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





      RECOVERY ACT: PROGRESS REPORT FOR INFRASTRUCTURE INVESTMENTS

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

                               (111-133)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             July 27, 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           BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania  ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York               AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin               PETE OLSON, Texas
STEVE COHEN, Tennessee               TOM GRAVES, Georgia
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
HANK JOHNSON, Georgia

                                  (ii)













                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Duit, James A., President, Duit Construction Company, Inc., 
  Edmond, Oklahoma, on behalf of the American Concrete Pavement 
  Association....................................................    26
Gannon, Kevin, Vice President, Northeast Asphalt Inc., on behalf 
  of the American Road and Transportation Builders Association...    26
LaHood, Hon. Ray, Secretary, U.S. Department of Transportation...     6
Macleod, Brian, Senior Vice President, Gillig, LLC, Hayward, 
  California.....................................................    26
Millsap, Steve, Assistant Vice President, Structures, BNSF 
  Railway Company................................................    26
Schneider, Bill, President and Cheif Executive Officer of Knife 
  River Corporation, on behalf of the National Stone, Sand and 
  Gravel Association.............................................    26

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Mitchell, Hon. Harry E., of Arizona..............................    60
Oberstar, Hon. James L., of Minnesota............................    61
Richardson, Hon. Laura, of California............................    66

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Duit, James A....................................................    70
Gannon, Kevin....................................................    80
LaHood, Hon. Ray.................................................    92
Macleod, Brian...................................................    97
Millsap, Steve...................................................   101
Schneider, Bill..................................................   111

                       SUBMISSIONS FOR THE RECORD

Committee on Transportation and Infrastructure, Majority Staff:..
      Chart entitled, ``Bridges Improved by Recovery Act Highway 
        and Bridge Funds''.......................................  cvii
      Chart entitled, ``Miles Improved by Recovery Act Highway 
        and Bridge Funds''.......................................   cvi
      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, 2010)''.......... xcvii
      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 June 30, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Clean 
        Water State Revolving Fund''.............................    cv
      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 June 30, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Highways 
        and Bridges''............................................   civ
      Report entitled, ``The American Recovery and Reinvestment 
        Act of 2009 Transportation and Infrastructure Provisions 
        Implementation Status as of July 16, 2010''..............    xv
Millsap, Steve, Assistant Vice President, Structures, BNSF 
  Railway Company, response to request for information from Hon. 
  Napolitano, a Representative in Congress from the State of 
  California.....................................................   108





 
    RECOVERY ACT: PROGRESS REPORT FOR TRANSPORTATION INFRASTRUCTURE 
                              INVESTMENTS

                              ----------                              


                         Tuesday, July 27, 2010

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The Committee met, pursuant to call, at 10:08 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 for the purpose of the 
twentieth in our series of hearings on the Recovery Act. This 
hearing today marks 1,000 hours of hearings the Committee of 
Transportation and Infrastructure has held in the 110th and 
111th Congresses; 308 hearings, 2,144 witnesses, and our 
twentieth in the series of oversight and accountability 
hearings on the Stimulus Act, which I committed to do when I 
advocated for a substantial investment in the Nation's 
infrastructure as part of a stimulus program to put Americans 
back to work, rebuild our highways and bridges and transit 
systems, aviation and waterway systems, and all that makes 
America move and produce.
    These jobs created by this extraordinary investment--and I 
would just point out that in September of 2008, this 
Subcommittee reported and the House passed a stimulus bill. Our 
portion of it was $30 billion. It was a much more modest 
program than we ultimately enacted. It was to accelerate 
funding out of the Highway Trust Fund to give States a 2-year 
respite from paying their 20 percent matching share, so that, 
in fact, there would be 100 percent funding, but ultimately the 
States' share would have been reclaimed from future revenues 
out of the Highway Trust Fund. Passed the House. We had 
substantial Republican support; Mr. Mica was an advocate for 
that legislation. And unfortunately, the President threatened 
to veto, the Senate stalled in its consideration, and no 
progress was made until after the election.
    We had a change, a change in direction, a change in 
leadership, and President-elect Obama said, we need to put 
America back to work. He supported what we had advocated from 
our Committee and even more. So February 17, the stimulus was 
signed into law, then State DOTs went to work.
    I just observe that, and further observe, that in 1956, 
when President Eisenhower signed the interstate highway 
legislation in June of 1956, by September State DOTs were at 
work. They weren't called DOTs, they were called highway 
departments at that time, and projects got under way.
    We actually moved much faster than in 1956 under this 
stimulus, because the State DOT agencies were ready, the 
Federal Highway Administration was ready, the U.S. Department 
of Transportation under the leadership of this great Secretary 
was ready. Since then we have 17,024 highway, transit and 
wastewater projects under construction, $32.7 billion, 86 
percent of the total available formula funds. Project work has 
been completed on 6,920 projects, totaling $5.3 billion. All 50 
States have signed contracts worth 100 percent of their 
Recovery Act wastewater projects. Forty States have signed 
contracts up to 90 percent of their Recovery Act highway funds.
    During the first year of implementation, these projects 
created 350,000 direct, on-project jobs. Total employment, and 
we will hear it later today, from the sand and gravel pit 
operators, Readimix, the asphalt operators, the steel service 
sector producing rebar, and guardrails, and I-beams and 
fenceposts, all that created additional jobs in the supply 
chain that reached 1.2 million jobs. So in total the cumulative 
effect is that we have payroll expenditures of $3 billion. 
Those workers are paying $610 million in Federal taxes alone, 
and those workers on the job site have avoided $509 million in 
unemployment compensation checks. That is putting America back 
on the road to recovery.
    Much more needs to be done, but we are under way. If we had 
had $300 billion, as I have said many times in many venues, 
instead of a tax cut for people, we would have 6 million jobs 
this summer.
    But nonetheless, the investment made shows great results: 
18,718 highway, transit and wastewater projects in all 50 
States; $35 billion under contract; 92 percent of the total 
formula funds available for our highway, transit, and 
wastewater projects under way; 50 States, 5 territories, the 
District of Columbia have signed contracts for 18,000 projects, 
totaling $33 billion. That is 88 percent of the funds. Work has 
begun on 17,000 projects in all 50 States. Work has been 
completed already on 6,920 projects, totaling $5.3 billion.
    I say that, and it is important to emphasize the work 
completed, because there were the naysayers at the beginning of 
this stimulus initiative that it won't work, they don't outlay, 
the outlays won't come fast enough to do any good. Well, ask 
those 1.3 million people on job site who are working now about 
things not--they are working. They have jobs, and projects have 
been completed.
    The result is also impressive: 35,399 lane miles of highway 
improvement; 1,264 bridges replaced, restored, rebuilt, 
resurfaced; and 10 million metric tons of concrete poured or 
will be poured, resulting in revenues of $950 million for the 
Readimix and its cement partner.
    Federal Transit Authority reports that transit investments 
resulted in rehabilitation or acquisition of 12,136 buses, rail 
cars and paratransit vans; 4,870 passenger facilities; 324 
maintenance facilities. Amtrak will, when it has completed its 
work, have replaced 1,300,000 concrete ties, 281,000 already 
completed, 60 Amfleet cars, 21 superliners, 15 locomotives, 270 
stations.
    Airports, the aviation investments resulted in 155 runway 
improvements at 139 airports, accounting for 11 million annual 
operations, that is, take-offs and landings; 83 taxiway 
improvements at 78 other airports that accommodate 8.1 million 
annual operations; and 25 projects that modernize air route 
traffic control centers, where their air traffic controllers 
work, and many of those are 30 and 40 years old, and they 
needed upgrades.
    In addition, the total projects announced beyond highway 
and wastewater treatment is 19,610 projects, totaling $62.9 
billion. All 50 States have met their requirement that 100 
percent of the Clean Water State Revolving Funds be under 
contract within 1 year of enactment. They have met that goal. 
Clean water investments will upgrade and maintain publicly 
owned treatment works, mitigate nonpoint source pollution, 
promote estuary management for 64 million people.
    I would just note in my own State of Minnesota, which was 
allocated $73 million, the very creative work of our State 
Public Facilities Authority, Terry Kuhlman and Jeff Freeman, 
because of bids coming in 25 and 30 percent lower than design 
estimates, have leveraged those funds into a $510 million 
program. From the 73 million, they got four or five times as 
much investment as initially expected. And 58 Superfund sites, 
155 of the 185 brownfield projects under way.
    The Corps of Engineers has committed $3.9 billion for 793 
projects. The Corps will repair or improve 155 lock chambers, 
and improve the harbor and waterway channels that serve 2,400 
commercial ports. Of course, also under way on 1,132 flood risk 
management projects to improve dam and levee safety and 1,000 
other projects to maintain and update recreation areas.
    GSA has awarded contracts for 425 projects for upgrading of 
Federal buildings. The U.S. Economic Development Administration 
has broken ground on $122 million for 54 of 68 planned 
projects, and the U.S. Coast Guard Bridge Alteration Program 
has begun four planned bridge projects totaling $142 million.
    It is breathtaking, in about a year and 4 months. And for 
those who want us to believe that the recession started on 
January 21st, 2009, that 7 million people were laid off on 
January 21st, 2009, I say, nonsense. The recession started in 
December 2007, and we are beginning the job and made a great 
start on clean-up and putting America back to work and 
rebuilding its infrastructure. And yet I would observe that of 
those 35,000 lane miles of highway improvement, that represents 
4 percent of the backlog of needs. Therefore, we have to move 
ahead with our long-term 6-year investment program.
    With those comments, I now welcome and yield to my good 
friend and colleague Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman, and thank you for 
convening this hearing. We had agreed to closely monitor the 
progress of stimulus. You kept your word, and this is--what is 
this, the twentieth?
    Mr. Oberstar. Twentieth hearing.
    Mr. Mica. So I think it is very worthwhile to examine where 
we have gone with the stimulus Recovery Act and particularly 
our portion of responsibility.
    I am pleased to see our Secretary back. He is still smiling 
at me in spite of some differences of opinion that we have, Mr. 
Chairman, between the Secretary and the Committee, but I know 
his intent is the same as ours, and that is to get America 
working and get our infrastructure projects under way.
    I might give a word in recollection of our efforts. Mr. 
Oberstar and I came back even before stimulus legislation was 
before the Congress in January. We agreed in a bipartisan 
fashion to commit to a very robust, substantial infrastructure 
bill to be ready. The Speaker had asked to us do that. We met 
that request, we submitted it, and as we now learn as part of 
history, the money was cut by more than half that we had 
proposed for legislation.
    I had also suggested that one of the things that undermined 
us is when there was an evaluation, I guess it was the 
Congressional Budget Office and others looked at it and said it 
would be difficult to spend the money that we had proposed in 
the time frame we had proposed because of the various 
requirements, State and Federal requirements, to get money out. 
Actually I had proposed to the Senate speeding that process up. 
And it is ironic that they used that to cut the money in half.
    It is ironic that we sit here today with only--and again, I 
take it from the Web site of DOT and the administration, we 
have only 30 percent of the Recovery Act money expended today. 
That is the latest figure that we have from your figures, 14.9- 
of the 48 billion actually spent and outlaid. Actually, Mr. 
Chairman, I think you cited obligated of 35 billion. We have 
figures of 37 billion, a little bit more than you had cited, 
has been obligated, although now we are facing issues of 
deobligation and also the problem of localities meeting their 
match. They have to work on a fiscally responsibility basis; we 
just keep printing money and adding to the deficit.
    The President had promised if we passed the stimulus bill--
and I know he reached a compromise with his tax cuts, with the 
spending, I think a third. We ended up with about 7 percent for 
infrastructure, 63 billion of which the Secretary has a 
responsibility over some 48 billion. And I know he struggled 
and has done everything he can in an honest and, I know, a 
concerted effort to try to get this money out.
    I talked to State transportation secretaries and folks 
around the country, and they have indeed heard the Secretary 
and the administrations were to get the money out. But the 
simple fact is we have only gotten 30 percent out. The simple 
fact is we are going to have to find a way in the new 
transportation legislation to expedite this process, and we are 
going to have to find a way to get even money out there faster. 
Thirty percent just doesn't cut it 18 months afterwards.
    The scary thing about what has been reported today is that 
many of the jobs have already been completed. Did you hear the 
figures that the Chairman gave? Let me give you a little 
microcosm in Florida. Of 848 projects, 337 have already been 
completed. We are looking at about 40 percent of the projects 
already completed.
    The General Accounting Office states that 50 percent of the 
money that has gone out so far through DOT has been used for 
repaving. What does that tell you? It is simple: That money has 
already been spent; those jobs have already been expended, so 
to speak. So it is worrisome and troublesome.
    Furthermore, according to the go GAO and other reports, 
four of out of five of the stimulus jobs created so far are 
government jobs. The Associated General Contractors report 
that, in fact, we have a 20.1 percent unemployment in their 
industry, in the construction industry. So there is plenty of 
need, there is huge unemployment.
    The Obama administration said if we pass the stimulus, 
unemployment would not go over 8.8 percent. It, in fact, 
stayed, hovered right about 9.5 percent. My State of Florida, 
the current June unemployment, this is horrendous for Florida, 
one of our most viable economic States and national economic 
generators, we are at 11.4 percent. So it is troublesome that, 
while well intended, we would hope that we could have done even 
better.
    Now, with most of the jobs in repaving, and the jobs 
already come and gone, and four out of five of the stimulus 
jobs in the public sector, another scary thing is about to 
happen at the beginning or middle of September: 585,000 jobs 
were folks that were hired for the census, those are all, 
again, government jobs, and those people, we are already 
hearing from them, now are going to be seeking unemployment 
compensation.
    So we tried to do better, Mr. Chairman. I worked with you 
in that effort. We gave it our full measure. We have intended 
to have more folks employed. The report you gave today does 
cite some increase in jobs, but some of those, again, I report, 
are temporary, and we are going to lose more in the overall 
picture.
    I haven't even gotten into the teachers and what is 
happening to those folks who relied on stimulus dollars and 
were kept on for some time and now are being laid off in record 
numbers. And I guess it could have probably been worse, but we 
gave it our all.
    I am willing to roll up my sleeves. I think we have got to 
look at an expediting of getting this money out, whatever it 
takes. If we could build that bridge in your back yard in 437 
days that collapsed between Minneapolis and St. Paul on an 
emergency basis, I declare it is a national emergency to get 
some of the 9.5 percent unemployed employed, and the 11.4 
percent in my district, my State, working again, and the 
millions of people that want work rather than just a 
government--short-term government job or handout.
    So I will work with you from today through the next 
Congress that--both of us depending on the people to send us 
back--and with the Secretary--at least we know he will be 
here--and we will work with him in whatever position the voters 
cast us into to try to do even better.
    I yield back the balance of my time.
    Mr. Oberstar. I thank the gentlemen for those comments, and 
I state for the record that Mr. Mica was very participatory, 
very supportive of robust surface transportation investment for 
stimulus back in December.
    Mr. Mica. And I might say the Chairman and I were prepared 
to do a 6-year bill, didn't comment on that. We are still 
committed to that. That is our goal. We are going to find a way 
to do it. I am sorry we have a temporary measure in place. He 
has my full commitment. We may have an intervening election, 
but whatever occurs, and even in the interim of a lame duck, 
whatever it takes to get that, because I believe that that 6-
year bill will get more people to work than anything we could 
do in the United States Congress.
    I yield back.
    Mr. Oberstar. Six million jobs. And you are right, we 
reported that bill from Subcommittee and are ready to move on 
it.
    One thing that the green eyeshade folks at CBO and Office 
of Management and Budget don't understand, that in the surface 
transportation program, the jobs actually precede the outlays. 
People are actually working. They put in a full week's work; 
the contractor then bills the State; the State validates the 
work has been completed, pays the contractor, bills Federal 
Highway Administration, which then further validates that the 
State's records are right, and then sends an electronic 
payment.
    The jobs precede the outlays. I think Mr. Summers now 
understands that. He has told me, I am an advocate for this 
program now. We just need to get the rest of that crowd at CBO 
and OMB to understand that the jobs are ahead of the 
expenditures and the outlays.
    And all those people--we heard from Joyce Fisk, the human 
face of stimulus, at this Committee hearing earlier this year. 
She was called back to work as a truck driver for Knife River 
Construction and has since had her health insurance reinstated 
because she and her husband both put the 600 hours back on the 
job and now are paying their bills, paying their mortgage, and 
sending their son Austin to summer camp.
    Mr. Secretary, welcome. Glad to have you here. Thank you 
for your relentless advocacy. And you have been a different 
kind of stimulus. You have been around the country stimulating 
State DOTs to get those projects out the door. So we look 
forward to your testimony.

  TESTIMONY OF HON. RAY LaHOOD, SECRETARY, U.S. DEPARTMENT OF 
                         TRANSPORTATION

    Secretary LaHood. Mr. Chairman, thank you, and thank you 
for your leadership on the stimulus program and to all those 
who have been strong supporters of the stimulus program. Thank 
you for allowing those of us at DOT to carry out the mandate 
that we were provided, and also to Ranking Member Mica and 
Members of the Committee. We are delighted to be here to talk 
about the progress in getting neighbors back to work.
    We are, in fact, making great progress. When President 
Obama and this administration took office, the country was 
facing the worst economic crisis since the Great Depression. 
When Congress passed, with your leadership and others on the 
Committee who voted for it, and President Obama signed the 
Recovery Act into law, we together began the heavy lifting of 
implementing the most significant jobs and infrastructure 
legislation since the New Deal.
    Here we are 18 months later, and you see the results: More 
than 14,800 highway, rail, transit, aviation and shipyard 
projects in every State of the Union. Airport projects were 
first to leave the gate. A total of 326 were funded, and 70 
percent of those are now finished. Not a bad record.
    The of summer 2010 is the most productive Recovery Act 
season yet. For example, 6.5 times more highway projects are 
under way today than were under way a year ago. That is an 
increase from 1,750 projects last summer to more than 11,250 
this summer. While last summer's efforts improved about 9,000 
miles of highway, this summer's efforts will improve 30,000 
miles, the equivalent of 10 cross-country road trips.
    More importantly this major investment in rebuilding 
America is helping families weather the worst recession in 
generations. We are on track to hit 3.5 million Recovery Act 
jobs by the end of the year, at least 160,000 of which have 
already come from DOT-managed programs. These are not just 
statistics. I have traveled to some 80 cities and 30 States, 
and everywhere I go, people come up and thank us for the work 
that they now have and for the ability to take care of their 
families.
    The Recovery Act has created a very powerful ripple effect 
as contractors start buying new supplies and hiring new 
employees, as workers start spending more money, and their 
families have the ability to do what they need to do. And 
restaurants are also benefiting as well as many other community 
businesses.
    In Bear, Delaware, a woman named Tracy Capelli, owns a 
local restaurant, Capelli's Subs & Steaks, located not far from 
Amtrak's car restoration facility. Last year the business was 
so slow that Tracy had no choice but to lay off 10 employees. 
She was devastated. Then the Recovery Act helped Amtrak hire 50 
new workers, nearly all of whom had previously lost jobs in the 
auto industry. Now that these workers have jobs, they also have 
lunch breaks and money for family dinners. In turn, Capelli's 
Subs & Steaks is flourishing once again, and Tracy is planning 
to hire a dozen new employees for the fall season because of 
the Recovery Act.
    The same cycle occurs in communities across America and in 
sectors across the economy. Because of the Recovery Act, it is 
easier for countless folks to pay the rent, put food on the 
table, and prepare their kids for college.
    Now, we have a long way to go with unemployment higher than 
9 percent. Our work is far from over. But the Recovery Act is 
making a very real difference not just in bringing the economy 
back from the brink, but also in laying the foundation for 
long-term, sustainable growth and prosperity. We are grateful 
for the leadership of this Committee and the partnership that 
we have with the Committee, and we look forward to your 
questions.
    Mr. Oberstar. Well, I say, three cheers for Capelli's 
Steaks & Subs. And Bill Montgomery at Swinerton Builders and 
Rhea Mayolo, those are the human faces for recovery. Thank you 
for personalizing. It is so reassuring to hear.
    I now yield to Mr. DeFazio, Chairman of the surface 
Subcommittee.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Thank you for being here, Mr. Secretary. Thanks for your 
advocacy, and particularly I am appreciative of your 
initiatives on distracted driving.
    That said, I am perhaps going to raise some questions that 
will be a bit difficult. I saw the end of last week where you 
made a fairly definitive statement saying that for the 
indefinite future, you could anticipate no new revenues in this 
administration, requesting no new revenues for the Highway 
Trust Fund. And I would just like to square that with the 
excellent work your Department just did recently.
    For instance, last week you announced that we have a $77.7 
billion--B--billion-dollar backlog in transit. We know that 
this backlog is killing people. It has killed people here in 
Washington, D.C., and will kill people in other parts of the 
U.S. We have outmoded, obsolete, transit systems in a state of 
not very good repair. And our current investments will not even 
keep up the current state of poor repair and capital backlog, 
let alone begin to improve.
    We are investing now about 80 percent of what we need to 
invest just to maintain the existing systems in their current 
state of disrepair, and we are at about 60 percent or 50 
percent of what we would need to improve the systems and 
performance. And that is not building new systems, that is just 
given the legacy systems. And there is a heck a lot of places 
in the United States where we need to build out new systems. 
You know the phenomenal demand.
    I guess I just have to wonder, and then we can go over to 
the highway side, we have 150,000 bridges that are obsolescent, 
either functionally obsolete or structurally deficient, 150,000 
bridges; 61,000 lane miles are in poor or fair condition on the 
National Highway System. We are investing about two-thirds of 
what we need to maintain the current state of disrepair; that 
is, it is getting worse. Same as with transit. And, you know, 
we would need an additional $96 billion per year to make all 
the costs beneficial highway improvements and eliminate the 
bridge backlog. It would also mean, where we are making those 
investments, millions of jobs across the country would be 
created.
    So I guess I am trying to square your advocacy. I know you 
are under constraints. I am not quite so sanguine as the 
Chairman is, having had his meeting with Larry Summers at the 
White House, economic team has come around on the value of 
infrastructure investment. I certainly haven't seen any 
advocacy out of the White House for infrastructure investment. 
And when I list those needs, and I hear Mary Peters talking, 
which is saying, all we need is private-public partnerships and 
tolling, and then the Obama administration addition to that is 
an infrastructure bank, I just wonder how it is going to work.
    Let us take transit systems. There is no transit system in 
the world that makes money. We have this massive backlog just 
to bring it up to safe operating conditions. How are we going 
to do that? Are we going to double, triple, quadruple the fares 
and drive all the riders off? So how do you do that without any 
additional investment?
    And then on the roads, bridges and highways, 150,000 
bridges, are we going to toll 150,000 bridges so we can rebuild 
them or bring them up to snuff? Are we going to toll the entire 
Federal Interstate System so we can begin to bring that system 
up to snuff and make the investments we need?
    I mean, Mr. Secretary, with all due respect, I know that 
you are constrained by the people you work for or with, but to 
say that somehow we are going to seriously address these issues 
through tolling, through private and public partnerships, and 
with an infrastructure bank, it is not going to get us there. I 
think that is very sad.
    This is more of a speech than a question, but certainly I 
will give you the courtesy of responding, but I just don't see 
how those nostrums are going to begin to meaningfully address 
this huge, huge hole in the transportation infrastructure of 
the U.S.
    We have gone from being First World and the envy of the 
world--I kept saying Third World until my colleague Mr. 
Blumenauer said, you are insulting Third World countries. They 
are investing a higher percentage of their GDP in 
transportation than we are. So I have taken to calling us 
Fourth World; that is formerly First World, vaulting over the 
Third World countries to a system that is the envy of none.
    Secretary LaHood. Well, I can tell you this. There are 
people in the administration that get it when it comes to 
infrastructure, including the President. The economic recovery 
plan had $48 billion, 8 billion times more than we ever had for 
high-speed rail. That was the President's initiative.
    The idea that people at the other end of Pennsylvania 
Avenue don't get it is not quite accurate. Right at the top, 
the occupant of the White House gets it. He knows that 
infrastructure investments will put people to work. That is why 
we received $48 billion.
    Everywhere that I have gone, Mr. Chairman, 80 cities, 30 
States, what I have talked about is the fact that we want to 
work with Congress on the way forward for a transportation 
program. We support the lion's share of what is in Mr. 
Oberstar's bill. It is a good bill. The only thing that we 
need, the only thing, is about $450 billion. And you know as 
well as I do, the Highway Trust Fund is deficient, so I don't 
know if the courage is around here to do something about that.
    So the reason that I talk about tolling, public-private 
partnerships, the infrastructure fund is because we need to 
think outside of the box about how we are going to do all the 
things that the President wants to do, that Ray LaHood wants to 
do, that you all want to do.
    Look, there is no disagreement about what the needs are in 
America. You have cited them very well, and I don't disagree 
with that. I am on board. We love doing transportation projects 
at DOT. The people that work there love doing them. The 
President believes in it. We need to work together to find the 
resources to get a bill and to get the job done. If we do that, 
we are well on our way to meeting all of the needs that you so 
well stated.
    Mr. DeFazio. If I could, Mr. Chairman, I know you are 
indulging me in length of time, but if I could just focus and 
get to such a big subject.
    Transportation and Infrastructure was almost 4 percent of 
the stimulus, 4 percent. If we had eliminated the tax cuts and 
taken, you know, half or a third or a tenth of that money for 
transportation, we could have created a heck of a lot more 
jobs.
    But beyond that, just let us focus in on Chicago, because 
it is a small part of this, but they have about a $7 billion 
backlog on their transit system. Parts of the L are propped up 
with 2-by-4s. They are not 2-by-4s; they are like big wooden 
beams. That is great we make wooden beams in my district, but 
really it probably should have steel support so it can go more 
than 4 miles per hour over those sections. It is pretty sad, 
and this is the President's hometown.
    They received $240 million from the stimulus. They spent it 
in 30 days. They said, well, we easily could have spent a 
billion dollars in 30 days, because all we did is take projects 
off the shelf that we haven't been able to fund. And these are 
nice projects that have huge employment components because you 
are buying rail cars, and you are buying steel, you are buying 
computer systems, control systems. These have a huge multiplier 
effect.
    So I don't see how tolling, public-private partnerships, or 
an infrastructure bank gets us there because transit systems 
lose money. So if we raise--if we theoretically raise the fares 
enough in Chicago to pay for backlog, people wouldn't be able 
to ride the thing. There needs to be a Federal effort, Federal 
leadership on these issues, and, you know, I am glad we have an 
advocate in the White House, but somehow it hasn't translated 
to, you know, a real like, OK, we have got to get this done, 
how are we going to do it? Oh well, throw out what Mary Peters 
said, tolling, private-public partnerships, and we will add on 
an infrastructure bank so people can borrow money that they 
can't pay back.
    But anyway, I----
    Mr. Oberstar. The gentleman's time has expired with 
enthusiasm.
    Mr. Secretary, thank you for support for our bill. You said 
it many times, in many ways, in many places. I would just make 
an amendment, a small amendment, to your statement. We need 
$450 billion, as two national commissions have recommended, but 
of that 450- we really need only $140 billion more than is now 
coming into the trust fund, that is $20 billion a year. Surely 
we can sit down and figure out where that money will come from.
    Mr. Mica?
    Mr. Mica. Well, Mr. DeFazio has cited one of the needs, 
which is financing, and you also mention the 450-, and the 
Chairman has also reiterated that need. Are you prepared now to 
give us any recommendation? Are you going to continue 
advocating the gas tax increase as an administration policy, or 
do you have any ideas that you want to give us for raising that 
revenue?
    Secretary LaHood. Well, Mr. Mica, I have been in this job 
18 months. I think if you look at everywhere I have been and 
every speech I have given, I have never advocated a gas tax. 
The President is opposed to raising the gas tax. You well 
stated it, as others have: We have already 10 percent 
unemployment in America. People can little afford to buy a 
gallon of gasoline, let alone if we were to raise the tax on 
it. I do not advocate, the administration does not advocate, 
raising the gas tax.
    Mr. Mica. I think that your pronouncement--and I talked to 
some of the press earlier today basically on that subject and 
said that the gas tax is dead. I am glad to hear you join me in 
declaring it dead on several bases.
    First, we have had 18 months to consider that. Secondly, 
the elections are coming, and I think there is a conservative 
wave coming on both sides of the aisle. I think there will be 
conservative Democrats, and a much more conservative overall 
Congress, and conservative Republicans. I think the last thing 
that people would do when they come back to Congress and the 
new session is to open the discussion around increasing the gas 
tax. I am pleased that you join me at least in facing that 
reality.
    I think we do have to look at other ways. Mr. DeFazio has 
recommended some; I am willing to look at all the others, a 
fair way to pay. I don't believe and infrastructure bank like 
the administration--I think you proposed 25 billion for is it 5 
years, I believe, or 6 years?
    Secretary LaHood. It is about 4 billion a year. Well, 4- to 
6 billion, somewhere in that range.
    Mr. Mica. I would agree with Mr. DeFazio, I think that that 
is a very small amount. If you take the projects--for example, 
transit projects in New York, we have got three $7 billion-plus 
tunnels. You can go to almost any community and find a 
multibillion-dollar list.
    When we asked Florida for a submission of projects that 
they would like to do, they give us $6.9 billion worth of 
projects of which they are going to get about 1.3 trillion--I 
am sorry, 1.3 billion. I wish we had that trillion figure.
    But in any event, the difficulty is also in trying to get 
the money out. I know you have made a sincere effort. You have 
hammered State secretaries and others and tried to get that 
money out. Would you be willing--now, Mr. Oberstar and I had a 
provision in our draft to speed up the time by about 50 percent 
of the processing time. And we have got to do something to get 
that money out there. Would you be willing to commit to us 
today that you would support the 50 percent? I would like to 
take it to cut it by three-quarters of the time, if possible. I 
know you haven't seen the particular, but that is one of the 
issues that we face is getting the money out now or in 6 
months.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Mica. Yes.
    Mr. Oberstar. The references made by Mr. Mica to the 
provision in our bill reported from Committee for an Office of 
Project Expediting in both the Federal Highway Administration 
and Federal Transit Administration, with concurrent review of 
permitting by all of the responsible Federal, State, local 
agencies, get in the room together at the beginning of the 
project so that those mill and overlay projects that have taken 
3 years could be done in 3 months, as we have seen with the 
stimulus. We have seen these projects expedited. And transit 
projects that take on average 14 years from idea to ridership 
could be done in 3 years instead of 14 years by concurrency of 
review and resolving bottlenecks. That is what is in our bill, 
and I think I have heard you reference that. So I yield now for 
you to respond.
    Secretary LaHood. Well, you all know that we changed the 
criteria for New Starts programs, which enables now a lot of 
different criteria to be considered, and it will short-circuit 
the amount of time. It will not take 14 years anymore for New 
Starts, and we were able to do that.
    Any time we can get money out the door quicker, we would 
like to do that. We are following the letter of the law, I 
would tell you that. We are doing what it says to do in the 
economic recovery plan that was passed by Congress. So it is 
not for a lack of not wanting to get the money out quicker, it 
is for making sure that the money is spent correctly, that all 
the boxes are checked, that we are doing what Congress wanted 
us to do.
    Mr. Mica. Well, again, we tried in stimulus--the other body 
said not no, but hell no to speeding up the process, so we are 
all stuck in the mire of existing law regulations.
    But I want to go fast forward. We talked first about 
financing, and you agreed with me on the death of the increase 
in the gasoline tax. We talked a little about infrastructure 
bank, and, quite frankly, I didn't get to finish my point, but 
I think we should be looking in the neighborhood of a $250 
billion infrastructure bank and finding ways to dramatically 
increase the amount of money rather than 25 billion.
    Finally, on transit, Mr. DeFazio went into that a bit. We 
found the GAO indicated that only 1 percent of transit 
obligations were used for operating expenses. We gave them the 
ability to look at using up to 10 percent.
    Now, I had also advocated--we have seen the problems we 
have seen with safety, like in the Metro system. And these 
folks are also hard pressed because they have had ridership 
down, revenues down. And I have advocated that we add some 
flexibility in Federal money, and our first priority, you 
stated, and I stated, and Mr. Oberstar on every occasion has 
stated that safety is our number one priority, and yet we 
continue to prohibit those Federal monies to be used for 
safety.
    Are you willing to weigh--I don't--are you willing to agree 
with us on some of that as a priority?
    Secretary LaHood. Well, we have promoted a transit safety 
bill.
    Mr. Mica. But you can't use Federal money under current 
guidelines. Could we do that? Would you agree to doing that?
    Secretary LaHood. Well, if you look at our transit safety 
bill, we want you all to give us the authority to get into the 
transit safety business and to help transit districts have some 
opportunity to really work on----
    Mr. Mica. The way your proposal is drafted, it still 
doesn't allow the Federal funds to be used. And I would set 
that as a first priority and allow that money to be directed 
for those funds and specifically designate it for safety.
    Mr. Oberstar. That is a matter that we will have continued 
discussion with.
    Mr. Mica. OK.
    Mr. Oberstar. And we will pursue this.
    Mr. Mica. If the Secretary would support us, we could get 
that done in a whiz bang, and it is important.
    So I hope it is something you will think about, Mr. 
Secretary, and, again, we are pleased to have you here and work 
with you.
    I yield back.
    Mr. Oberstar. Before I yield to Mr. Schauer and the Chair 
to Mrs. Napolitano, I just make an observation on the 
gentleman's comment about a conservative wave. I think that 
wave against the gas tax would come as a huge surprise to 
Dwight Eisenhower, who proposed the 3 cent user fee to launch 
the Interstate Highway Program and Federal Highway Trust Fund. 
It would come as a great surprise to that archetype 
conservative Ronald Reagan, who signed a 5 cent increase in the 
gas tax, saying it is budget neutral; the users are paying for 
the system; it will cost the average user the equivalent of two 
shock absorbers in a year. It will come as a great surprise to 
that other conservative George H. Bush, who signed a 5-cent 
increase in the user fee, with 2-1/2 cents of that going for 
deficit reduction for a while.
    I think that so-called conservative wave is going to turn 
out to be a little ripple, and people are going to come to 
their senses and say, this Highway Trust Fund, this user fee 
that has been in place for 54 years has been the most 
successful--outside of Social Security the most successful 
social and environmental and transportation investment in the 
history of the country and in the rest of the world. Other 
countries come and admire what we have done with the Highway 
Trust Fund and our financing system. And we are going--I think 
we are going to see this turn around.
    At this point I yield the Chair because I have to run off 
to another event.
    And Mr. Schauer is recognized.
    Mr. Schauer. Thank you, Madam Chair.
    Mr. Secretary, thank you. Particularly I want to begin by 
thanking you for your Buy American efforts and support of 
American manufacturing as it relates to new railcars and 
rolling stock. I am fully with you, and we will be pushing 
legislation to make things in America. Thank you.
    I would like to change the subject, though, something you 
may know about. Sunday night or Monday morning in my district, 
a Canadian pipeline failed, leading to a spill of a million 
gallons or more of crude oil into Talmadge Creek near Marshall, 
Michigan, not far from my hometown of Battle Creek. The 
Enbridge pipeline has migrated into the Kalamazoo River. Some 
residents have been evacuated, and fish and birds have been 
killed. I never would have imagined an oil spill in my district 
in southern Michigan. The environmental impact could be 
devastating.
    My staff on scene is assisting with locating sites for the 
remediation effort, and I want to let any residents out there 
that may be watching, they can contact me at my district office 
toll free at (877)737-6407 for assistance.
    Mr. Secretary, in a disaster like this, after very heavy 
rainfalls we have experienced, every second counts. My goal is 
to make sure that every necessary resource is brought to bear 
to contain the spill and minimize its impact.
    There is a Superfund site, you may know, Mr. Secretary, 
about 35 miles downstream to the west in Kalamazoo County. This 
oil cannot, must not get to that site and mix with the PCBs 
that are present there.
    I have personally contacted all Federal agencies and the 
company responsible, Enbridge, to express the deep concerns of 
the people of Calhoun County and press them to swift action to 
stop the spill, clean it up, and ensure there is no long-term 
impact from this spill. I will accept nothing less.
    Mr. Secretary--and I am getting to a question, or more a 
comment than question, there is an embedded question. I spoke 
to the Deputy Secretary yesterday and again this morning, to 
the PHMSA Administrator yesterday, as well as to a number of 
her staff. I will have a number of questions that I will put in 
writing for you later today and ask for your response about the 
timelines of this incident, and PHMSA's response, Enbridge's 
safety record, PHMSA's inspection of this pipeline, and 
Enbridge's maintenance record of this pipeline.
    This is an emergency situation, I think you would 
acknowledge, and I ask that you commit every necessary resource 
along with other agencies on the ground, EPA, Coast Guard, Fish 
and Wildlife, and ask that you commit every necessary resource 
to aggressively respond to this crisis.
    Secretary LaHood. We will commit every available resource. 
We view this as a very serious situation, and I think, as you 
have stated, I think people are very surprised that something 
like this could happen in this part of the State. And we will 
commit every resource we can, and every person that needs to be 
there will be there, and we will answer every question and be 
very transparent about whatever issues you want to bring to us.
    Mr. Schauer. Thank you, Mr. Secretary. I appreciate it. It 
is--there are--in addition to the ecological impact that we are 
already seeing, my office is actually helping find space for 
agencies to de-oil birds. Marshall, Michigan, we are talking 
about.
    Secretary LaHood. Sure, uh-huh.
    Mr. Schauer. There is benzene in the air, EPA is on the 
ground, some folks have been evacuated, and the situation is 
being monitored very carefully. Certainly my top priority is to 
make sure that every resource is committed to aggressively 
attack this spill, but then we have got to find out why it 
happened, and I look forward to working with you.
    Secretary LaHood. Exactly. We will work with you.
    Mr. Schauer. Thank you, Madam Chair, and I yield back.
    Mrs. Napolitano. [Presiding.] Thank you.
    Mrs. Miller.
    Mrs. Miller of Michigan. Thank you. It is nice to have two 
women sitting here, an unusual thing.
    Mr. Secretary, welcome. We are delighted to see you here, 
appreciative of your remarks and the job you have done, and we 
appreciate your service to the country for that.
    Secretary LaHood. Thank you.
    Mrs. Miller of Michigan. Mr. Secretary, you and I have had 
this conversation in the back--in the past, and I was one that 
voted against the stimulus, but to tell you the truth, when the 
President first started outlining the stimulus, and it seemed 
as though it was principally focused on both on tax cuts and 
infrastructure investment, I was very supportive of it. And I 
think that we have had a vivid demonstration, particularly with 
the unemployment numbers, of a mistake that the Congress made 
with the stimulus of not putting more money into infrastructure 
investment. And I feel very strongly that that would have 
resulted in a different outcome, a better outcome for the 
country economically if we had invested in infrastructure, and 
I still feel very strongly about that.
    Let me ask you, if I could. One of the biggest issues that 
is happening in Michigan--not only Michigan, but Canada has 
made it their top priority as well--is an additional span of 
the--of a bridge over the Detroit River. And currently, as you 
know, there is a private bridge that has been there for about 
80 years, and the owner wants to twin that span, and he is 
willing to do that with his own dollars. And the debate is the 
DRIC, as we all refer to it, the Detroit River International 
Crossing, which would be about a mile south of the existing 
Ambassador Bridge, which is the first busiest border crossing 
on the northern tier.
    Without getting too much into the whole DRIC debate, which 
is an enormous debate, as you know, Canada, the first time in 
my lifetime I can even recall, they have actually offered to 
pay--not to pay, but to loan, they want to get the money paid 
back--to loan the State of Michigan $550 million to pay for 
their match share to the Feds for this, so they obviously have 
made it an enormous priority.
    In full transparency, I represent the Blue Water Bridge, 
which is about 30 minutes, maybe an hour, north of that, which 
is the second busiest border crossing, and that is the focus of 
my question. I will leave the DRIC alone for a moment.
    The Blue Water Bridge, the second busiest border crossing 
on the northern tier, the Canadians have done a remarkable job 
of expanding their plaza on the Canadian side. We have not done 
that on the American side. That has had its own controversy. 
Some of it has been our own fault in the States because of 
different reasons. But now all the controversies are settled, 
we are ready to proceed, and it would just seem to me that this 
would be an excellent way to expand and expedite commerce 
between the two nations. It would be a wonderful expenditure of 
infrastructure investment long term.
    It is an international border crossing, a huge border 
crossing. And I think the DRIC--this is a million opinions--my 
opinion is I don't think the DRIC, in all the controversy 
surrounding that, is going anywhere--will be resolved any time 
in the near future. And in the interim here where are with the 
Blue Water Bridge.
    I will mention, and I want to thank you for the $30 million 
in the TIGER grant that was given not to the Blue Water Bridge, 
but to a border cross--excuse me, a river crossing, the Black 
River crossing, right in that immediate area, which is a 
component of the plaza expansion, and we are very appreciative 
of that.
    But what are your thoughts on the possibility of some 
additional assistance through your Department on assisting with 
the expansion of the plaza there at the Blue Water Bridge?
    Secretary LaHood. Well, what I should do is really have our 
people go up and meet with--and if you want to help organize 
it, it is fine. We will meet with the folks from Michigan and 
also from Canada and see how we can be helpful. I mean, we do 
have another round of TIGER, which applications are due in mid-
August or late August, and so I think it would be worthwhile 
having a discussion. I take what you say that everybody is in 
agreement.
    When people have their act together, good things will 
happen.
    Mrs. Miller of Michigan. We are shovel-ready. Shovel-ready. 
We just need the cash.
    Secretary LaHood. If people have their act together-- which 
I have no doubt if you say it, it is so--so we should go up and 
meet with them and try to find a path forward.
    Mrs. Miller of Michigan. You can believe that I am going to 
take you up on your offer, Mr. Secretary.
    Secretary LaHood. We will do it.
    Mrs. Miller of Michigan. Let me ask you one other question, 
if I could. One of the other things that you and I have worked 
on, Mr. Schauer as well, Mr. Ehlers, Members from Michigan, is 
of course the match for Federal dollars. And in Michigan, it is 
no surprise to anybody. I wish our unemployment was at 10 
percent the national average. Our unemployment has just taken a 
dip. We are down in the high 14 percentile right now. Some of 
my counties are around 20 percent. So we are on our knees 
economically. And why I am not whining about that, we are doing 
everything we can to find our way back.
    At the same time, here we are with about three-quarters of 
a billion dollars of Federal money that we cannot advantage 
ourselves of because we are not going to be able to afford the 
20 percent match. And yet this is Federal fuel taxes that our 
residents have already paid for. And it is not like it is going 
to just disappear somewhere; it will go to another State.
    Is there anything else? And I know we have talked about 
this, but do you have any comment today on how Michigan may be 
able to get a temporary waiver from that match or flesh out a 
bit how we can access that and advantage ourselves with those 
dollars?
    Secretary LaHood. To my knowledge, whenever I have talked 
to your Governor and others, I don't know that there has ever 
been a request for a waiver. As you know, the economic 
recovery, the transportation requires no match; and so I don't 
know, maybe that is an area where we can look at for some of 
these projects, that they would qualify for the economic 
recovery portion, which there is no match required. So we will 
be happy to work with you on that.
    Mrs. Miller of Michigan. I appreciate it very much. And I 
will take you up on your offer to have someone come and take a 
look at the Blue Water Bridge. The Chairman and I actually sit 
on something called the U.S.-Canadian Interparliamentary Group. 
We met about a month ago with our Canadian counterparts, and 
this was a huge issue about the DRIC. And at the end of it, 
basically what we were saying, we need to be focusing on the 
Blue Water Bridge in the immediacy. So I think you will find a 
lot of support on both sides, both Nations, for that.
    Secretary LaHood. We will do it. Thank you.
    Mrs. Napolitano. Mr. LaHood, I just want to say to my 
colleague, Ranking Member Ms. Miller, that I have found great 
support from your staff. And I just want to mention that. Thank 
you for allowing your good Assistant Secretary, Joel Szabat, to 
go and talk to my groups of COGs and MTA and all those. 
Fantastic job. And you are to be commended, sir.
    Secretary LaHood. Thank you.
    Mrs. Napolitano. [Presiding.] Mr. Altmire.
    Mr. Altmire. Thank you, Madam Chair.
    Mr. Secretary, as you certainly are aware, we in 
Pennsylvania had an application for tolling of I-80 which was 
denied, and which I won't ask you about. But the issue is, now 
there is a $472 million funding gap at the State level because 
they had counted on that money. And one of the decisions that 
was made yesterday is the Governor had recommended diverting 
some existing highway money to public transit, and in 
southwestern Pennsylvania the decision making entity had a vote 
and they voted against allowing that to happen.
    I just wanted to ask your opinion of, in a State like 
Pennsylvania, where there are so many critical needs with roads 
and bridges--and now the transit authority have multimillion-
dollar deficits as far as the eye can see, nonbinding--but just 
your opinion, since you are here, what would you suggest the 
State do or what do you think about the dilemma we are seeing 
in Pennsylvania?
    Secretary LaHood. Look, Pennsylvania is not unique. Every 
State, as Mrs. Miller said, from Michigan, you know, every 
State is cash strapped and every State is trying to find 
revenue to either match the money or to provide the money for 
projects. And our people in the States with the Federal Highway 
Administration or FAA or others are willing to sit down and 
work with Governors and DOTs to try and find a path forward.
    These are not easy answers. You all passed a bill that 
allowed transit districts to use up to 10 percent of their 
money for operating, and that has been helpful. But the dilemma 
continues because ridership is down and costs continue to go 
up, and so we know that there are States that are really trying 
to figure out what to do.
    We have worked a lot with the State of Pennsylvania on 
their transportation issues, particularly with Governor Rendell 
and his team; and, obviously, we would be willing to sit down 
and figure out what we can do.
    Mr. Altmire. Thank you.
    On a more national perspective, we have discussed today in 
the Committee, and you have mentioned your testimony and have 
in dozens of other places, the need for funding in the highway 
bill.
    And my question is--we are all having that discussion 
within our districts, ways to generate the revenues to fund the 
needed roads and bridges repair--what is the result of the 
delay that has occurred because of this ongoing discussion and 
inability to finalize that plan?
    Secretary LaHood. Well, we are operating on a continuing 
program, the program that was passed 2 years ago. And we at the 
Department think, as I think Mr. DeFazio laid out very well, 
that there are a lot of unmet needs in America. And as we have 
looked at Chairman Oberstar's bill and the way he tries to 
address those unmet needs, we agree with many of the things 
that are in his bill.
    So what we are doing is operating on the current program, 
or program that was passed 2 years ago, that has been extended 
through the end of this calendar year, and created innovative 
thinking to meet infrastructure needs I think have been 
included in many of the aspects of the Chairman's bill, and we 
agree with many of those. It is a matter of trying to find the 
resources to do them.
    Mr. Altmire. One of the things I continue to hear, as you 
know, I represent southwestern Pennsylvania where we have a 
thousand structurally deficient bridges, crumbling 
infrastructure. And with the stimulus bill, there was a lot of 
work that was done, it was very visible, and there seems to be 
this idea that that is now a disincentive to go forward with 
the huge highway bill because there are some casual observers 
who say, well, the stimulus came in and they funded all these 
transportation projects, so therefore it is less of a priority 
now to move forward with a multiyear highway bill. How do you 
respond to that? .
    Secretary LaHood. Well, what I have said to people when 
people have said, what is the follow-on to the stimulus bill, 
it certainly is a comprehensive transportation program passed 
by Congress. I think that is the natural follow-on that will 
keep these people working and keep the momentum going and 
fixing up infrastructure.
    Mr. Altmire. Thank you, Mr. Secretary.
    Mrs. Napolitano. Thank you, Mr. Secretary. And I think I 
will step in for a moment on this one, because one of the 
things that I have great concern in California, of course, is 
the high-speed rail, and I would like to be able to discuss 
that with you at great length at some time.
    In deference, because I know you have to leave, and to give 
other Members time, there are only a couple of things I would 
like to bring up and I will follow up on the other one with 
you.
    Specifically, the Colton Crossing BNSF received a 30 
million TIGER grant; this is a subsidy for a very profitable 
industry that benefits only the railroads. Yet when we are 
trying to get the railroads to fork over a minimal amount to be 
able to work on other projects, they refuse.
    So I would like to be able to sit and figure out, how do we 
get the railroads to be aware that if they are getting Federal 
taxpayer money to do the railroad, the Colton Crossing, it is 
the Colton Great Separation, then they need to be able to make 
adjustments in their budget to be able to help the locals in 
other areas. And, again, I will cover that with you.
    But the Department has been focusing on creating a high-
speed rail manufacturing sector in this country so that the 
engine and cars for the proposed high-speed rail system will be 
made in America. We currently spend $3 billion on transit cars 
that are overwhelmingly made in foreign countries.
    What are you doing? What can we do to help promote 
manufacturing in the U.S. to create the jobs that we so 
desperately need?
    Secretary LaHood. Well, there is a very strong Buy America 
provision in the Recovery Act. We have not granted any waivers. 
We have put the $8 billion out to 13 regions around the country 
for high-speed rail. We don't intend to grant waivers. We hope 
that companies from Europe, whether it be France or Spain or 
Italy or Germany, or even the Far East, China, Japan, will come 
to America, hire American workers and use American facilities.
    I have traveled to all of those regions in the world. I 
have ridden high-speed rail in France and Germany and Spain and 
Italy and China and Japan. What I have told every one of those 
train manufacturers, Come to America, hire American workers and 
build the train sets in America using American facilities. And 
there are many of them that are here in America doing that.
    Like Congress, we believe in the ``buy or build,'' as my 
friend from California has in his bill, Made in America, Build 
in America, or Buy in America; however you want to say it, we 
are with you on that.
    Mrs. Napolitano. Well, I certainly want to be sure that we 
continue to develop these opportunities for our manufacturing 
base to grow back in America. So whatever we can do, whatever 
is there.
    I would move on to our next person, Mr. Platts.
    Mr. Platts. Thank you, Madam Chair. Mr. Secretary, always a 
pleasure. Good to see you.
    Secretary LaHood. Good morning.
    Mr. Platts. I apologize if I am going to be repetitive with 
coming in here and running out. I know you appreciate the 
juggling of our schedules.
    Secretary LaHood. I do.
    Mr. Platts. A question that I certainly get back home, and 
I know it is on our side in the reauthorization, but also from 
the administration's side, how you best see where we are; and 
if we don't get reauthorization done this session, and the plan 
of that 18 months, whether that be in the next session, where 
we are going to be from an outlay standpoint?
    My concern is I have construction companies that do 
highway, bridges. They are saying if it is not done by the end 
of this year or very early next year, there are going to be 
dramatic layoffs, because the numbers in the current just won't 
allow them to keep people on the payrolls because they are not 
going to have the work.
    Can you give your best assessment of where we are?
    Secretary LaHood. What I have said and continue to say is 
we will work with Congress, we will work with this Committee, 
those Senators on the committees of jurisdiction in the Senate. 
There is no dispute about what the needs are in America. We all 
know what they are. It is really just trying to find the 
billions of dollars that it takes to do it, and we just need to 
work together to find those resources. If we find the 
resources, I have no doubt you all could pass a bill tomorrow 
or pretty quickly.
    Mr. Platts. Does the administration have a number that they 
would like to see in reauthorization, what they think best-case 
scenario, assuming we have the resources?
    Secretary LaHood. Well, I have been running around the 
country applauding Chairman Oberstar for his bill. We like his 
bill. We think many of the things in his bill are very good. 
They really begin to address the infrastructure needs and other 
needs, transportation needs in the country. And so we have had 
a little discussion here earlier about what the cost of that 
is; and if we can agree on what the cost is and how to get 
there, obviously we are on our way to a transportation program.
    Mr. Platts. I know that you are as anxious as we are to get 
that done and have the dollars flowing and infrastructure 
improvement. And certainly an area where I think we will find 
ultimately some really strong bipartisan agreement is the 
importance of this investment, sir.
    I appreciate your leadership at the Department. Always good 
to see you.
    Secretary LaHood. Thank you.
    Mr. Platts. I yield back, Madam Chair.
    Mrs. Napolitano. Thank you, sir. Mr. Kagen.
    Mr. Kagen. Thank you, Madam Chairwoman. I appreciate the 
opportunity.
    Thank you, Mr. Secretary, for being here. Perhaps you could 
very briefly highlight the contrast of who the American people 
should believe. Some people have stood on the House floor to 
say that the stimulus bill, the American Recovery and 
Reinvestment Act, hasn't produced a single job at all; and you 
are here, telling us it produced thousands. So convince me and 
the American people who is correct and who is being truthful on 
this.
    Secretary LaHood. Well, all you have to do, Congressman, is 
walk a few steps in my shoes. I have been to 80 cities and 30 
States in the last 18 months, and everywhere I go I see orange 
cones and orange barrels. Everywhere I go I see people working. 
These are people that would not be working if it hadn't been 
for the courageous votes of those who voted to pass the 
economic recovery plan. Forty-eight billion dollars, almost all 
of it is out the door in the States. Almost all of the airport 
money has been spent. A lot of the highway money is being 
spent. Thousands of jobs are now in existence, building, 
resurfacing roads and bridges in America today.
    So my point is get out around the country, and what you 
will see is America's infrastructure being rebuilt. We took $8 
billion and gave it to transit districts to buy clean burning 
buses. Those buses were made in America in places like 
Minnesota, New Flyer, and other companies; a company in 
California, very fine company in California.
    Some transit companies use the money to build facilities 
which put building tradespeople to work. We have given $8 
billion to 13 regions in the country for high-speed rail. That 
is 8 billion times more than America has ever invested in high-
speed rail.
    High-speed rail is coming to America, and soon we will have 
contracts signed with the States, and people will be going to 
work building infrastructure for high-speed rail, building 
train sets.
    And this program has put thousands of people to work in 
thousands of projects all over America. I have personally seen 
it, and I know that you have all seen it in your districts 
traveling around like you do.
    Mr. Kagen. Well, we will hear later this morning from 
someone from my district who has put people to work because of 
the stimulus bill and it helps to retain jobs.
    You mentioned that it was a courageous vote to put people 
back to work and to keep people working. But it might take 
another steel spine, it might take another courageous vote to 
find the funding to make sure that we can fully fund the 
rebuilding and reinvestment in America's infrastructure and 
transportation. So how specifically would you find the money to 
pay for a $500 billion 6-year Rebuilding of America Plan in 
transportation infrastructure?
    Secretary LaHood. Well, look, it has to be a combination of 
many different funding opportunities.
    Mr. Kagen. Well, you heard the Chairman. He is in favor of 
a gasoline tax. How does the administration feel about that?
    Secretary LaHood. The administration is opposed to raising 
the gas tax when we have unemployment hovering around 10 
percent and people are out of work. But we think there is a gas 
tax in existence; we should use those resources and couple 
those with other opportunities. We suggested an infrastructure 
fund. We suggested public-private partnership. We suggested 
tolling. I have been to places in the country where they put 
hot lanes in. Build them with tolls. You can raise a lot of 
money with tolling and people see the value of those. So I 
think we need to think outside of the box about where we find 
the resources.
    Mr. Kagen. So you are in favor of a user fee, that those 
who are using that particular benefit, that transportation 
modality should be the ones to pay for it.
    Secretary LaHood. When I have been around the country, I 
have seen the value of tolling in building infrastructure. And 
people are using--whether it is a road or a bridge or a 
highway, you can raise significant dollars, and people have the 
discretion whether to use it or not.
    Mr. Kagen. And how do you feel about the creation of an 
infrastructure bank, where we put together the resources so we 
don't have to go to Wall Street to borrow the money but we put 
our own resources together to finance our Nation's 
infrastructure?
    Secretary LaHood. We favor an infrastructure fund. We put 
it in our budget, we have asked for it in our budget, and we 
will continue to do that. We think it is a good way to build 
significant big projects around the country.
    Mr. Kagen. Thank you very much. I yield back my time.
    Mrs. Napolitano. Thank you, sir. Mr. Teague.
    Mr. Teague. Thank you, Madam Chairwoman, for letting me 
speak.
    Secretary LaHood, thank you for appearing before this 
Committee and thank you for your tireless work on behalf of 
American workers and the American transportation system.
    As part of your implementation of the American Recovery and 
Reinvestment Act, I am not sure I can think of a better team 
between you and Chairman Oberstar for this legislation 
implementation and oversight of the Recovery Act.
    In Dona Ana County, which is the largest county of my 
district population-wise, we are spending $36.2 million to add 
a lane for 17 miles of I-10, and it is creating hundreds of 
jobs and laying the groundwork for our future economic 
expansion there. And we also have the pleasure of having 
Chairman Oberstar to come out for the groundbreaking of that.
    But you know, in almost every little town in my district, 
folks--we are spending money and getting overlay on Main Street 
or rehab a bridge or widening the shoulders or something. I was 
going through the mountains coming across Emory Pass, which is 
about 10,000 feet high in the helos, and there it is, you know, 
the American Recovery and Reinvestment Act at work repairing 
the shoulders on those dangerous roads up there. I mean, the 
roadis a good road, the site is a beautiful site. But as you go 
up those steep switchbacks, you need to be paying attention. 
The roads need to be in good shape. And they are because of the 
Recovery Act.
    I think the Recovery Act has brought us back from the brink 
of economic catastrophe. And if you go to my district, you can 
see the hard work that is happening everywhere.
    But speaking of my district, I would like to invite you 
there on September 8. I am having what we call a Dona Ana 
County transportation summit. We are going to discuss the 
success of the Recovery Act projects and how they relate to our 
future plans for transit and new interchanges, intermodal 
freight carrier centers, and the challenges of moving goods and 
people across the international boundary.
    And I really would love to host you in New Mexico, and I 
have an invitation here that I will get to you before this 
meeting is over. But I just wanted to follow up on the question 
that Congressman Kagen was asking.
    So I think the way I understood you to say, if people would 
get out and go across their district and see, they would see 
jobs that are being created by the American Recovery and 
Reinvestment Act. And those people that say that the Recovery 
Act has completely failed to create jobs are just overlooking a 
lot of jobs in their district, or haven't been out.
    Secretary LaHood. There are many thousands of jobs that 
have been created over the last 18 months. They exist today. 
America is being rebuilt as we speak, and we have the 
statistics to show that thousands of people are working today 
on thousands of projects.
    Mr. Teague. You know, I thank you for saying that, because 
that is what I see in my district. I look forward to hosting 
you in my district, and thank you for your service. .
    Secretary LaHood. Thank you.
    Mrs. Napolitano. Mr. Garamendi.
    Mr. Garamendi. A comment. Some of those people that are 
saying there are no jobs are quite happy to appear in various 
photos with great big checks saying that the jobs are being 
created. So maybe there is a little inconsistency.
    Mr. Secretary, thank you so very much for the work that you 
are doing. You and your Department are getting the money out. 
It is excellent, and you are doing very, very well at it. 
Earlier in your comments you alluded to a program that you are 
working on, which is Make It in America, Build It in America, 
Make It in America. Manufacturing matters.
    You and I have had a discussion about the waivers, the way 
in which they have been used in the past. And you said here 
that you are not interested in providing waivers and that you 
are going to be very hard on that. I think that is the right 
policy. I encourage you to continue to do that.
    And for my colleagues here, I would ask them to consider 
supporting a piece of legislation that I have introduced that 
would remove three of the four waivers that you presently have 
available to you, leaving only a cost waiver in place. We must 
make it in America. There will be a witness here from the San 
Francisco Bay Area, Gillig, a little longer.
    So my question is a very quick one to you. You have already 
answered it. And that is: What is your policy with regard to 
waivers on manufacturing rolling stock and others outside of 
the United States?
    Secretary LaHood. I mean, we, as you know, some people have 
asked us for a waiver and we have denied that. We believe that 
Made in America, Build in America, Buy in America has to be a 
very strong policy and will be a very strong policy under this 
administration.
    Mr. Garamendi. Thank you very much. And I commend my piece 
of legislation to my colleagues that would say, yes, it will be 
built in America. If it is American taxpayer money, it is going 
to be used in America, not in some foreign country.
    So thank you very much, Mr. Secretary.
    Secretary LaHood. Thank you.
    Mrs. Napolitano. Mr. Capuano.
    Mr. Capuano. Thank you, Madam Chair.
    Mr. Secretary, welcome back. It is always great to see you. 
And I will tell you, I have been doing a little bit of time in 
the Chair, and I will tell you that you have been my role 
model, the perfect person to oversee the House.
    Secretary LaHood. Thank you.
    Mr. Capuano. I will tell you that I think the U.S. 
Secretariat and you have done a fantastic job with this bill 
with the limited resources we gave you, if you want the truth. 
I was one of the ones who thought we should have done more on 
transportation. And we did what we could, and I think that this 
country would have been better off if we would have given you 
more tools to work with. But nonetheless, with what we gave you 
I think you have done great.
    I do have one bone to pick and one policy question to ask.
    The bone to pick: Everywhere we go, we talk about the signs 
that say ARRA. It took me about 6 months to figure out what it 
was; I thought it was a baseball term. I wasn't quite sure. I 
really wish, I beg you, to put out an executive order to 
require all those signs to say ARRA, whatever you want on it, 
but put the words ``the stimulus'' on the sign. Nobody knows 
what ARRA is except for those of us who live in the Beltway.
    The average American, as has been referred to here 
repeatedly, are talking about the stimulus. It is the one and 
the same. And if those signs don't say it, the American people 
don't get the connection. They think it is something else 
altogether. So I am begging you to put the word ``stimulus'' 
somewhere in big bold letters on those signs.
    Secretary LaHood. We don't make the signs. We don't 
manufacture signs at DOT. The signs are a voluntary provision 
if States want to put them out. Half the States have used signs 
and half the States have not used signs. In the States that 
have used signs, they have used small businesses in their 
States that hire workers to make signs.
    Mr. Capuano. I have no problem with it. But I would also 
say if it is Federal money paying for those signs, we have the 
authority to require them to put the word ``stimulus'' on it.
    Secretary LaHood. I take your point.
    Mr. Capuano. And the last item, again, it is not really a 
bone to pick. It is really a policy question. I have always 
respected the policy difference amongst Members of Congress and 
in this country. I think the democratic process is beautiful. 
We debate, we disagree, we agree, and we work it out. And I 
respect that.
    I find some of the people, I tell this to people all the 
time at home. They always ask me about partisanship and why 
can't we just get along. And my answer is always: Most of us 
do, even when we have strong disagreements. Some of the people 
I like and respect the most here in Washington are people I 
disagree with on a regular basis, because they have good, 
solid, philosophical views I respect.
    And the same thing goes for the stimulus. I have no problem 
whatsoever, not one, with anybody who voted against the 
stimulus, because it was a leap of faith. I took the leap of 
faith because I thought it was necessary for the economy. I 
think it has worked out better--I mean, it is not perfect--but 
it worked out better than not doing it.
    I would like to know, Are there any policy considerations, 
any formal or informal policy considerations, given to when you 
have various projects--many of which qualify--to giving a 
little extra weight to those projects that are in the districts 
of Members who supported the stimulus?
    Secretary LaHood. Absolutely not.
    Mr. Capuano. I respect that, Mr. Secretary. But I would 
respectfully, strongly, and vehemently disagree. I respect 
those people who voted against it, but I will tell you they are 
the largest, most vocal hypocrites in Washington, and maybe in 
public office. It is like earmarks. I don't mind anybody who 
doesn't take them. I respect that. I think that is a good 
philosophical view. I disagree, but that is OK. And those who 
voted against the stimulus, fine. But those who voted against 
it and then come to you and beg you for money--which I have 
heard on this panel today--are hypocrites of the worst degree. 
And I think they are doing a disservice to the American public 
and I think the American public they--if they truly represent 
their constituents, they didn't want the money, and I respect 
that. And out of respect for them, I think we should deny them 
the money that they so hypocritically asked for. And if we 
can't deny them the money, at least can you deny them the photo 
op? Could you at least put out some sort of an executive order 
to say anybody who voted against it is no longer welcome to a 
photo op on ribbon cuttings of bridges and roads that have been 
fixed with the stimulus money? I would hope that you would be 
able to do that.
    Secretary LaHood. I have a very difficult time operating 
the camera. I don't take photos at these events, Mr. Capuano.
    Mr. Capuano. You are entitled to take a photo in my 
district any time you want, Mr. Secretary.
    Secretary LaHood. Thank you.
    Mr. Capuano. Happily so.
    Mr. Secretary, I only have 35 seconds and I would like to 
bash the hypocrites in Washington a little bit more, but I 
guess I have done my job and I yield back the remainder of my 
time.
    Mrs. Napolitano. Thank you, Mr. Capuano. I can tell you, 
you are something else; and I agree with you.
    Mrs. Miller has one more question.
    Mrs. Miller of Michigan. Thank you very much, Madam 
Chairman.
    You know, just following up on my colleague's comments 
about people with the stimulus. Actually, there was an 
interesting poll in the New York Times, which I think is not 
the most conservative of all newspapers, that showed only 6 
percent of the American people believed the stimulus worked. I 
heard somebody refer to--say that more people think Elvis is 
alive than think the economic stimulus actually works. So I am 
not sure that the overwhelming majority of the Americans are 
hypocrites. I do not believe that.
    And I would also just make one comment about the signs. It 
is my understanding that we have spent already over $100 
million on signs saying ARRA. And my opinion, a million 
opinions, I don't think it is a good expenditure of tax 
dollars. I would rather spend $100 million on roadwork, 
actually, in our State of Michigan. Our Governor started out 
putting her name on the signs. There was such a huge outcry, as 
you might imagine, that she quickly took her name off of those 
signs.
    But my question, Mr. Secretary, is let me go back to the 
DRIC just for a moment, being a bit parochial, since it is the 
overwhelming issue of transportation in my district. And you 
mentioned about P-3s, and how as we on the road forward, fund 
the highway transportation, whether that has--there are a 
number of things of how that might happen--tolls, P-3s. I think 
P-3s have an enormous opportunity for our country. So many 
places, particularly in Europe, have utilized them very, very 
effectively.
    And I guess I would ask you two things, perhaps. Maybe you 
could give us a good example of a P-3 in the country now that 
you think is something we might look at.
    And in regards to the DRIC, because the Ambassador Bridge 
is currently a privately owned bridge--and, again, the owner of 
that bridge wants to spend his own dollars to twin this bridge. 
And although I haven't taken a position on whether we should 
allow that to happen, or whether the DRIC, which will be 
financed by both Federal money and Canadian money, taxpayers' 
dollars, which of that is better. But it does appear as though 
the DRIC may not actually be able to proceed because there is 
not much movement in the State Senate in Michigan.
    I am not sure how all of that will work. But if the State 
of Michigan does not approve the DRIC, what would be the 
position of your Department regarding the twinning of the 
Ambassador Bridge, which is a P-3?
    Secretary LaHood. Well, what we have said is that we are 
going to work with people in Michigan and Canada. I think it is 
probably not a good idea for people in Washington, D.C. 
deciding the siting of a bridge and whether it should be 
privately owned. I mean, those are decisions that need to be 
made by people in Michigan and people in Canada. And if we 
could be helpful in getting those people to the table and 
talking about it, that is fine. But we need to let folks that 
are elected by the people in the country of Canada and the 
State of Michigan make those decisions.
    Mrs. Miller of Michigan. I appreciate that, because there 
has been a tremendous amount of coverage, and people have said 
that the Department of Transportation, the Federal Government 
generally, is very supportive of the DRIC. So you are saying 
you are not taking a position until such time as the State of 
Michigan makes their position known?
    Secretary LaHood. I have talked to the Governor a lot about 
the DRIC, and we are waiting for the Michigan legislature to 
make a decision.
    Mrs. Miller of Michigan. Thank you. I appreciate that. 
Thanks very much, Madam Chair.
    Mrs. Napolitano. You are very welcome.
    And I just have some information. The cost of the signs is 
significantly less than the Recovery Act critics tried to 
claim. It is less than 2 cents for every $100 they are 
investing in the ARRA funds. And the best estimate is that the 
States have spent about $5 million on these signs. So I just 
want to, for the record, show that is what we have.
    Secretary LaHood. Well, let me just say that these signs 
don't just mysteriously appear. These signs are made by small 
businesses in States that employ people. And that is part of 
where the--the money is going to small businesses.
    Now, I think everybody in this room knows I am a 
Republican. When I was a Republican serving in the House, you 
know, there were a lot of Republicans supporting small 
business. I don't know a better way to support small business 
than to buy things from them like signs. That is one good way 
to help small businesses in your States. This money is going to 
help employ people who are making signs.
    Mrs. Napolitano. That is one area that I know well. I was 
in a parade on July 4, and one of the people in the area said, 
``Thanks so much for the ARRA for repaving our streets,'' 
because they were repaved with ARRA funds.
    So, Mr. Secretary, it has been a pleasure. Thank you so 
much for being with us today, and we will now excuse you. This 
Subcommittee, this hearing is going to go into the next panel, 
and look forward to talking to you, sir.
    Secretary LaHood. Thank you.
    Mr. Kagen. [Presiding.] Gentlemen, welcome to the 
Transportation Subcommittee. We will now hear testimony from 
Mr. Bill Schneider, Brian Macleod, Steve Millsap, Jim Duit and 
Kevin Gannon. Let's begin on the far left with Mr. Bill 
Schneider. Welcome to the Committee. Thank you for appearing.

   TESTIMONY OF BILL SCHNEIDER, PRESIDENT/CEO OF KNIFE RIVER 
 CORPORATION, ON BEHALF OF THE NATIONAL STONE, SAND AND GRAVEL 
ASSOCIATION; BRIAN MACLEOD, SENIOR VICE PRESIDENT, GILLIG, LLC, 
     HAYWARD, CA; STEVE MILLSAP, ASSISTANT VICE PRESIDENT, 
  STRUCTURES, BNSF RAILWAY COMPANY; JAMES A. DUIT, PRESIDENT, 
  DUIT CONSTRUCTION COMPANY, INC, EDMOND, OK; AND KEVIN GANNON

    Mr. Schneider. Good morning, Chairman Kagen, ladies and 
gentlemen of the Committee. My name is Bill Schneider, and I am 
the President and CEO of Knife River Corporation, the Nation's 
ninth largest aggregate producer. I am also here in the role of 
chairman of the board of National Stone, Sand & Gravel 
Association. Thank you for this opportunity to speak with you 
today.
    When the construction industry began a steep decline in 
2008, many of us thought it would be a temporary downturn, but 
today the decline continues. We are still unable to see light 
at the end of the tunnel. At our company, Knife River, we have 
over 2,000 fewer employees today versus the market peak of 
2007.
    Last year, we received, thanks to all of you on this 
Committee, a much needed boost of public works through the 
project-sponsored American Reinvestment and Recovery Act. I 
have heard dozens of stories from our Members about how this 
stimulus money helped keep their people employed while 
reconstructing thousands of miles of our Nation's highways. It 
has been our safety net, and soon it will be gone.
    Since ARRA's passage, Knife River has been awarded nearly 
$200 million in stimulus projects throughout our 17-State 
operation. Our current backlog of work to be built is nearly 20 
percent stimulus funded. Earlier this year, your Committee 
heard from one of our drivers, Joyce Fisk from Minnesota, whose 
job was saved due to this funding.
    We all understood this bill was a one-time bankroll. Now we 
are headed back to square one and wondering what our future 
holds. Chairman Oberstar's proposed $450 billion 6-year funding 
plan would put over 1 million Americans back on the job doing 
real work in an extremely competitive environment, a great 
value for the taxpayer.
    Construction workers are on the unemployment lines at over 
double the rate of other American workers. The unemployment 
rate this past winter peaked at 27 percent--and, by the way, we 
think that is understated--and now sits at 20 percent only 
because we are in full swing in the construction season. If a 
6-year bill is not passed before the stimulus funds are 
completed, construction unemployment in this country is going 
to go off the charts.
    More effective than these statistics are real-life stories 
of what is happening across the country. As an unbelievable 
example of road conditions and correlated lack of funding, 
Stutsman County in my home State of North Dakota, started 
turning back 50 miles of paved road back into gravel surface 
this summer because it can no longer afford to maintain the 
existing asphalt surfaces. This is equivalent to turning back 
the clock 75 years. We are going backwards, not forwards, in 
investing in our country's infrastructure.
    In 2008, a poll conducted by Fabrizio McLaughlin & 
Associates reported that 72 percent of Americans believe that 
the Federal Government should lead the funding of major 
highways and bridges. In addition, 14 out of 15 Americans 
believe it is important for Federal elected officials to 
support the position that fuel taxes and other highway fees be 
dedicated only for highways and bridge improvements. Further 
findings discovered that nearly three-quarters of Americans 
support increased investments in infrastructure. And, finally, 
57 percent would support an increase in gasoline user fees if 
the funds were dedicated only for transportation.
    As NSSGA Chairman, I represent hundreds of members and 
thousands of workers, plus millions of Americans, when I say 
that Congress needs to pass a long-term highway funding 
legislation now. We have had too many SAFETEA-LU extensions. 
State DOTs will soon start shelving projects without the 
certainty of a 6-year bill. Certainty is the key. This is 
something we cannot continue to put on the back burner.
    Now, we realize the big question, as we have heard earlier, 
is where will the money come from? As you all know, we have the 
system in place, the Federal Highway Trust Fund, that the 
Chairman talked about. It needs to be restored to the strength 
it once had, and more money is needed to keep up with the 
growing demands.
    While it is politically difficult to consider raising the 
Federal gas tax, many of us believe it is really our only 
answer to fund highway projects that are in serious need. As 
noted in the previous research, American taxpayers would 
support it if it meant safe and efficient highways.
    We are very grateful for Chairman Oberstar's bold 
leadership in passing our legislation and monitoring its 
effectiveness. The industry thanks him and those on the 
Committee that supported him.
    Now, though, we must come together to build support for a 
long-term highway user's bill to make transportation a priority 
in Congress and the White House. Passing this bill means you 
are essentially passing a jobs bill and putting thousands of 
Americans back to work not only in the construction industry 
but in many other businesses that support our work.
    Finally, let's get real. Now more than ever, there is a 
need for real jobs, meeting real needs, and providing the 
American taxpayers real value. Thank you.
    Mr. Kagen. Thank you very much for your testimony.
    Mr. Macleod.
    Mr. McLeod. Good morning, Mr. Chairman, Congressman 
Garamendi, and staffers. My name is Brian Macleod, and I am 
here representing the employees and owners of Gillig, LLC, 
transit bus builders.
    Gillig is a 120-year-old American company that started in 
San Francisco as a builder of horse-drawn buggies and 
carriages. We are still in the San Francisco Bay Area and still 
in the transportation business, except now we build modern 
heavy-duty hybrid electric and fuel-efficient transit buses 
that are the most reliable and most economical buses in the 
United States.
    Gillig is the second largest bus manufacturer in North 
America and the last surviving transit bus company. We have a 
unionized workforce and about 700 direct employees. And they 
produce about 1,600 buses per year that are operated by transit 
systems across our great country from Alaska to Florida and 
Massachusetts to Hawaii.
    The current economic downturn caused many companies to lose 
money, cut back production, and lay off workers. However, 
things are different at Gillig. Our customers are transit 
agencies who normally buy buses with a combination of Federal 
and local money, but the economic slowdown has caused their 
local budgets to be cut. So early last year our customers began 
telling us they would have to reduce their bus orders due to 
insufficient funding. This of course concerned us greatly, 
because that would mean we would have to cut production and lay 
off some of our hard working employees.
    However, the Recovery Act came to our rescue. It included 
100 percent Federal funding for buses, without the need for a 
local match. But our story gets better.
    Some customers were also able to buy one or two extra 
buses, so we actually booked more buses than anticipated and, 
accordingly, we were able to increase production slightly and 
actually hire additional full-time employees.
    In the last 15 months or so, we received bus orders from 
over 160 different customers, for a total of over 1,000 buses. 
The orders came from transit agencies all over the country. 
Some of the cities receiving ARRA-funded buses from us are San 
Jose, Buffalo, Minneapolis, Dayton, Memphis, Kansas City, 
Omaha, Salt Lake City, and Orlando. As a result, we have 
increased our full-time employment by 40 people instead of 
laying off about 170, which is probably what we would have been 
forced to do without the Recovery Act funds. So we actually 
saved about 170 jobs and added another 40. That is 210 Gillig 
families that are directly benefiting.
    And it gets even better. In our industry, the job 
multiplier is about five or six, which means that our 210 jobs 
saved another 1,100 or so supplier jobs. And the benefits don't 
end there, because transit investment produces multiple 
benefits. These new buses are more energy efficient, more 
comfortable, more economical, safer, and generate fewer 
emissions than the buses they replace.
    So on behalf of all our employees and their families as 
well as the families of our supplier companies, I thank the 
Committee, this Congress, and the administration for 
thoughtfully conceiving and then passing the transportation 
portion of the Recovery Act.
    Gillig has recycled all that funding back into the U.S. 
economy through U.S. workers and their families, no outsourcing 
and no offshoring. The Recovery Act has effectively secured our 
jobs for now, but the slow recovery is threatening our jobs 
late next year and in 2012. State and local budgets are 
continuing to be cut, so bus orders are dropping now that ARRA 
funding has been used up. This means we could have to cut 
production late next year. So please consider ways to redirect 
any unused Recovery Act moneys to transit.
    We have proven that we used the funds effectively and 
efficiently. These funds were spent in the U.S. and so were 
good for the U.S. economy, good for U.S. families, good for the 
general public, good for industry, and good for the 
environment.
    Thank you for an effective and very beneficial Recovery 
Act. Thank you for your time today. And please help our future 
with additional Recovery Act funding, if possible. And please 
also do what you can to get a new 6-year transportation bill 
passed, because investment in our infrastructure is one of the 
best ways for Congress to stimulate our economy, create good 
jobs, and generate other benefits for our people and our 
country, a true win-win-win. Thank you.
    Mr. Kagen. Excellent. Thank you very much for your 
testimony. And I will give you an open invitation to come to 
any of my listening sessions in northeast Wisconsin.
    Mr. Millsap.
    Mr. Millsap. Mr. Chairman, distinguished Members of the 
Committee, thank you for the opportunity to appear here today 
to discuss the Truman-Hobbs Act project which places the 
Burlington Bridge swing span over the Mississippi River.
    My name is Steve Millsap. I am the assistant vice president 
of structures with BNSF Railway. In this capacity, I have 
responsibility for BNSF's tunnels, bridges, snow sheds, and 
other structural assets and facilities. BNSF employs close to 
40,000 people and operates one of the largest freight rail 
systems in North America with approximately 32,000 route miles 
in 28 States and two Canadian provinces.
    BNSF railway has about 14,000 bridges on its network. There 
are approximately 250 major bridges similar to the Burlington 
Bridge in size. We project that we will spend more than $400 
million in major bridge capital replacement over the next 10 
years.
    The Burlington Railroad Bridge was originally built in 
1868, and crosses the Mississippi River between Burlington, 
Iowa and Gulf Port, Illinois. The bridge's swing span 
replacement project was ordered by the U.S. Coast Guard in 1991 
to remove what they determined to be an unreasonable 
obstruction to the waterway operation on the Mississippi River.
    Based upon a 2003 report by the Coast Guard and the 
American Waterway Operators, the Burlington Bridge is the third 
most struck bridge in the Nation. In fact, on average, vessels 
make contact with this bridge an average of 10 times per month.
    The Federal Government, under the provisions of the Truman-
Hobbs Act, is responsible for funding the Coast Guard's order 
to alter this bridge; however, despite the fact that the order 
to alter was issued in 1991, it was not until the passage of 
the American Recovery and Reinvestment Act in February of 2009 
that the full amount of Federal funding became available to 
move the project forward. Until that point, only $26.7 million, 
or less than half of the required funds, had been made 
available over the course of numerous congressional 
appropriations cycles. The Recovery Act provided $36.4 million 
for the Burlington Bridge project out of the total of $142 
million made available to the Coast Guard and Truman-Hobbs 
projects.
    The total cost of the swing span replacement required by 
the Coast Guard is currently estimated at $43.5 million, and 
the BNSF will contribute approximately $8.3 million; however, 
BNSF is also moving forward simultaneously with a significant 
private investment of another $72.2 million to replace the 719-
year-old bridge spans on both sides of the new vertical lift 
span.
    The Truman-Hobbs part of the project is now about 40 
percent complete. We expect a substantial completion of May of 
2011. So we are expecting to finish this 24-month project in 19 
months.
    The project has impacted the retention and creation of jobs 
within dozens of large and small companies who are associated 
with the span's construction. Through reporting by our 
contractors and subcontractors, we know that this project so 
far insured the retention of 43.98 FTEs. Roughly 80 percent of 
the onsite project crew is local Iowa and Illinois residents. 
In addition, of course, local vendors and other downstream 
suppliers have been positively impacted by this project.
    Replacing the existing swing span with a modern vertical 
lift span will double the navigational channel width through 
the bridge from an existing 147 feet to 300 feet. This will 
greatly improve navigation for the waterborne traffic through 
the bridge and reduce operational delays and risk to the 
railroad.
    The Burlington Bridge is a critically important 
infrastructure component along the freight and passenger rail 
corridor between Chicago and Denver and on to California, 
carrying an average of 34 freight trains per day and 2 daily 
Amtrak California Zephyr inner-city passenger trains.
    In conclusion, BNSF Railway is pleased with the progress of 
the Burlington Bridge alteration project. We look forward to 
continuing our cooperative working relationship with the Coast 
Guard and to ensure that the intent of the Truman-Hobbs Act is 
met.
    BNSF has a positive history of partnering with the public 
sector in rail projects that provide improvement in safety, 
energy use, reduced congestion, and fewer emissions, in 
addition to the freight benefits that we and our customers pay 
for and realize. We believe that this is a good model which was 
recognized in the Recovery Act and is being demonstrated in 
this public-private partnership on Burlington Bridge.
    Mr. Chairman, thank you again for inviting me to testify 
here.
    Mr. Kagen. Thank you so much.
    Mr. James Duit, representing the American Concrete Pavement 
Association. Thank you for joining us.
    Mr. Duit. Thank you. Chairman, Members of the Subcommittee, 
and distinguished guests, thank you for the opportunity to 
contribute to this progress report for the transportation 
infrastructure investments.
    My name is Jim Duit. I am the president of Duit 
Construction Company, a highway heavy contractor located in 
Edmund, Oklahoma. I am pleased to share my perspective today 
about the American Recovery and Reinvestment Act of 2009.
    Today I am speaking on behalf of Duit Construction Company 
and a joint venture partner, TTK Construction. Together, we 
were awarded five ARRA projects. I am also representing the 
American Concrete Paving Association as an at-large member.
    The concrete paving industry and we in Oklahoma welcome the 
arrival of ARRA. We appreciate the leadership of the President, 
Congress, the U.S. Department of Transportation, and the 
Federal Highway Administration. Also, a great deal of credit 
goes to Oklahoma Secretary of Transportation, Mr. Gary Ridley, 
and his talented staff.
    Of the $27.5 billion appropriated for transportation 
projects nationwide, Oklahoma's share was $465 million. 
Oklahoma has led nearly every State in putting 100 percent of 
its transportation stimulus money to work and in applying 
stimulus funds to 274 highway and bridge projects contracted in 
Oklahoma. To date, over 70 percent of the work is completed and 
paid for. Working together in a joint venture, Duit 
Construction Company and TTK have been awarded five major 
projects totaling $140 million. These include two projects on 
Interstate 40, two projects on Interstate 35, and one on U.S. 
69.
    In my written testimony, I have provided specific project 
details, but for this hearing I want to emphasize four 
important hallmarks common to each project.
    First, we used environmentally friendly methods on all 
interstate projects by recycling the old concrete pavements 
back into the new projects.
    Second, these interstate projects are not quick fixes, but 
they are 30-year pavement design structure.
    Third, the industry worked very closely with Oklahoma DOT 
to streamline planning and accelerating projects.
    Fourth, a research provision in SAFETEA-LU had a direct 
impact on the success of the design of these ARRA projects.
    In all, some 2.1 million manhours have been logged on ARRA 
projects in Oklahoma. Duit and TTK have budgeted 855 manhours 
for the ARRA projects. We are about 342 full-time employees, 
including subcontractors. For Duit and TTK, it was more about 
retaining personnel than creating new jobs.
    Based on our experience, I believe the critical success 
factors of planning and preparation by Director Ridley on ODOT 
were critical. When ARRA was signed into law, ODOT had 
identified and readied plans for more than $1 billion worth of 
projects, and I understand that the balance of these plans are 
still on the shelf, ready for future funding.
    Close communication among ODOT and the industry also 
factored heavily in the success in Oklahoma. Innovation and 
inventiveness were also key factors. This came in the form of 
new materials, designs, and construction. As mentioned 
previously, research also played an important part. 
Streamlining was a hallmark for these projects. Plans from 
conception to contract administration through actual 
construction were compressed to record times.
    Finally, there were contractors that were in dire need of 
the work, and the watch words of ``use it or lose it'' that was 
incorporated in the ARRA were not just a guiding principle, but 
a way of life. Words alone do not express the relief and 
gratitude of those of us that were fortunate enough to be part 
of this initiative.
    Even so, we are concerned about the future of our Nation's 
surface transportation infrastructure. For example, we are 
witnessing a large number of talented, experienced, consulting 
engineers in the design community who are being laid off or are 
unable to find work. As noted previously, ARRA enabled us to 
retain workers and even hire 75 more for the 2009 and 2010 
season, but the numbers are starting to fall as we complete 
work. A retained, experienced worker is extremely important to 
any company.
    Duit Construction Company has 75 employees who have been 
with the company for 5 years or more, representing a combined 
knowledge base of over 1,000 years of experience with Duit 
Construction and continuous experience in the highway 
construction industry; and many other industries and industry 
companies have similar stories. This is a tremendous amount of 
experience, and we do not want to lose this talent.
    Also, Duit Construction and TTK, like many others in the 
construction industry, are simply not comfortable investing in 
long-term capital expenditures in the current economic climate.
    In the absence of a robust highway bill, transit program, a 
time for passage, or a durable solution to funding issues, many 
in the industry are concerned that the gains realized from ARRA 
will be lost without a robust highway bill now. Mr. Chairman, 
the concrete paving industry stands ready and willing to assist 
you and the T&I Committee, colleagues and staffers in finding 
and advocating for a workable solution. We are also receptive 
to ways that we can work together to advance the highway 
transit bill and to ensure that it receives the attention it 
deserves.
    Thank you, Mr. Chairman and Members.
    Mr. Kagen. Thank you, Mr. Duit, and appreciate all the hard 
work you have been doing in Oklahoma. Some of that benefit 
comes back to the Federal Government as well, because when you 
have people working, they pay their Federal taxes, they stay in 
their own home, and we help solidify our housing situation. So 
thank you again.
    Mr. Kagen. I now wish to introduce from my hometown of 
Appleton, Wisconsin, Mr. Kevin Gannon.
    Mr. Kevin Gannon, you have got 5 minutes. Thank you. 
Welcome to Washington.
    Mr. Gannon. Thank you, Representative.
    Mr. Chairman, Members of the Committee, my name is Kevin 
Gannon. I am vice president of Northeast Asphalt, Incorporated, 
headquartered in Appleton, Wisconsin. I am also the current 
president of the Wisconsin Transportation Builders Association 
and a member of the Board of Directors of the American Road and 
Transportation Builders Association.
    Northeast Asphalt is a professional asphalt production and 
construction services company founded in 1979 that operates in 
about 30 counties in northern Wisconsin. We currently have 
approximately 300 employees. Due to the Nation's economic 
difficulties, our employment rolls have declined by 7.5 percent 
since 2007.
    Mr. Chairman, I would like to again express our industry's 
appreciation for the leadership of this Committee in securing 
major new transportation investments as part of the Recovery 
Act. These investments have been immensely successful in 
supporting transportation construction jobs in the United 
States. Over the last several years, our industry has witnessed 
recession-induced cutbacks in State transportation investment 
and a major decline in private sector transportation work. The 
Recovery Act's transportation investments have been the lone 
bright spot for our sector.
    My own company, Northeast Asphalt, is involved with 66 
Recovery Act projects in Wisconsin, and 7 projects in Michigan. 
The size of these contracts ranges from $2,500 to $16 million. 
Due to the more than 50 percent decline in our private sector 
work over the last several years, we have not been able to add 
new employees; however, our Recovery Act work has certainly 
helped us hold on to our existing workforce.
    I know creating jobs is a political hot button right now, 
but, as an employer, saving jobs is just as important to me. 
Few things are as difficult as having to let someone go because 
we do not have enough work.
    I would also like to point out that due to the overwhelming 
challenges our industry continues to face, many firms have been 
forced to adjust their business operations to simply survive. 
Essentially we are doing more with less of everything, and this 
recent dynamic complicates our sector's employment picture.
    As of July 16th, more than 11,000 highway and bridge 
projects had moved to the construction stage, and over 3,000 
have been finished. Mr. Chairman, this means $23 billion worth 
of Recovery Act highway funds are either supporting projects 
currently under construction or already completed. This is $23 
billion that is generating jobs in direct construction and the 
supply sectors, and all of it is boosting the economy.
    We saw an overall 7.1 percent increase in highway and 
bridge contract awards nationwide from 2008 to 2009. To further 
emphasize this point, the last page of my written testimony 
includes a U.S. map that shows 37 States and the District of 
Columbia increased highway and bridge contract awards in 2009. 
By comparison, in 2008, the year before the Recovery Act, 28 
States decreased awards, while 22 increased.
    As undeniably successful as the Recovery Act's 
transportation investments have been, this initiative was only 
intended as a temporary boost. It will continue to support 
transportation construction work and jobs in 2010. After that 
its impact will phase down quickly. Frankly, the uncertain 
outlook about the reauthorization of the Federal highway and 
public transportation programs is making an already difficult 
situation worse. It is not just the delay in passing the 
reauthorization bill that has our industry concerned, it is the 
uncertainty and trepidation caused by how the delay is being 
handled with short-term extensions and deficit spending.
    For more than 50 years, the Federal-aid highway and transit 
programs have been a model of responsible and stable financing 
from system users. That dependability, which is needed to plan 
and execute multiyear projects, is now threatened by a lack of 
the will to enhance Highway Trust Fund revenues.
    Mr. Chairman, I know you and other Members of this 
Committee are trying to address this problem head on, and we 
greatly appreciate your leadership. Until all Members of 
Congress and the Obama administration stop trying to avoid the 
situation, however, there is little chance of seeing true 
recovery in the transportation construction industry. This is a 
real-world consequence that directly impacts Northeast Asphalt, 
our employees and the State of Wisconsin.
    I appreciate the opportunity to testify, and I am happy to 
answer any questions. Thank you.
    Mr. Kagen. Thank you, Mr. Gannon, and thank you for 
employing so many people in my hometown and my home district. I 
really appreciate it.
    Mr. Gannon. And we appreciate your help, too.
    Mr. Kagen. I am sure all of your employees appreciate being 
able to pay their own bills and stay in their own home because 
they have a higher-wage job that is here and hasn't been 
shipped overseas.
    I would like to ask all of you, because I will draw from 
all of your testimony that the Recovery Act or the stimulus 
act, as we know of it, has been immensely successful not just 
for your own businesses, but also the communities in which you 
employ people. It has been immensely successful and beneficial 
not just to your company, but also to the communities. So I am 
going to ask you a hypothetical question. Had all of you been a 
Member of Congress, would you have voted yes in favor of 
passage of the Recovery Act?
    Mr. Gannon. Yes.
    Mr. Schneider. That would be yes for me.
    Mr. Macloed. Yes.
    Mr. Kagen. Mr. Millsap?
    Mr. Millsap. I have become a member so quick, I am not sure 
how to respond here.
    Mr. Kagen. You are pleased with its passage? 
    Mr. Millsap. We are certainly seeing the benefit of the 
passage, yes.
    Mr. Kagen. Mr. Duit?
    Mr. Duit. Yes, we are certainly seeing the benefit of the 
passage. And, yes, I would, but it would certainly have been 
nice if more than 4 percent was--were spent on highways and 
roads.
    Mr. Kagen. That will get to my next question.
    Mr. Gannon?
    Mr. Gannon. I am very pleased with the highway portion of 
the bill. The entire bill, again, I would probably have a tough 
time. I can't speak for the over 95 percent-plus.
    Mr. Kagen. But you haven't lost money because of the 
stimulus bill; you have been gainfully employing people, and 
you have been prosperous.
    You mentioned in your testimony, in your written 
testimonies, but for the fact the government stepped in to fill 
the void, the State didn't have the funding, and the private 
sector didn't have the funding for your businesses to continue 
on the path you are on now, and that has been universally true 
with everyone throughout the country. So I will assume that 
that would be a yes, you are pleased with the results if 
nothing else.
    Mr. Gannon. Yes, sir.
    Mr. Kagen. Would you have voted for something that had even 
a larger portion for transportation infrastructure?
    Mr. Schneider. That would be an easy vote.
    Mr. Kagen. That is an easier one, isn't it? Well, that is 
part of the governmental process is the tug and pull here in 
Congress the way our Founding Fathers put us together.
    I am certainly not in control of this institution. Chairman 
Oberstar has been here a few years longer than I have, and he 
is not in control either, but this is part of the debate that 
takes place about where we can best invest our money.
    About how we are going to find the resources necessary to 
rebuild our Nation's infrastructure, by some estimates we are 
about $2.1 trillion behind. I would like to hear from all of 
you about where you think those resources should be had. In 
Kevin's testimony he suggested that we should stiffen up and be 
responsible and have a tax increase. So, Mr. Gannon, let me ask 
you straightaway, would you be in favor of raising the gasoline 
tax?
    Mr. Gannon. Representative, I am in favor of users--user 
fees. We all use the highway system, we all have the wear and 
tear on our vehicles, we all want the smooth roads. I am in 
favor of a gas tax or another--other revenues to fund the 
Highway Trust Fund, absolutely.
    Mr. Kagen. Mr. Duit?
    Mr. Duit. The gas tax, as Congressman Oberstar had said, 
was really the backbone for all of our infrastructure and our 
interstates in the past. And the statistics show that 38 hours 
of every driver in the urban environment is spent in 
congestion, basically 1 week sitting behind a steering wheel 
that they really don't have to do.
    I am not necessarily for the gas tax, but I think that that 
is a solution, an immediate solution. There are other solutions 
on the horizon, maybe a phased-in gas tax or other solutions in 
a longer period of time. Public-private partners certainly 
enters into this; it has in Europe for years. It will and has 
worked here also.
    Thank you.
    Mr. Kagen. Mr. Millsap? 
    Mr. Millsap. As first representing BNSF Railway, we are 
here privately financed. As a matter of fact, we are spending 
$2.4 billion on our own infrastructure, so I am not really in 
this debate. I would certainly agree that we are encouraged and 
get excited about public-private partnerships. That is a very 
good way to go after it.
    Mr. Kagen. Mr. Macleod?
    Mr. Macloed. Yes, I would be in favor of a gas tax 
increase. I am seeing that every day. When I drive past gas 
stations, prices go up 5 cents, and nobody seems to care. 
People are still filling up at the pump.
    I think we can use that money very effectively, but we also 
need to find another source, because gasoline consumption is 
going down, and we need a good funding source for the long 
term.
    Mr. Schneider. The administration, of course, laid out 
earlier today that the options infrastructure bank at 4- to 6 
billion, that could be one or two projects. I mean, come on.
    Secondly, toll roads, try a toll road in the middle of the 
State of Wyoming. For rural States that doesn't fly either. So 
in public-private partnerships, same thing for the rural part 
of the United States, which is where we operate on with a lot 
of our construction.
    So the gas tax was a tough vote. The alternative, if there 
is not a political will for a gas tax, would be a tax on 
petroleum. We think that that is another option, as long as it 
is dedicated to the Highway Trust Fund.
    Mr. Kagen. I remind everyone in the room it was this 
Committee under the leadership of Chairman Oberstar that made 
certain that the funding portion within the stimulus bill that 
went into transportation stayed there, and we recorded--you are 
here today because of the process, the oversight process, of 
making certain that the funding that went into transportation 
infrastructure stayed there, and that is reported publicly and 
transparently. I don't think the other committees that were 
involved in the creation of that funding source had the 
oversight that Chairman Oberstar had in terms of making sure we 
are all accountable.
    Mr. Chairman. Mr. Garamendi from California.
    Mr. Garamendi. Thank you very much, Mr. Chairman, and your 
line of questioning was superb. We have to come to grips with 
this. Some of us from California might remember 1990, when we 
actually increased the gasoline tax in California, took it to 
the vote of the people, and they overwhelmingly supported it. I 
happened to have been the author of that bill when I was in the 
California Legislature. It was something that we did not fear 
as long as it is used properly, and the gentlemen at the table 
have used the money very wisely for the benefit of many.
    I did travel on Interstate 40 to observe some of the 
construction the Duit Construction Company was doing. Part of 
it was finished, and part of it was not, and there was some 
congestion, but I forgive you for that, because ultimately it 
will last for many, many years, and very, very well done.
    My question really goes to Mr. Macloed of Gillig, an issue 
that I raised once before here in this Committee hearing, and I 
will raise it again, and that is billions of dollars of our tax 
money has gone offshore to purchase rolling stock, buses, light 
rail, heavy rail, commuter trains and the like. It seems to me 
to be a perfectly foolish thing to do is to send our tax money 
offshore to purchase equipment that could and should be made in 
America. We should have a ``make it in America'' policy.
    Previous Secretaries of Transportation have overused the 
four waivers that have been in the law for some time. It is 
time for us to eliminate at least three of those four waivers 
and make it clear if it is our tax money, it is going to be 
spent in America to purchase rolling stock and equipment not 
only for the transit and public transit sector, but also for 
the other parts of the transportation program. So I have 
introduced legislation that would eliminate three of those 
four, leaving only in place the existing 25 percent waiver; 
that is, if it is more than 25 percent expensive to be built in 
America then a waiver could, but not necessarily would, be in 
place.
    I bring that to the attention of my colleagues. I am not 
asking for comments, but, Mr. Macleod, since you are one of, I 
think, only two bus manufacturers in America, you may want to 
indicate your personal or company feelings with regards to the 
proposal that I made.
    Mr. Macloed. Yes. In my opening remarks I mentioned that 
Gillig was one of the last surviving American bus companies. 
Other transit bus manufactures like AM General, General Motors, 
Flexible have all failed and gone away. We can't afford to do 
that; we have to have a manufacturing base here in this 
country. We invent things like the television and telephone, et 
cetera, and then we have them made in other countries. We can't 
survive as a service organization; we have to be producing 
something over here.
    We make excellent buses. We have the technology, we have 
the people, and if it is our tax dollars, why should not we 
spend them over here?
    So I thoroughly agree with Congressman Garamendi's bill and 
support him, and I hope you all will, too.
    Mr. Garamendi. Thank you, Mr. Chairman.
    And thank you, Mr. Macleod.
    Mr. Kagen. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    To Mr. Millsap, I have the distinct, how would I say, 
privilege of having the Alameda Quarter East go through my 
whole district that delivers the goods to the rest of the U.S., 
and part of it is BNSF and Union Pacific. The question right 
now in many of the areas, because the high-speed rail is being 
proposed for San Francisco to down south through us, that the 
railroads own most of the right-of-way, and they are a little 
reticent allow the high-speed rail to either build a third rail 
or to be able to utilize some of the lines that conceivably 
could be used for the high-speed rail. And, in fact, it was 
just released a couple days ago stating that they are moving 
forward on the high-speed rail authority that would slow down 
the goods movement.
    What is your opinion on that?
    Mr. Millsap. Congresswoman, I don't know if you were here 
when I introduced myself----
    Mrs. Napolitano. No, I am sorry, I was not.
    Mr. Millsap. I am head of the bridge department.
    Mrs. Napolitano. That is outside of your realm. Then I will 
pose another one to you, sir. My time will be running. 
    Mr. Millsap. If I may, we will certainly have someone get 
back to you on that.
    Mrs. Napolitano. I appreciate that very much.
    There is an overpass in one of my communities that the 
embankment had been eroding because of both negligence on the 
State's part and also on the railroad's, BNSF; that it would 
have been clogged up, and it was undermining the underneath, 
and that would have caused great concern, both the city and to 
the railroad, because that is part of the land that delivers 
the goods movement to the rest of the State.
    Yet when apparently you do have in the ability to be able--
the contractual agreement that the city has to maintain it, yet 
it is called to both. If that were to go down, that rail line 
would be closed for quite a while. Yet we couldn't get your 
officials to be more cognizant of the value to BNSF and to keep 
it moving, and they just totally moved away from it on being 
part of the solution in terms of funding. I would like to 
discuss that with you further, sir.
    Mr. Millsap. I look forward to that.
    Mrs. Napolitano. Thank you.
    Do you have any concerns with any of the high-speed rail 
proposals awarded by ARRA? Do you have any comment?
    Mr. Millsap. I really don't, in my capacity, no.
    Mrs. Napolitano. Then to Mr. Schneider, to what extent 
does--and he has asked the question before, and I know that in 
my area there have been many jobs created because--or 
maintained because of ARRA. How has it impacted your business, 
to any of you? And had this not been enacted, where would you 
be?
    Mr. Schneider. Well, we have to track--as you probably 
know, with the ARRA spending, we have to track the number of 
hours and submit that. And to date it has been over half a 
million hours have been worked by Knife River on stimulus fund 
projects. I think you might have been out of the room when I 
mentioned that we have done about $200 million worth of 
stimulus projects to date, and we have $80 million of stimulus-
funded projects in our backlog of work still to be built. So it 
has been huge.
    I think the one thing I would like to say and put it into 
context is you all know since 2008, the private market has 
collapsed in this country. We used to do about 60 percent 
public work, 40 percent private work. The private work now is 
down to about 7 percent of the work that we do. So all of our 
eggs are in the public-funded basket.
    And so the stimulus spending right now is 18 percent for 
us. When that is gone next year--so that is going to have a 
revenue decrease of about 20 percent, but more importantly is 
the State DOTs. And most States have budget problems, as you 
know. They have all told us is next year don't even think about 
the kind of spending from the State level that they have seen 
in the past. I was just in Idaho. Idaho DOT directors told 
everybody they are going to cut their budget next year by 50 
percent. I believe a lot of other State DOT directors are 
saying the same thing.
    So we have double whammy: The stimulus is gone, and lack of 
a 6-year bill. And so it is really a train wreck about ready to 
happen unless we get the 6-year bill passed.
    Mrs. Napolitano. My time is almost up. I have a few 
seconds. Certainly if you were able to convince some of the 
Members that are reticent to vote on that or to push that bill 
there is ways of being able to fund it possibly year by year as 
was suggested before and be able to extend it. So I would 
suggest if you make your statements known to this Subcommittee 
and to the Full Committee and Mr. Oberstar, because we all want 
to see it pass; the problem is the funding issue is what has 
been delayed, or at least from my own personal observation.
    So with that, thank you, Mr. Chair.
    Mr. Kagen. Thank you.
    Ms. Richardson of California.
    Ms. Richardson. Good to see you there. Thank you.
    I have just two questions that I would like to ask, the 
first one to Mr. Schneider and Mr. Duit. There has been 
discussion about the pending reauthorization, for it to come 
forward. And given the fact that I am not in the pavement 
business or the concrete and sand and asphalt business, can you 
describe to us--and I did go back and look in your testimony--
what does it take for you to prepare to do a big project? 
Meaning, you know, how many months in advance do you have to 
get the necessary sand and asphalt and concrete and equipment? 
And what does it take to do a big job, and why is our continued 
delay so problematic in you being able to assemble the 
appropriate resources that you are going to need?
    Mr. Schneider. I will go first, Congressman, is if we get 
the notice to proceed, if we are the low bidder on a project, 
and we are what is called vertically integrated, and we produce 
the sand, gravel, and we also make the asphalt, and we make the 
concrete and then do the construction itself, if we get the 
notice to proceed on a project in California or wherever we are 
operating, we can be ramped up and we can be underway within 30 
days, no problem, absolutely no problem.
    Now, the easier projects, of course, to do, and the ones 
that the DOT, of course, have really focused in on with the 
shovel ready, have really been the pavement projects, whether 
concrete or asphalt. And the reason for that is as opposed to 
new alignment, where you have to buy the right-of-way, and you 
have to get the permits and whatnot, which could be years, as 
this Committee well knows, an overlay can happen right now.
    I have to tell you this. You really need to understand 
this. And I said about the real value, the value for the 
taxpayers today with the spending on these projects is just 
extremely good. The competition for these jobs, because there 
is very little work in the private market, it is brutal. 
Everybody is bidding this at low, low margins. So the taxpayer 
is winning right now, but we can ramp up very quickly.
    Ms. Richardson. You are preaching to the choir on that last 
point. But I would say I thought I had heard that steel and 
some of the other things are in great need due to the 
increasing amount of work that China is doing. So you are not 
seeing that at all in your industry?
    Mr. Schneider. That may be an issue for the bridge 
builders, but for those of us in the pavement business, it is 
not an issue.
    Ms. Richardson. OK. Mr. Duit?
    Mr. Duit. It doesn't take very long to ramp up for these 
larger projects. Availability of material is available. Our 
biggest concern is our people, maintaining our status of our 
people currently, and we have not seen any steel prices or 
shortage of steel in our current market. Our environment is 
extremely competitive, and steel and cement and asphalt, all of 
these products, are readily available.
    Ms. Richardson. Again, Mr. Gannon, the question I have for 
you is in your remarks you had alluded to the fact that many 
companies, as well as municipalities, that were able to do 
additional projects than what we had anticipated because the 
numbers are coming back a lot lower than we had anticipated. Do 
you have any idea how many States, based upon your organization 
and/or projects, have been able to participate due to being 
able to deobligate and utilize unused funds?
    Mr. Gannon. I can't speak for many other States, but I can 
tell you in Wisconsin there has been a number of letting 
savings. In fact, with the ARRA jobs coming to completion for 
bidding, they are going to add another bid-letting year towards 
the end of September for the leftover funds, which appear to be 
approximately 30 million. And I would echo what Mr. Schneider 
said. Due to material decreases and the intense competition out 
there, there is a lot more let savings than was anticipated, 
which is good for everybody.
    Ms. Richardson. Mr. Chairman, I realize he is preparing his 
remarks. Might I suggest Mr. Chairman has been just one of the 
amazing folks out there not only urging with the 
reauthorization, but really bring value to what we did to the 
recovery dollars.
    Might I suggest that this Committee, we might want to get 
that number from the States, how many additional projects have 
they been able to fund due to the lower bids that have come in. 
And that is really a positive story that we should be adding as 
we are talking about the stimulus. Not only has transportation 
met in terms of what we anticipated, but we are actually 
funding even more projects than that. Very few Members have 
been talking about that. I am talking about outside of the 
Committee.
    Mr. Oberstar. If the gentlewoman would yield?
    Ms. Richardson. Yes, of course.
    Mr. Oberstar. The number given by AASHTO, The Association 
of State Transportation Highway Officials, is 25 percent on 
average nationwide. That is, bids have been coming in 25 
percent lower than anticipated, and that has resulted in one-
fourth more projects under construction than originally 
anticipated, which proves the point that we and this Committee 
made.
    And I am grateful for the support of all my colleagues on 
the Committee, including Ms. Richardson, who was very outspoken 
during that period of time; Mrs. Napolitano; Mr. Baird; and Mr. 
Kagen; and many others; Mr. Mica way back in December of 2008, 
who was very supportive of in the range of $100 billion 
investment in our surface transportation program.
    And it has now been proven that the State DOTs were ready 
to go with projects, the contractor community was ready, the 
sand and gravel sector was ready, the transit agencies were 
ready to award bids, and the producers like Gillig and O'Ryan 
and New Flyer and others were ready. They all stepped up and 
greatly exceeded expectations, even their own expectations. 
They were able to move things faster.
    The answer to your question is at least one-fourth more 
projects than originally anticipated, and that has resulted in 
35,000 lane miles of highway improvement, 1,264 bridges 
rebuilt. You think in 1 year, 1 year and 3 months, the 
contractor community, the State DOTs, the transit have built 
the equivalent of three-fourths of the mileage of the entire 
interstate highway program which took 50 years to build. That 
is an extraordinary accomplishment.
    Ms. Richardson. Dr. Kagen, if I could ask one last 
question, and it is to the three of them, it should only take 
about 15 seconds.
    Mr. Kagen. Fine.
    Ms. Richardson. Thank you.
    Gentlemen, of the three of you particularly that represent 
associations, one of our concerns is unbundling, that many of 
the companies that you work with subcontracting, the same folks 
get the same jobs. And part of why we did the recovery was to 
bring other people to the table.
    Could any of you share with us what you have done to reach 
out to our companies, particularly small business, to give them 
a chance to participate in some of these projects?
    Mr. Gannon. I will take that answer--question.
    Basically you are right, a lot of projects were unbundled, 
and like I said, we have done a number of projects being in the 
number of 70, but a fair amount of them are subcontract work 
also. The State of Wisconsin did a nice job of diversifying the 
projects. A third of the money basically that went to Wisconsin 
went to local municipalities, and a lot of their work, which 
was a lot of small bridge work, those type of jobs, would 
happen in the private market, which is basically nonexistent.
    A lot of the other contractors and why we probably didn't 
see our employment--our employee numbers go up is because a lot 
of other contractors that worked in the private sector have 
moved over into the public sector and worked on a lot of these 
municipal jobs. And the States will tell you there are a lot of 
contractors that they haven't seen bidding jobs and being 
awarded jobs that used to work in the private sector.
    Ms. Richardson. So, Mr. Schneider, Mr. Duit, and Mr. 
Gannon, if your associations could supply to the Committee any 
new contractors that have gotten a chance to work with you 
through this process, that would be helpful.
    Ms. Richardson. Thank you very much.
    And thank you for your extending time.
    Mr. Kagen. The madam's time has expired.
    Before recognizing Mr. Baird, I just want to make the 
comment that at the time that we did pass the stimulus bill, 
our private sector economy was coming to a standstill. You may 
not have had the opportunity to come here to Congress, to be in 
the chairs that you are at. Your businesses may not have 
survived had we not invested in America's infrastructure. It is 
a tremendous economic value, especially at today's prices. So I 
want to thank you again and recognize Mr. Baird.
    Mr. Baird. I thank the gentleman for holding the hearing, 
and thank you all for your testimony.
    From what I have heard, we are putting people to work, we 
are getting a good buy for our money, we are building lasting 
infrastructure, and without it, many companies and individuals 
would have lost their jobs; is that a fair summary? So that 
must explain why everybody hates this bill.
    I have to say, those of us who have had the pleasure of 
town halls over the last year and had people screaming and 
shouting about how evil the stimulus is could use some cover 
fire. And many of us are going to go back home to our districts 
over August and try to talk about this. And, quite frankly, we 
need your members there. These are nonpolitical, public town 
halls with Members of Congress trying to get the story out 
about what we are doing to get people back to work, and it is 
just not right to have some poor Member of Congress having 
hundreds of people yelling at them, shouting them down, running 
against the stimulus.
    All across this country candidates for office are running 
against the stimulus, saying such preposterous things as it 
hasn't created any new jobs. And their logic is awful. Their 
logic is, well, we had the stimulus, and there are still 
unemployed people; therefore the stimulus had no effect.
    So I would ask you what are you doing to let your 
employees, and their families, and your communities know that 
the stimulus is indeed having the aforementioned impact?
    Mr. Schneider.
    Mr. Schneider. Congressman, that is a great question. I can 
tell you that when I was back here in May for the TCC fly-in, 
one of our meetings was with Congressman Edwards from Waco, 
Texas. And he said exactly the same thing. He said, I am in a 
fight like I cannot believe, and the number one issue that my 
opponent Mr. Flores is using against me is my vote for the 
stimulus. He said, I got almost no appreciation whatsoever, 
when, in fact, it meant about $1.7 billion worth of work, Fort 
Hood, College Station, et cetera. And we walked out of that 
meeting like, well, that was a wake-up call for us.
    So what we are doing, Congressman, is we are having the 
Congressman appear at our employee meetings, and we are letting 
him talk to our people, and we are also thanking him in front 
of everybody. We should have done that before. We were 
ungrateful. I don't think he heard too many thank yous, and 
that is our mistake, and we are, I think, remedying that.
    Mr. Baird. I really appreciate that.
    Any others wish to address that?
    You know, we put $228 billion worth of tax cuts in that 
bill. Not a single person since we passed the legislation, not 
one, has come to myself or any colleague I know and said, thank 
you for the tax cuts. In fact, they tend to believe that taxes 
were increased. In fact, they were cut for over 90 percent of 
American people and businesses.
    Some of your members undoubtedly benefit from the small 
business loss carryback provision, I am guessing, that was in 
that. There was no gratitude there.
    If we are to continue to move forward, as I think we must, 
to rebuild this Nation's infrastructure, and as this great 
Chairman Mr. Oberstar has led the fight to achieve, we have to 
get the story out, because I will tell you, if people who 
believe the stimulus has had no effect or even a negative 
effect prevail, there will be no more stimulus, there will be 
cuts in transportation funding, and we will go backwards, not 
forward, in fixing this Nation's infrastructure problems.
    What would happen if we had another stimulus? There is a 
lot of debate about that. This time we won't waste it on tax 
cuts, because those have been shown to be greatly appreciated. 
We will put it straight in the infrastructure. What would it 
mean to all of you if we had another infrastructure-based 
stimulus package?
    Mr. Oberstar. If the gentleman would yield, let me amend 
his statement by saying if the Senate were to pass the $34 
billion HIRE Act that the House passed in December 2009. Be 
very specific about it.
    Mr. Baird. Anyone wish to? Would it hurt you?
    Mr. Gannon. I will take that question.
    Basically it would be stability to begin with, and 
hopefully growth. We were growing all the way up through 2007. 
Our company continued to add employees. In 2007, basically 
after that things started to go down, and I am actually looking 
right now, I feel, going into this fall, just like I did in 
2008.
    I mean, it is almost deja vu, because in 2008, we were 
planning and looking at things that are very difficult to do 
when you are looking at taking your entire workforce--these are 
good-paying jobs, not minimum paid wages, and livable wages--
and looking at your whole workforce and looking at a 20, 25 
percent reduction, and that includes managers, staff, 
administrative, right down the line. So stimulus funding--and 
like we said before with the private market basically 
nonexistent, you know, it is scary where we are going.
    Mr. Baird. Any others?
    Mr. Duit. I would like to echo what Mr. Gannon said. It 
would be very stabilizing for us. We are currently winding down 
some of our stimulus work. We do have other work coming 
available to bid. It is fiercely competitive, and we are just 
not sure where we are going to land. It certainly would help 
everyone. The values are great for the taxpayer, very, very 
good. The capacity is out there. There is more than enough 
capacity to build. There is more than enough raw ingredients 
from raw material to build.
    I would like to share with this Committee one disturbing 
thing that was brought to my attention by our bonding company, 
if I might. I asked them straight up how long can contractors 
hang on. As you know, they have total financial disclosure to 
the bonding company. How long can the general contractors hang 
on? How long can the highway contractors hang on? And the 
answer was, we feel we are going to lose 15 percent of our 
contractors in less than 18 months.
    So I guess my point is we are ready and willing. We can do 
it.
    Mr. Baird. I thank you.
    Mr. Millsap, did you want to comment?
    Mr. Millsap. Obviously in the railroad business, which is a 
very capital-intensive business, investment in the 
infrastructure is good. Investment in the infrastructure is 
good for our employees, for our people, for moving the goods in 
this Nation. So we are certainly--we look to making those 
investments.
    As I indicated earlier, obviously we are looking to 
opportunities for the public-private partnerships and what that 
does. I think that as we look at the railroad industry, we were 
seeing some positive turns. We were seeing some improvements, 
increase in our units that we are moving, which is a very 
positive thing. More investments in the infrastructure just 
helps out.
    Mr. Baird. Well, I want to thank you for your comments. I 
hope to see you all at town halls. It is desperately important 
that you show up. If not, you are leaving some good folks who 
fought hard for you, and fought hard for your workers, and 
fought hard for your industries, and fought hard for this 
Nation's infrastructure, you are leaving them hanging out to 
dry, and the results will be bad for them, and bad for you, and 
bad for this country. They can't succeed unless the people who 
are doing the jobs, employing the workers, getting the economy 
going are there, saying that is what is happening, because they 
are being drowned out by people who are just not saying the 
truth, and we need people who know the truth firsthand to be 
there.
    I thank the Chairman for allowing me a little more time.
    Mr. Oberstar. [Presiding.] I want to thank the gentleman 
from the State of Washington, where his comments were a 
penetrating observation here, questions that may have been a 
little uncomfortable to answer. But, Mr. Schneider, I thank you 
for your candor about the encounter with our colleague from 
Texas.
    But I also want to thank Mr. Baird for his service. It is 
not concluded, he has until the end of this session, but he has 
chosen to leave the Congress, and that is a loss for us. A 
person of his personal integrity, his vision, his oversight of 
the broader role of a legislative body, the numerous 
contributions that he has made, and the standard he sets for 
just personal and intellectual honesty and integrity, it has 
been a great support for all of us who serve with him and a 
standard for others to meet, but a loss that he would take this 
to other pursuits.
    Thank you for your great contribution. We will be thanking 
you more as we go on through the rest of this session. You are 
not gone yet.
    Mr. Gannon and Mr. Duit, in Wisconsin there have been 418 
highway projects, by our count, under contract, underway or 
completed; and in Oklahoma, Mr. Duit, 266 projects. One of 
those could count perhaps as 50 or 60. The interdispersal loop 
is a massive project.
    And parenthetically I would like to observe that when 
Secretary Ridley was a witness before our Committee, I think he 
said it there, but I know he said this, that when he attended 
and was a witness at our hearing in October of 2008, he said, I 
went back to Oklahoma and gathered our engineering staff and 
said, this Committee is serious. I heard this Chairman talk 
about doing a stimulus program. We better be ready because 
something is going to happen. And he said, I ordered my 
engineers to start designing and completing the engineering 
work on the interdispersal loop, which turned out to be a $77 
million project, if I recall rightly. He said, I told them I 
want you to take your plans to church with you on Sunday, 
because if I need to talk to you, I will. And he did, and they 
did.
    And that is the kind of spirit that we wanted from State 
DOTs. So they were ready, they were prepared, they went ahead. 
We had all the naysayers and the green eyeshade folk, I call 
it, at OMB and the Congressional Budget Office say, oh, it 
can't be done, it doesn't spend out that fast, it takes too 
long for these outlays to occur. But we know, all of you at 
this table know, that the jobs are out on the line before the 
money is paid out. So State DOTs surprised themselves by 
getting their projects out. If we had had a few more Gary 
Ridleys, I think, oh, you know, this place would have been 
hopping, but it was nonetheless.
    So how many more projects do you have, Mr. Gannon, in 
Wisconsin? Let me say the same for Frank Busalacchi, your 
secretary of transportation. He is just terrific. Unfortunately 
I understand he has a kidney problem and is having dialysis, 
which is really sad to me. There is a man of enormous vigor, 
and he inspired the department, as Gary Ridley did in Oklahoma.
    So you have these projects. How many more do you, by your 
count--you are not the administrators, but, you know, you talk 
to your colleagues in the business--how many more projects do 
you think, given this $34 billion we have already passed, the 
Senate has, it hasn't acted on--if we put that to work now, how 
many more projects would you be able to do, say, in the next 
year?
    Go first, Mr. Gannon.
    Mr. Gannon. It depends on what we mean by number of--I 
can't speak for what the State has on its shelf. The State of 
Wisconsin mandated this last year that they maintain 65 percent 
of the funding available plans on the shelf, because that is 
really where it all the starts is the funding to be in place, 
to be able to plan ahead. And you are exactly right, Mr. 
Chairman, to physically get the job going, but there is a lot 
that takes place before we are out there and actually working 
on the roadway.
    Basically Wisconsin did an admirable job of getting the 
projects out. They utilized the consultants--a lot of the 
consultants for designing and inspecting jobs also. And as far 
as number of projects, where we are going next year, and 
Wisconsin facing the $2.5 billion deficit, going the next 
biennium, we are very nervous where the State will go with the 
highway funding. We have been very fortunate that we had 
legislators that have looked at things and have kept--you know, 
have seen the need for the jobs. One of the big things is jobs 
and jobs retention.
    So in your statement with a $34 billion would roll into the 
funds, we could easily match. We have completed over 84 percent 
of the stimulus projects; our company has 84 percent completed 
to date. Some of them are, like we said before, just milling 
overlays, and some of them are reconstruction jobs that will be 
going into 2011, maybe even 2012.
    Mr. Oberstar. But those are 100 percent funded projects, 
100 percent Federal funded. That gives you the certainty of the 
State doesn't have to dig in and worry about where it is going 
to get the matching dollars. That is $529 million that was 
allocated to Wisconsin; you have got it under contract. And in 
Oklahoma, you had 465 million allocated, 266 projects.
    If you had the same amount of money now, given the 
experience of the stimulus, knowing that you can get these 
projects underway much faster because you have had a selection 
process now, where do you think Oklahoma could go?
    Mr. Duit. In my earlier presentation, Gary Ridley had 
indicated that he had--he will have over a half million--or 
half billion or 500- to 600,000--or million dollars' worth of 
plans ready, currently on the shelf, that could be going to 
letting as soon as funds were available.
    Mr. Oberstar. So that would be the equivalent of 268, 300-
plus?
    Mr. Duit. Exactly, exactly.
    Mr. Oberstar. And there has been some debate within the 
contractor, engineering and the State DOT community nationwide 
about state of good repair versus projects of a longer 
duration, those that would be more in the trade call capacity 
projects. Have you evaluated the balance between these capacity 
enhancement projects and the state of good repair and whether 
they are done concurrently or separately? Is there any 
distinction?
    Mr. Gannon. I will take that.
    Basically from the capacity, both of it--because there is 
over--I think it is in the area of about 15 percent of our 
roads are deemed unacceptable. And we have a balance of 
capacity enhancements. We have a $1.5 billion project that is 
just getting underway in Wisconsin, and it is starting the 
early stages of it, but the funding isn't in place for the 
whole project at this time.
    So there has been a pretty good balance, but our roads are 
still in disrepair, yes.
    Mr. Oberstar. Not all are in the capacity category of the 
Milwaukee interchange, which turned out to be a very--a 
multibillion-dollar project. I think it cost $50 million when 
originally built and 10 times that amount to rebuild it. But 
that is what I am thinking of.
    Mr. Gannon. Yes.
    Mr. Oberstar. So you feel there is a balance of these that 
are in the ready-to-go category that could be underway now.
    Mr. Duit?
    Mr. Duit. Absolutely. There is a good balance in backlog in 
Oklahoma. Four of the interstate jobs that we are constructing 
now with the stimulus bill, one added the capacity, and the 
three others were overlay or total reconstruction. So the 
balance of the plans on the shelf are well balanced in the 
future, and I think they could be put to use very well.
    Mr. Oberstar. Mr. Schneider, you are involved in many 
States, and you have very broad experience. Can you relate to 
these questions I have asked?
    Mr. Schneider. Yes, Mr. Chairman. It really depends on the 
17 States we operate in. The vast preponderance of the stimulus 
has been towards paving and what we have seen in some capacity 
projects that we have been involved with and some in your 
district back in Minnesota.
    Mr. Oberstar. Well, that is--I think all of this is very, 
very instructive. The contractor community, the State DOTs all 
learned a great deal from this recovery experience, while there 
was resistance initially to my proposal that these prices be 
under contract in 90 days, and we changed that to obligated in 
90 days. And half of it obligated in 120 days greatly exceeded 
expectations.
    And AASHTO has given our Committee a list of 6,700 projects 
nationwide. All the States have done inventory. So these are 
projects that can be under contract in 90 days. That was the 
underpinning for the HIRE Act of December 2009. It stalled over 
in the other body as people were wringing their hands about our 
deficit. Well, if you don't put people to work, you are not 
paying taxes, they are drawing unemployment compensation 
instead of paying taxes, and that helps to reduce this deficit, 
and we have something permanent to show for it. We have real 
and lasting benefits. That just exasperates me to no end when 
people don't understand that.
    Now, Mr. Macleod, I have known you for a good many years 
through the Mineta Institute. I have made note, and I am going 
to use it in my future talks, no outsourcing and no offshoring. 
I like that. And there will be no outsourcing or offshoring in 
the future as the U.S. Department of Transportation, the 
Federal Transit and Federal Railroad Administrations proceed 
with development of standards for design and engineering of bus 
and rail transit vehicles. So that competition in the future 
will be based on U.S. designs, U.S. materials, U.S. products, 
putting U.S. workers and U.S. companies to work instead of, as 
you saw, on certain--and I know all too well because I held 
hearings on it at the time--in the 1960's, we lost this 
engineering and technical design capability, and it all went 
offshore because we simply disinvested, just eliminated funding 
for streetcars, for what we call today light rail, for commuter 
rail, and for bus transit systems in favor of the automobile.
    Now there is a revival. There is a revival in inner-city 
passenger rail, there is a revival in transit systems. We were, 
until the recession, adding a million new riders a day for 
transit; for 2 years ago, 10.5 billion transit trips a year.
    So with what the administration is doing, and I think it is 
a tremendous initiative, what do you think will be the future 
for transit investments as we continue? Our bill, by the way, 
reported from Subcommittee last year doubles the funding for 
transit over the next 6 years of this legislation.
    Mr. Macloed. Mr. Chairman, we definitely need that. Talking 
about the technology, our buses are superior to European buses 
and to Far Eastern buses. I was in China a month ago, and our 
buses have better technology. They are safer. We have been 
using hybrids for a lot longer than any of the other countries 
have in buses. We have been networking our electronic systems 
in our buses.
    So we certainly have the technology, we have got the 
capabilities, we have the capacity. All we need do is get the 
orders, and the orders depend on funding. And I think doubling 
the new transportation bill from the SAFTEA-LU level would be 
excellent because we need that. We need more buses, and we need 
more infrastructure. I am just talking about the bus side of it 
because that is where my knowledge is.
    You were also talking about putting people in jobs 
straightaway. At the Mineta Institute meeting in January of 
2009, we talked about the stimulus bill, and we went back and 
started preparing so that in March we were actually hiring 
additional people to take up our production. It takes us a 
little while, so we are slowly edging up the production.
    So we were right there. And I think all of transit and all 
of transportation is capable of doing that. And the jobs we 
create are here in the U.S., and they have this spillover 
effect or multiplier that creates other jobs in the supplier 
base.
    Mr. Oberstar. In your experience in the various communities 
in which--to which you market your transit vehicles, are you 
seeing a continued growth in ridership, in use, and design and 
engineering plans for the future?
    Mr. Macloed. Yes. And we did see a spike when gasoline 
prices went up. So I think if we add a tax on gasoline, I think 
we will push people into using transit. And once they started 
using it, when the prices came down, people stayed with 
transit. They found it was more convenient. It eased congestion 
for other people who have to use the roadways, like delivery 
trucks and things.
    Mr. Oberstar. Thank you.
    Mr. Millsap, in your work with the Truman-Hobbs Act and the 
bridge removal or reconstruction/rebuilding, do you know of 
other projects that are on your horizon or on your radar scope 
that need attention and that could qualify for a future 
stimulus program?
    Mr. Millsap. Chairman, I certainly do. I think that you are 
certainly familiar with one. It is Tower 55. It is not a bridge 
project, but it is Tower 55, the rail intersection in Fort 
Worth, Texas.
    Mr. Oberstar. Oh, yes. I may be going to see that in a few 
weeks.
    Mr. Millsap. It is certainly a project that is looking for 
support and for funding. Obviously 100 trains a day meet at 
that intersection. BNSF and the UP, the railroads are certainly 
partnering up. And understand this is TxDOT's number one 
project. They will be making, or have already filed, a 
preapplication for TIGER 2. So that is certainly one.
    And another one, you made reference to a bridge. Yes, on 
the Mississippi River, Fort Madison. Fort Madison is the bridge 
crossing the Mississippi River. The Coast Guard issued again an 
order to alter that bridge in 2001. And as of right now, I 
believe there is about $5 million that is allocated, 
appropriated for replacing the swing span again and installing 
a modern vertical lift. That project will be something in the 
70-, $75 million range. So certainly a long ways to go, and I 
hope that we don't have to wait another 18, 19 years to make 
the improvements on that bridge.
    Mr. Oberstar. A structure of that kind is truly an obstacle 
to navigation, and that is what the Truman-Hobbs Act is 
designed for, to remove obstacles to navigation.
    Mr. Millsap. That is what occurred in 2001, whenever the 
Coast Guard issued the order to alter, because it was 
identified as an unreasonable risk or hazard to navigation.
    Mr. Oberstar. I am enjoying this opportunity to exchange 
with you and get your thoughts and inputs, but we have other 
Members here who have their own comments and questions. I want 
to turn to them.
    Mr. Schneider, would you please give Joyce Fisk a hug for 
me, if that is acceptable in your arena? But, you know, just 
tell her it is from me.
    Mr. Schneider. As long as it comes from you, I can do that.
    Mr. Oberstar. She is a honey. She is just terrific. She is 
the human face of stimulus and has been an inspiration daily 
for me.
    Just one observation. We talked a little bit ago about 
financing, and I think the comments of--let us see, who was it 
that said we have a lack--Mr. Gannon, you said it well, a lack 
of will to enhance the revenue stream. That was very nicely, 
euphemistically put as no guts to raise the gas tax.
    It was Dwight Eisenhower, the very apostle of conservatism, 
who said we need a gas tax, we need a user fee to finance the 
Interstate Highway System and the Highway Trust Fund, and he 
signed it. And 2 years later, that was 1956--2 years later the 
Bureau of Public Roads came back to the Congress and the 
President and said that 3 cents isn't enough; we need another 
penny for what was to be a $22.5 billion Interstate Highway 
System that eventually committed $125 billion in 1960's dollars 
funds. That 1 cent passed the House on a voice vote. You can't 
pass the prayer on a voice vote today. The way to clear a room 
of Members of Congress is to stick your head in and say, gas 
tax, and they all run for cover, or any kind of tax.
    But it was years later that Ronald Reagan, in 1982, said--
faced with a proposal from this Committee, from our then-
Chairman Jim Howard, a Nickel for America--who said no, and 
then signed it, saying, quote, this user fee is budget neutral. 
The users of the system are paying for it, maintenance and 
upkeep. And this 5 cents represents the cost of two shock 
absorbers in a year for the drivers on our systems. It was good 
enough for him to sign. Why isn't it good enough for modern-day 
conservatives to sign up for?
    And there was George H. Bush who supported--signed a 5 cent 
increase in the gas tax, half of which to go for a deficit 
reduction for 3 years and then be repatriated to the Highway 
Trust Fund.
    Who are these self-appointed conservatives who say that the 
users of the system shouldn't pay for it? That is nonsense. Mr. 
Macleod said very well, just stand on a street corner, and gas 
prices will go up 5 cents. Of course, in the afternoon they 
change that sign, and now they do it electronically. They used 
to have someone come out there, go on a ladder and hang up 2 
cents. Now it goes automatically. And where is it going? United 
Arab Emirates, and to Saudi Arabia, and Venezuela, and to our 
friends north of us, to Canada. They are happy to take that 
increased money. It is not going to the Highway Trust Fund, it 
is not going into our bus and transit system, and we need to 
recapture that.
    What we need is not just will, we need a few political guts 
to stand up and say, yeah, this is what we need to do. This is 
in the best public interest to invest in our own system that 
the users of it are actually paying for it. And while public-
private partnerships have been popular in Europe, they are for 
very limited, big-scale projects like the bridge on the border 
of France and Spain. I have the video on that construction 
project.
    Wonderful, marvelous project. That is one project. It is 
not a system. And I think, Mr. Duit, you said, I think, you set 
out in Wyoming to try to put in a toll road. That just doesn't 
work.
    Mr. Petri has just arrived, but Mrs. Napolitano had her 
hand up earlier. I will recognize her for 2 minutes and then go 
to Mr. Boccieri.
    Mrs. Napolitano. Thank you, Mr. Chairman. I won't take 2 
minutes, but just to comment, to follow up on Congressman 
Baird's comment about letting people know that the ARRA funds 
have created jobs. May I suggest, Mr. Chairman, that maybe an 
op-ed piece, with your name and theirs, to the newspapers 
stating facts, not making up, but stating facts that you have 
been able to keep people employed in those areas where it has 
been more critical. Because he is right; if you only tell some 
employees, that won't be enough to spread around to the areas 
where people are condemning the spending of funds unnecessarily 
but people have been put to work in many of those areas.
    So either that, or letters to the editor from some of your 
own folks who have been able to have gainful employment would 
be helpful to be able to put an end or at least try to counter 
the claims that there have been no jobs developed through this 
ARRA funding, Mr. Chairman. Thank you.
    Mr. Oberstar. Thank you very much. You are right on. You 
all can help each in your own way.
    Mr. Johnson.
    Mr. Johnson of Georgia. Yes, Mr. Chairman. Thank you. 
Before I make a statement, I must--before I ask questions I 
must make a statement.
    Back during the deliberations of the House of 
Representatives, the Democratic caucus on the Recovery Act, 
whether or not we should actually pass it or not, and if so, 
what should be featured in it. I believe that the Chairman was 
a strong advocate for $500 billion, if I recall correctly, for 
transportation and infrastructure investment as a part of the 
Recovery Act. And that amount unfortunately was watered down 
and we ended up with what we got--I think it was around maybe 
somewhere between $100 billion and $200 billion--for 
transportation and infrastructure projects in the recovery 
package. Is that right?
    Mr. Oberstar. The total for our Committee was $64 billion, 
which accounts for 8 percent of the total Recovery Act funding. 
And of that $64 billion, $35.9 billion is in highway and 
transit.
    Mr. Johnson of Georgia. Well, that is a long way from the 
$500 billion that was being advocated.
    Mr. Oberstar. That is for a 6-year program.
    Mr. Johnson of Georgia. And I am happy that we got that 
despite--I am happy we got what we got, despite it being less 
than what I thought it should be. And if we had had a more 
robust recovery agenda focused on job creation through 
transportation and infrastructure development, I think we would 
show a much healthier result than what we are showing now in 
terms of job creation.
    Certainly the number of jobs that have been created is 
nothing to sneeze at by this recovery package. I am just 
simply, Mr. Chairman, wanting to have a more robust 
transportation and infrastructure program fully funded, as the 
Chairman pushed so hard for during these deliberations on this 
act.
    I mean, 11,382 jobs created in Georgia just based on 
roughly one-third of the recovery money having been expended 
thus far, 11,382 jobs; 1,780 jobs created just during the month 
of June. This is substantial stimulus to the economy.
    We all know that unemployment numbers are unacceptable, and 
we have been trying to bring those numbers up. But because our 
programs and projects keep getting watered down, America 
continues to have its infrastructure be used up and maintenance 
deferred and new construction put off and jobs-- and the job 
numbers remain too high, and we are not recovering from the 
economic disaster that the previous administration left to us 
quickly. And so the American public is left to feel that we are 
not doing enough, and I agree with them. But, unfortunately, we 
have done as much as we could do under the circumstances.
    But I want to thank you all, gentlemen, for your work as 
small business people. And we all know that small business is 
the job creator in our economy. And to the extent that we 
enable and empower small business to develop, you know, to that 
extent we get job creation. So I want to applaud you all for 
the work that you do in representing before this Committee the 
efforts of small business and the effect of small businesses on 
job creation. And this, despite the withholding of capital that 
you need to expand your business.
    All of those things coming from--and we just had Wall 
Street reform, but we know that those financial entities are 
holding onto their gains that they have made during the Obama 
administration. They are holding tight. Credit is tight. Their 
profits are up. And all of this seems to be in keeping with the 
strategy to obstruct success by the Obama administration which 
was announced by my good friend, Rush Limbaugh, the leader of 
the party on the other side, and they have held fast to this 
strategy. And that is just the truth of the matter.
    And so I look forward, Mr. Chairman, for the future. We 
have got to stay the course. America needs infrastructure 
improvement. It needs more transportation dollars. There are 
some tough decisions that have to be made in the future, and 
this body will be viewed in history with an eye towards 
determining whether or not we did what was best for this 
country or whether or not we kicked the can down the road for 
another session. And I am not frustrated, Mr. Chairman. I am 
actually ready to go to work and make some tough choices.
    And with that, I think all of the questions that probably 
should have been answered were--or should have been asked have 
already been asked and answered, and I just wanted to throw my 
little two cents in. And thank you very much for holding this 
very important hearing.
    Mr. Oberstar. Thank you. I thank the gentleman for his 
observations and for his support and for his consistency. And 
with that kind of support, and support from this panel and the 
members of the associations they represent, we will get there. 
We are going to do this long-term transportation bill. We will 
make it work and we will have a brighter future.
    Mr. Petri.
    Mr. Petri. Mr. Chairman, thank you for having the Secretary 
of Transportation and other members on these two panels giving 
us an update on the progress report of this important 
legislation.
    I apologize for not hearing all of your presentations, but 
I still have a question. And since there is a fellow Badger on 
the panel, I thought I would ask Kevin Gannon and Northeast 
Asphalt, which is speaking for the Transportation Association, 
is a well-respected and well-known firm in our part of the 
world.
    Toward the end of your statement, to just quote from it, 
and it fits into what was just being said, you talk about the 
difficulty in the last 2 years, and then you say, ``Frankly, 
the uncertain outlook about the reauthorization of the Federal 
Highway and Public Transportation programs is exacerbating an 
already difficult situation. It is not just the delay in 
passing a reauthorization bill that has our industry concerned; 
it is also the uncertainty and trepidation caused by how the 
delay is being handled with short-term extensions and deficit 
spending.
    ``For more than 50 years, the Federal Aid Highway and 
Transit program has been a model of responsible, stable, and 
dependable financing, user-funded and deficit-neutral. That 
dependability, which is so critical to planning and executing 
multiyear construction projects is now threatened by a lack of 
will to enhance the revenue stream to the Highway Trust Fund to 
reflect today's realities.''
    I wonder if you could use a few minutes I have of my time 
to expand on that a little bit. And I know we are hearing in 
general a lot of, if you want to say, malaise or uncertainty in 
the business community as to the path forward. And so people 
are making money, but they are sitting on their cash and the 
piles are building up within the business sector because of not 
having a clear framework in a number of areas in our economy. 
At least that is a concern that I am sure you have heard and 
that I hear.
    But it is particularly the responsibility here of us in the 
Transportation Committee, and I know the Chairman has been 
leading the way, trying to plow ground to get people organized 
to get this reauthorization done. It is way overdue, and it is 
looking like it is going to be even further. And there is a 
cost to it, as you allude to in your statement.
    So if you could expand on that a little bit and why it is 
important to get a good framework in place, not just 
transportation, but for the country.
    Mr. Gannon. Absolutely, Representative.
    Basically in our business, we always look for capital 
expenditures. And what I mean by ``capital expenditures'' and 
``capital investment,'' it is in equipment for, first of all-- 
because in our business it is very capital intensive. You start 
talking about buying pieces of machinery that are $500,000, or 
million-dollar pieces of machinery, you need to know that you 
have an outlook for work for 3, 4, 5 years, that there is 
stability there.
    Along with that goes capital investment in people. You 
know, if you don't see the work coming, it is pretty tough to 
hire somebody, or hire a young engineer coming out of college, 
not knowing if you are going to have work in the future; 
because when you bring them in, you have a lot of training and 
that to ramp them up for work.
    Along with that is a workforce. You know, being in the 
northern climate, you know, 6 to 7 months a year a majority of 
our workforce is working. We ramp down pretty heavily in the 
winter on repairs and things like that. But even in the repairs 
and that, what machine are you going to be using the next year? 
Are you going to have work for it? Those type of things.
    I have had a number of employees come up to us, come up to 
myself, even last week I had one come up. A 13-year employee 
comes up, young man, and pulled me aside--we were doing safety 
audits, you know, that we go out and see all the crews--and 
basically pulled me aside and said, ``You know, Kevin, I just 
really need to hear it from you. My wife wants to have another 
baby.'' He says, ``I am sitting here with a 3-year-old,'' and 
told her, ``I don't know what I am going to have for work in 
the future.'' And a good employee and everything else. I don't 
know what next year is going to bring. But along with that is 
the manhours. How many hours are men working and are employees 
working? You know, in a 7-month season, most of them work more 
than 40-hour weeks.
    So those type of things all come into play when you look at 
what you have down the line, you know, that planning. The 
States, are they really going to get into designing? It takes a 
number of years for them to put plans together and get them on 
the shelf and plan their projects. So, you know, if the States 
aren't designing and consultants aren't designing and putting 
plans together, that work isn't going to hit the street.
    So when the stimulus does come up, the last year and a half 
it has been great, it really filled the void in the private 
sector. No doubt about it. But again, like I said earlier, I 
really feel right now that I am looking at where I sat back in 
2008, wondering what is going to happen in 2009. The talk was 
there about the stimulus. But should that not have happened? 
Heck, I don't know. Maybe I wouldn't be here today.
    So I guess kind of telling you how it is a longer-range 
planning business is what we look at.
    Mr. Oberstar. Thank you for a very candid and thoughtful 
response to Mr. Petri's question. That really brings it home 
personally, just as Joyce Fisk did to me on the construction 
site. She said, ``Thank you for my job driving a truck on the 
I-35 rebuild project between North Branch and Rush City.'' She 
said, ``Two months ago, my husband and I just finished dinner. 
We sent Austin to bed, our 10-year-old. And then we looked at 
each other and said, Where do we go from here? Our health 
insurance ran out in December. Knife River carried all of its 
employees through Christmas, to the end of the year; but then 
with no jobs, no revenue stream, they had to cut off the health 
insurance, and our unemployment comp ran out. We have 2 months' 
savings to pay the mortgage. And are we going to be able to 
send Austin to summer camp?'' And then we hugged each other, 
cried, and went to bed.
    ``And the next morning, Knife River called and said, 
'Report for work on Monday. We won the stimulus bid on I-35.' 
And now, if I can get my 600 hours in, I will get my health 
insurance reinstated. My husband as well. Gene works for Knife 
River. We are paying the mortgage. We are buying the groceries. 
And we are sending Austin to summer camp.'' And I think she and 
Gene have sent Austin to summer camp this summer as well.
    But that is the story of your employee as well. And that 
story is written all over the country, the 1,300,000 jobs 
created by stimulus. But we need that continuity and we need 
that long-term stability in the program. And that is what the 
Highway Trust Fund has given us and that is what the highway 
user fee has given us, is the continuity to know that at the 
beginning of the project, when you design it, you will be able 
to finish it, and not have projects half done all over the 
country, as happens in Third World nations and as happens even 
in First World industrialized nations in Europe, because they 
don't have a steady guaranteed revenue stream that is not part 
of the general revenues of the national government.
    Mr. Boccieri.
    Mr. Boccieri. Thank you, Mr. Chairman. Thank you for your 
leadership on this issue.
    Congressman Oberstar, Chairman Oberstar, obviously feels 
very passionately about transportation infrastructure needs in 
our country, and I firmly support his endeavors.
    You know, he always says that we need to do the right 
thing. We just don't run for office to win elections; we run 
for office to get things done. And there is probably no other 
Committee that we can get things done quicker and have such a 
broad and vast impact into the Nation's economy than on this 
Committee. And that is one of the reasons why I am here.
    On the Stone and Gravel's testimony, they talked about how 
the U.S. population has increased 34 percent since 1980. 
Registered vehicles are up by 55 percent. Number of miles that 
the Americans travel every year has doubled by 97 percent. That 
being said, obviously user fees, such as the gas tax and what-
not, add to the trust fund so that we can do the kinds of 
projects that are so necessary.
    However, with the advent of alternative energies and with 
the advent of cleaner burning fuels, more longevity in terms of 
the number of miles that we can get, and even gas-electric 
hybrids--In fact, there was a report that said that if 27 
percent of the vehicles on the road were gas-electric hybrids, 
we could eliminate our dependency on oil from the Middle East. 
Forty percent of our oil comes from the Middle East right now.
    So that being said, what are the associations, what are the 
private sector willing to support in terms of a broad-based 
approach to having this trust fund emboldened and used for 
future generations?
    Mr. Schneider. Thank you, Congressman.
    The issue you laid out is very clear, is we have got two 
things going on: the purchasing power of the gas task, since it 
hasn't been increased for so many years, has dropped; fuel 
efficiency hybrids, et cetera. And we have talked with the 
Chairman on a couple of occasions about vehicle miles traveled, 
the basis, something along those lines.
    The fact of the matter is, though, is whatever change we do 
make--and there are some good ideas that are out there--the 
amount of time that it is going to take I think to steer the 
ship to go to a new funding mechanism is going to be a very 
lengthy process. Just the mechanics of getting it instituted, 
some of the States have tried to do this and it has met with 
some strong resistance, as you know.
    So, in the meantime, I think what we are all doing is we 
are watching the clock on the wall, and this is what we see in 
the scenario. Most of the stimulus spending will have been 
spent by the end of this year. And without the 6-year highway 
bill, as we know with the State budget problems with 40-some 
percent of the States having deficit issues, is they are going 
to be cutting back their transportation spending by anywhere 
from 30 to 50 percent.
    So the fire is in the building right now, and we are going 
to dip. And so to do something to change the gas tax, or to 
another, we don't have time to do that right now,
    Mr. Boccieri. Let me ask a question. Ohio has a gas tax. In 
fact, every time I fill up my tank there is a placard by the 
vendors that say, ``46 cents out of every dollar that you spend 
is going to the government, in some way suggesting that we are 
using it for things other than transportation and 
infrastructure needs.
    Ohio has a gas tax, and that goes into a trust fund much 
like the Federal Government has. Do other States not have a 
trust fund? Are they spending this out of their GRF, their 
revenue budgets, to do this; or do they have designated funds 
that are used specifically for that?
    Mr. Schneider. Some States do have designated funds, like 
Texas, for example. Others, it goes into a general fund.
    Mr. Boccieri. And that is the big issue, is the fact that 
designated funds are going to be spent irrespective. Ohio, this 
year, is spending $2 billion on transportation and 
infrastructure needs, and then next fiscal year will be 
spending another $2 billion on transportation and 
infrastructure needs. We do have those dedicated funds in Ohio.
    There was a study out that said that $600 billion needs to 
be spent every year for the next 10 years just to get our 
infrastructure modernized and up to speed with our competitors.
    That being said, China is doing that just in the next 2 
years, $600 billion over the next 2 years, which makes us, I 
should say, vulnerable in terms of if we are not going to be 
able to build it here and transport it and have intermodal 
facilities that allow for efficiency of transportation, our 
economy is going to be challenged by other countries that are 
doing this.
    So we need to find some way, whether it is a transportation 
infrastructure bank, whether it is the fees that we have, or 
other sources of revenue, to make sure that this is indexed; 
that it doesn't have to be a political football to be thrown 
back and fourth; and that we can get this done so that we don't 
have to have this discussion.
    Thank you, Mr. Chairman.
    Mr. Oberstar. That is very true. We shouldn't have to have 
this discussion. It ought to have been a readily accepted 
principle that we have had this enormous success with the 
Highway Trust Fund and with the user fee, and it has brought 
the Nation the greatest mobility of any country in the world, 
produced the most extraordinary transportation system of any 
country in the world.
    China is working hard now to equal ours. They had 167 miles 
of interstate-quality freeway in 1978; they now have 25,000 
miles. Their goal is within 10 years to have 52,000 miles of 
six-lane interstate-quality freeway linking the nation, moving 
heavy loads of goods and tens of millions of people.
    And India is on track with their Golden Triangle project, 
over $25 billion initiative to build something in the range of 
25,000 lane miles of interstate-quality freeway.
    The European community, the Transport Ministry, with the 
consensus of 27 individual transport ministers of the member 
countries of the European Union, 9 years ago launched a 20-year 
$1.4 trillion surface transportation investment program to 
double the miles of inter-city high-speed passenger rail--that 
is 186- to 220-mile-an-hour speeds; to develop freight rail 
which they don't have in the capacity that we have in the 
United States; and to build a 2,000-mile canal through the 
heart of Europe, linking the North Sea to the Black Sea.
    Now, that is the kind of vision we need in America. That is 
what we did in 1956 and what this Congress launched in 1956 
with the Interstate Highway program. It was called the National 
System of Interstate and Defense Highways, because Eisenhower 
understood very well if you do something in the name of the 
Nation's defense, it will sell a lot easier.
    Well, we were also on course to kill 100,000 people a year, 
because our highways were choked with traffic and the roadways 
were inadequate and they hadn't been improved, and we needed 
something vast. Our gross domestic product was $345 billion in 
1956. We had, on average, one car per household. That one car 
drove 9,600 miles. Today, we have nearly three cars per 
household and driving 15,000 miles per year. It took 65 years 
for the Nation to drive 1 trillion miles cumulatively in 1 
year, and then it took only 20 years to get to the second 
trillion miles, and then only 10 years for us to drive 3 
trillion in a year. Mileage driven has outpaced population 
growth by a factor of 3- and 4-to-1, and we have to keep pace 
with that growth.
    We had 1 million trucks in 1956. There are 7 million trucks 
on the Nation's highways today, delivering goods all over 
America, part of that mobility.
    Amazon.com depends on trucking, depends on the U.S. Postal 
Service, and UPS and FedEx, to deliver their goods to their 
final destination, and so do all these other Internet companies 
in which you can sit down in the comfort of your home, order 
whatever goods you want, and our highway system is going to 
deliver them ultimately. They don't come through the ether. 
They don't come by broadband to your doorstep. They come via 
roadway, and those roadways weren't sprinkled there by manna 
from heaven, as with the Israelites in the time of Moses. This 
is--we have got to build it ourselves. And I just get----
    So if you look at the surface transportation needs, we have 
roughly a $53 billion-a-year program; two national commissions 
recommended going to $450 billion. We took those 
recommendations seriously. We held hearings. Mr. Petri sat 
through a great deal of that. He was part of shaping the bill, 
a leader in shaping the bill that we know today as SAFETY-LU, 
and authorized the two commissions to make these findings and 
recommendations. So if you go between the $53 billion a year 
and the needs of those commissions, that comes out to $140 
billion over 6 years. That is a roughly a $23-billion-a-year 
gap between where we are and where we need to be. And at $1.8 
billion in revenue from percent increase in the user fee, 12, 
13 cents, even 15 cents would get us there, and you could phase 
it in over a period of time. But if you start it now, then the 
contractor community sitting at this table will know what they 
can do and will know what is in front of them, and they can 
plan accordingly.
    And I think Mr. Gannon said it very well. If you are going 
to order heavy equipment, you have to know that you are going 
to be able to amortize it. You can't just go and buy it and 
then sit on it for 6 months or 1 year or 2 years. You have to 
know that you are going to be able to put it to work and hire 
people and pay them. And that is what this system is about.
    So I looked at every revenue option with your associations, 
with U.S. Chamber of Commerce, the National Association of 
Manufacturers. Mr. Mica sat in those meetings with me. 
Ultimately, it all comes back to the user fee. The users are 
paying for it. It is not a general tax. It is dedicated to a 
very specific purpose. It is clear and transparent. At any 
rate, you are the choir; I am the preacher. You are awfully 
good to listen.
    Mr. Petri, do you have any closing observations, comments?
    Mr. Petri. No. It has been a very interesting hearing. We I 
think in a sense are preaching to the choir. But it doesn't 
just affect us. I mean, obviously if you are a contractor, you 
are worrying about having a framework. But at the end of the 
day, our neglect or failing to put in place a good roadmap and 
framework in the transportation sector is going to increase the 
risk that our economy will not be able to grow efficiently 
going forward and will undermine the extent to which we can 
have confidence in a higher standard of living for our children 
than we have had for ourselves.
    We often talk about each generation trying to pass on more 
opportunities to the next, and that has been one of the things 
about our country. And as you so well pointed out, a robust, 
efficient transportation sector really makes possible a high 
standard of living. And we have that now, but it is not 
perfect, and there is a lot more to be done. And we really 
should be getting about doing it rather than just engaging in 
short-term, fill-in efforts that don't allow people in various 
sectors to plan adequately, and that also postpone the day when 
we will be addressing those problems and make it an even bigger 
challenge.
    Schneider Trucking in our area has been a leader for years 
in what they call logistics, and they pointed out that the 
efficiency that we achieved through steady investment in 
transportation enabled the--and modernization of our 
manufacturing sectors to squeeze out inventory and the like 
that was not necessary, enabled us to move about 6 or 7 percent 
of our economy from paying for logistics to paying for other 
things. And that really basically was where we managed to pay 
for the health care increase in our country,.
    And now that is no longer happening. The efficiency in our 
transportation sector has leveled off, and now it is starting 
to eat up a little bit more and a little bit more of GNP, And 
that is causing real anguish in other parts. It all has to add 
up to 100 percent, so that is another percent you can take out 
of logistics to move over to health care. Suddenly we are 
getting into sort of a real budget crunch here in our country.
    So there are a lot of opportunities to have greater 
efficiency through integration of the road-rail network, more 
efficient systems time--if we can go to satellite road use, we 
can use the existing system more efficiently than ever before 
and have a higher standard of living. But it is going to 
require planning and it is going to require investment and 
requires a framework. And our job is to provide that framework. 
That is really what we have to do.
    And I just hope that our Chairman and Transportation 
Secretary can figure out a way of getting some kind of a little 
national summit or something with people in the administration, 
so that we have a more unified focus on the importance. I know 
they have a lot of other things to do, but this is something 
that should have been done and still needs to be done. And it 
is not--it is very important and it is not as hard as we all 
think. We have nothing to fear but fear itself. And in this 
area, if the need is there, the capacity is there, its user 
fee--gasoline prices have gone up and down by a dollar and they 
are constantly changing.
    If we can figure out a way to do this in a graduated 
fashion, I think that the American public, once they understand 
what they are getting for the investment, will realize that it 
is worth doing. And we all know, if you don't invest, you are 
still going to pay, because you will pay with greater 
inefficiency and higher repair bills and delays and all the 
rest. So we might as well invest it and get something for that 
rather than frittering it away.
    Mr. Oberstar. A splendid statement of the case, and I thank 
you very much for that.
    All of you have made great statements. And I particularly 
want to single out the ARTBA statement, made on behalf of the 
ARTBA by Mr. Gannon. There is a map on the last page, 
instructive. And I want all of you to take note of the 
Committee's documented detailed report, some 80 pages of 
documentation, for each of the programs go into much more than 
the summaries that I gave at the outset.
    And I want to note, while it says ``Prepared for the 
Honorable James Oberstar,'' the preparation was done by Joey 
Wender of our Committee staff, our Recovery Act guru. He has 
been superb, has followed this religiously. And a call from Mr. 
Wender to State DOTs and wastewater treatment agencies often 
brings fear into their hearts. ``Oh, my God. What have we done? 
The Committee is on our case.'' But that has stimulated this 
openness, transparency, and accountability. And I thank you for 
your contributions today.
    Let's all join hands and go forward from here. The 
Committee is adjourned.
    [Whereupon, at 1:50 p.m., the Committee was adjourned.]






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