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



                     RECOVERY ACT: PROGRESS REPORT
                       FOR HIGHWAY, TRANSIT, AND
             WASTEWATER INFRASTRUCTURE FORMULA INVESTMENTS

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

                               (111-100)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             March 26, 2010

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure








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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

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

                                  (ii)











                                CONTENTS

                                                                   Page

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

                               TESTIMONY

De Rugy, Veronique, Senior Research Fellow, Mercatus Center At 
  George Mason University........................................     6
Fisk, Joyce, Truck Driver, Knife River Corporation...............     6
Freeman, Jeff, Deputy Director, Minnesota Public Facilities 
  Authority, Representing the Council of Infrastructure Financing 
  Authorities....................................................     6
Luna, Florentino Esparza, Carpenter, Cherry Hill Construction, 
  Representing the United Brotherhood of Carpenters..............     6
Miller, Brad, General Manager, Des Moines Area Regional Transit 
  Authority, Representing the American Public Transportation 
  Association....................................................     6
Richardson, Nancy J., Director, Iowa Department of 
  Transportation, Representing the American Association of State 
  Highway and Transportation Officials...........................     6
Warton, Jeffery, President, IMPulse NC LLC.......................     6
Wright, Stephen D., Vice President, Wright Brothers Construction 
  Co, Inc., Representing the American Road and Transportation 
  Builders Association...........................................     6

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    41
Cohen, Hon. Steve, of Tennessee..................................    42
Hare, Hon. Phil, of Illinois.....................................    43
Mitchell, Hon. Harry E., of Arizona..............................    44
Oberstar, Hon. James L., of Minnesota............................    45

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

De Rugy, Veronique...............................................    51
Fisk, Joyce......................................................    66
Freeman, Jeff....................................................    70
Luna, Florentino Esparza.........................................    82
Miller, Brad.....................................................    84
Richardson, Nancy J..............................................    99
Warton, Jeffery..................................................    61
Wright, Stephen D................................................    71

                       SUBMISSIONS FOR THE RECORD

Committee on Transportation and Infrastructure, Majority Staff:..
      Report entitled, ``The American Recovery and Reinvestment 
        Act of 2009 Transportation and Infrastructure Provisions 
        Implementation Status as of March 12, 2010''.............    xi
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State and Formula Funding 
        under the American Recovery and Reinvestment Act of 2009 
        (P.L. 111-5) (``Recovery Act'') Submissions Received by 
        T&I Committee (Data Reported as of June 30, 2009).......lxxxiii
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of February 28, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Highways 
        and Bridges''............................................    xc
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of February 28, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Clean 
        Water State Revolving Fund''.............................   xci
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Miles Improved by Recovery Act Highway and 
        Bridge Funds''...........................................  xcii
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Bridges Improved by Recovery Act Highway 
        and Bridge Funds''....................................... xciii
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of February 28, 2010), Completed 
        Projects, Highway and Transit Funds''....................  xciv
Freeman, Jeff, Deputy Director, Minnesota Public Facilities 
  Authority, Representing the Council of Infrastructure Financing 
  Authorities, response to request for information form Rep. 
  Mica, a Representative in Congress from the State of Florida...    78
Miller, Brad, General Manager, Des Moines Area Regional Transit 
  Authority, Representing the American Public Transportation 
  Association, response to request for information from Rep. 
  Mica, a Representative in Congress from the State of Florida...    92
Richardson, Nancy J., Director, Iowa Department of 
  Transportation, Representing the American Association of State 
  Highway and Transportation Officials:..........................
      Brochure entitled, ``AASHTO Survey of the States, 9,8000 
        Ready-to-Go Transportation Projects''....................   114
      Report entitled, ``Projects and Paychecks, a one year 
        report on State Transportation Sucesses under the 
        American Recovery and Reivestment Act"...................   118
      Response to request for information from Rep. Mica, a 
        Representative in Congress from the State of Florida.....    58
Warton, Jeffery, President, IMPulse NC LLC, response to request 
  for information from Rep. Mica, a Representative in Congress 
  from the State of Florida......................................    66
Wright, Stephen D., Vice President, Wright Brothers Construction 
  Co, Inc., Representing the American Road and Transportation 
  Builders Association, response to request for information form 
  Rep. Mica, a Representative in Congress from the State of 
  Florida........................................................    83



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
  RECOVERY ACT: PROGRESS REPORT FOR HIGHWAY, TRANSIT, AND WASTEWATER 
                   INFRASTRUCTURE FORMULA INVESTMENTS

                              ----------                              


                         Friday, March 26, 2010

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The Committee met, pursuant to call, at 11:35 a.m., in Room 
2167, Rayburn House Office Building, Hon. James Oberstar 
[chairman of the Committee] presiding.
    Mr. Oberstar. The Committee on Transportation and 
Infrastructure will come to order.
    Apologies from the Chair for the second delay. We were 
delayed to 11 o'clock because it was clear the House was going 
to remain in session last night. But then I was delayed further 
last night, way into the late hours, close to midnight, trying 
to resolve matters with the "other body," as we affectionately 
call our friends across the way; and even into this morning, 
problems still were being worked out.
    And so I was unnecessarily delayed by the other body, but 
necessarily had to delay the beginning of this hearing, the 
16th in our series of accountability hearings on performance of 
State DOTs, metropolitan planning organizations, transit 
agencies, the State Revolving Loan Fund authorities, and the 
other Federal agencies who have direct spending responsibility 
under the Stimulus Act that Congress passed a year ago.
    It seems like a much longer time than a year, but in that 
period of time, as we will hear in the course of today's 
session, we will be able to account for 1.2 plus million jobs 
in the programs under the jurisdiction of this Committee, an 
extraordinary measure of accomplishment. And on direct jobs, 
directly on job site from highway, transit and wastewater, not 
counting all the others in the Federal Government agencies, 
payroll expenditures of $1.8 billion; Federal taxes withheld 
from those on job sites, $376 million; and unemployment 
compensation checks avoided, $296 million. That is net overall 
extraordinarily positive contribution to our gross domestic 
product.
    In addition, the State DOTs can account for 24,000 lane 
miles of highway improved, built, widened, renewed, and 1,200 
bridges either replaced, restored, or reconstructed. Now 24,000 
lane miles of highway is equal to half of the entire interstate 
highway system, which took us 50 years to build, and this 
amount of highway improvement has been done in a year.Before I 
go further and recognize our witnesses, I would like to yield 
to the gentleman from Iowa, Mr. Boswell, who has a plane to 
catch and who had planned to leave town according to our 10 
o'clock schedule, but he has delayed his departure. He has 
witnesses in this morning's hearing.
    Mr. Boswell, thank you for your wonderful support of our 
stimulus legislation and all the programs of the Committee.
    Mr. Boswell. Thank you, Mr. Chairman. And again, we all 
thank you for your leadership and your vision on trying to 
teach everybody of this complex of transportation and 
infrastructure jobs, good-paying jobs, and they are not 
exportable. They are jobs right here that we need to do, and 
things we need not do anything. And you have certainly been a 
leader in this. We can't tell you how much we appreciate it. 
And we are having discussions about the recovery going on and 
the money to be available to our States, and your concept of 
report back and who is ready to go and so on. I think I assured 
you at that time that my Iowa Department of Transportation 
would be standing and ready to go. And I am very pleased that I 
can report that has been true. They have been right up near the 
top in their responsiveness.
    I am very privileged to have someone I have known for a 
long, long time, who is very much an expert in transportation, 
and that is our Director of the Iowa Department of 
Transportation, Ms. Richardson. So I welcome her today and 
thank her because I know that not only she responded to the 
direction, she is ready for the next round. She is ready.
    And then sitting next to her is Mr. Miller, Brad Miller, a 
young fellow who came to the capital city a few years ago and 
people said, I don't know if he can can fill the shoes of the 
guy that went ahead of him, but he has, and he has filled them 
very well. He is the general manager of the Des Moines Area 
Regional Transit Authority, and he is just doing a bang-up job 
innovating young people to use public transportation and making 
it reliable, dependable, and coming up with a concept to have a 
location where people can get in and out easily and so on. I am 
sure he will share that with you today.
    I am just very appreciative that people in my State and my 
capital city are responding, and responding in a very expert 
way to the very guidelines that you established. I look across 
the table and I look at the background, we have a lot of people 
here that have a lot of things to share with us. I appreciate 
it.
    I would just comment about Ms. Fisk, who is a truck driver. 
There are a few of us in the Congress that have an unrestricted 
CDL, so I just share that with you, that I know something 
about--a little bit. I am glad to have you here, the one who 
has the hands on the wheel and using this road system of ours 
that keeps our commerce going, so I appreciate it very much.
    Mr. Chairman, I yield back and thank you for this. I can 
stay a few minutes, but I really appreciate the attention and 
the leadership that you have given to this extremely important 
matter to our country, across the whole country, and especially 
for me and our State of Iowa. Thank you very much, Mr. 
Chairman.
    Mr. Oberstar. Thank you very much, Mr. Boswell.
    Mr. Oberstar. At this time, the Chair will yield to the 
distinguished chair of our Subcommittee on Economic Development 
and FEMA and a host of other issues, who has been very diligent 
in holding hearings on her Subcommittee's portion of the 
stimulus, Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I must say, Mr. Chairman, you are taking accountability to 
a new level. This Chairman is sitting in accountability 
hearings on the stimulus when most Members of Congress have 
long since gone. Having passed an historic health care bill, 
they thought they were entitled. Well, Chairman Oberstar is 
entitled to, but in keeping with the way he always approaches 
his work, here we sit in an accountability hearing, and one 
that I think is important because occasionally you hear people 
say, Well, if you have gotten stimulus funds, I am not sure I 
myself have personally felt it. Well, that certainly is true.
    Chairman Oberstar and many of us would have preferred to 
see a much larger stimulus package, but what these 
accountability hearings have done, Mr. Chairman, is to show 
that the money has hit the ground. And it has hit the ground in 
no small part because of the new accountability--the 
accountability the likes of which the Congress has never seen.
    These pieces of paper, which every Member should carry home 
with her, tracks not only the Subcommittee chairs--because this 
Chairman has held us accountable, I have had five tracking 
hearings myself--but in turn, the agencies are being held 
accountable, the States are being held accountable. And that is 
difficult because the agencies are pass-throughs for the 
States, and yet they are being held accountable.
    And if you don't believe the States are being held 
accountable, every Member is going to be looking at this sheet 
to see where her State fits. And I must say, Mr. Chairman, I am 
pleased to see that the District of Columbia on highways and 
bridges has 85.3 percent under contract. And in the United 
States, among the 50 States, the District of Columbia ranks 
14th.
    I have said to my State, Don't embarrass me here; we worked 
too hard to get these funds. I don't see how there could be any 
controversy about these funds because the Chairman has put it 
in black and white almost every week to help us track our own 
jurisdictions and the agencies over which we have oversight.
    So, Mr. Chairman, I thank you for the accountability that 
you are showing through these hearings, and if I may say so, 
Mr. Chairman, for showing up also at the hearings of 
Subcommittees when we are having hearings to hold the agencies 
under our jurisdiction accountable.
    My own agencies, EDA, GSA, the Smithsonian, a number of 
Federal agencies, precisely because they know not only am I 
holding them accountable, but the full Chairman is looking at 
them just as hard, have proceeded in ways that I have found 
satisfactory. And if you continue as you have done, not only 
will those who come to these hearings know that this money has 
been put to good use. As the press focuses on how you are 
putting facts and figures before the public, it will be 
impossible to underestimate what the stimulus funding that came 
through our Committee has done for the American people.
    I thank you again, Mr. Chairman.
    Mr. Oberstar. Again, I repeat my appreciation and 
admiration for your persistence in holding the accountability 
hearings which have served to spur on the Federal agencies to 
stay on course, stay on track, or be shown to the public for 
failing to do their job. And the first series of hearings, the 
first 3 months of hearings showed great inconsistencies among 
the States and Federal agencies. But after the information was 
made public and reports to Members and calls into State and 
Federal agencies, they all got on board and they moved their 
projects out smartly.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman. I thank 
you for convening today's hearing to enable us to receive an 
update on the implementation of highway, transit, and 
wastewater infrastructure products under the American Recovery 
and Reinvestment Act. Under your leadership, Mr. Chairman, this 
Committee has kept meticulous records of how Recovery Act 
funding has been expended. I applaud the diligence of our staff 
in compiling the data that is available to us today.
    You have ensured that we have remained focused on the goal 
of getting this money out the door and flowing into the economy 
as quickly as possible, while also ensuring that funding 
recipients are fully accountable for every single dollar they 
expend.
    Today's report shows that more than $48 billion of the more 
than $64 billion provided for transportation and infrastructure 
projects under the Recovery Act has now been obligated to more 
than 18,500 projects. Further, of the $38 billion provided for 
the highway, transit, and wastewater infrastructure projects 
that are the focus of today's hearing, 88 percent of the 
available funding has been put out to bid. Work has begun on 
more than 12,500 projects, totaling $26.7 billion. These 
expenditures have created or sustained nearly 350,000 jobs. 
These are truly stunning achievements in the work that is 
underway to producing a new and rehabilitated infrastructure 
that will ensure our future mobility.
    Mr. Chairman, many of us forget that when we enacted the 
stimulus, we faced an economic crisis of unprecedented 
proportions. We had just had to provide $700 billion in Federal 
funding to keep our entire financial system from melting down. 
We were uncertain of whether even the extraordinary sum would 
be adequate.
    Against that backdrop, Mr. Chairman, while the current 
unemployment rate of 9.7 percent is unacceptably high--and I 
note that unemployment among minorities is still higher, with 
unemployment among African Americans hovering at some 15.8 
percent--I am certain it would have been far higher had we not 
made the critical decision to enact the Recovery Act.
    Finally, the fact that we now need reminding of the 
severity of the crisis we face when we approve these 
expenditures, is perhaps the best possible testament to the 
effectiveness of the Recovery Act. I again commend you, 
Chairman, for holding the hearing today, and I look forward to 
the the testimony of our witnesses.
    With that I yield back.
    Mr. Oberstar. Thank you very much for your kind words, but 
also again for the splendid cooperation you and Ms. Norton and 
all the Members of our Committee have extended in ensuring that 
the work of the Committee on stimulus was carried out by the 
responsible agencies, and each of you doing your respective 
oversight work, and Mr. Cummings as chair of the Coast Guard 
and Maritime Subcommittee.
    At this time I would ask, without objection, that the 
statement of Mr. Mica, the senior Republican on our Committee, 
be included in the record. He had to be out of town and gives 
his concurrence in proceeding with the hearing without his 
presence, but his statement will be in the record in full.
    Mr. Oberstar. Today's hearing will focus on the work of the 
Federal Highway Administration's transit, fixed guideway, 
wastewater treatment programs. But there is also Amtrak, which 
has started work at 141 projects totaling $1.1 billion, which 
is 83 percent of Amtrak's funding. Those investments will 
result in the replacement of 80,000 concrete ties, restoration 
to service of 60 M Fleet passenger cars, 21 Superliners, 15 
locomotives, and the improvement of 270 passenger stations.
    FAA has completed work or has work underway on 94 percent 
of its $1.2 billion, 663 projects. Those projects went out so 
fast because of the unique contracting authority of aviation 
agencies, airport authorities who can advertise award bids, but 
withhold work on a project until the funding is available. We 
were able to get further ahead on the work than the surface 
transportation agencies. So those aviation investments have 
produced 155 runway improvement projects, 139 airports that 
accommodate 11 million takeoffs and landings a year, 82 taxiway 
improvements at 78 airports, that accommodate 8 million 
operations.
    The EPA has awarded $582 million for 57 Superfund 
construction projects for design projects, and work is underway 
or completed on 45 of those, at a total of $502 million.
    The Corps of Engineers has committed $3.1 billion for 780 
projects, navigation repair or improvement to 284 locks in 
commercial ports, 1,124 dam and levee safety projects, 
maintenance and upgrading of 460 Corps of Engineers recreation 
facilities, lakes, and Corps-constructed dams that result in 
recreation areas. Those investments are extremely important to 
the navigation and movement of people and goods on our inland 
waterways.
    And the General Services Administration, prodded by Ms. 
Norton's hearings, has awarded contracts and begun work on 383 
projects, $2.4 billion, 43 percent of the funding.
    The Economic Development Administration has awarded 68 
grants for $147 million.
    Coast Guard, alterations of bridges; three projects are 
underway, totaling $81 million.
    All of these have resulted in jobs, people working, getting 
their lives restored, such as that of Joyce Fisk, whom I had 
the unexpected pleasure of meeting last August on the 
Interstate 35 project of Knife River Construction. They were 
doing 28 lane miles of highway between North Branch and Rush 
City. And it was a day like today, a gloomy, overcast, rainy, 
drizzly, dreary day; but the clouds parted and the sun came out 
with Ms. Fisk's smile as she jumped down from her truck on the 
job site and threw her arms around me and said, Thank you, I am 
working. Joyce Fisk represents the human face of recovery, of 
stimulus.

      STATEMENTS OF JOYCE FISK, TRUCK DRIVER, KNIFE RIVER 
 CORPORATION; FLORENTINO ESPARZA LUNA, CARPENTER, CHERRY HILL 
     CONSTRUCTION, REPRESENTING THE UNITED BROTHERHOOD OF 
 CARPENTERS; NANCY J. RICHARDSON, DIRECTOR, IOWA DEPARTMENT OF 
TRANSPORTATION, REPRESENTING THE AMERICAN ASSOCIATION OF STATE 
  HIGHWAY AND TRANSPORTATION OFFICIALS; BRAD MILLER, GENERAL 
     MANAGER, DES MOINES AREA REGIONAL TRANSIT AUTHORITY, 
 REPRESENTING THE AMERICAN PUBLIC TRANSPORTATION ASSOCIATION; 
  JEFF FREEMAN, DEPUTY DIRECTOR, MINNESOTA PUBLIC FACILITIES 
AUTHORITY, REPRESENTING THE COUNCIL OF INFRASTRUCTURE FINANCING 
AUTHORITIES; STEPHEN D. WRIGHT, VICE PRESIDENT, WRIGHT BROTHERS 
 CONSTRUCTION, JEFFERY WHARTON, PRESIDENT, IMPulse NC LLC; AND 
 VERONIQUE de RUGY, SENIOR RESEARCH FELLOW, MERCATUS CENTER AT 
                    GEORGE MASON UNIVERSITY

    Mr. Oberstar. So we are going to begin with Ms. Fisk's 
story. Thank you for traveling all the way out here.
    Ms. Fisk. Thank you for inviting me.
    Good morning everyone, ladies and gentlemen of the 
Committee. My name is Joyce Fisk. I am 35 years old, and I am 
the mother of a 12-year-old boy named Austin. I am married to 
Gene Fisk, a volunteer firefighter and first responder in our 
community. We both work for Knife River Corporation in 
Minnesota. I drive a belly-dump and Gene drives a dump truck. 
We live in Almelund, a small town about 40 miles northeast of 
Minneapolis and 10 miles east of Interstate 35.
    I met Chairman Oberstar while working on I-35 project last 
summer. It was a stimulus-funded project. And I was thrilled 
that Mr. Oberstar took the time to come see firsthand the job 
in progress, to take the time to talk to someone like me, just 
a truck driver thankful to have a job. Mr. Oberstar told me 
about the new bill he was working on and the progress it was 
making. I went home that evening and wrote a quick e-mail to 
the Transportation Committee, thanking him for taking the time 
to visit and to see his hard work in action.
    As a belly-dump driver, I transport materials to and from a 
job site. I haul material, such as classified rock for the road 
base, or I haul millings away when we do road tear-outs, and I 
also haul bituminous mix to a paver. But I not only drive the 
truck, I amexpected to help maintain them. I grease moving 
parts, I check the oil daily, I crawl in the engine 
compartment, check for cracks in my frame, and I even make 
small repairs on the road if I need to. I put 500 miles or more 
on a day.
    Driving an 80,000-pound truck isn't easy. I have to 
constantly be alert for traffic hazards, other drivers, 
animals, and potholes. And it can be a challenge to drive all 
day without getting tired.
    Even more of a challenge is trying to guess what is going 
to happen next spring. I get laid off every winter, usually 
around Thanksgiving, and would usually be recalled in May after 
road restrictions are lifted. Last year was the first time I 
panicked when I heard our plant only had 10,000 tons of mix and 
no bids were being won.
    We are proud of our company. Knife River has a large 
workforce of knowledgeable men and women who care about their 
community. We care about each other and provide moral support. 
But with no jobs to bid because of the recession and uncertain 
government funding, I watched morale fall. It was difficult to 
stay optimistic, and we started to argue about who was going to 
get the hours. It made work stressful.
    My husband and I started to wonder what were we going to do 
if something didn't come in soon; are we qualified to get 
another job to sustain the household? What about health care? 
We bank up to 600 hours during the summer that allows us to 
qualify for health care during the layoff season, but if the 
hours run out, we have to pay for the COBRA and the continued 
coverage. It is almost unaffordable in unemployment and to make 
a mortgage payment, too.
    What could we afford to give up? Austin might have to give 
up his saxophone. I once had an electric guitar, and my mom 
made me sell it because we needed the money. We decided to sell 
the pickup we were making payments on, so now the newest 
vehicle we own is an 8-year-old Pontiac with 163,000 miles on 
it.
    We were preparing for a long summer of no work. The 
previous year, 2008, was hard on our industry. We saw close 
friends lose jobs, and we realized we no longer could take ours 
for granted. But then our plant estimator won the bid on the I-
35 stimulus project, and we were relieved. The project was the 
heartbeat of a newfound source of happiness for many of my 
coworkers and me, we had faith in the economy again.
    But many of our friends are still out of work and there are 
many Minnesota roads in need of repair. Some highways are 
almost undrivable in a tractor-trailer because they have 
deteriorated to the point of being unsafe. We need a long-term 
dedicated highway bill that will allow small companies a chance 
to rebuild and provide real jobs that will last.
    Short-term bills are good for keeping a few companies 
afloat, but the real deal of a 6-year, $450 billion dedication 
of funds to transportation can restore confidence to companies 
and their workers. A new funding bill can ease the congestion 
in big cities and heavily traveled highways. Funding for light 
rail transit can save time, money, and help clean up our 
environment. Without future funding, I don't see manufacturers 
selling new equipment; there will be no companies starting up 
and offering new jobs.
    Road construction is constant. There will always be a need 
for repairs. Let's stop the Band-Aid approach and put money 
into infrastructure that is going to offer real jobs that are 
going to last and get our economy moving again.
    Thank you for this opportunity to speak today.
    Mr. Oberstar. Thank you very much for that heartfelt 
statement. You just summed it all up so well. Your personal 
story, though, has been repeated 1,200,000 times all over the 
country; people who were laid off, who faced a bleak future and 
who have had a respite; and now our task, our challenge, as you 
suggested, as you appealed for to enact the 6-year 
authorization bill and continue to extend regular programs of 
the Federal Highway Program and make it possible to do the more 
complex projects that take longer time and involve more effort 
and more subcontractors, where minority enterprises will have 
more of an opportunity than in simple mill and overlay 
projects.
    Before I go to my next witness, I must observe that on the 
job site--I had driven over I-35 at that point many, many 
times, maybe hundreds of times over the years--but there is a 
rut so deep that my forearm disappeared in it. Where the 
engineer put his road level on the surface, it went right over 
it, two inches over my forearm--that is not a dainty little 
forearm either. That was the nature of the project being 
undertaken.
    It was so heartwarming. I had been at that sand and gravel 
pit that Knife River opened to carry out the project. There 
were workers doing the classifying of sand and gravel and 
aggregate who had been laid off 2 months earlier, who now were 
back on the job, as Ms. Fisk.
    Staff reminded me, I misstated the number of road miles. I 
have been using a 5-week-old figure. We are now at 34,438 miles 
of highway improvements.
    We will come back to each of the witnesses in due course, 
but our next witness is Mr. Florentino Esparza Luna, a 
carpenter.
    My grandfather, Alexander Giuseppe Grillo came from Naples, 
Italy, as a carpenter in 1896, settled in Providence, Rhode 
Island to build homes, and then when iron ore was discovered in 
northern Minnesota, the district that I now represent, he and 
many others were lured west to build homes in the iron ore 
mining country. So we come from a family of carpenters, it is 
very touching for me.
    One of my treasured pictures is a picture of Alexander 
Giuseppe Grillo and me, 5 years old, hammer in hand, pounding 
nails in the home that I still live in.
    Mr. Luna.
    Mr. Luna. Thank you, Chairman Oberstar, Ranking Member 
Mica, and Members of the Transportation and Infrastructure 
Committee. It is an honor to join you today.
    My name is Florentino Esparza Luna. I am a resident of 
District Heights, Maryland, and a proud member of the United 
Brotherhood of Carpenters and Joiners, Local 1145, a local 
union with the Mid-Atlantic Regional Council of Carpenters, 
MARCC. MARCC covers the District of Columbia, Maryland, 
Virginia, and West Virginia. Local 1145 is based in Upper 
Marlboro, Maryland, but we work throughout the region.
    My message today is simple and straightforward: The 
stimulus passed by this Congress and signed by President Obama 
provided me with the job I have now. I am living proof of the 
job creation from the Recovery Act. The stimulus helped fund 
the Fairfax County Parkway project near Fort Belvoir, where I 
work.
    I appreciate being able to work for a private contractor 
with the Federal dollars you provided in transportation. A job 
means so much. Nothing is more important than providing for my 
family.
    I work for Cherry Hill Construction on the Fairfax County 
Parkway project in nearby Virginia. After being unemployed for 
over 4 months, I started work on this project in December of 
2009. I am a skilled carpenter. I build concrete forms and 
perform other carpentry work on this huge, multimillion-dollar 
project. There are 30 carpenters working on the project now. 
The project is expected to employ about 150 workers in the 
construction trades. It will take well over a year to complete.
    We are building the extension to the Fairfax County 
Parkway. My contractor will perform the first two phases of the 
work. The project involves extending the parkway, grading, 
draining, building a sound wall, and more. The project should 
make a big difference in Northern Virginia, where, as you know, 
traffic can be terrible.
    I sincerely appreciate the support of the Members of 
Congress who voted for the Recovery Act. You played a key role 
in helping me provide for my family. I have a wife and two 
children. It is not easy getting by on an unemployment check. I 
would much rather be working, building my community's 
transportation system. I know that is also true for 
construction craft workers throughout the industry.
    Construction workers are struggling. Many of the work 
opportunities in the residential and commercial parts of the 
industry dried up with the recession. About 20 percent of the 
members of my local union are unemployed. Even with an 
employment rate twice the national average, my local union is 
doing better than the rest of the construction industry.
    As you know, Chairman Oberstar, the employment rate 
nationally in construction is over 27 percent. Too many 
construction workers simply cannot find work and provide for 
their families. It would be a lot worse if it wasn't for 
stimulus. The Recovery Act allowed me to put food on my 
family's table, allowed me to provide health care for myself 
and my family, and I am also able to put money into retirement 
so that I can retire in dignity.
    The Carpenters Union and my employer also invest in the 
future workforce by making investments in apprenticeship and 
training. The Carpenters Union believes not just in jobs, but 
in long-term careers. Unfortunately, the high unemployment rate 
in construction and in my union has made it difficult to find 
work opportunities. That is why the support from this Congress 
and this President in providing real jobs through the American 
Recovery and Reinvestment Act has been so important to me and 
my brothers and sisters at Local 1145. All construction workers 
hope that Congress will make more of these investments in our 
economy.
    Thank you for the opportunity to testify today. I sincerely 
appreciate it.
    Mr. Oberstar. Thank you very much for that wonderful, 
heartwarming testimony. We started off with two home-run 
hitters here of a very personal testimony, a personal 
experience. To me, that is reward enough for the hours put in, 
the hundreds of hours we have put in on crafting this bill, 
beginning in December of 2007, moving it through the House in 
September of 2008, but with resistance from the previous 
administration, they vetoed the bill. Then we had an election. 
President Obama said he would sign a stimulus bill--or 
President-elect Obama at the time. And, as President, he did 
sign it.
    As for the future of transportation, this is it; this is 
the bill that we reported from Subcommittee for the 6-year 
authorization. It is 750 pages--probably a few more will be 
added once we finish the final legislative drafting. It will be 
a total transformation of the Department, of the Federal 
Highway Administration, the Federal Transit Administration. And 
we will be able to move projects much more expeditiously. We 
found lessons learned in the stimulus that States can move 
projects out much faster than in the traditional scheme of 
things, and we are incorporating those lessons learned into 
this bill.
    So we are moving ahead, and your encouragement is very 
important for me and for my colleagues on this Committee. I 
know Mr. Mica has many times said we just have to move ahead 
with this bill. All the Members feel that way. We have had 
difficulty getting the Senate to concur with us, but Senator 
Boxer made a statement at a hearing 2 weeks ago, and again last 
week, that she will move ahead with the bill and start with our 
document as the foundation for it. So I am very encouraged that 
we will be able to complete the bill in this session of 
Congress.
    Ms. Richardson, Director of the Iowa Department of 
Transportation, you have already been generously introduced by 
Mr. Boswell.
    Ms. Richardson. I am Nancy Richardson, Director of the Iowa 
Department of Transportation. And on behalf of the American 
Association of Highway and Transportation Officials, AASHTO, I 
amhere to talk to you about three things:
    First, the success that States are achieving through the 
Recovery Act; second, the States' ability to spend further 
funding on additional ready-to-go projects; and third, the role 
of transportation in rebuilding and sustaining our Nation's 
economy and the importance of passage of a new Federal Highway 
and Transit authorization bill.
    But first, Mr. Chairman, let me thank you and your Members 
of the Committee for your commitment to transportation, which 
led to the enactment of the HIRE Act that extends the highway 
and transit programs through the end of the year. This means 
that Congress can now turn its attention to your priority and 
ours, the enactment of a comprehensive, multiyear bill.
    Speaking of economic recovery, as you know the Recovery Act 
had a March 2 use-it-or-lose-it deadline, and I am happy to 
report today that every State obligated every highway dollar 
they were eligible to receive, and not one dime was returned to 
Washington for redistribution. We are proud of the thousands of 
jobs the economic Recovery Act enabled us to support in Iowa 
and across the Nation, and of the long-lasting economic 
benefits of this capital investment.
    The States' record of 100 percent obligation of these funds 
by the deadline did not happen just by accident. It took early 
planning and preparation and quick action. I am particularly 
proud of the pace of getting the Recovery Act funds put to work 
in my State of Iowa. I am pleased that Iowa has consistently 
ranked in the top five States in your Committee's rankings of 
how States have moved to get the Recovery Act funded projects 
out to bid, under contract, and underway. My State is just one 
of 50 examples of how the States have put the Recovery Act 
money to swift and good use.
    Prior to the act even becoming law, the Iowa DOT worked 
with local partners to identify potential projects which would 
qualify for funding. We wanted to be ready to hit the ground 
running when the bill was passed, and we were.
    Through these partnerships, we were able to quickly 
identify over 645 miles of highways and streets, 55 miles of 
trails, 36 bridges and structures, and four freight rail 
projects that were in need of improvement or replacement and 
were ready to make use of Iowa's $358 million.
    Work has begun in Iowa on over 200 projects, and as of 
March 15, $215 million, or over 60 percent, of the highway 
funding available to Iowa has been received from the FHWA as 
reimbursement for payments to contractors and vendors. This 
funding was injected directly into our economy last year and 
was responsible for creating or retaining jobs all across the 
State.
    When spring arrives and the construction season begins 
again in Iowa, we will see the remaining $143 million in 
Recovery Act funds being used to once again support jobs, aid 
economic recovery, and continue to improve Iowa's 
transportation system.
    The same success has occurred as a result of the transit 
capital funding. With the $25 million in transit funds for 
Iowa's small urban and rural transit systems, we were able to 
identify for much needed replacement 216 old transit vehicles. 
As of the end of February, 136 of those transit vehicles 
ordered had already been delivered and put into service in 
Iowa.
    Congress and the public also expect transparency and 
accountability in our administration of Federal funds, and I 
amconfident that the DOTs and our local partners will meet and 
exceed those expectations.
    But what does this mean to Americans? First of all, it has 
meant jobs. I understand that every Member of the Committee has 
been given a copy of AASHTO's report: Projects and Paychecks. 
It found that States have created or saved 280,000 direct, on-
project jobs. Total employment related to the projects has 
reached 890,000. While transportation received 6 percent of 
total Recovery Act dollars, as of this past December, it was 
responsible for at least 14 percent of the total direct jobs 
saved or created to date.
    But the real story is about people, the people whose jobs 
were saved or who went back to work, the people who were able 
to make their mortgage payments, put their kids through school, 
and pay for health care, as you have just heard. These 
investments in our Nation's transportation network, first and 
foremost, have put and are putting paychecks in people's 
pockets. And although the primary focus of the Recovery Act was 
job creation and short-term immediate economic stimulus, we 
should not overlook the fact that these investments will 
provide long-lasting benefits with improvements to the Nation's 
transportation network.
    We are very appreciative of Congress' recognition of the 
role that transportation can play in this Nation's economy, and 
we want you to know, Chairman, that we remain poised to support 
continued economic recovery and job growth.
    Earlier this year, AASHTO went back to the States to 
determine additional ready-to-go projects. The States have 
identified more than 9,800 projects valued at close to $80 
billion that could move through the Federal approval process 
within 120 days of enactment. The Recovery Act is working, and 
the States could do more of the same if additional jobs were 
available.
    Finally, we urge you to enact a multiyear highway and 
transit bill before this Congress adjourns. We believe the $500 
billion surface transportation funding target that you, 
Chairman Oberstar, have established, is a reasonable goal for 
this 6-year authorization period, and Congress should seek to 
fund it.
    We need a balanced bill that increases funding for both 
highway and transit, and funds continued progress on high-speed 
rail. We also need a balanced bill that meets the needs of both 
rural and urban parts of the country. Mr. Chairman, we stand 
ready to work diligently with you to see that reauthorization 
happens promptly.
    In closing, let me say thank you to Congress for providing 
us Recovery Act funds for transportation improvements. The 
States' DOTs have taken seriously your confidence in us that we 
could swiftly and wisely spend the money in order to benefit 
the economy, and we have delivered. We stand ready to swiftly 
and wisely spend additional funding that you might provide for 
continued economic recovery.
    And finally, we urge you to continue your efforts and 
advocacy for passage of a well-funded, balanced, multiyear 
highway and transit bill.
    Thank you, Mr. Chairman. I appreciate the opportunity to 
testify and will be happy to answer questions.
    Mr. Oberstar. Thank you very much for that splendid 
testimony. Congratulations on the superb achievements in Iowa 
under the stimulus, as you have reported, and for the work of 
AASHTO's report, Projects and Paychecks. It is well-documented 
with photos of the successful projects all around the country. 
I just love stuff like that, it just gets me going.
    And this is the AASHTO proposal for 9,800 additional 
projects, and nearly half of those are projects that Mr. 
Horsely, your executive director, has said can be under 
contract within 90 days, and the rest within 120 days. That 
would satisfy the requirements of the bill we passed in 
December in the House, which, unfortunately, the Senate has yet 
to complete action on; they have only dealt with half of it.
    And for readiness, there are many touching stories, but one 
that really sticks in my mind is that of Secretary Gary Ridley 
of Oklahoma, who, in my visit out there to Tulsa and Oklahoma 
City, pointed to the Inner Dispersal Loop project or the loop 
around Tulsa. He said, We began designing this in November 
after your hearing--the one I held in October. He said, That 
Committee is serious, we better be ready. I told my engineers 
we are going to do 18 months of design in 4 months, and I want 
you to take your design and engineering plans to church with 
you on Sunday, because if I need you, I will call. And they did 
and he did, and they had it designed more than halfway through 
the $76 million project, which includes 44 bridges, by the way. 
So you have got a great story, and all of your colleagues 
across the country and all the State DOTs have great stories as 
well.
    Mr. Oberstar. Now we will move to transit with Brad Miller, 
General Manager of the Des Moines Area Regional Transit 
Authority, speaking for APTA.
    Mr. Miller. Thank you, Mr. Chairman.
    Chairman Oberstar, I am honored to submit testimony 
regarding the Des Moines Area Regional Transit Authority's use 
of funding for the American Recovery and Reinvestment Act, 
which has already created jobs in central Iowa and around the 
country, while improving public transit.
    DART serves Iowa's capital region with a service area 
population of just over 400,000. While DART and Des Moines may 
be somewhat smaller than some of the other transit systems your 
Committee has heard updates from, I am pleased to report the 
funds have had a profound, positive impact for our 16,000 daily 
riders.
    DART received $7.8 million in funding. Not only has DART 
been awarded all of our ARRA funding and will sign contracts 
for 100 percent of the funds by June, but DART has already 
drawn down and cut checks for nearly half the funds, getting 
these dollars into the economy and generating dozens of good 
jobs and improving the transportation services in Des Moines. I 
don't think our story is unusual, as FTA has awarded more than 
99 percent of the $8.4 billion that was made available for 
transit under ARRA.
    DART spent more than one-third of its ARRA funds on bus 
replacements, and I was thrilled to see the funded buses roll 
onto our property--as shown in the picture--just 2 weeks ago. 
The Committee has no doubt heard significant testimony of the 
strong need for funding of our country's infrastructure to 
achieve a state of good repair. This policy is as true for 
small-and mid-size transit systems as it is for our Nation's 
aging rail systems and deteriorating bridges and highways.
    Not only did the ARRA funds benefit DART in Des Moines, but 
I am also pleased to report that ARRA funds supported the 
replacement of more than 180 small buses and 17 large busses at 
other transit systems throughout Iowa. Iowa takes great pride 
in its expansive network of rural transit services in all 99 
counties of the State. The senior citizens and job seekers 
living in Iowa's small towns who rely on public transit are 
also seeing the benefits of ARRA.
    DART used $1 million of ARRA funds to help build an energy-
efficient expansion for our bus storage facility. The project 
is well underway, and the contractor has identified over 30 
full-time jobs and more than $200,000 in construction wage and 
benefits that have already been created by this ARRA-funded 
project.
    The recovery funds have moved DART's number one capital 
project priority a step closer to construction by supporting 
the design of the LEED-certified transit hub in downtown Des 
Moines. Now a design has advanced for this important facility 
that will create not only 200-plus direct construction jobs, 
but will will also be a catalyst for additional job growth as 
DART will be able to vacate its outdated transit mall along 
Walnut Street and provide space for first floor retail and 
small businesses.
    Finally, DART is one of the many transit systems to 
gratefully use 10 percent of our allocated ARRA funds for a 
one-time source of operating assistance. While not every system 
was chosen to use this flexibility, preliminary results from an 
APTA survey now underway show that about a third of the 
approximately 150 agencies responding to the survey so far are 
using a portion of ARRA funding to prevent layoffs, avoid fare 
increases, or maintain service. With the help of nearly 
$800,000 in ARRA funds for operations in Des Moines, along with 
pay reductions and furlough days from me and my nonunion staff, 
we were able to reduce our budget gap and save more than 30 bus 
operator jobs.
    As the general manager of a 150-bus system like Des 
Moines', it is Yours Truly that makes the presentations at 
public meetings and listens to the hundreds of riders who tell 
me they are going to lose their jobs if we cut their bus 
service.
    We just completed 10 such meetings 3 weeks ago. And I 
recall the story of one woman I met at a public meeting at the 
Forest Avenue Library in Des Moines. Ms. R. Cofield was at the 
meeting with her 3-year-old daughter to fight to keep the 
weekend bus service past the House of Mercy residential 
treatment facility where she and more than 40 other single 
mothers live with their children. She said she and the other 
mothers at the House of Mercy were going to lose their jobs at 
the Qwest telecommunications call center in downtown Des Moines 
if we cut the weekend bus service on DART's route number 5. She 
asked the question I heard more than a dozen times at the 
hearing: Why are you buying buses and building a transit hub 
when you could be saving routes?
    I tried my best to explain the limits on using funds for 
operations versus capital expenses, but as the Committee knows, 
when transit is your lifeline to keeping your job to support 
your struggling family, you are not going to be easily 
convinced. Luckily, thanks to the allowance of the 10 percent 
of ARRA funds for operating assistance, DART was able to 
preserve that weekend service that Ms. Cofield and many others 
rely on.
    Certainly, the question of operating assistance is a 
challenging one for the Committee. Undoubtedly, many transit 
agencies, particularly smaller agencies, would accept a change 
to allow them to spend more Federal money on operations. 
However, they would defer capital projects, including 
desperately needed bus replacements.
    But these are certainly extraordinary times. DART's 5 
percent cut in service and likely layoff of 20 bus operators 
are the most substantial cuts we have had to make since the 
1980s. We are extremely thankful to the Committee for the 
temporary ability to use 10 percent of the ARRA funds for 
operations, and would strongly support continuing this 
authorization on a temporary basis.
    I finish my remarks by noting that without a new Federal 
investment in a long-term reauthorization bill, it will be 
difficult to maintain the employment benefits that ARRA has 
already created for our agency. Needless to say, we definitely 
support the Committee's efforts to approve a multiyear 
transportation bill at the highest level of investment possible 
for public transit. Such a bill would stabilize DART's 
finances, advance our job-creating capital projects, and 
strongly assist our efforts to improve transit this Iowa.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    Mr. Oberstar. Thank you very much, Mr. Miller, for that 
splendid testimony, for the before-and-after pictures, and for 
your remarks on operating assistance. It was very important for 
us to include that language in this bill. We extend it in the 
authorization bill and doubled the funding for transit over the 
6 years of this bill.
    I will now invite Mr. Jeff Freeman, who is the Deputy 
Director of Minnesota Public Facilities Authority, who has an 
extraordinary story to tell us of how they leveraged their 
funds to achieve a nearly 50 percent increase, or more, of the 
Recovery Act funds allocated to Minnesota and provide clean 
water for communities that in many cases didn't have it at all.
    I will excuse myself for a few minutes for a meeting with 
the Speaker and invite Mr. Cummings to chair the hearing.
    Mr. Cummings. [Presiding.] Mr. Freeman, please.
    Mr. Freeman. Thank you.
    Mr. Chairman, Members of the Committee, my name, again, is 
Jeff Freeman. I am the Deputy Director of the Minnesota Public 
Facilities Authority. Thank you for the opportunity to come 
before the Committee to talk about our Clean Water State 
Revolving Fund program and our experience with the American 
Recovery and Reinvestment Act funds.
    The Minnesota Public Facilities Authority is a multiagency 
structure financing authority that manages the Clean Water 
State Revolving Fund, the Drinking Water State Revolving Fund, 
a State Infrastructure Bank for our transportation projects, 
and several other infrastructure financing programs.
    Since the Clean Water State Revolving Fund began in 1989, 
Minnesota has received $577 million in Federal capitalization 
grants, added $150 million in State matching funds, and 
leveraged those funds with our own AAA-rated revenue bonds to 
finance $2.4 billion in clean water projects throughout the 
State. These low-interest loans have saved cities and their 
taxpayers over $530 million in interest charges.
    This financing has helped local governments rehab and 
replace aging wastewater treatment plants, upgrade systems to 
meet new standards, rehab collection systems, construct new 
interceptors, and a variety of other projects. These are 
essential infrastructure projects that protect and improve 
water quality, and also, of course, have a major economic 
impact not only in terms of the construction jobs that they 
create, but also in terms of providing a critical foundation 
for the economic vitality of the cities that have and need this 
infrastructure.
    The enactment of the American Recovery and Reinvestment Act 
in February 2009 provided badly needed capital for these 
programs, but also created significant challenges for the State 
Revolving Fund programs. The specific provisions and 
accountability requirements attached to ARRA required EPA and 
each State to develop and implement new processes and 
procedures within a very short period of time. In Minnesota, 
there was a flurry of activity between February and April of 
2009 as we put together all the pieces leading up to our formal 
application for the funds in mid-April.
    On June 8, 2009, we received the official notice that the 
funds had been awarded, and by June 25, 3 weeks later, 
virtually all the funds had been committed for projects that 
were approved, bid, and under construction. Formal loan 
agreements were then executed over the next few months.
    Minnesota's share of the ARRA funds for clean water was 
approximately $82.5 billion. We awarded $44.7 million as 
principal forgiveness, and $17.5 million for green 
infrastructure projects for energy and water efficiency 
improvements.
    Our strategy for the ARRA funds focused on using the 
principal forgiveness aspect in three ways, with an emphasis on 
creating incentives to get projects moving quickly. We offered 
20 percent principal forgiveness to all projects on a first-
come, first-served basis, if they were open bids and were ready 
to start construction. And we also directed principal 
forgiveness to deal with particular affordability problems, and 
as incentive for the green infrastructure aspects of the 
projects.
    To get the biggest impact and fund the most projects, we 
leveraged those $82.5 million in ARRA funds with over $100 
million in non-ARRA clean water SRF loans to finance 25 
projects, for a total investment of $182 million. To date, we 
have expended over 62 percent of the ARRA clean water funds, 
and our job reports show that there have been 295,000 job hours 
created, with a total payroll of $11.7 million.
    The Clean Water ARRA funds went to a variety of cities and 
projects. I would like to give you a couple of examples. The 
city of Waseca financed a $16 million project for improvements 
to their wastewater treatment and collection system. The 
undersized system was creating raw sewage discharges to Clear 
Lake, and impaired water, and also sewage backups in people's 
basements.
    To prepare for the project, the city had increased their 
rates by 60 percent to an average household cost of $55 a 
month, but they still would have been unable to move ahead with 
the project without the ARRA funds. The city of Duluth received 
$5 million to build a sewage overflow tank on the shores of 
Lake Superior to prevent overflows into the lake during storm 
events. The city of Grand Rapids constructed a $30 million 
project to relocate their primary treatment and solids 
dewatering facilities and incorporated energy and water 
conservation improvements into that project as a result of the 
ARRA funds.
    Our experience with ARRA illustrates some of the features 
of the Clean Water State Revolving Fund that have made it so 
successful in general. The Clean Water Fund utilizes a project 
priority list, a comprehensive list that in Minnesota's case we 
have 381 projects for about $2.1 billion. Each year we get over 
$400 million of requests for projects to move ahead to 
construction. We know that not all of those can go ahead 
because there will be delays for various reasons, so we 
purposefully put more projects on the list than we expect to go 
ahead, and we use our ability to sell AAA-rated revenue bonds 
as the flexibility of that to provide funding for the projects 
that are able to go ahead.
    When our board approved our intended use plan in the summer 
of 2008, at that time the economy was already slowing down; and 
they recognized the importance of putting more projects on the 
list to give as many of us an opportunity to move ahead. 
Because of that X, we put five times as many projects on the 
list as we typically fund; and, because of that, we were well 
positioned to fund the ARRA projects when the money came 
through.
    Mr. Chairman and Members, thank you for your strong support 
of the Clean Water State Revolving Fund. We look forward to 
working with you on reauthorization of the program in the 
future, and I would be happy to answer any questions.
    Mr. Cummings. [presiding]. Thank you very much, Mr. 
Freeman.
    We will now hear from Mr. Stephen Wright, the Vice 
President for Wright Brothers Construction Company, Inc., 
representing the American Road and Transportation Builders 
Association.
    Welcome.
    Mr. Wright. Mr. Cummings, I am Steve Wright, President of 
Wright Brothers Construction Company in Charleston, Tennessee. 
I am here today representing the American Road and 
Transportation Builders Association where I serve as the 
Southern Region Vice Chairman.
    Wright Brothers was founded in 1961 by my father and my 
uncle. Our company performs a variety of highway and heavy 
construction services. We currently have projects under way in 
Tennessee, Alabama, Georgia, and North Carolina.
    Mr. Chairman, the Recovery and Reinvestment Act's 
transportation investments have been a resounding success. Its 
impacts, however, cannot be truly appreciated without 
understanding what our sector faced prior to the measure's 
enhancement.
    The U.S. transportation construction market had been in a 
steady decline since 2007 due to State budgets, the general 
economy, and an increasing material crisis. The continued 
recession made this bad situation worse. Highway contractors 
laid off almost 26,000 employees in 2008 and early 2009. In 
fact, my company's employment peaked in 2008 at 350 workers, 
and it has since fallen by 34 percent, due largely to declines 
in the private construction market.
    Going into 2009, we faced a severe recession, uncertainty 
about the Federal Surface Transportation program 
reauthorization and continued State budget difficulties. Not 
surprisingly, this made for a very sobering outlook.
    The one bright spot for our sector was the Recovery Act's 
transportation investments. My written testimony includes 
substantial information that describes the exemplary pace at 
which these funds have been put to use and their real-world 
impacts.
    I would like to highlight one point to demonstrate the 
contribution of the Recovery Act's transportation investments.
    Figure 2, on page 4 of my testimony, compares the 
transportation contracts awards for 10 months prior to the 
enactment of the Recovery Act with the awards 10 months after 
these investments hit the marketplace. This information is 
significant because contract awards are a leading indicator of 
future construction activity.
    Following the Recovery Act, highway construction awards 
increased 19.4 percent. Bridge contracts are up 14.6 percent. 
Airport awards have grown 61.2 percent. Transit contracts 
ballooned 216 percent.
    Because there are a variety of U.S. transportation 
construction investment sources, it is difficult to attribute 
the increase of contract awards solely to the Recovery Act. 
However, it is abundantly clear that the 22-year negative 
transportation construction market trend began reversing itself 
in May of last year. This is the same point at which we saw 
Recovery Act funds begin supporting projects. As figure 3 
demonstrates, this positive trend is continuing with highway 
contract awards growing this January, while awards in January 
of 2008 and 2009 had declined.
    To put a real face on this data, Wright Brothers won four 
separate Recovery Act contracts. Three of these are small 
projects in Tennessee that have allowed us to save the jobs of 
one five-person concrete crew. We also have a large capacity 
and reconstruction project in Alabama that has allowed us to 
hire 19 people and has saved at least that many jobs. We are 
expected to add more people as we get further into this 
project. Half of the project is subcontracted, so we represent 
only a portion of its job impacts.
    The leadership at the Alabama Department of Transportation 
has said that, while this project was a priority for them, they 
would not have had the ability to move it forward without the 
Recovery Act.
    The success of the Recovery Act notwithstanding, the 
transportation construction industry continues to struggle with 
unemployment at record levels and great uncertainty about 
future State and Federal transportation investments. I can 
state with all certainty that, as bad as things are right now, 
they would have been much worse without the Recovery Act.
    To sustain and bid on the Recovery Act and re-energize the 
long-term growth potential of the United States, we must not 
lose sight of the need to enact a 6-year surface transportation 
authorization bill at the investment levels proposed by this 
Committee as soon as possible.
    Thank you for your leadership on the Recovery Act, for the 
recent transportation extension and your ongoing efforts to 
deliver a multi-year reauthorization bill.
    I appreciate this opportunity to testify, and I am happy to 
answer any questions.
    Mr. Cummings. Thank you very much, Mr. Wright.
    We will now hear from Mr. Jeff Wharton, President ofIMPulse 
NC LLC. I guess it is in North Carolina?
    Mr. Wharton. Yes, sir.
    Mr. Cummings. Thank you very much for being with us.
    Mr. Wharton. Well, good afternoon, Mr. Cummings.
    My name is Jeffrey Wharton, President of IMPulse NC. Thank 
you for this opportunity to present testimony regarding the job 
creation and retention impacts of the public transit 
investments included in the American Recovery and Reinvestment 
Act.
    As a brief background, IMPulse is an overhead contact 
hardware manufacturer located in Mount Olive, North Carolina, 
with 30 direct employees, plus a large nationwide sub-supplier 
base. Our product, which dates back to 1888 through the Ohio 
Brass Company, is used to support aerial wires that feed power 
for light rail trains, streetcars, vintage trolleys, and 
electric trolley buses. IMPulse is a Marmon Group/Berkshire 
Hathaway Company and is a member of the American Public 
Transportation Association.
    My testimony today is on behalf of my company.
    I am pleased to report that, in 2009, my new project 
business grew 35 percent; and, in 2010, I expect sales to grow 
another 10 to 15 percent. I do not believe that my business 
would have survived without the investment in public 
transportation by way of the ARRA stimulus funding. Our 
projects include the Los Angeles Gold Line extension, the 
Denver West Corridor line, the Pittsburgh North Shore 
Connector, and the Portland Streetcar Eastside Loop project, 
among others.
    I recognize that most of these projects were already in the 
funding pipeline as new capital projects; and as the program 
and project authorizations under SAFETEA-LU approached 
expiration, ARRA funding served as an important bridge between 
that bill and the next authorization bill and helped expedite 
these projects.
    In talking with my supply partners, I have come to learn 
how much they have relied on my business due to the tough 
economy.
    Shirley Gaines, President of Synehi Castings, a woman-owned 
business located in Greenwood, South Carolina, told me that 
IMPulse has kept her business afloat. With the decline in the 
automotive industry, she was able to keep 36 jobs through the 
orders received by IMPulse and the ARRA-funded projects.
    John Petro, a third-generation owner for Warsaw Foundry in 
Warsaw, Indiana, has been able to maintain 44 jobs through the 
transit orders directly from IMPulse. John stated that the only 
sales growth in his business that he has experienced has been 
from the IMPulse transit orders.
    Mac Flynn, plant manager for the Brost Foundry that 
operates in Mansfield, Ohio, and in Cleveland, attributes over 
29 percent of his business to IMPulse, helping to keep 50 to 60 
employees working.
    Lastly, Korns Galvanizing Company, located in Johnstown, 
Pennsylvania, has been able to keep 44 jobs through IMPulse 
orders and the quick implementation of economic stimulus and 
jobs funding for public transit. Previously, they had relied 
mostly on commercial work; and, today, IMPulse is one of the 
larger accounts.
    I could go on and on with suppliers in Texas, California, 
Illinois, Washington State, and others. As you can see, 
IMPulse's transit sales have impacted businesses throughout the 
U.S., and the associated ARRA funding has directly contributed 
to saving hundreds of jobs.
    Let's face it. Transportation is the backbone of the 
economy, and public transit is an incredibly important aspect 
of our national surface transportation system. Public transit 
creates great jobs.
    I want to make substantial long-term investments to grow my 
business and to develop new products and technologies that will 
improve public transit options, but I need a long-term vision 
from our elected officials.
    I truly wish to thank Chairman Oberstar and this Committee 
for your steadfast leadership in advancing transportation 
investment through ARRA and your efforts to pass a new surface 
transportation authorization bill.
    Let there be no mistake. There is a cliff fast approaching 
if we do not continue to invest and recognize the immediate and 
invaluable benefit that public transit provides our economy, 
quality of life, and the environment.
    I thank the Committee, and I look forward to answering any 
questions you may have.
    Mr. Cummings. Thank you very much.
    Ms. Veronique de Rugy. Am I close?
    Ms. de Rugy. Yes, very.
    Mr. Cummings. We thought Mr. Oberstar would be in the 
chair. You know he speaks French.
    Ms. de Rugy. I was told.
    Mr. Cummings. de Rugy?
    Ms. de Rugy. Yes. Sure.
    Mr. Cummings. Is that close?
    Ms. de Rugy. Yes, close.
    Mr. Cummings. You are a Senior Research Fellow with the 
Mercatus Center at George Mason University. Thank you.
    Ms. de Rugy. Mr. Cummings, it is an honor to appear before 
you today to discuss the allocation of the Recovery Act funds. 
My name is Veronique de Rugy. I am a Senior Research Fellow at 
the Mercatus Center at George Mason University, a research-
based organization where I study budget and tax issues. It is 
in this capacity that I have been tracking stimulus dollars 
since last February.
    Using recipient report data from Recovery.gov and economic 
and political data from the Bureau of Labor Statistics, the 
Census Bureau, GovTrack.us, and others, I have compiled a 
series of facts about stimulus spending. My interest is simply 
to make use of the tens of thousands of stimulus recipient 
reports recently published on Recovery.gov and to put the 
aggregate information contained in those reports in a larger 
context.
    This report is the second of a series of reports, published 
on a quarterly basis, as new recipient reports are released 
each quarter. The data presented here covers the fourth quarter 
of the calendar year 2009 reports of Recovery Act contracts and 
grants only. The complete data set used for this report is 
available for download at Mercatus.org. You can find the 
details about my methodology in my written testimony, but, 
today, I will highlight some of the main results of my 
analysis.
    First, in this second quarter for which Recovery.gov 
reports are available, over 65,000 contracts and grants were 
awarded. The total spending reached over $170 billion--that is, 
roughly, $1 billion awarded per week--and an additional $13.6 
billion reported received over the previous quarter. This is a 
sharp decline in spending compared to the $156 billion received 
in the previous 3 months. At that rate, the government should 
be done awarding stimulus dollars by 2020.
    Second, the total number of jobs claimed to have been 
created or saved overall by the stimulus actually declined from 
last quarter, shrinking from about 634,000 to a little over 
597,000 jobs. This job shrinkage could have resulted from 
changes made by the White House on how to count jobs. However, 
it goes to show how terribly difficult it is to account for net 
jobs created from stimulus spending. It also outlines the near 
impossibility to account for how many jobs were saved by the 
stimulus funds.
    Third, I found, for every $286,000 spent, one job was 
claimed to have been created.
    Fourth, the main argument for enacting the $787 billion 
stimulus bill was that, if the government spends money where it 
is the most needed, it would create jobs and trigger economic 
growth. Hence, we would expect the government to invest 
relatively more money in districts that have the highest 
unemployment rates and less money in districts with lower 
unemployment rates.
    Controlling for the percentage of the district employed in 
the construction industry, which is often used as a proxy for 
the vulnerability to recession of a district, we find no 
statistical correlation between all relevant unemployment 
indicators and the allocation of funds. This suggests that 
unemployment, so far, has not been the factor leading the 
awards. Also, I found no correlation between other economic 
indicators, such as income, however you want to measure it, and 
stimulus funding.
    Finally, on average, Democratic districts received one-and-
a-half as many awards as Republican ones. Democratic districts 
also received two-and-a-half times more stimulus dollars than 
Republican districts. Republican districts also received 
smaller awards, on average.
    There are more Democratic districts than Republican 
districts in the Congress. This is why then I checked for the 
correlation between political indicators and stimulus funds. I 
found that, with the exception of the district's party's 
affiliation, which is whether the district's representation was 
Republican or Democrat, there is no effect of political 
variables on the allocation of stimulus funds.
    So how much does party affiliation matter? While the effect 
is significant, because of the specifications of the model, 
more confidence should be placed on the relationship between 
the two variables than on the quantification of that 
relationship. In plain English, it means that, while I am 
confident that whether the district is represented by a 
Republican or a Democrat matters for funding, we are not sure 
what the weight of this particular factor was compared to 
others that went into the decision of spending the money, such 
as the formula, for instance.
    Thank you very much for the opportunity to testify before 
you today. I am looking forward to answering your questions.
    Mr. Cummings. Thank you very much, Ms. de Rugy.
    Let me just ask you something. I just asked staff, you 
know, what you were basing those figures on. I am just curious. 
You know, a third of this money went to tax cuts, right?
    Ms. de Rugy. The report that I published is based on the 
data that is available on Recovery.gov. This is the data 
reported by recipients of the stimulus dollars for contract and 
grants exclusively.
    Mr. Cummings. Okay. I see. I see.
    When we talk about stimulus, I mean, almost two-thirds of 
the money went to two things, one, to tax cuts and, two, to 
helping States address their issues and keep policemen hired 
and folks hired and that kind of thing. So I guess, with what 
you have got left, you are talking about the actual contracts 
themselves. I see.
    Ms. de Rugy. Yes.
    Mr. Cummings. All right. Thank you very much.
    Ms. de Rugy. You are welcome.
    Mr. Cummings. Ms. Richardson, you indicated in your 
testimony that States have $80 billion of ready-to-go projects 
if additional funding were made available. What do you mean by 
"ready-to-go"? How long would it take for those projects to 
actually begin construction, and would the majority be 
repayment projects?
    Ms. Richardson. By "ready-to-go," when we did the survey, 
we defined that similar to what the Recovery Act had been and 
said that they could be obligated--using that Federal 
definition of "obligation," they could be obligated within 120 
days of enactment. We have done some additional analysis of 
that, and about half of those could actually be put to contract 
within the first 90 days following enactment, which would be 
even a more aggressive time frame.
    With types of projects, the $80 billion has crossed all 
modes. So it is not just highway. You know, it is also aviation 
and trails and transit and other kinds of projects. On the 
highway side, certainly a fair amount of it or a certain amount 
of it would be in the resurfacing and preservation of the 
existing system, but there is also a mix of projects that would 
be expansion or the creation of some new lane miles.
    Mr. Cummings. Now, you discuss a number of direct on-
project jobs among the States made possible by the Recovery Act 
expenditures. Has AASHTO tracked the total DBE participation 
across the States?
    Ms. Richardson. I don't know if AASHTO has, but I do 
believe that that is being tracked as part of the reporting 
that we are doing either to the Federal Highway Administration 
or to GAO or to someone like that. So that is being tracked.
    We always track that, frankly, on all of our projects. We 
track the percentage that we have achieved, and that data is 
out there for that related to the Recovery Act. I don't have 
that number in my head, but it is available.
    Mr. Cummings. All right. Thank you.
    Mr. Freeman, have other States provided principal 
forgiveness, as you have done, to your knowledge?
    Mr. Freeman. Mr. Cummings, yes. All States have used the 
principal--the ARRA funds that went to Clean Water State 
Revolving Funds required a minimum of 50 percent be provided as 
principal forgiveness.
    Each State has done that a little differently. In our 
State, we have affordability criteria; and we have used some 
State funds in the past to deal with affordability problems. 
That is where we directed most of our principal forgiveness 
funds. I think that is a similar experience with other States, 
but each State has--and that is kind of the strength of the 
Clean Water State Revolving Fund, is that each State has some 
flexibility to design the criteria and the procedures to best 
fit their needs.
    Mr. Cummings. Do you know what has been the experience of 
other States with that process? Do you have any idea?
    Mr. Freeman. I don't have the numbers from other States. I 
know that all States did meet the 1-year--the requirement to 
have the funds under contract and under construction within the 
1-year period of time and, as part of that, had met all of the 
principal forgiveness requirements as well.
    Mr. Cummings. Now, is this something you have done in the 
past?
    Mr. Freeman. With some State programs, we have provided 
some additional subsidy for communities that have affordability 
problems. We have found that, for smaller communities in 
particular, the costs for wastewater treatment infrastructure 
can easily go over $50, $60, $70 a month per household. At that 
rate, communities just can't afford to move ahead with projects 
without some additional subsidies, so we have done that with 
some State funds. The principal forgiveness through the ARRA 
funding gives us another tool and a significant share of those 
funds to be able to meet those needs.
    Mr. Cummings. Mr. Miller, you indicate in your testimony 
that you used 10 percent of your allocated Recovery Act funds 
for a one-time operating assistance infusion; is that right? Is 
that what you said?
    Mr. Miller. That is right.
    Mr. Cummings. What will happen to your operating budget 
when this infusion is no longer available?
    Mr. Miller. Well, Mr. Cummings, that is a very good 
question. You know, we are hopeful that the economy will start 
to improve and that some of our other sources of revenue will 
improve, but we certainly would be supportive of additional 
authorizations to use some of our other Federal funds or 
additional stimulus dollars, should they be allocated in the 
same way.
    Mr. Cummings. You also indicated that you have purchased 
new buses with the Recovery Act funds; is that right?
    Mr. Miller. That is right.
    Mr. Cummings. I know that purchases have been common with 
recovery funds. You said that you have taken delivery of your 
new buses, but have other transit agencies experienced delays 
in getting buses, given the large number of orders that they 
have placed? Do you know?
    Mr. Miller. I mean, I have heard that we are very lucky in 
that we have already received the delivery just 2 weeks ago of 
our buses and that some other transit systems have not received 
theirs. But, you know, even under normal times, it takes a year 
to a year and a half to deliver buses. So I have not heard of 
any particularly long delays in receiving buses, and they are 
already out on the streets, driving around Des Moines, Iowa, 
right now.
    Mr. Cummings. Finally, let me just ask you, Mr. Wright--I 
just have two questions, and then the chairman will take over.
    Mr. Wright, what are the trends in State transportation 
budgets in 2010? Are the States able to afford to maintain 
their existing systems or is even maintenance suffering in this 
economic environment?
    Mr. Wright. Mr. Cummings, the State I am most familiar with 
is Tennessee, and their program has evolved into, basically, a 
maintenance-only program. They have almost no funding available 
for new capacity.
    Mr. Cummings. So they are just basically maintaining?
    Mr. Wright. That is right.
    Mr. Cummings. Are there any specific changes to the 
metropolitan planning process that you are advocating for, say, 
the next reauthorization?
    Mr. Wright. I would encourage anything you can do to 
simplify the process. It takes too long to get a project from 
creation to contract where we actually begin to work on it.
    Mr. Cummings. Well, I will tell you--and I know he will 
tell you about this--our chairman has been trying to figure out 
how to do that, how we can go about doing what you just said. 
It has not been easy, but we are trying to figure it out. With 
the reauthorization he is proposing, I think you will be 
pleased with some of the things in there because it goes a long 
way towards what you are talking about.
    Mr. Chairman.
    Mr. Oberstar. [presiding.] To extend the conversation you 
just had with Mr. Cummings, the chairman of our Subcommittee on 
the Coast Guard, we established in this bill that has been 
reported from Subcommittee an Office of Project Expediting in 
the Federal Highway and the Federal Transit Administration.
    It is intolerable that it takes 3 years to do, under 
current law, a simple mill and overlay, go over and ground the 
surface of a roadway, reprocess it, and put it back in place, 
or that it takes 14 years from idea to ridership for a transit 
project. That is way too long. Bond issues run out. Costs 
escalate. There have been some experiences of up to 50 percent 
cost increases over the time of a transit project. That is just 
intolerable.
    We have to end this sequential process of endless reviews 
and turn that on its side and have these reviews done 
concurrently with the transformation we spell out in this 
legislation and craft for the future of transportation--do 
those reviews concurrently, be able to do transit projects, new 
starts and extensions of existing operations in 3 years instead 
of 14 years.
    The system we have today is new starts, slow starts, and no 
starts. That is not serving the needs of transportation or 
reducing congestion in America's major metropolitan areas. We 
have to move much faster and put people to work and projects 
under way much faster, and we will do that with this 
legislation.
    The ARTBA has made a great contribution to our process, to 
the legislative language. Mr. Luane has been like a Marine 
Corps drill sergeant in helping us get this done. So, yes, we 
are very keen to get this bill moving again.
    We reported this document from Subcommittee in June of 
2009. Unfortunately, the Senate thought they needed 18 months. 
The administration said they wanted 18 months. I said that 
delay is the enemy of progress. That is way too long. We have 
to move fast.
    In the stimulus, AASHTO, transit agencies, the contractor 
community, the Associated General Contractors, the Road and 
Transportation Builders, the building trades, and the truck 
drivers have all shown that, given deadlines, they can perform. 
They can meet those deadlines. They can put people to work and 
projects under way in much shorter time frames than we have 
done in the past. So we are taking those lessons and 
incorporating them into the future of transportation, but we 
also need a follow-on to the stimulus.
    There are 30 States that have notified this Committee that 
they will be unable to provide their full 20 percent match 
under the 80-20 Federal-aid Highway Program because the 
revenues are down, because their tax revenues are down, because 
their gas tax revenues are down. Those 30 States represent 70 
percent of the population of the United States.
    The Associated General Contractors did a survey of their 
top 400 firms, and they came back to the Committee with a 
report that, when the stimulus runs out, they expect to have 40 
to 50 percent layoffs because the private sector financing for 
what the trade calls the "vertical projects" isn't coming back. 
Investors simply are not making the investments that they were 
making.
    Knife River told me last year that, in 2007 and 2008, 
nearly 80 percent of their work was in the private sector--is 
that right, Ms. Fisk?
    Ms. Fisk. I believe it is close to that number, yes.
    Mr. Oberstar. --by last summer. Because of the 
deterioration of the economy, the financial meltdown, most of 
those general contractors were doing 60-plus percent of the 
work in the public sector. But we have to sustain the existing 
jobs and investments and carry that so that the rest of the 
economy can catch up and so that the private-sector investments 
that had been made in the past can continue to be made in the 
future. We need to get through this summer. I think this one 
more summer of stimulus will set the stage and move the country 
forward.
    Unfortunately, while we passed our legislation to fully 
fund the States' 20 percent share of the Federal highway 
program in December, the Senate has not done that. They have 
only passed the extension of current law through the end of 
this fiscal year and 3 additional months. That is not 
sufficient. That is not a good service to the country. Every 
witness that we have had over these past 12 months of hearings 
has said we need an additional investment in transportation and 
other infrastructure projects to carry us through until the 
private sector has made its recovery and then we will see a 
return. Meanwhile, we have got permanent investments and 
improvements for the future of our transportation system and 
our wastewater treatment system.
    Now, Mr. Freeman, you and Terry Coleman have done 
outstanding work, as I said, at the outset. You are 25-year 
professionals. You have been at this program for a long time. 
What lessons learned from the stimulus would you offer for the 
Committee that we can apply to the future of the State 
Revolving Loan Fund that has already passed the House but that, 
again, is awaiting action in the Senate?
    Mr. Freeman. Thank you, Mr. Chairman, for those kind words.
    The Clean Water State Revolving Funds, of course, are 
unique in that, first of all, these are cities that are 
building these projects, and we are providing the financing 
rather than doing direct contracting. The Clean Water Revolving 
Funds operate from a comprehensive priority list, so there are 
always projects in the pipeline that are in various stages of 
development. The fact that these are revolving loan funds 
rather than straight grants means there is an ongoing stream of 
repayments. The money is always revolving, so projects are 
continually moving through the processing, being funded, and 
the additional Federal capital and State matching funds allow 
us to leverage those funds and to generate additional lending 
capacity.
    But the key, I think, is that, for the cities that are 
developing these projects and moving them through the process, 
they need steady and predictable funding. They need to know the 
money will be there when their projects are ready, and they 
need to have a clear sense of what the requirements will be. So 
we are very much in favor of the proposed reauthorization of 
the program.
    We are a little troubled with the 2010 appropriation, 
because it imposed some additional requirements that were not 
predictable and became somewhat disruptive and difficult for 
the cities that were already in the pipeline, for projects that 
were already bid and, in some cases, already under 
construction. So that is a difficult way to fund the process, 
and certainly a reauthorization bill that will again restore 
kind of the predictability and the steady funding for the 
program will be--you know, we are very much supportive of that, 
and we appreciate your efforts on that, and we will do anything 
we can to help.
    Mr. Oberstar. How were you able to manage the balance of 
loan funds with grant funds? The SRF is a loan program. We 
provided part of the funds as grant money and part as loan 
funds, and you were able to--not just you but your agency was 
able to leverage those dollars to create more funding, 
including State funds appropriated by the Minnesota 
legislature, and you were able to leverage those into a 
significantly greater investment than what otherwise would have 
been the case. What did you do? You had some creative financing 
going.
    Mr. Freeman. Mr. Chairman, Minnesota is one. I think there 
are approximately 35 or so States that operate their Clean 
Water Revolving Funds as leveraged programs.
    In simple terms, what that means is we are using the 
Federal capitalization funds and the State match as kind of the 
seed money and then selling, in the case of Minnesota, our AAA-
rated revenue bonds. They are not backed by the State. They are 
Minnesota Public Facilities Authority bonds. They are backed by 
the repayment stream of all the loans that we had made 
previously.
    So using that leveraging ability allows us to give a larger 
number of projects on the priority list kind of the green light 
to move through the engineering design work, the approval 
process, and then we can have the money available when their 
projects are ready rather than those projects waiting for us to 
tell them, okay, now you can start. They are always moving and 
always developing those projects, and we are able to use our 
leveraging to have the money available when they need it.
    Mr. Oberstar. Do other States have a rating system such as 
the Minnesota Public Facilities Authority? If I recall rightly, 
you ranked the projects 1 through 263 on the wastewater 
treatment side and 1 through--what was it?--112 or 113 on the 
drinking water side. By need locally, by the readiness to go to 
bid and by the local financing capability in place, are there 
other States that have similar rating systems?
    Mr. Freeman. Yes, Mr. Chairman. All States operate from 
that priority list. That is part of the requirement and the 
framework of both the clean water and drinking water State 
Revolving Funds.
    In our case--and, actually, those numbers have increased 
quite a bit since, I think, the last time we provided you a 
list. We now have over 280 projects on the clean water list for 
about $2.1 billion. The drinking water list, I think, has close 
to 300 projects as well. So the needs are certainly there.
    We rank those projects--actually, we don't. Our partners 
with the Minnesota Pollution Control Agency ranks those clean 
water projects based on environmental and public health 
factors, so that is the ranking that we follow.
    Then we work with communities to identify the ones that 
have completed the preliminary planning work and will be ready 
to go to construction, and that is the list that we take then 
and develop the intended use plan from so that all of those 
cities know, if they get to reach a certain point where the 
planning is done, they can then move on, and we will put them 
in a fundable range on our intended use plan and have the money 
available when their projects are ready.
    Mr. Oberstar. Very good.
    In our reauthorization of the State Revolving Loan Fund 
program, we require States to develop management plans and the 
ranking of projects and to develop a long-range program of 
investment. In using the criteria that you just cited, we hope 
that the Senate will act on that legislation, which is a $15 
billion authorization over the next 5 years. I think it is far 
less than what the Nation needs, but it is responsible funding, 
and we know that it will be fully offset.
    Ms. Richardson, in the Surface Transportation Program, we 
had a two-part requirement for projects to get under way in 90 
days and others in 120 days. Initially, the State DOT said, oh, 
that will be too difficult for us to meet. But, in the end, all 
State DOTs have far exceeded their original--they have 
underestimated their own ability to perform.
    Now, what lessons are there to be drawn for the future of 
transportation from your stimulus experience?
    Ms. Richardson. Well, a couple come to mind based on your 
comments.
    One, I think that we cannot underestimate how much work 
there is that needs to be done in the transportation 
infrastructure in this country. So when we go to States and 
other jurisdictions and say, what projects do you have, there 
is a considerable backlog and a lot of needs out there. So I 
think that there will always be a pool of very good projects 
for us to choose from, whether it is from our regular funding 
or from any special funding.
    The second lesson is the one that you highlight, and that 
is maybe we underestimated our own abilities a little bit. But, 
you know, you are always concerned when you hear time frames 
like that because we are used to longer time frames, but I 
think, when asked to change our paradigm and look at things a 
little differently, we all were able to come through and 
deliver in that type of time frame. The 120 days to obligation, 
everybody met.
    I know, as there were discussions about a follow-along 
stimulus in the jobs bill, there was concern that that had 
language in it that said 90 days to contract, but, in fact, 
when we did the survey of States to find out what other ready-
to-go projects were out there and when we identified over 9,800 
projects at $80 billion, I am told that somewhere around half 
of those could actually get to contract within 90 days.
    So I think we have learned that we can--with the pent-up 
demand that is out there and with the kind of work that needs 
to be done just to preserve this system from crumbling, there 
is certainly enough work out there that we could do it quickly, 
whether it is 120 days to obligation or 90 days to contract.
    Mr. Oberstar. Well, those are important lessons learned.
    The Office of Project Expediting that we will include in 
this bill that has been already reported from Subcommittee will 
take those lessons learned and apply them and expedite the 
process so that we are not doing multiple reviews in sequence 
that delay project delivery. It is not to set aside any 
environmental concern or other permitting requirements of a 
host of government agencies. Townships and sewer boards and the 
Environmental Protection Agency and the National Trust for 
Historic Preservation all have a permit responsibility, but 
they can be done concurrently rather than sequentially.
    Ms. Richardson. Absolutely.
    In fact, when we looked at that in our State in the past 
decade, we termed it the "can do" process, "can do." It was to 
do exactly that, to see where in our process we could have 
things running in parallel, rather than sequentially, so that 
we would take considerable chunks of time out of that lengthy 
process.
    Mr. Oberstar. Well, that is where we want to go for the 
future.
    Now, what is the situation in Iowa? I mentioned 30 States 
have notified the Committee. Iowa was one of those. Are your 
highway funding prospects looking better or the same as earlier 
this year?
    Ms. Richardson. Well, I think that, like all States, the 
economy, of course, is affecting our revenue streams, and both 
in terms of--our revenue at the State level comes from fuel 
taxes and then also fees and new vehicles purchased, on their 
registration fees and some fees at the time of purchase. When 
the economy is not as strong, people are not buying as many 
vehicles nor driving them as much, so we certainly have a lag 
in our revenues from what we were projecting.
    I believe that our legislature, at the State level, 2 years 
ago took on the hard task of looking for additional State 
revenue, and it passed a piece of legislation called TIME-21, 
which is bringing more revenue at the State level into the 
transportation fund, the Road Use Tax Fund. It is just that 
that is ramping up over about 7 or 8 years. So our legislature 
has put in place something that will bring some additional 
State funds in gradually over the next few years, and I think 
that will help us continue to have enough match for Federal 
funds. But it is touch and go, and there are other States in 
which it certainly is already a problem.
    Mr. Oberstar. That is why we need to get this bill passed--
--
    Ms. Richardson. I agree.
    Mr. Oberstar. --and the long-term funding mechanism----
    Ms. Richardson. Yes, I could not agree more.
    Mr. Oberstar. --and an additional, maybe, 6-month stimulus 
but also significantly more revenue.
    In this legislation, we expressly prohibited project-
specific designations known as "high-priority projects." Each 
State has a ranking process that they have followed. So you 
made selections of projects based on readiness--that is, 
meeting the criteria of the Act, which is through right-of-way 
acquisition, the environmental impact statement completed, the 
design and engineering down to final design, ready to go to 
bid, provided the money was available. Is that essentially the 
process that Iowa has used and that other States have used?
    Ms. Richardson. Yes.
    Of course, there were other criteria that we paid attention 
to. For example, economically distressed areas and making sure 
we identified those, and we tried to overlay that on our 
selection process as well as making sure that we had a good 
blend of projects geographically, urban and rural. I think all 
States paid attention to those things. They were in the bill.
    We are very fortunate in Iowa that the process we 
traditionally use, that we were able to use for the Recovery 
Act, is one that is very collaborative with our local 
partners--the metropolitan planning organizations and the 
regional planning agencies. We already work in concert with 
them, and they help identify projects. We try to have a little 
bit more local input into helping to define some of the 
projects. That process serves us very well, and it was what, I 
thought, helped Iowa really jump the gun and get going very 
quickly because we had already talked with those local 
partners. They had helped identify priority projects.
    We had all of ours at the State level, and that meant that 
we had that priority list of projects ready to go when you 
passed the bill. We would be in the same situation before. We 
have already done that. In case there is another stimulus, we 
have made sure we have got that priority list all ready to go.
    Mr. Oberstar. That is wonderful. That is very encouraging. 
Of every State DOT director I have to talked to--and I have had 
conversations with at least half, maybe more than half--30 of 
them are in the same situation.
    Mr. Miller, prior to the stimulus funding, what was the 
average age of your fleet?
    Mr. Miller. Chairman Oberstar, like all of the systems, I 
have had a very old fleet. I think the average was somewhere 
around 9 years, with the typical bus lasting 12. We are just 
very thankful for the stimulus dollars, because, with those, 
combined with the annual appropriations, our regular Federal 
dollars, we were able to buy, in this one order that is 
arriving this month, a sixth of our fleet or replace about 80 
percent of our buses that were over their useful life. It has 
been fantastic.
    Mr. Oberstar. Do those new buses provide more passenger 
capacity?
    Mr. Miller. Not necessarily more passenger capacity, but 
they break down on the side of the highway, which affects our--
--
    Mr. Oberstar. Better reliability.
    Mr. Miller. They break down, certainly, one-fifth as often 
or they cost half as much to maintain as those older buses. So, 
yes, they are a real boon to our system.
    Mr. Oberstar. So, just as on the highway side where we are 
replacing pavement and are making a better ride and drive for 
people, on the transit side, there is better equipment, a lower 
cost to operate, and a longer service life for the equipment.
    Mr. Miller. Not to mention the environmental benefits, the 
cleaner engines--and we even have the hybrid bus. So the newer 
buses are beneficial in that area, too.
    Mr. Oberstar. Terrific. Thank you.
    Mr. Wright, does the future of funding give you concern--
that is, what I cited a moment ago about the general 
contractors being concerned that the private sector investments 
are not recovering as all would have liked and the funding 
continuing and perhaps even winding down from some of the 
stimulus by the middle of summer. What is the outlook from the 
contractor's side, from the ARTBA side?
    Mr. Wright. It is exactly like what you described earlier. 
My company's balance of private versus public work has gone 
from 50/50 to probably 80/20 now, you know, 80 percent being 
public work. The short term with the Federal Transportation 
bill not being--you know, being extended and extended and 
extended, you know, it gives us no faith or no belief that the 
workload is there. So we have not bought any equipment in the 
last couple of years.
    You know, our capital investment is just down dramatically. 
It has gone from the ability to plan your work, looking ahead, 
to just reactionary to what was absolutely required. When you 
have a 6-month extension, it is hard to go make a 6-year 
investment.
    Mr. Oberstar. That has Caterpillar worried, and it has the 
other equipment manufacturers concerned.
    It is a matter of concern and an astonishment to me that 
this time last year the United States had developed a new 
export product--used construction equipment. We were filling up 
containers, shipping backhoes and D-4 and D-8 cats and front-
end loaders to China and India where they were making 
investments in their stimulus programs.
    China has committed 9 percent of its gross domestic product 
to stimulus, $540 billion limited to highway, port, airport, 
rail, and wastewater treatment projects. They are on track to 
complete an 820-mile rail line from Beijing to Shanghai, which 
is the distance from Boston to Richmond on the East Coast of 
the United States--822 miles. You will be able to travel that 
distance in 4 hours with 220-mile-an-hour, steel-on-steel 
passenger rail. They have made the investment in it, and this 
time next year there will be full ridership. That is between 
two megalopolises of 12 million people in Beijing and 16 
million in Shanghai.
    The European community has committed $1.4 trillion over a 
20-year period to upgrade its aviation, water, passenger rail, 
and highway infrastructure, including building a canal to link 
the North Sea to the Black Sea. That is 2,000 miles across the 
heart of Europe to move goods more efficiently and more 
effectively with less of an environmental impact and at a lower 
cost to shippers and consumers.
    We are just falling behind. Their plan includes an 
additional 7,200 miles of high-speed passenger rail line in 
Europe. President Obama put up $8 billion for passenger rail in 
this country, but it is a drop in the bucket compared to what 
the European community is doing in addition to their already 
extensive and successful program. So here we come back to the 
point: Other countries have made these investments. They are 
stimulating their economies. They are having great short-term 
as well as long-term investment impacts.
    Now, you mentioned your concern about buying equipment. 
What amortization period do you have to look at as a contractor 
for, you know, these pieces of equipment that I mentioned that 
are not inexpensive? You don't just buy it on your credit card. 
You have got to figure out how you are going to pay for that 
long term, right?
    Mr. Wright. You don't put a $1 million crane on your credit 
card. We amortize most of our stuff on about 60 months, so it 
is approximately the life of the highway bill.
    Mr. Oberstar. Very interesting. So you really want to see a 
longer-term investment and greater stability and a continuity 
of funding?
    Mr. Wright. Absolutely, sir.
    Just this week, there was a conversation in my office about 
should we buy two machines or should we rent them. We only have 
90 days' worth of work for them. It is hard to make a 5-year 
commitment to that process when you cannot see any further than 
that. With an appropriate bill in place, you would at least 
believe you would have the opportunity to compete for a market 
that you know is there, that would give you the faith to go 
ahead and pull the trigger, for lack of a better way of saying 
it.
    Mr. Oberstar. What we have seen also in this stimulus 
period is that bids have been coming in 25 percent below 
original design estimates because there is so much competition 
in the marketplace and materials costs even have dropped in the 
U.S. during this recession period. Was that your experience as 
well?
    Mr. Wright. Yes, sir, it is. There seems to be three to 
four times as many bidders on projects as people move from the 
private sector back to the public sector in their bidding 
process; and margins are very, very low.
    Mr. Oberstar. Now, Ms. de Rugy.
    [conversing in French.]
    Well, thank you very much for----
    Ms. de Rugy. I am not sure my mom is as happy about this, 
but----
    Mr. Oberstar. We will translate this later for the 
reporters.
    President Sarkozy will be in the United States shortly. He, 
too, had a [French] Of $47 billion euros, which is roughly $60 
billion, and their recovery plan has created jobs, has 
stimulated the economy, and has moved France ahead. But you 
make a good deal of reference in your testimony about party 
affiliation and political variables. You must be talking about 
something other than the programs of our Committee.
    Ms. de Rugy. The way I looked at the numbers, I only--I 
mean, I only used the data from Recovery.org, and I compared 
them to other publicly available data, government data, and 
then I ran regressions. The spending that I am talking about 
covers, you know, some of the transportation money. So $10 
billion exactly of that data that I looked at was spent through 
the Department of Transportation
    Mr. Oberstar. But these correlations of party affiliation 
and political variables and so on would surely have to be 
happenstance rather than deliberate?
    Ms. de Rugy. Well, the only thing I can tell you for sure 
is that, when you look at the regressions, we can tell whether 
the district is represented by a Democrat or a Republican 
matters for the funding. What I cannot tell you is how much 
this factor has influenced the decision compared to other 
factors, such as the formula or the unemployment in the States, 
even though, actually, my findings also find that the money 
does not seem to be allocated, guided, by the level of 
unemployment in the district.
    Mr. Oberstar. In our legislation, we specifically directed, 
as Ms. Richardson said, that priority be given to areas of 
highest unemployment as measured by the Economic Development 
Administration of the U.S. Department of Commerce, which has a 
map of the United States by county in which EDA certifies the 
unemployment level for each county and updates it monthly.
    And we wanted those dollars to go to the areas of highest 
unemployment, the areas of greatest economic distress. And, 
secondly, we wanted an equitable distribution of dollars so 
that not all the money would be used up in the major 
metropolitan areas, such as Minneapolis-St. Paul or Chicago in 
Illinois or Los Angeles in California. They could consume the 
State's entire stimulus allocation in one major metropolitan 
area; that would not be right.
    And State departments of transportation are the ones who 
have made those allocations and they have distributed the 
funds. And, as Ms. Richardson said, they spent a good deal of 
time assuring that projects went to the areas of highest 
unemployment.
    So I would be very interested to see the backup details for 
your analysis.
    Ms. de Rugy. Absolutely. All the data is available for 
download at the Mercatus Web site exactly for that reason, 
because we wanted to be absolutely transparent about----
    Mr. Oberstar. Yes.
    Ms. de Rugy. So we have put not only the data, the raw 
data, but also the regression that we have used and the result 
of the analysis.
    What I can tell you is the data that we have used for 
unemployment--so we have used two sorts of data. The first 
report that we did was for the first quarter of the money 
allocated. We used unemployment level in the districts, and we 
found that there was no correlation.
    The second time around, actually informed by after talking 
with a series of economists who just do econometrics all the 
time, they suggested that a better measure and a better way to 
assess unemployment level is to actually look at the variation 
of unemployment between time to actually get not only a sense 
of the unemployment level in absolute terms, but also how hit 
and hurt each given district was by the recession.
    And, again, we were using Bureau of Labor Statistics and 
Census Bureau data. I mean, these are totally official data. 
And we, again, no matter what type of unemployment indicator we 
use, we find absolutely no correlation. In fact, if I remember 
correctly, the coefficient that we used make it almost look as 
if it was done intentionally to not, even though I know it is 
not the case.
    But it is was quite stunning, because I assumed, 
considering the rationale behind the stimulus bill, that we 
would find a strong correlation. And we tested it many 
different ways. We used different methods. And you can--
actually, I would be happy--you don't even have to go to our 
Web site. I would be happy to even, like, send it to you.
    Mr. Oberstar. That would be very helpful.
    So you did this on the basis of congressional districts?
    Ms. de Rugy. Congressional districts, yeah.
    Mr. Oberstar. My congressional district, for example, is 
the size of the eastern seaboard from here to Connecticut.
    Ms. de Rugy. So we controlled for the size. That is what 
regression analysis do, is to control for the size.
    Mr. Oberstar. And my district has the highest unemployment 
of the whole State.
    Ms. de Rugy. But this is why we do regression analysis 
rather than just comparing numbers, is because it controls for 
all the variation there could be.
    Mr. Oberstar. And the funding in Minnesota is controlled by 
the department of transportation under a Republican Governor, 
who, if he were attempting to manipulate, would have avoided by 
district. But that is clearly not the case. He did not put his 
hand into it. He did not involve himself.
    I don't know of any other States where Governors have 
attempted to--there is no evidence on the record that there has 
been any manipulation.
    Ms. de Rugy. I am absolutely not judging intent. I am just 
looking at facts. In fact, this report was done--and it is 
called "Stimulus Facts"--to provide facts about the stimulus to 
you, Members of Congress, so you could actually decide what is 
happening.
    Mr. Oberstar. We would be concerned if there were any 
manipulation at the State level of these funds.
    Ms. de Rugy. My data doesn't look at intent. The only thing 
it looks at is results. And, again, this data is based on the 
data we found as reported by recipients of the awards and as 
posted on recovery.gov.
    Mr. Oberstar. Thank you. It is a very interesting 
correlation, and I would like to receive the entire body of 
data.
    Ms. de Rugy. Absolutely. I would be happy.
    Mr. Oberstar. And I will review it myself. Merci.
    Ms. de Rugy. Merci beaucoup, Mr. Chairman. I don't know how 
to say that----
    Mr. Oberstar. [Speaking in French.]
    Ms. de Rugy. [Speaking in French.]
    Mr. Oberstar. All right, after that love affair in French.
    For the future of transportation funding, which has been 
the big obstacle in getting this bill moving, from time 
immemorial--that is, from 1956 forward--we have had the Federal 
Highway Trust Fund. In 1956, the Congress enacted a 3-cent user 
fee. President Eisenhower signed the bill into law. Three cents 
in 1956 represented 10 percent of the cost of fuel, which was 
30 cents a gallon.
    In 1982, President Ronald Reagan signed a 5-cent increase 
in the user fee. At the time, he said this 5 cents is budget-
neutral; the users of the system are paying for their use of 
that system. And this 5 cents represents the equivalent of two 
shock absorbers in a year on your car.
    Fast-forward to 2009, and we have the President of the 
United States who says, "I made a commitment in the campaign 
that I wouldn't raise your taxes," we have Senators who say, 
"We can't raise taxes in time of a recession."
    But, in 1958, the Bureau of Public Roads came back to the 
Congress and said, "That 3 cents isn't sufficient. We need 
another penny increase in the user fee." Congress passed it; 
this House passed it on a voice vote. You can't pass the prayer 
on a voice vote today.
    We need to revive that spirit of investment in America's 
future, just, as I cited a little bit ago, that the European 
community has committed a $1.4 trillion for their future to 
remain competitive in the world marketplace, as China is doing 
now, as Japan has done, as India is doing with their Golden 
Triangle, a $25 billion highway program.
    And we have to move our goods more efficiently in this 
marketplace. Look, UPS did a survey of their operations 
nationwide. For every 5-minute delay their trucks experience, 
they lose $100 million in overtime charges, for costs for their 
truck drivers, in late delivery fees for their customers.
    In the Minneapolis-St. Paul metropolitan area, an 
independent group did a survey of the cost of congestion. Among 
the companies studied was General Mills. They spend $692 
million a year moving their Wheaties and Betty Crocker goods to 
market. But for every mile an hour their trucks travel below 
the speed limit, it costs them $2 million in overtime charges 
to their drivers and late delivery fees for their customers.
    There is a business cost to delay. Just try, anywhere in 
America, to get a plumber who will be there between 8:00 and 
noon. Plumbing contractors told us that they used to make eight 
or nine calls a day; now they are doing four. That means their 
business is less efficient. Because they can't get through the 
congestion.
    So we have to make these changes. We have to deliver 
projects more expeditiously. We have to put people to work 
faster. We have to get goods moving more efficiently. We do 
this with freight movement corridors and a whole host of 
investments for major metropolitan areas of the country. But we 
have to finance--we have to have a $450 billion investment in 
America's future of transportation, recommended by two 
independent national commissions.
    So what I am proposing for consideration is an idea that I 
will attribute to Mr. Basso of AASHTO, who many years ago 
worked on this idea for AASHTO. And at the time, I said, "Jack, 
that won't work." I have come back to him and said, "Jack, it 
has to work."
    It is a modification of a bonding proposal. We would 
direct--we, the Congress, would direct the Treasury to deposit 
$130 billion in bonds, Treasury bonds, into the Highway Trust 
Fund to be repaid with revenues from the Highway Trust Fund out 
into the future. And we would delay the repayment for the 
first, perhaps, 4 years, giving the economy time to recover, at 
which time we would need to increase the highway user fee, 
probably by 2014, 2015, and begin repaying the Treasury bonds, 
capital and interest, at the Treasury rate of interest. That 
would give us, with a baseline of the current revenues into the 
trust fund, $450 billion over 6 years.
    Mr. Wright, what do you think about that?
    Mr. Wright. I think it is a wonderful idea. Let's get 
started.
    Mr. Oberstar. I am hitting you cold. You haven't had time 
to see this or think it. But, from your perspective, a 
contractor, business operator, what do you think? Do you think 
it is a good, workable idea?
    Mr. Wright. It sounds workable to me, sir, yes. I would 
order some equipment.
    Mr. Oberstar. Thank you.
    Mr. Wharton, what do you think here? You are on the firing 
line.
    Mr. Wharton. Well, Chairman Oberstar, I think that it is 
definitely needed. As I mentioned in my testimony, we see a 
cliff, and unless there is a long-term solution, you know, 
there is going to be a lot more people looking for work and a 
lot of businesses closing down. So we need to act, and we need 
to act now.
    Mr. Oberstar. Ms. Richardson, you are a practitioner at the 
State level. What do you think? Is this workable? Can you work 
within that framework?
    Ms. Richardson. Well, Chairman Oberstar, if you and Jack 
Basso say it is workable, I would hate to argue with either of 
you, the two of you together.
    It certainly sounds interesting. I have not heard that 
discussed and haven't thought a lot about it. The idea of 
waiting 3 or 4 years for the economy to recover would be an 
appealing part of it, you know, would allow to appeal to some 
of the dissenters, in terms of increasing funding.
    I guess one of the other questions would be, is 15 or 20 
cents going to be enough? But you guys have done the math.
    So I think it is very intriguing, very intriguing.
    Mr. Oberstar. Well, this is the first time it has been 
discussed in an open forum. I have tried it out on small groups 
here and there and economists.
    Ms. Fisk, Mr. Luna, what do you think about the future of 
transportation?
    Ms. Fisk. Mr. Oberstar, Chairman, I believe that 
transportation is the backbone of United States. The Eisenhower 
system, set forth back then, really put the plantation down for 
us. And I think we need to move forward. And I think your bill, 
or proposal, there actually could very well work, and I support 
it. Thank you.
    Mr. Oberstar. Thank you.
    And, Florentino, mi amigo, go ahead, please. Do you think 
we need to make this kind of investment in the future of 
transportation?
    Mr. Luna. Yes, it is necessary for everybody, for business.
    Mr. Oberstar. And if you had to spend another 10 or 15 
cents on gasoline every time you filled up, knowing that it 
makes it possible to make the investment in a transportation 
system that will create employment opportunities, do you think 
it is worth it?
    Mr. Luna. Yes, we have to.
    Mr. Oberstar. Thank you.
    Jeff Freeman, we don't fund the wastewater treatment system 
like we do surface transportation, but, just as a consumer of 
the system, what do you think?
    Mr. Freeman. Mr. Chairman, I think it sounds like a very 
innovative idea. And, you know, actually, that is, tying it 
back to what I know more about, with the clean water revolving 
fund and wastewater financing, that was really--the key to the 
success of the program is it is an innovative and, sort of, a 
different approach to how financing is being done for municipal 
wastewater treatment, setting up these revolving funds and 
using then the ability to leverage money. And, you know, in 
that way, I think your proposal is similar. And I am all for 
it.
    Mr. Oberstar. Thank you.
    Madame Rugy, you are an economist, I take it.
    Ms. de Rugy. Yes.
    Mr. Oberstar. What do you think?
    Ms. de Rugy. I think that the government doesn't have any 
money, and, as you have mentioned, each time the government 
spends money, it needs to take it somewhere in the economy. And 
it makes it very hard to actually measure the return, the true 
return on investment of the dollars invested by the government.
    Fifteen cents, you know, might not seem like a lot to you, 
to me. This 15 cents is on top of the dramatic increase in 
gasoline prices that we have seen certainly in the last 10 
years. So, sure, it is a marginal increase. But, more 
importantly, I really think that, you know, measuring the 
return on investment that we make is--I mean, just let me give 
you an example.
    I mean, measuring the performance of government action by 
how much it spends seems to me like the wrong measure of 
things. Like, I can go to the grocery store and spend $100. 
What matters is not so much that I have spent $100, but it is 
what I have bought with it, right? Whether, with this, I have 
been able to actually buy enough food to actually feed my 
family, and not just with junk but with things that are 
actually good for them.
    And I feel very often in all the conversations that go on 
is that unfortunately the performance of the government is 
measured more by how much it spends than compared to how much 
it produces. Even when we talk about how many jobs were 
created, not to mention that it is extremely hard to actually 
measure, as I have said in my oral testimony, but very often 
these measures are very arbitrary, and they don't really quite 
look at how much economic growth has been produced. So, for 
instance, you can spend government dollars to create a job to 
dig a hole and create another job to fill this hole. Has this 
created economic growth? Maybe. Maybe not.
    And I think it would be--you have talked a lot about 
accountability. It would be very, very, very important to 
actually think very, very hard about how we can better measure 
the return on government dollars, our dollars. Because, again, 
for the government to be able to spend money, it needs to 
either tax it, borrow it, or print it. And all of these things 
have consequences for us who live in America.
    Mr. Oberstar. In the surface transportation program, 
however, as in our aviation program we have an Aviation Trust 
Fund, we have the Highway Trust Fund. The revenues collected at 
the gas pump do not go into the general Treasury of the Federal 
Government, they are deposited into the Highway Trust Fund, and 
the U.S. Treasury pays interest on those revenues deposited in 
the trust fund, and they are allocated and reserved only for 
highway and transit funding according to the formulas set forth 
by the Congress.
    In 1956 our gross domestic product was $345 billion. Today 
it is $13 trillion. In 1956 there was one car per household. 
That car drove on average 6,000 miles a year. Today we have, on 
average, three cars per household that are driving 15,000 miles 
each. We had 1 million trucks in America in 1956. We have over 
7 million trucks on our highways today.
    Our economy depends on mobility, on movement of people and 
goods. The Interstate Highway System and the National Highway 
System that which the Interstate is now included, have been the 
fundamental reasons for which our economy has expanded at the 
rate that it has grown.
    And we can track these figures with the annual reports of 
the Texas Transportation Institute that measures the cost of 
congestion. In the 75 major metropolitan areas of this country, 
congestion last year cost those metropolitan areas $86 billion. 
People are spending a week longer in their cars than they would 
if they could drive at posted highway speeds. They are buying 
four and five tanks of gasoline more than they would if they 
could drive at posted highway speeds. They are also 
experiencing higher maintenance costs on their vehicles because 
the road surface is in such poor condition that they are buying 
more shock absorbers and more tires and more other equipment 
for their vehicles.
    Where we improve the roadway, where we make it more 
efficient and safer and save lives, we are improving our 
economy. The Highway Trust Fund is different from other 
government investments is what I am saying, and so with the 
aviation program.
    Ms. de Rugy. Can I add something?
    Mr. Oberstar. Yes.
    Ms. de Rugy. I am not a transportation expert, but I have 
read a lot of reports about transportation funding. And I 
remember in particular a pretty groundbreaking report produced 
by the Urban Institute in 2004, I believe, where they actually 
looked at the economic literature on transportation spending 
and acknowledged that for a very, very long--in fact, 
economists agreed that investments in transportation was 
essential to economic growth for exactly the reason that you 
have talked about it, and that it had become not clear at all 
anymore. We seemed to have hit a threshold.
    However, maybe there are other ways to do everything you 
want to do, such as actually making the consumer pay more of 
the cost of the roads they are using. For instance, I will give 
you an example in France. The A-14 highway, which is a 
privately owned highway in Paris, that goes out on the west to 
Rouen and Caen and all these, it is privately funded and it has 
a fee; and it actually makes a profit and has actually allowed 
massive decongestion of the Parisian highway system, in 
particular on Fridays and weekends, Sunday, when people want to 
come in and out of the city.
    So maybe there is something to be said to actually look at 
France for this. And this is not a government solution. 
Obviously it was facilitated by the government that allowed, 
but it was privately--it is privately owned and it is actually 
working. Obviously a choice is given to people to pay that fee 
which is pretty expensive, but what it does. It actually allows 
to reduce the congestion on other roads. And that is where my 
expertise ends.
    Mr. Oberstar. Same with the bridge in the south of France 
to Spain, massive, I have seen the video of the building of 
that beautiful structure, massive structure, but that was 
funded by tolls. Toll system.
    Ms. de Rugy. So maybe you have to look outside of the way--
--
    Mr. Oberstar. In fact we do that in this bill. We provide 
in our program for metropolitan mobility and access an array of 
funds for those 75 major metropolitan areas of the country who 
have the worst congestion, to use tax credit bonds, tax-exempt 
bonds, public-private partnerships, design-build authority, 
congestion pricing, tolling, but only for new capacity, not 
tolling existing roadways that have already been paid for by 
the users, and provide those metropolitan areas new financial 
tolling, new financial capabilities, as I said, and include 
tolling as you have suggested, because those are unique 
situations.
    But we are not going to allow tolling of the Interstate 
Highway System. It has already been built and paid for.
    Ms. de Rugy. I was talking about something else.
    Mr. Oberstar. Yes. New capacity that is also a need that we 
have.
    Ms. de Rugy. It is also possible that if you allow--if 
there is a profit to be made--and I believe that in cities that 
are very highly congested there is a gigantic profit to be made 
by a private developer--that they would make it independent of 
government bonds or incentives and that would save taxpayers' 
money.
    Mr. Oberstar. The California legislature approved a toll 
authority for a private contractor under bidding process to 
build, as they proposed, two lanes of highway, California 90. 
The tolling company won the bid. They built 20 miles of this 
roadway and set the tolls, but few people used it. The tolling 
company was on the verge of bankruptcy.
    The State, however, was experiencing increasing congestion 
on the adjoining State highways with rising fatalities and 
injuries. So the State proposed to build two additional lanes 
of freeway in that corridor. The tolling authority sued the 
State because they had provision in the State legislative 
authorizing bill for exclusivity in the corridor, no 
competition from any other source. The State of California 
wound up acquiring the tolling authority and building two 
additional lane miles of roadway and retired the tolls and 
continued the roadway. So not in all situations does tolling 
succeed. But there is an appropriate place for it in the future 
of transportation and we provide for it in this legislation.
    Ms. de Rugy. Maybe the fact that this private company was 
guaranteed no competition had to do--led to actually this 
company not to do the best job it could.
    Mr. Oberstar. No. The tolls were too high. That was the 
conclusion.
    Mr. Miller, for the future of transportation, we provided 
funding in this bill. Mr. Cummings asked you the question, What 
happens when the authority to use capital account moneys for 
operating expense--in our legislation, we provide authority for 
up to 10 percent of your capital account for smaller systems to 
use in their operating account and only 5 percent for the 
larger systems. There is considerable tension within the 
transit community over that provision.
    What do you, what thoughts do you have, not necessarily 
percentage, but what is the balance, what is the proper balance 
here between operating account and capital account?
    Mr. Miller. Well, Mr. Oberstar, it certainly is a 
challenging question for transit because, as you know, most of 
the smaller systems who have the ability to use all of their 
Federal funds for operations, at least all of--most of the 
smaller systems in Iowa under 200,000 do use all of their money 
to offset local funding. Des Moines is an area over 200,000, so 
we cannot use our regular funds for operations, only capital, 
and we are saving jobs with the great ability to use 10 percent 
of our stimulus dollars.
    Moving forward, certainly again, like some of the other 
folks have testified, there is a cliff; these are one-time 
funding and we are not sure exactly how we are going to be able 
to handle it moving forward. We would certainly be supportive 
of a limited ability to use some of our Federal funds for 
options in another stimulus bill should that become available 
or longer term.
    Mr. Oberstar. This is part of the tension within our 
surface transportation program. At the beginning of the year, 
the first 15 years of the Interstate Highway Program, the 
Federal funds were provided for capital account for 
construction. Only in the late, or only in the mid-seventies 
did Interstate maintenance become a category of funding.
    The principle was the Federal Government from with the 
Highway Trust Fund would provide 90 percent of the cost of 
building this new system of roadways--divided, access 
controlled, superhighways--and the States would then maintain 
it. But as the Interstate aged--and it is 1 percent of the 
highway mileage of the entire United States, it carries 26 
percent of the traffic, of the vehicle miles traveled, go on 
our Interstate--it began to wear down.
    And, reluctantly, the Congress provided a limited amount of 
funding for Interstate maintenance that eventually grew to 
larger numbers as, on average, 15 percent of the Interstate 
needs to be rebuilt almost every year in order to keep pace 
with the growing demands on the system and the deterioration of 
the bridges. Half of the bridges of this country were built in 
the 1960s with Interstate Highway funds.
    So similarly with the transit. The original concept was 
Federal partnership with transit agencies would be to provide 
the capital to acquire the equipment, and the local entity 
would maintain it, and generally that was a 50/50 proposition. 
In some cases it is a little bit higher.
    We are moving into--we are now firmly in the post- 
Interstate era of transportation. We are in an intermodal era, 
long overdue, but now thinking intermodally, and so it is 
appropriate I think to provide some Federal--some level of 
Federal funding for transit operations. But we are still-- it 
is still an open question of just how much that should be.
    We have set some goals in this legislation, but that will 
be a continuing dialogue. So I urge you and APTA to think more 
about that subject matter and help us move forward.
    Mr. Miller. Yes. As I mentioned in my testimony, when I was 
out at public meetings these last few months, talking about our 
service reductions we were going to have to make because of the 
drop in the economy, it was a very tough question to answer: 
Why are you buying buses and spending all this capital money 
and why can't you save my route?
    And it is a tough question to answer to anybody, to explain 
that that is how we have to do it. So yes, as we are moving 
forward, I think there needs to be a balance.
    Mr. Oberstar. Exactly. In the stimulus we thought long and 
hard about that issue. And Bev Scott, the director of the 
Atlanta system, says it doesn't make sense, on the one hand, 
for you to provide us funds to buy new buses and for us, on the 
other hand, to lay off drivers of existing buses in the system. 
So give us some flexibility to keep the existing system 
operating as well as replace our fleet and make it more more 
efficient and reduce our cost of operation.
    Well, all of you have been very thoughtful and very 
contributory in your responses and you have helped shape a view 
of the stimulus up to this point.
    My judgment is, it is doing what we intended; 1,200,000 
jobs created, and more to come; 35,000 lane miles of highway 
improvement improved; 1,200 bridges restored, replaced, 
rebuilt; over 10,000 transit vehicles acquired. That has 
created jobs in the production sector building those buses, 
building those rail cars. And we are seeing the effects all 
reverberate throughout our economy. We need to sustain it. We 
need to continue it. And I thank all of you who have made your 
contributions.
    Madam de Rugy, [speaking in French] And everyone else, you 
only get it in English. Thank you very much for your testimony. 
Keep up your great work, each in your respective ways.
    For those who are on the front lines, Ms. Fisk, Mr. Luna, 
keep driving, keep building.
    The Committee is adjourned.
    [Whereupon, at 2:10 p.m., the committee was adjourned.]
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