answer, I am sorry--but when the commission was put together, 
the idea was not to have a commission that the administration 
ran. The language was put in Sherry Boehlert's hands in the 
Science Committee from New York State, from us, when I was 
commissioner of transportation in New York, we wanted Congress 
to do this just like we did in the past. And I have a copy of a 
book that--Hamburger, are you still here? When did get that 
out? The one you were on, the old one. About 1976. And if 
anybody doesn't have a copy of that, that gives you an idea of 
the kinds of things that were addressed back then. I will stop.
    Mr. Olver. Ms. Kaptur.

                     EFFICIENT TRAINS IN THE WORLD

    Ms. Kaptur. Thank you, Mr. Chairman.
    There is nothing more awesome to me as a Member of this 
Congress, and we thank you all for coming today, than to go to 
Kuwait and to see the full military power of the United States 
at the end of a sword. If you have never been to camp--how many 
people here have been to Camp Arifjan? Well, America, as you 
know, is totally dependent, if the Saudis pulled their money 
out of this economy, we would crash even harder, one-seventh of 
it is held up by their dollars. There is no more important 
strategic objective for this country than to become energy 
independent in our lifetime for the sake of our kids and 
grandkids.
    The idea that we are putzing around on high speed rail, I 
am looking at these pictures here. We knew how to cut through 
mountains to build roads. We knew how to go through deserts. 
And we even bridged oceans and bays when we were serious about 
doing something great for America. We have forgotten we can do 
it domestically. We don't have to put all of our soldiers' 
lives at stake halfway around the world because we haven't 
figured out how to run this country.
    So I operate by two rules for this, representing the fifth 
largest rail center in the United States of America and the 
busiest Amtrak passenger terminal in the State of Ohio, with 
over 50,000 ridership annually: Make no small plans, Robert 
Moses told us how to do that. And for me, my rule is rail has 
got to be three to four times more efficient than the 
automobile; 120 miles an hour doesn't do it for me. It is 
almost laughable that we are in the 21st century, and we are 
talking about 90 or 110? We have to be competitive.
    And so it seems to me that we need a big vision. And I know 
just the place to do it. Where the land has no mountains, and 
it has no water, and it is as flat as it can possibly be 
because they invented bowling there. And that is from Toledo to 
Cleveland and Toledo to Chicago. And that is the line. That is 
the line.
    Anybody here ever ride the Lake Shore Limited. Okay. Well, 
sometimes it starts in Chicago, and if you can get to Toledo in 
13 hours on a journey that by car takes 4, you are lucky. You 
are lucky. And if you want to go east, you get on the train at 
3:30 a.m. Or 6:15 a.m., and despite that, 50,000 people still 
get on and get off at Toledo. And I have been in that corridor 
many times, and I say to myself, what is wrong with us? We 
landed a man on the moon, and we cannot move rail, high speed 
rail around this country? You go to other countries, and you 
see it. It is embarrassing.
    And in addition to our strategic vulnerability, we don't 
live in the same world as our parents did. When I was born--and 
you can figure out the year--there were 146 million people that 
lived in this country. By 2050, there will be 500 million, and 
it is growing every day, and we are acting like it is 1946, and 
it isn't.
    So you don't have to figure out where I am on this issue. I 
have three questions. Number one, in terms of, and these are 
for the train guys, what is the most, in terms of mileage and 
energy efficiency, what is the most efficient train system that 
exists in the world today as far as amount of fuel used and 
speed? What speed maximizes the efficiency? What system can you 
tell me about for passenger? What exists?
    Mr. Boardman. We will research that, and get back to you. I 
don't know.

                        FUNDING HIGH SPEED RAIL

    Ms. Kaptur. Question number two, what percent of high speed 
rail anywhere in the world, after we build the thing which is 
the easy part, in terms of finance, how do you pay for it? The 
passenger fees or whatever you have to do, sell gimmicks in 
your train stations, whatever you do, what do we do, put 
something on the gas tax? What is the transportation solution 
in terms of paying for it?
    And then, Director Molitoris, I loved your testimony. The 
only thing is when you identified the high speed rail corridors 
in Ohio, you mentioned Cleveland, Columbus, Dayton or 
Cincinnati. And I am just curious why you didn't mention the 
one that we put in the Federal legislation. So those are my 
three questions, and I am in time.
    Mr. Boardman. I answered the first.
    Matt, yours is next.
    Mr. Rose. Go ahead.
    Ms. Molitoris. Mr. Chairman, Representative Kaptur, in my 
oral testimony, I did. I apologize that it was not listed. But 
the PEIS, we are going on two tracks right now, and the PEIS 
for the Ohio Hub Plan includes Cleveland to Pittsburgh, 
Cleveland to Columbus, Toledo to Cleveland, and Toledo to 
Columbus, and Columbus to Cincinnati. And we are doing that 
PEIS work now, and we are also looking at ways to apply for 
grants to do the EIS, which, the PEIS is at $7.5 million 
internally for Ohio and the actual EIS, the full-blown out, is 
$50 million. So we are looking at an application for a grant 
for that.
    Let's see----
    Ms. Kaptur. Somewhere we are listed, even though it was not 
in the formal testimony?
    Ms. Molitoris. And I apologize. We will send an amended and 
corrected version. And I apologize for that.
    Ms. Kaptur. Thank you for that. And thank you for being 
here. We admire your work so much.
    Yes, Mr. Rose wanted to make a statement.
    Mr. Rose. I appreciate your vision. I think you have hit 
the nail on the head. One of the things that you mentioned was, 
how are other networks paying for this? And we get into this 
trick logic that passenger rail doesn't pay. Well, passenger 
rail doesn't pay anywhere in the world. And by the way, highway 
systems don't pay either.
    And so, Congressman, you asked the question, who should be 
in charge of this? Well, it should be the DOT. That is logical, 
right? It should be the Department of Energy. That is a little 
less logical. But I mean, how can we possibly plan our society 
in the future without thinking about the energy impact of 
transportation? I know that we are bifurcated in the way we 
govern, but energy is as critical to transportation; it is like 
bread and water.
    Ms. Kaptur. And I look at that and think, that is not what 
should be up there. That is 1946. We need something better.
    Mr. Rose. The third group that should be responsible for 
this, you will be shocked, the Department of Commerce. I mean, 
think about, as a society, what we--what you all do up here is 
find ways to make sure that our people can have work and that 
we can produce goods, right? And yes, even transport them 
within the United States as well as globally. And then the 
fourth group is the housing group, because there are some 
cities in our country that are taking a whole different 
approach to housing, which combines with transportation, and 
yet we always come back to say, well, DOT is in charge of all 
of this; that is just one slice of it.
    And again, I hate to get back to places like China and 
other places, but they are kind of figuring this out. They have 
got to put their transportation systems next to where people 
are going to live, and they are going to provide transportation 
systems to get them to work and their goods to market.
    And by the way, the environmental thing is probably the 
latest issue to the party, but that is very much an important 
issue, along with energy, that literally, 5 years ago, when we 
were thinking about transportation systems, we weren't thinking 
about a carbon-restrained market, and we really weren't 
thinking about fuel either at all. And life has changed.
    Ms. Fleming. May I add a couple points? One, we believe 
that public benefits need to be valued and quantified. Again, 
internationally, they do a better job at that. For instance, 
France right now is working on doing a multivariational 
analysis where they are going to consider the pollution 
reduction, economic development, congestion reduction.
    And the second point is, there are some real lessons learn 
from the international countries. First, I would highlight that 
there is a commitment or priority by the national government to 
develop high speed rail. These systems would not have occurred 
without the financial investment by the national governments.
    And what they started in most of the countries was an 
initial trunk, and that was really, in most cases, 75, 100 
percent financially funded by the national governments. And 
then they expanded along the way.
    And the last point is that, in Europe, the systems 
basically are steel wheel on steel rail. And the reason for 
that is in order to be able to connect with downtown areas, but 
also to be able to connect with other country systems. You 
can't do that with Maglev type technology. You may get the 
faster speeds, but you are not going to be able to utilize and 
connect with existing rail networks.
    Mr. Pastor. Can I ask a question very quickly? When you 
said flat, no water, and ready for train, I thought we were 
talking about Arizona.
    Ms. Kaptur. Hey we are happy to connect to Arizona, just so 
you don't take our water.
    Mr. Chairman, I just want to express the opinion: I support 
a national plan. As a planner by profession, I support 
planning.
    However, I liked what you said, Ms. Fleming, about start 
with a trunk line where you have people who have the will to do 
this, and let's get it done and show the rest of the country. 
And I think Congressman LaTourette and I know just how to do 
that.
    Mr. LaTourette. We do.

                             LENGTH OF PLAN

    Mr. Olver. Well, I don't know that I am in any better 
position than I was in the first situation. This is a wonderful 
conversation.
    But quickly, if I could, how long would it take to develop 
a plan that incorporated all of these different ideas?
    Ms. Fleming, your comments here at the last moment, very, 
very important. The cost benefits. How do you do this without, 
as you said in your earlier comments, without spending a lot of 
money? At one point you said you are afraid we are going to 
spend a lot of money without the best benefits, with far from 
the optimum benefits the way this goes. We have a stimulus bill 
which has an exemption from planning, except that that money 
has to be spent on the one thing that has been created at an 
earlier time, sort of piecemeal, by T&I but with added--I 
helped to add to it and so forth--of the 11 corridors which are 
designated high speed rail corridors.
    They didn't bother to put in the designation of our one 
really appropriate corridor, most appropriate corridor maybe 
from the original comments that you made, Ms. Fleming, of 
populations, high population density in a very restricted kind 
of an area, very short-term area.
    You are not going to build high speed rail in the terms of 
European rail if there are 500 miles between two stops. You are 
going to do it where it is three stops maybe in that 500 miles 
rather than only long distances between major metropolitan 
areas.
    How long would it take to incorporate all of these things 
that you have been talking about around the edges of this idea? 
Everybody agrees there has to be a plan. How long it would take 
to do such a plan properly, by the Federal Government leading 
that planning process through the Secretary of Transportation 
and so forth?
    Mr. Boardman. Too long. It will be too long. And a cost-
benefit analysis----
    Mr. Olver. Even 3 weeks from now, we are going to be 
operating on something that has to be done in 3 weeks.
    Mr. Boardman. Mr. Chairman, in all due respect, you said to 
us, to me, that we, all of the sudden, got this $8 billion, 
amazing. I don't know if that is the word that you used. You 
may have used stronger words than that. But here we were with 
$8 billion to spend, and we don't have a plan to spend it, and 
yet we need a plan to spend it.
    Mr. Olver. As Ms. Kaptur pointed out, we have never had a 
Federal commitment to money. The Federal commitment to money 
first appeared in the authorization bill last fall and then is 
implemented with a big new sum of money coming down the road. 
And here we are all running to catch up. We have done that 
planning before.
    Mr. Boardman. But a lot of the interstate highway system 
was never built that passed any muster for cost-benefit 
analysis. But because of a political decision, it was because 
this place needs to be connected to that place, and therefore, 
it gets built, and we need to get it done.
    Part of what we need to do here today is a collaborative--
it is the freight railroads, it is Amtrak, and the States.
    Mr. Olver. You have to bring freight in.
    Mr. Boardman. Bang, go do it.
    Mr. Olver. I am getting close to the end of my time again, 
already. Europe--Cleveland, no disrespect meant to Toledo or 
Ashtabula. That is your big city, isn't it?
    Mr. LaTourette. No.
    Mr. Olver. What is your big city? You do come into the 
Cleveland suburbs.
    Mr. LaTourette. I do come into the Cleveland suburbs, and I 
am a Clevelander.
    Mr. Olver. But Cleveland to Columbus to Cincinnati sounds 
like one of those very best appropriate places that Ms. Fleming 
has been talking about.
    But in even what planning had been done, the high speed 
rail corridors, only one of those 11 corridors is on dedicated 
track. The kind of thing that really is intended to go 150 
miles an hour, that is the California system. All of the others 
are intended to go incrementally, which gets you right into the 
face of the problem that we were talking about with freight. We 
can incrementally go up from Class III to Class IV, to Class V, 
and so forth, with those expenditures in the $4 million to $7 
million per mile. And when we get there, we will not have 
figured out what we are going to do with freight.
    That is the point at which freight and passenger cannot 
operate on the same track. Then it has to be separated. Then 
you have to have grade separations and dedicated track and so 
forth if you want to go farther.
    So we really are stepping off here without looking to see 
where we are going, in a way.
    Ms. Fleming. May I make a couple of comments, Mr. Chairman?
    Mr. Olver. Yes.
    Ms. Fleming. I think two points. One, we did not use speed 
as a threshold in our work. We really used the FRA definition, 
which is the time competitiveness with other modes. So speed 
was not what we used.
    Mr. Olver. Authorizers have used a rather vague 110 limit. 
It doesn't really--it isn't a fixed line.
    Ms. Fleming. That is right. That is right. That is right. 
So, as you know the corridor characteristics are extremely 
important. Having that population density----
    Mr. Olver. But her density is almost perfect for that. 
There are 100 miles between each one----
    Ms. Fleming. But it is also very critical, not just what 
the corridor looks like today, but how that service is set up. 
It has to compare favorably with other alternatives. You want 
to get people out of their cars, maybe not considering 
airports. So the door-to-door trip time is critical, as well as 
the frequency and reliability of service. So those things, I 
just wanted to make sure you understood that.
    Going back to the plan, a couple points. The plan could 
just be, what are the goals for this high speed rail system? 
You know, it should clearly articulate that as well as, what is 
the Federal role as well as other stakeholders, and then you 
can build upon that. So I think clearly articulating, what is 
the national vision and goals for having a high speed rail 
system? How does it fit into the national transportation 
system?
    So you know, you can build with that kind of framework. And 
then you will have all of these projects that we have heard 
about today, so you really want to develop policy and 
procedures for making those important decisions in trying to 
decide, you know, where to put your money, so to speak.
    Mr. Olver. Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman.

                                DISTANCE

    Ms. Fleming, in the GAO report you studied a number of rail 
systems in other countries, and many of those countries are 
much smaller than the U.S.--I mean, Japan is about the size of 
Montana. Spain is Oregon doubled. France is about the size of 
Texas. And in your report on page 16, you have got a chart 
about utilization of rail over different distances. And it 
becomes apparent that it really peaks between 314 and 469 
miles, and then just falls off dramatically from there.
    And I guess in a way that kind of begs the question as to 
whether we should be looking for utilization more in these 
ranges of distances that are more convenient? And we are 
competing with air. You know, it takes 6, 7 hours to take the 
train down to Charlotte from D.C.; hour and 20 minutes in an 
airplane. You have airport and all of that time involved. But 
where is the best place we can go? Do you know? Can you tell us 
what we should be focusing on first, distance wise? Where the 
biggest utilization is?
    And I have ridden the trains in France and across Europe. 
And they are electric. And if you are going to have high speed 
rail, it is going to be electric. One huge advantage France has 
is they are 80 percent nuclear energy. So you are very 
environmentally clean to start with. You have a cheap supply of 
energy to run those trains on. Isn't that also part of the 
whole equation, too, if we are going to have high speed rail?
    Ms. Fleming. To answer your first question, what our work 
found that, 100 miles or less, passengers are not really 
willing to leave their car. That is the threshold on the lower 
end. On the higher end, anything over 500 miles, folks would 
rather hop on a plane and go use that mode of transportation. 
So what we really found is up to 100 to 500 miles seems to be 
the threshold that folks, again, if it is time competitive, and 
it is door-to-door, are willing to consider, particularly if 
all of those other things are in place in terms of the service 
is reliable, it is frequent, the price point is there. And that 
seemed to be the threshold for, again, the systems that we 
looked at.
    Mr. Latham. Mr. Boardman, do you have any comment?
    Mr. Boardman. Yes, I do. You used Charlotte as one of the 
examples, but the example is not Washington to Charlotte; the 
example is Charlotte to Atlanta, 245 miles and 110-miles-per-
hour or 150-miles-per-hour rail service becomes very 
competitive. If you want to fly from Atlanta to Charlotte, 
oftentimes you will fly from Atlanta to Newark or Atlanta to 
LaGuardia and then back to Charlotte. Because of those long 
distances, and the FAA's studies show you that part of the 
reason you have congestion, air congestion, in New York City is 
not because people want to go to New York, but they have to go 
to New York to get to where they want to go. So they fly, to 
get from Atlanta to Charlotte, they fly to New York and back to 
Charlotte. It makes no sense from a policy standpoint to do 
that when you could have exactly what is being talked about 
with rail in that corridor, and it is a perfect corridor.
    Mr. Latham. But to have that high speed train, you have to 
have electric trains.
    Mr. Boardman. To do over 110. But I think, personally, that 
we should electrify everything in this country on rail.
    Mr. Latham. Then we get back to the whole debate, do we 
build more coal energy? If we can't build nuclear, how are we 
going to produce all of this energy that we need? We don't have 
a grid in this country to make it uniform so that you can have 
electricity everywhere you go.
    Mr. Boardman. I think you are exactly right when you 
connected the two. I think the electricity and rail and the--
not only the environmental but the mobility issues are 
connected to rail and to electricity, clearly.
    Mr. Latham. Anybody else have any comment?

                       RANGES OF HIGH SPEED RAIL

    Mr. Rose. I just think, again, somebody mentioned 
population growth; 300 million people in this country. We are 
going to 337 million by 2030. Our airports, we have a number of 
airports that are jacked up; 30 percent of all the take off and 
landings at American airports are less than 350 miles. So we 
are going to end up building a whole new set of airports and 
new airplane capacity. Again, if we looked at of this 
holistically, you would make a different decision.
    Mr. Latham. So is the answer to my question that we should, 
first of all, focus in on that range for high speed rail?
    Mr. Rose. From my standpoint, Congressman, and this answers 
your frustration, too, the elephant in the room is that when 
you are talking about high speed rail with these 11 or 12 
corridors that is bantered around, you could be easily looking 
at a trillion dollars. And when we say that, everybody steps 
back and says that is not doable.
    But if you think about a trillion dollars over 10 years, 
and you think about how it could change travel and change 
energy dependency and change environmental issues, and change 
commute times, that, to me, is the issue why we get into this. 
I call it ``passenger rail on the cheap'' when we want to go on 
a freight rail and put it to 79, and we can incrementalize 
ourselves into it because we don't want to deal with the real 
deal. And the real deal is probably a trillion dollars for 
these 11 or 12 separated corridors, high speed, 150.
    And then, if you want to do it, you have got the issue of 
how you are going to power them; probably electrification. If 
you are going to do those, then you could put a transmission 
line in the railroad.
    Mr. Boardman. You are still going to have to have the 
regular rail service that meets it because you are not going to 
stop at every station. So you will need that. For the 10 years 
that I was commissioner of transportation for New York, I spent 
$30 billion on highway and transit. Just about $3 billion a 
year. So the numbers to me are not as big as what they appear 
to be when you really pull them all together, and that is 
exactly what Matt is talking about.
    Mr. Latham. I just have one closing point. I don't want to 
make it political or anything. But the fact of the matter is, 
in the last 9 months, we have obligated or spent in this 
government $5.3 trillion. If we had taken one of those trillion 
dollars and put it into this, the whole country would have been 
a hell of a lot better off.
    Mr. Boardman. You are right. Exactly.
    Mr. Olver. If we planned first. If we had a comprehensive 
plan.
    Mr. Latham. No, let's get a plan and spend it there rather 
than waste it.
    Mr. Olver. Mr. Pastor.
    Mr. Pastor. The other issue that we tend to forget is the 
population shift that is occurring and where the population 
growth is. It is all going towards Texas and west. And so if 
that is what is happening to this country, what consideration 
are you going to give it in terms of protecting the environment 
it still has and the cost benefit, et cetera?
    But I don't think many people are willing to say that is 
what is happening, but that is the reality. More congressional 
districts are going to shift west, and so that is another 
reality. And I am just going to open it up. I know that you 
wanted to make a comment.
    I still would like to get your thoughts on this development 
of a plan. You already told me who should be involved and how 
realistic it is to get it done in time. We are not going to get 
it done in time to spend $8 billion, but where should we put 
the priority?
    Ms. Molitoris. Mr. Pastor, a couple of things, first of 
all, on the plan, I think we need to do a plan that has both 
the incremental and the high speed elements. That is what we 
are doing in Ohio. There has been a lot of comment that sounds 
like it is an either/or situation. And I don't want to do Joe's 
work for him, but if you look at the 14 corridors that have 
State-sponsored service right now and you look at the needed 
support from the State every year--somebody talked about, I 
think you did, Joe, the annual investment that is required--out 
of those 14 corridors, 12 of them are--the highest one is 11.2 
and below. Only California and Illinois spend more.
    Plus, they create a lot of opportunity to grow ridership. 
When you talk about France and Spain and China and Japan, they 
never gave up their rail passenger service. They have invested 
in it over the last 50 years. When we made other decisions. I 
think Matt said it; we had a different plan.
    So I remember riding on a New Jersey Transit train into New 
York, and I was talking about somebody saying, this is really 
great; I am happy I am on this train. And she looked at me kind 
of blankly as if, what was I talking about? And I said I was 
from Ohio, and we don't have as much as you do. And she looked 
at me as if it was unimaginable because it is so much a part of 
life in the northeast. We need to make it a part of life in 
Ohio for the majority of our citizens.
    We have an opportunity, I think, with the vision of 
Congresswoman Kaptur and Congressman LaTourette to really focus 
on high speed in that north corridor and in other areas. At the 
same time, we can create opportunity for other corridors to 
build up from 79. I don't think we have to say it is all or 
nothing, one or all.
    And I think a plan, if partnerships are involved, can be 
done in a reasonable amount of time, a year, I think we can do 
that. We are going to have our plan done by the end of the 
year, but we are not a country. We are a State.
    Mr. Olver. Mr. LaTourette.
    Mr. LaTourette. Thank you, Mr. Chairman.
    First of all, it makes me nervous that you studied the map, 
and you know about Ashtabula. I am very nervous. Actually, 
Ashtabula has a storied history. It is where the Ohio crime 
families smuggled whiskey from Canada in during prohibition and 
distributed it to Cleveland and Youngstown. Probably didn't go 
to Toledo, Marcy.
    Ms. Kaptur. Other gangs controlled us.
    Mr. Pastor. They used the train, right?
    Mr. LaTourette. They did. The Interurban.
    One of the disappointments--and I don't want to 
overemphasize this plan business, but one of the 
disappointments I have had as a Republican was that we always--
in one case, President Bush gave zero, as Ed mentioned. And in 
other cases, we always had to fight to give Amtrak enough to 
fail. I mean, we always nibbled around the edges; $800 million, 
a billion, a billion 2, a billion 4, never enough to take care 
of your backlog or never enough to put new rolling stock on the 
tracks.
    And part of the plan has to be, we are either going to make 
the societal decision that we are going to be in the passenger 
rail business, or we should get the hell out of it and close 
down Amtrak and be done with it. But this sort of nibbling 
along is ridiculous. I for one think that a trillion used to be 
a lot of money around here. It is not so much any more. And I 
for one say spend the trillion, get this thing done, and get it 
done right.
    You know, I think this hearing has demonstrated, and I am 
glad we are all in agreement that this pilot line is going to 
be from Chicago through Toledo to Cleveland, and so we don't 
have to worry about it anymore.
    Mr. LaTourette. And I do think that if you build it, they 
will come. And I think we have to have one really nice 
service--I would like it to be where Marcy and I want it, but 
if it has to be someplace else--but I think if you show people, 
hey, this is a better way than getting down in your underwear 
at the airport and waiting for an hour and taking the plane, or 
driving in your car, they will do it. And that's how they have 
been successful.
    The other thing we have to get out of our head is that 
we're not going to have to subsidize this as a government. 
We're going to have to make that choice.
    When we were in France, I asked somebody, what was the cost 
of a ticket? How much is subsidized? Seventy percent.
    So this complaining that, oh, Amtrak, we've got to give 
them $1 billion. It's nuts, if you're going to be in the 
passenger rail business, it's not a money maker. It's a way to 
get your people to work and to get people around. And so I hope 
we go in that direction.
    But we're really whistling in the wind until we solve the 
Chicago problem. My friend, Jim Oberstar, always talks about 
the fact that if Matt offloads a container, a C-tag, it takes 
18 hours on his train to get from Seattle to Chicago. It takes 
18 hours to get from the west side of Chicago to the east side 
of Chicago before it can come east.
    So when you talk about the plan, I hope that part of the 
plan--and this is where the Senate screwed it up in the highway 
bill--is to fully fund the CREATE program and get the 
bottlenecks taken care of, whether it's Long Beach, whether 
it's Chicago, and get this show on the road.
    The question that I have--and, Mr. Boardman, I have been 
waiting 3 years to ask you this question. Since you no longer 
work for the Bush administration, when you were the 
Administrator at FRA, we had really bumped up the RIF program, 
the Railroad Investment Fund, to $40 billion, I think was the--
--
    Mr. Boardman. Thirty-five.
    Mr. LaTourette. Close enough, $35 billion. And we could 
never get you guys to spend it.
    Now we had a professor from Minnesota in here the other 
day, and he was proposing to rip up all the roads in Iowa. And 
he was complaining--he had consumed, I think, some of the Kool-
Aid with these guys who want to re-regulate the railroads and 
roll back, go back to the Staggers Act days.
    So what's the bias? That money was sitting there, and I 
think you only approved the DM&E line, right? Did anybody else 
get any money?
    Mr. Boardman. I don't think we ever approved the DM&E line, 
did we, Matt?
    Mr. Rose. No. You gave money to the DM&E but not the----
    Mr. Boardman. No, we didn't ever approve the DM&E. That was 
competitive with another railroad.
    Mr. LaTourette. Right. Well, it was competitive with 
another railroad.
    But as we move forward, I mean, just like we are talking, 
this is like sewers to me. You've got a main line, and then 
you've got all these laterals that have to run off it. And 
that's the way it's going to have to be with rail, too.
    So what was the problem with getting that money out to 
short lines so they could connect to the main line so that the 
chemical guys and the rural coal guys would quit complaining?
    Mr. Boardman. There was a policy point of view in the 
administration that didn't allow the money to come out very 
quickly--or at all, in some cases. That policy point of view 
has changed. And it's changed also I think with the railroads 
that are interested, the freight railroads, at least some of 
them, and now the larger ones are interested in that particular 
fund as well. And we see it as a realistic way to do financing 
for longer assets like locomotives.
    Mr. LaTourette. Right. And, Mr. Chairman, I would just say, 
you obviously have great sway with the new administration. I 
would just urge you to ask the President and Secretary LaHood 
to let our money go and make these improvements.
    Mr. Olver. Ms. Kaptur.
    Ms. Kaptur. I would just like to place some recent American 
history on the record.
    If we think back to the first Arab Oil Embargo in 1978 and 
the capture of the Iranian hostages--some of us lived through 
that, and we saw a President of the United States lose an 
election for many reasons, but the primary one was because our 
entire economy was sent into a terrible nosedive and he had no 
ability to pull us out.
    The oil imports and the cost of those drove this economy 
into a terrible, terrible recession; and I began my career in 
Congress shortly thereafter trying to pick up the pieces in 
districts like I represent.
    Then I served in Congress during the 1980s; and then we 
approached the first Persian Gulf war, which was fought over 
the oil field between Kuwait and Iraq. We tried to establish 
the international line again between those two countries. They 
said that was the reason for our going in there. We can't seem 
to extricate ourselves from there again, now the second largest 
set of oil fields in the world.
    And we also watch the movement of our military and other 
strategic assets into the area of Georgia, Azerbaijan, 
everything that just surrounds the Caspian Sea.
    We have to fight a political fight in this country to 
convince the American people that our soldiers' lives are worth 
more than protecting oil. That's my closely held view. And this 
is part of the answer.
    We seem to forget that we are totally dependent upon 
imports, totally. And I don't know why it's so hard to remind 
ourselves that it really is our lifeblood and that it 
circulates through our veins every day, and that we simply have 
to build our way out of this as a country. This is an important 
part of the solution.
    We also have something happening in our country that is 
truly amazing. The three Os--Olver, Oberstar and Obey. We just 
need to put those circles together, and we get our high-speed 
rail.
    Mr. Boardman. You might want to have Obama in that as well.
    Ms. Kaptur. Obama. Oh, that's a good line. I can use that. 
Great. Great. Great. Great. There you go. Do we have another O? 
Is there one in the Senate? All right. Let's add Obama to it.
    So this will never happen again, this alignment. I served 
in Congress 27 years. This will never happen again. We have an 
opportunity we cannot let get by us.
    The other thing, getting down to the nitty-gritty, I want 
to place on the record passenger ridership on Amtrak for the 
State of Ohio. I want to brag, as a representative from the 
station that has the most passengers in Toledo. But I also 
represent Sandusky, Ohio. Those combined have an annual 
ridership of over 56,322, double the ridership out of the 
Cleveland system and quadruple out of Cincinnati.
    I think it's important to understand that, to really see 
where the people are, where they are going. And to also say 
that I think we ought to reward communities and any trunk lines 
we establish, those places that have not torn down their rail 
stations but have improved them, those that have put in 
infrastructure to handle passengers. And there are 
opportunities in other places where services have truly been 
underutilized. I think we ought to reward good measure as part 
of this plan where people have been trying.
    So I wanted to place that on the record.
    I also want to ask--the people that are before us today, 
Mr. Chairman and members, really are the best our country has. 
You know more about this on the national basis than anybody. 
You might be able to add some additional private carriers to 
the group, but, nonetheless, really, you know----
    I know what Director Molitoris did before, Mr. Boardman, 
what you're doing now. And I truly ask your advice, and could 
you provide to the record the best individuals you know that we 
could privately consult with, or maybe bring up to a briefing, 
responsible for passenger rail development in other countries 
that are the most efficient, the most well-financed, the most 
well-thought-through.
    I went to one presentation by--is it Alsten--out of New 
York. I was very impressed with that presentation, but it's the 
only one that I have really had on the actual systems. And I 
think we need a little inspiration beyond what we have had 
today from all of you. So if you could give us additional 
suggestions, I would truly appreciate for the record.
    Mr. Chairman, I would like to place the record of Amtrak in 
Ohio into the official record of today's hearings.
    Mr. Olver. Well, it is almost 5 o'clock. I will try not to 
go beyond about 1 minute after 5 in my own comments, and we are 
going to close.
    I want to thank you all. This is almost the end of a series 
of hearings that we are having where people testifying are 
supposed to help us think, make us think, which is a major part 
of what has been going on here. It's been a good conversation. 
I think it's been a good conservation. You really--as Marcy 
just said, you have a huge amount of experience and a huge 
amount of knowledge about the system. I wish we could put it 
together. We should sit you around and make the plan.
    I do want to just mention that in a series of similar 
hearings from 2 years ago it was out of that that the 
sustainable Communities Initiative that was just announced by 
two of the secretaries that Mr. Rose mentioned ought to be part 
of it. And I have spoken to each of them how really there is a 
three-legged stool, which should include Energy, and you add in 
Commerce. Because I usually talk about how we have the 
responsibility for housing and for transportation, for HUD and 
for transportation. We don't have either Commerce or Energy.
    And so in the housing, you are driven to the business of 
what are the communities going to look like and where are you 
putting your housing to--and then, of course, where are you 
putting your jobs? I talk about the jobs, but I've never really 
talked about it in terms of bringing the Commerce Department 
in. But the Energy Department, that three-legged stool I think 
is very critical.
    We are surrounded here by Ohio. We are besieged by Ohio on 
the right and on the left, essentially.
    Ms. Kaptur. There are two Os in Ohio.
    Mr. Olver. Well, in any case, I appreciate it very much. I 
thank you very, very much for being here, for helping us to 
think and making us think today.
    With that, the hearing will be closed. Thank you.


                           W I T N E S S E S

                                                                   Page
Babbitt, J. R....................................................    99
Boardman, Joseph.................................................   329
Cox, Victoria....................................................    99
Fleming, Susan...................................................   329
Fruin, Jerry.....................................................   249
Gilligan, Margaret...............................................    99
Krakowski, Henry.................................................    99
LaHood, Hon. Ray.................................................     1
Lobue, Nancy.....................................................    99
Malarkey Black, Faye.............................................   249
Marsico, D. J....................................................   249
Molitoris, J. M..................................................   329
Rose, Matt.......................................................   329
Schwarz, Robert..................................................   249
Scovel, C. L., III...............................................   165
Siggerud, Katherine..............................................   165


                               I N D E X

                              ----------                              --
--------

                      DEPARTMENT OF TRANSPORTATION

                                                                   Page
Air Traffic Controllers..................................20, 35, 44, 47
Auto Task Force..................................................24, 47
Environmental Issues.............................................    19
Essential Air Service............................................    45
Funding Mechanisms...............................................16, 43
High Speed Rail..........................................23, 32, 41, 46
Highway Trust Fund...............................................    15
MARAD Questions for the Record...................................    59
Metropolitan Planning Organizations..............................    29
Movement of Goods................................................    18
NextGen..........................................................    26
Opening Remarks, Chairman John W. Olver..........................     1
Opening Remarks, Ranking Member Tom Latham.......................     3
Opening Remarks, Hon. Ray LaHood, Secretary of Transportation....     4
Rail.............................................................    20
Reauthorization..................................................    17
Recovery Act Funds...............................................    17
Smart Growth.....................................................    27
Star Alliance....................................................    23
TIFIA Program....................................................    33
Transit..........................................................31, 45
Written Statement, Hon. Ray LaHood, Secretary of Transportation..     7

                    FEDERAL AVIATION ADMINISTRATION

3-D Path Arrival Management Tool.................................   136
ADS-B............................................................   154
AIP..............................................................   161
Air Traffic Control Facilities...................................   132
Air Traffic Controllers...................................157, 158, 162
Airline Delays...................................................   155
Airspace Design..................................................   131
Airspace Redesign................................................   154
Alternative Fuels Research.......................................   161
Back-up Plan to Satellite........................................   138
Burke Lakefront Airport..........................................   133
Closing Remarks of Chairman Olver................................   163
Controller Hiring................................................   146
Controller Training..............................................   134
Demonstration with Controllers...................................   130
FAA Computer Security............................................   156
Foreign Repair Stations..........................................   163
Human Intervention Motivation Study............................142, 162
Inspectors.......................................................   162
LAX..............................................................   142
Memphis Airport..................................................   152
NEXTGEN...................................................126, 128, 136
Opening Remarks, Chairman John W. Olver..........................    99
Opening Remarks, Ranking Member Tom Latham.......................   101
Opening Remarks, the Honorable Randolph Babbitt, Administrator, 
  FAA............................................................   102
Recruitment Efforts in Minority Communities for Air Traffic 
  Controllers....................................................   138
Regional Jets and the Scope Clause...............................   159
Renewable Fuels..................................................   155
RTCA Project.....................................................   137
Rural America....................................................   131
Tower Simulators.................................................   135
TRACON...........................................................   153
Traffic Control System...........................................   135
Training.........................................................   130
Written Statement, Hon. J. Randolph Babbitt, Administrator, FAA..   105

 DEPARTMENT OF TRANSPORTATION OVERSIGHT: TOP MANAGEMENT CHALLENGES AND 
                            HIGH RISK SERIES

ADS-B Program....................................................   244
Air Traffic Controller Staffing..................................   234
Amtrak...........................................................   239
Aviation Trust Fund..............................................   234
Collective Bargaining............................................   234
Cyber Security...................................................   243
David-Bacon......................................................   235
Ethanol..........................................................   233
Fast Action on the Stimulus......................................   228
Federal-Aid Highway Program......................................   238
GAO High Risk Series...........................................222, 243
Gas Tax..........................................................   229
Grant Management.................................................   223
Green Energy.....................................................   239
Grant Management.................................................   223
High Speed Rail..................................................   240
Highway Trust Fund...............................................   223
Highway Trust Fund and Budget Authority..........................   226
MARAD............................................................   247
Natural Gas Tax..................................................   229
Opening Remarks, Calvin L. Scovell, III, DOT Inspector General...   167
Opening Remarks, Chairman John W. Olver..........................   165
Opening Remarks, Katherine Siggerud, Managing Director, U.S. GAO.   191
Opening Remarks, Ranking Member Tom Latham.......................   166
Operating Rules..................................................   231
RABA.............................................................   227
Recovery Act Funding.............................................   225
Safety...........................................................   223
Solution to the Highway Trust Fund...............................   224
Southwest Airlines...............................................   242
STARS............................................................   235
States and Localities............................................   232
Timeframes.......................................................   228
Use of Recovery Act Funds........................................   222
Written Statement, Calvin L. Scovell, III, DOT Inspector General.   169
Written Statement, Katherine Siggerud, Managing Director, U.S. 
  GAO............................................................   193
Vehicle Miles Traveled Tax.......................................   230

               TRANSPORTATION CHALLENGES OF RURAL AMERICA

Amtrak...........................................................   316
Broadband Initiative.............................................   314
Bus System.......................................................   311
CARE Coalition...................................................   312
Carriers.........................................................   310
Connectivity.....................................................   307
Deregulation of Transportation...................................   306
Disabled Veterans................................................   315
Ember Air........................................................   322
Fairness.........................................................   320
Gas Tax..........................................................   310
Government Regulation............................................   308
Highway Construction.............................................   308
Intercity Bus Program............................................   318
Iowa System of Transportation....................................   316
Opening Remarks, Chairman John W. Olver..........................   249
Opening Remarks, Dale J. Marsico, CCTM Executive Director, 
  Community Transportation Association of America................   272
Opening Remarks, Faye Malarkey Black, Vice President, Regional 
  Airline Association............................................   262
Opening Remarks, Jerry Fruin, Associate Professor of Economics, 
  University of Minnesota........................................   253
Opening Remarks, Ranking Member Tom Latham.......................   251
Opening Remarks, Robert Schwarz, Executive Vice President, Peter 
  Pan Bus Lines..................................................   299
Passenger Subsidy................................................   321
RIF Program......................................................   313
Rural Development................................................   324
Rural Transportation.............................................   309
Tax Credits for Rail Lines.......................................   307
Tubular Rail.....................................................   320
Vehicle Miles Traveled...........................................   319
Veterans in Rural Areas..........................................   314
Written Statement, Dale J. Marsico, CCTM Executive Director, 
  Community Transportation Association of America................   275
Written Statement, Faye Malarkey Black, Vice President, Regional 
  Airline Association............................................   264
Written Statement, Jerry Fruin, Associate Professor of Economics, 
  University of Minnesota........................................   256
Written Statement, Robert Schwarz, Executive Vice President, 
  Peter Pan Bus Lines............................................   301

  THE FUTURE OF HIGH SPEED RAIL, INTERCITY PASSENGER RAIL, AND AMTRAK

Agency Negotiation...............................................   385
Design of a National Plan........................................   395
Distance.........................................................   403
Efficient Trains in the World....................................   397
Environmental Planning...........................................   389
Freight/Passenger Rail...........................................   384
Funding High Speed Rail..........................................   398
High Speed Rail..................................................   382
Length of Plan...................................................   400
Liability........................................................   388
National Transportation Plan.....................................   387
Opening Remarks, Chairman John W. Olver..........................   329
Opening Remarks, Joe Boardman, President and CEO, Amtrak.........   358
Opening Remarks, Jolene M. Molitoris, Director, Ohio DOT.........   338
Opening Remarks, Matt Rose, Chairman, President, Burlington 
  Northern Santa Fe Railway......................................   346
Opening Remarks, Ranking Member Tom Latham.......................   330
Opening Remarks, Susan Fleming, Director, Physical Infrastructure 
  Issues, U.S. GAO...............................................   331
Outreach.........................................................   391
Passenger and Freight Rail.......................................   394
Possibilities of High Speed Rail.................................   385
Rail in Cities...................................................   391
Ranges of High Speed Rail........................................   404
State Rail Plans.................................................   386
Train Speed and Bulk.............................................   388
Transportation and Environmental Policy..........................   384
Written Statement, Joe Boardman, President and CEO, Amtrak.......   363
Written Statement, Jolene M. Molitoris, Director, Ohio DOT.......   340
Written Statement, Matt Rose, Chairman, President, Burlington 
  Northern Santa Fe Railway......................................   349
Written Statement, Susan Fleming, Director, Physical 
  Infrastructure Issues, U.S. GAO................................   333