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


 
                      RECOVERY ACT TRANSPORTATION
                           AND INFRASTRUCTURE
          PROJECTS: IMPACTS ON LOCAL COMMUNITIES AND BUSINESS

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

                               (111-138)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           September 29, 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

Barnes, Doran, Executive Director, Foothill Transit..............    12
Cohen, Lauren, Assistant Professor of Business Administration, 
  Harvard Business School........................................    38
Cox, Bill, President, Corman Construction, Inc., Representing the 
  American Road & Transportation Builders Association............    38
Eleanor, Joyce, Chief Executive Officer, Community Transit.......    12
Foxx, Alfred H., Director, Baltimore Department of Public Works..    12
Johnson, Kelly, A.A.E., Airport Director, Northwest Arkansas 
  Regional Airport Authority, Representing the American 
  Association of Airport Executives..............................    12
McCullough, James E., President, Case Construction Equipment/CNH, 
  Representing the Association of Equipment Manufacturers........    38
Mobley, Gregory, Columbus, Indiana Construction Laborer, Laborers 
  International Union of North America Local 741.................    12
Rock, Dave, Electrician, New Flyer of America, Inc...............    12
Theerman, Jeff, Executive Director, Metropolitan St. Louis Sewer 
  District, Representing the National Association of Clean Water 
  Agencies.......................................................    12
Wright, Yancy, Sustainability Director, Sellen Construction Co., 
  Inc., Representing the U.S. Green Building Council.............    38

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hare, Hon. Phil, of Illinois.....................................    55
Mitchell, Hon. Harry E., of Arizona..............................    59
Oberstar, Hon. James L., of Minnesota............................    60

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Barnes, Doran....................................................    66
Cohen, Lauren....................................................    71
Cox, Bill........................................................    77
Eleanor, Joyce...................................................    89
Foxx, Alfred H...................................................   100
Johnson, Kelly...................................................   105
McCullough, James E..............................................   113
Mobley, Gregory..................................................   120
Rock, Dave.......................................................   123
Theerman, Jeff...................................................   126
Wright, Yancy....................................................   132

                       SUBMISSIONS FOR THE RECORD

Committee on Transportation and Infrastructure, Majority Staff:..
      Chart entitled, ``Bridges Improved by Recovery Act Highway 
        and Bridge Funds''.......................................  cxiv
      Chart entitled, ``Buses, Vehicles and Rail Cars Purchased 
        or Rehabilitated by Recovery Act Transit Funds''.........   cxv
      Chart entitled, ``Miles Improved by Recovery Act Highway 
        and Bridge Funds''....................................... cxiii
      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 August 31, 2010)''........   civ
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of August 31, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Clean 
        Water State Revolving Fund''.............................  cxii
      Chart entitled, ``T&I Committee Transparency and 
        Accountability Information by State under the American 
        Recovery and Reinvestment Act of 2009 (P.L. 111-5) 
        (Recovery Act) Submissions Received by T&I Committee 
        (Data Reported as of August 31, 2010), Percentage of 
        Allocated Funds Associated with Project Stages, Highways 
        and Bridges''............................................   cxi
      Report entitled, ``The American Recovery and Reinvestment 
        Act of 2009 Transportation and Infrastructure Provisions 
        Implementation Status as of September 10, 2010''......... xxiii

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  HEARING ON RECOVERY ACT TRANSPORTATION AND INFRASTRUCTURE PROJECTS: 
                      IMPACTS ON LOCAL COMMUNITIES

                              ----------                              


                     Wednesday, September 29, 2010

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The Committee met, pursuant to call, at 10:00 a.m., in room 
2167, Rayburn House Office Building, the Honorable James 
Oberstar [Chairman of the Full Committee] presiding.
    Mr. Oberstar. The Committee on Transportation and 
Infrastructure will come to order.
    We meet this morning again to review the progress on the 
stimulus program, the American Recovery and Reinvestment Act, 
and the effect on that stimulus program of the programs under 
the jurisdiction of the Committee on Transportation and 
Infrastructure.
    This is the twenty-first in our series of hearings. I 
committed at the outset of the development in our Committee of 
stimulus initiatives to overseeing the progress, holding 
Federal agencies accountable, State and local government 
agencies accountable. I am requiring them to report 
periodically on the use of funds, and that process has been 
tremendously successful. I recall at one of our earliest 
hearings, when I had said I would hold up each month those 
States that had done well and those that had done poorly, and 
there were a few States in the initial going that, within six, 
eight weeks, had not obligated their funds. It didn't take very 
long before sunshine applied to the process and caused State 
DOTs to move those projects forward.
    Overall, the stimulus program has had a very positive 
effect in turning the Country around from the worst recession 
the Nation has experienced since the Great Depression. We have 
stemmed the tide of job losses from 750,000 jobs lost in 
January of 2009, 650,000 jobs lost in February 2009, when the 
President signed the stimulus into law, to 290,000 jobs created 
in the subsequent month. Across the Nation since then, this 
past year and almost year and a half since the bill was signed 
into law, 18,365 highway transit and wastewater infrastructure 
projects have broken ground; $33.9 billion, 89 percent of the 
total available formula funds. Forty-five States have started 
construction on 100 percent of their Recovery Act wastewater 
projects; 40 States have begun work on 90 percent of their 
Recovery Act highway projects.
    During the first year, these formula projects created 
350,000 direct onsite, on-project jobs. Total employment from 
direct jobs, those in the supply chain, including sand and 
gravel operations, cement producers, Ready Mix operators, 
asphalt, rebar, fencing, I-beams, guardrail, all have reached 
the total of 1.2 million obs. In August these projects created 
and sustained 71,000 direct jobs and total employment, that is, 
direct, indirect, and induced jobs, was 225,000 jobs for the 
month of August.
    A payroll of $3.8 billion. Workers on those construction 
projects have paid Federal taxes totaling $780 million. We have 
avoided $644 million in unemployment compensation checks 
because you have people being paid to work and not being paid 
for not working.
    Earlier this month, the President, in fact on Labor Day, 
unveiled a plan to build on the achievements of the Recovery 
Act by furthering the National Transportation Infrastructure 
Investments. The principles he outlined are consistent with 
those that the Committee, we have set forth in our blueprint 
for investment and reform, and in our Surface Transportation 
Authorization Act. We go at it differently than does the 
President, but I welcome his initiative and we will build on 
it.
    During the entire process of allocating these funds and 
obligating and getting projects underway, the Congressional 
Budget Office has been reviewing the process and concluded 
that, as a whole, the Stimulus Act has had far-reaching effect. 
CBO estimated that in its entirety the Recovery Act has lowered 
unemployment by between 0.7 of a point and 1.8 percentage 
points. It increased the number of people employed, according 
to CBO, by between 1.4 and 3.3 million. Nearly half of those 
jobs, though, come from our Committee's 8 percent portion of 
the overall stimulus funding.
    Against this backdrop of these positive reports from the 
Congressional Budget Office, which also said that the Recovery 
Act has raised inflation-adjusted gross domestic product by 
between 1.7 percent and 4.5 percent. Those are very significant 
numbers.
    So today we bring together witnesses that include workers, 
community leaders, business persons, all who can talk to us 
about projects on the ground that have had a positive impact on 
the livelihood of people and communities.
    Work has begun on 18,365 projects in 50 States, 5 
territories, and the District of Columbia. A total of $33.9 
billion, that is 89 percent of the highway, transit, and 
wastewater funding. There are 8,965 projects, totaling $7.1 
billion, in 50 States on which work has been completed. Now, 
highway and bridge investments total 35,399 miles of highway 
improvement, that is equal to three-fourths of the entire 
mileage of the U.S. interstate highway system; 1264 bridge 
improvements; and that has, in turn, led to production of 10 
million metric tons of cement, cement and ready mix, $950 
million for the cement industry.
    I cite that because I spent at least two summers of my 
college years working on ready mix projects, pouring concrete 
for streets, for the wastewater treatment plant in my hometown 
of Chisholm, and building concrete blocks in a ready mix 
concrete block factory in our hometown. I know what it means to 
carry a 42 pound block and a 48 pound corner block, and to hold 
a 94 pound sack of cement and pour it into a mixer, and to pour 
out sand and gravel and run it through the mixer, pour it down 
the chute, and then go down and make the blocks and put them on 
the racks and haul them into the kilns. I have done that. It is 
good formative work.
    The transit investments have resulted in 12,234 buses, 
vehicles, and railcars purchased or rehabilitated; 4,870 
passenger facilities built or rehabilitated; 324 maintenance 
facilities built or rebuilt; and Amtrak is in the process of 
replacing 1.3 million wood ties with prestressed concrete ties, 
326,000 already completed; 60 Amfleet cars, 21 Superliners, 15 
locomotives restored to service; and 270 station improvements. 
Work is underway on 185 Amtrak projects, totaling $1.3 billion, 
that is 100 percent of their Stimulus Act funds.
    Aviation, 155 runway improvements at 139 airports, those 
airports accommodate 11 million annual takeoffs and landings; 
83 taxiway improvements at 78 airports that have 8.1 million 
annual takeoffs and landings; and 25 projects to modernize air 
route traffic control centers. Work is underway or completed on 
757 aviation projects, totaling $1.3 billion, and that is 100 
percent of the funding allocated to aviation.
    All 50 States have met the requirement that 100 percent of 
their Clean Water State Revolving Fund be under contract within 
one year of enactment, February 17, 2010. So the result is 
1,946 projects are under construction, 100 percent of available 
funds, $3.8 billion.
    Work is underway or is completed on 59 Superfund projects. 
We had a huge backlog of Superfund projects because that fund 
was allowed to expire, and work is underway to clean up those 
165 of 185 planned Brownfields projects.
    The Corps of Engineers has improved or repaired 155 lock 
chambers, 1,132 flood risk management projects to improve dam 
safety and levy safety, 1,034 projects to maintain and upgrade 
their recreation areas and maintain or improve harbors and 
waterways that serve 2400 commercial ports.
    The General Services Administration is underway on 536 
projects totaling $4.6 billion; 78 roofs installed, 68 
photovoltaic rays on roofs. That is 33 years after I introduced 
the first legislation to retrofit Federal office buildings with 
photovoltaic systems and save cost, save electricity costs, 
which we are doing right in this Committee room. One hundred 
forty lighting systems have been put in place, 78 roofs 
installed, and 68 photovoltaic systems.
    The Economic Development Administration has broken ground 
on 57 of 68 projects, 88 percent of its allocation, that is 
$130 million.
    The Coast Guard Bridge Alteration Program has started work 
on all four of its planned bridge repair and replacement 
projects.
    And the Maritime Administration has work underway on small 
shipyard projects. A hundred percent of their $123 million 
committed for that program is underway.
    All in all it is a very commendable record. I just wish we 
had had $100 billion instead of the $64 billion our Committee 
was allocated. We have made it work, we have held States and 
local agencies accountable, and, as far as I can see, my view 
is that our Committee's stewardship of the program has been 
successful.
    I yield to the distinguished gentleman from Florida, Mr. 
Mica.
    Mr. Mica. Well, thank you, Mr. Oberstar. Thank you for your 
efforts in trying to get folks back to work and also highlight 
our involvement from this Committee in trying to move dollars 
for improving our Nation's infrastructure forward.
    Let me start where you left off. Let me say that this has 
been a bipartisan effort. We came back early. We were asked to 
put a package together. We held hearings long before the 
February passage of the stimulus legislation. We advocated a 
package which was I think in the range of $120 billion, which 
would have been about half of a $250 billion stimulus bill. 
Some had talked $250 to $300 billion, but history provided a 
different course; it ended up being $787 billion, of which we 
got 7 percent, $63 billion.
    I also argued at that time, and we had heard at that time 
from the Congressional Budget Office and others who looked at 
our proposal, one of the reasons we got our legs cut out from 
underneath us is they said there was so much red tape, 
paperwork, requirements to get transportation money out there 
that it would be impossible in the time that you set forth and 
the goals you established in the legislation to in fact get 
that money out. So we were axed down to $63 billion of that 
total, less than 7 percent.
    I had argued that we needed to speed things up. Some of you 
have heard my 437-day plan. I have given speeches. I stood on 
the bridge that collapsed in Mr. Oberstar's backyard. We were 
on the Floor together the day that it collapsed, a tragic 
event. Lives were lost, but an older bridge, not properly 
designed, did collapse, and we pledged together on the Floor to 
get that bridge rebuilt that connects an important leg of our 
interstate.
    And I stood, two weeks before the bridge opened, with some 
of my colleagues and I held up three numbers, 4-3-7, and I said 
this is the number of days it took to replace this bridge. It 
normally would have taken seven or eight years. And that was an 
emergency situation, and there is no reason why, in an 
emergency national economic situation, we couldn't do many 
projects across the Country putting people to work.
    So I have advocated, and if we get to do transportation 
long-term authorization, that would be one of the cornerstones, 
because we can get people to work. We can do projects quicker. 
That bridge was brought in seven to eight years ahead of 
schedule. That is the time the paperwork would have taken, and 
under budget. So it is a shining example of what we can do and 
what we should be doing.
    So I am disappointed in the fact that we didn't allow in 
that legislation, and it wasn't our side; I went over to the 
Senate and begged, pleaded, asked, requested that they look at 
measures to speed things up. And they have done it in the past, 
and some of those who were opposed were from California and 
said we were going to do this and that, which we weren't going 
to do.
    But even in California, when they have had earthquakes and 
emergencies, they move projects forward on an expedited basis. 
So we have plenty of examples. When we can and want to do 
things, we can get them done. So I am very disappointed that 
wasn't adopted.
    I am disappointed that the President came out a week or two 
ago and offered another $50 billion in spending and, 
unfortunately, also in taxing, and then talked about a six-year 
plan infrastructure bank, some of the things that we have also 
advocated. But one of the chief reasons we haven't been able to 
get people working in construction is that we can't get the 
money, again, out there, and also unbeknownst to Mr. Oberstar 
or myself, we had worked hard, he came up with a proposal for a 
six-year long-term and robust investment, and we got deep-sixed 
the day before we were planning to make our announcement to opt 
for 18-month.
    I thought back. Again, you guys know I come from a family 
that has a bipartisan history, but your side of the aisle would 
be in much better shape right now if they had first focused on 
getting the stimulus money out.
    Over 60 percent of the stimulus money is still sitting in 
the Treasury. That is the report I got, 61 percent still 
sitting in the Treasury. And then some of the decisions that 
were made on TIGER grants, they spent $3.3 million, which is 
.22 percent of $1.5 billion. States like my State, in the first 
round, got no TIGER grant. We have over the national 
unemployment, and some that had under the national unemployment 
got some of those grants. But the bad news is even that money 
isn't spent yet.
    So if you go across the board--and we can submit that for 
the record--you can see that the money, while some has gotten 
out and we may hear some very nice stories today and some 
people have retained their jobs, the overall picture is not to 
my satisfaction and, obviously, if you ask any American, they 
want to know where are the jobs and how can you spend--now it 
is scored at what, over $800 billion, the stimulus package, and 
everybody thought that was infrastructure. They really thought 
we would be building bridges.
    And heaven knows we have a $2.2 trillion need in the next 
six years, which the American Society of Civil Engineers has 
not only stated, but documented very well. So the need is out 
there to address our crumbling infrastructure; our antiquated 
bridges, our highways, our ports, our airports.
    I would say, in closing, that I am prepared--I don't know 
what the outcome of the election will be; none of us do, but I 
am prepared to sit down November 3rd, whatever it takes, and 
work with the Administration, work with Mr. Oberstar. We have 
only had, what, one vote in three years in this Committee, but 
when we sit down we can move things forward. But look at how we 
can move the rest of this forward, because there are people who 
are hurting, people who have lost their jobs, their homes, 
their businesses; and it shouldn't be that way.
    And if you stop and think, if we had taken like Mr. 
Oberstar just ended on if we had done 120, $150 billion, how 
many jobs that would be. It would probably be about 8 or 9 
million jobs, simple calculation. And if we had sped the 
process up and if we had done a six-year bill rather than doing 
sidewalks and paving and short-term jobs, many of which jobs 
are already done.
    I just met with a transportation secretary from one of the 
Dakotas, and he told me what is really bad now, he says, we are 
going to be in our free season, which we in Florida don't even 
think of. He said even if I got the money now, it is hard for 
me to spend on some of these projects that we could go ahead 
with because of their construction season.
    So we can and we must do better. Heaven knows Mr. Oberstar 
tried and I tried, but we have to, and I pledge to roll up my 
sleeves. We will sit down with the folks and move this puppy 
forward, and I know we can do it.
    I yield back. Thank you.
    Mr. Oberstar. Thank you very much for those comments. 
Again, I want to emphasize it was a bipartisan initiative in 
this Committee to address the impending and growing recession 
in 2008, actually in December 2007, and this Committee 
reported, we brought to the Floor a bill that was largely this 
Committee's infrastructure jurisdiction, and that would have 
been a great start there. We couldn't get the other body to act 
on it.
    The gentleman is so right about the I-35W bridge. They 
didn't have to go through an environmental impact statement; 
they didn't have to do right-of-way acquisition; they didn't 
have to go through preliminary design and engineering. They did 
a design build project and it was completed in less than a 
year, as the gentleman said. Similarly, these stimulus projects 
are 100 percent federally funded, and we set out those same 
criteria that the projects had to have EIS completed, right-of-
way available, completed, final design and engineering, ready 
to go but for the financing; and that is what made all these 
projects so successful, is that they were ready to go.
    In the surface transportation assistance bill for the 
future, Mr. Mica and I, and Mr. Young in the previous 
Congresses, worked on a project expediting process, and we have 
a robust project expediting provision in the draft bill 
reported from Subcommittee. We can improve upon it and will do 
because there have been lessons learned in the stimulus about 
how to push these projects further ahead. We are going to take 
those lessons, we are going to apply them.
    I spent August of 2009, one day a week with all the 
interested groups looking at various transportation financing 
plans. Mr. Mica unfortunately couldn't participate, but by 
conference call in the meeting we spent an hour plus in that 
particular session. We will do more of those. We have to find a 
way to finance the future of transportation. That is really the 
only thing holding this up. So after election, to quote Lyndon 
Johnson, John F. Kennedy said, let us begin. I say let us 
continue. And we will continue with the hand of bipartisanship 
going across this Committee, as we have historically done.
    Just before I called the Committee to order, I met with Mr. 
Horsley, John Horsley, Executive Director of AASHTO. More 
projects and paychecks. A copy of this report is available for 
all persons I think outside the Committee room or it is 
available online. It is very nicely done using data developed 
by our Committee, and the report, with more details than I 
cited at the outset, including our spreadsheet on each State 
has 15 categories of program accountability. AASHTO has used 
that data plus information they independently gathered, and it 
is a very exciting read and very valuable contribution to this 
process.
    Now, in the interest of proceeding, I will ask Members to 
limit their opening comments to two minutes and begin with Ms. 
Norton.
    Ms. Norton. Mr. Chairman, I just want to emphasize that all 
of the projects that have been undertaken are projects that the 
State and local governments or the Federal Government would 
have had to do anyway. What we have done is to make sure they 
are done at a time when they also provide jobs when they are 
most needed.
    I also, Mr. Chairman, want to commend you for your shovel-
ready jobs, jobs-ready approach because it has worked. Your 
hearings in full Committee held people accountable. We tried to 
follow your lead in my own Subcommittee; had five tracking 
hearings. In the case of GSA, which does not work through the 
States, we were particularly focused on making sure that they 
had no excuses, and I am pleased that 82 percent of GSA money 
has been allocated. I don't think any more could have been 
allocated given the nature of some of these massive projects, 
so they have done well. EDA is under our jurisdiction; 88 
percent of the money has been allocated. FEMA is under our 
jurisdiction; 95 percent of the money has been allocated.
    Mr. Chairman, that translates into jobs, and at some point 
we will know how many jobs have come out, those jobs, and the 
money is still flowing because people get paid on a weekly or 
biweekly, sometimes monthly, basis. So obviously the money has 
been allocated; the people are earning the money, and I think 
this Committee has done precisely what you announced we would 
do, and not only held people accountable, held the States 
accountable, in the case of the Federal Government, held the 
Federal Government accountable. And when you hold entities 
accountable, they produce.
    Thank you very much, Mr. Chairman.
    Mr. Oberstar. Thank you very much for that positive 
statement.
    Mr. Cummings, I want to compliment Mr. Cummings, who was 
not able to be on the Floor last night when we passed the Coast 
Guard bill. Mr. Mica acknowledged Mr. Cummings' leadership, 
along with Mr. LoBiondo. We have had a great team working 
together to get this first Coast Guard authorization passed in 
six years with remarkable changes in the safety procedures and 
upgrading the whole safety process of the Coast Guard.
    I know, Chairman Cummings, you worked diligently, put in 
enormous hours of hearings and meetings and discussions. It was 
a great moment of success and a bipartisan success. We all 
started out with ideas about the future of the Coast Guard, we 
reshaped our ideas as we went along, and at the end we had to 
overcome mystical holds and objections from the other body that 
were obscure and obscurantist, but at least I think that bill 
is going to sail through the Senate now.
    Mr. Cummings. Thank you very much, Mr. Chairman. I was 
sorry I wasn't able to be on the Floor at the passing of the 
bill, but I was in my district in a debate that I needed to be 
at because I knew Mr. Mica would want me to be there.
    [Laughter.]
    Mr. Oberstar. I am sure your opponent didn't.
    Mr. Cummings. Mr. Chairman, I want to thank you for holding 
this hearing today. You have been truly diligent in leading our 
oversight of the Recovery Act, and I think that is so 
important. The American people deserve accountability.
    The Recovery Act, as we have highlighted so many times, 
provided $64.1 billion to fund infrastructure programs under 
this Committee's jurisdiction. My State of Maryland received 
more than $677 million in formula funds under the Recovery Act, 
including highway funding, transit assistance, and funding 
under the Clean Water State Revolving Fund. The State has $340 
projects under contract, and the projects that have received 
Recovery Act funding in my State have paid out nearly $35 
million in total payroll. The Recovery Act has been essential 
to the State of Maryland. And today we have the opportunity to 
hear how critical the Recovery Act has been to my hometown of 
Baltimore, Maryland.
    Mr. Chairman, I reserve the balance of my time because 
later I will be introducing Mr. Foxx of the DPW in Baltimore.
    Mr. Oberstar. Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman.
    I echo the sentiments of our colleagues in the fact that 
this hearing is important to listen to where the money is being 
spent, the amount of jobs that are being created, the benefit 
to our different districts. It is important for us to 
understand and I would implore the transit agencies and others 
to let their people know that it is the recovery funds that 
have helped not only keep the jobs, but provide some of the 
assistance to keep moving people and doing all the different 
things. I just wish, as Mr. Mica and you pointed out, that we 
would have been able to pass the TEA-LU bill, because that 
would have really put people back to work and really invested 
in our U.S. economy.
    I look forward to the testimony and I certainly want to 
thank Mr. Mica for joining us in California; and we will touch 
on that when I introduce our witness. Thank you again so very 
much for this hearing.
    Mr. Oberstar. Ms. Hirono.
    Ms. Hirono. Thank you, Mr. Chairman.
    As this may be the last time before our break that we will 
be able to meet, I would like to thank you, Mr. Mica, and all 
the Members of this Committee for really being a model for 
accountability of Recovery Act money. All of us have been in 
our districts, I, myself, have been to the bridges that have 
been renewed or repaired because of Recovery Act money, and 
even on the little island of Molokai, where there was road work 
being done, hiring people from that island who otherwise would 
not have had jobs, it is truly, truly important for us to have 
these hearings to focus on what the reality is of the Recovery 
Act.
    Also, Mr. Chairman, Hawaii, for the first time, had, as you 
know, an infrastructure summit. There is so much attention 
being paid to the infrastructure needs throughout our Country, 
and you participated in that summit, and as I continue to talk 
with people in my district, they are very thankful and mindful 
of your continual focus on the need for Congress to do more to 
support infrastructure renewal in this Country. So mahalo to 
the Committee.
    Mr. Oberstar. Thank you very much. Appreciate that. It was 
a pleasure to join in that teleconference.
    Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman and Ranking Member.
    Again, I will echo what my colleagues said. Your due 
diligence on watching taxpayer dollars, watching how the 
Recovery Act was put out, providing hard data on the number of 
jobs and the number of projects is exactly what my constituents 
in Southern Minnesota want to see. They are not against putting 
their taxpayer dollars into infrastructure projects; they want 
to know where they go.
    And I have to tell you, since we passed this and we were 
hemorrhaging 700,000 jobs a week, I see one project in my 
district, Lewis and Clark Rural Water Project, diverting water 
from the Missouri River in South Dakota over into Minnesota and 
Iowa, serving 300,000 rural residents, that residents in my 
district, some of them, have to collect drinking water from 
cisterns when it rains. That is how short it is.
    This project is out there. Fifty-six million dollars went 
to this, creating hundreds of jobs, and it was a bipartisan 
effort between South Dakota, Iowa, and Minnesota, where the 
local communities paid their tax dollars forward by 10 years to 
fund their part of it; the Federal Government came in with this 
creating those construction jobs. I have communities that can't 
add a single business because of the lack of water. We have had 
to turn away ethanol plants. Swift, one of the largest meat 
packers in the Country, is not able to expand simply on that 
region, in the heart of an agricultural area.
    So I appreciate this hearing because when I hear the 
disconnect between what happens here and what I see on the 
ground, when I hear Mr. Boehner say not a single job has been 
created by the Recovery Act, I am baffled, because I have 
walked in the trenches, I have talked to the construction 
workers, I have talked to the city manager and the mayor, who 
talks about the expansion of jobs created by this.
    So everyone wants us to be accountable for the dollars, but 
there has to be some reality in our conversations here, and I 
am proud of the work this Committee has done, and I thank you 
and look for the day when my folks can turn on a drinking 
fountain instead of a cistern to get water; and the Recovery 
Act is making that happen.
    I yield back.
    Mr. Oberstar. That is a great success story. Thank you for 
sharing that with us.
    Mr. Hare.
    Mr. Hare. Thank you, Mr. Chairman. I am going to be very 
brief here.
    For those folks who say that the Recovery Act really hasn't 
done anything, let me just say that for my State it has 
directed over $2.8 billion to my State's transportation and 
infrastructure system. And as of July 2010, nearly $1.1 billion 
has been awarded and over 4,000 direct jobs have been created 
or retained.
    So I, with my colleague, Mr. Walz, am a little bit miffed 
when I hear it hasn't created a single job. You might want to 
talk to those 4,000 people that are working had we not done 
this. This is expected to increase by many more as we approach 
our next quarterly reporting period at the end of September.
    In my district, the stories are plentiful. As we all know 
from the July 27th hearing that was held by this Committee, 
Railway Company of Burlington in Northern Santa Fe has been 
working on the Burlington Bridge, a major project which crosses 
the Mississippi River, and it was made possible with the help 
of the Recovery Act. Every dollar that we invest in 
transportation, the Federal Government gets five dollars back.
    My hope is, Mr. Chairman, I know you have been working on 
this incredibly hard, as has the Ranking Member, we have to do 
more. We have bridges and roads and schools and sewer and water 
projects all across this great Nation that need to be 
completely redone. We have locks that are failing. We have a 
number of things to do, and the passage of a bill would have 
put 6 million Americans to work, and we will get it done.
    Mr. Chairman, I just want to say, as this may be our last 
Committee hearing before the break, I thank you for your 
leadership on this project and all of these, and I am honored 
to be a freshman on this Committee, but I have learned a great 
deal and this Committee is very, very lucky to have Jim 
Oberstar as its Chairman, and I yield back.
    Mr. Oberstar. You are very kind. Thank you for those good 
words, but also for your steadfast participation in all of our 
hearings. You have never missed a hearing or a markup, and I am 
grateful for that.
    Mr. Schauer. You did a great job on the House Floor, 
managing that pipeline legislation last night. Thank you.
    Mr. Schauer. Thank you, Mr. Chairman. It was an honor to do 
that and I am proud to serve on this Committee with you and 
with Mr. Mica.
    Mr. Oberstar. I might also say, Mr. Mica, that Mr. LoBiondo 
was the journeyman last night; he handled more areas of 
jurisdiction one evening than I have seen a Member do in a very 
long time. Thank you for designating him.
    Mr. Mica. Thank you. I complimented him. He does a great 
job. I am very proud of all of our guys and the teams that we 
have had. Mr. Cummings wasn't there; I did recognize him, 
though, for his effort.
    Mr. Oberstar. Yes, you did indeed. I appreciate that. Just 
want to be sure Mr. LoBiondo gets a little overtime.
    Mr. Mica. We will put a little extra in his salary.
    Mr. Oberstar. A little more Starbucks, maybe.
    Excuse me, Mr. Schauer.
    [Laughter.]
    Mr. Schauer. Thank you for that. I enjoyed managing a 
number of bills on the Floor and appreciate the chance to have 
H.R. 6008, the Clean Act, dealing with hazardous liquid spill 
reporting requirements.
    This is an important hearing. We have spoken about 
accountability of the expenditure of Recovery Act dollars for 
infrastructure projects, and when we look at how far our 
economy has to go, I think we have to acknowledge the fact that 
infrastructure projects have helped pull our economy out of a 
recession, and we have seen eight consecutive months of private 
sector job growth. We have to continue to move the economy 
forward. I am from Michigan. Need I say more?
    I do want to recognize one of our panelists. I haven't met 
him before, Gregory Mobley, of Construction Laborer of the 
LIUNA union. I work very closely with his counterparts in my 
State and I have to say, Mr. Chairman, we talked about this at 
our hearing the week before last, with this pipeline spill 
cleanup in my district, his counterparts in my district were 
trying to get work on this project and it was very frustrating 
to me and quite offensive to have illegal, undocumented workers 
bused from Texas to clean up the oil in the Kalamazoo River in 
my district, and we need to address that in every way possible. 
But I appreciate a hardworking individual here who is one of 
the examples of jobs created with ARRA expenditures.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Oberstar. I thank the gentleman.
    Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman. Thank you for your 
leadership as well. This has been a very important part of 
recovery in Nevada, which has the highest unemployment in the 
Country, 14.8 percent. It is probably really higher than that. 
If you look at the construction trades, it is probably double 
that. So the Recovery Act has been very important.
    I also want to thank your staff, who has just done a great 
job of putting together all the statistics and the charts that 
we are using in this accountability process. These numbers have 
helped me to help Nevada push ahead. We were at the bottom of 
the list. Having these numbers in front of us gave me 
ammunition to go to State agencies and say let's get this money 
out.
    In addition, I want to bring up the point that not only are 
these Recovery Act dollars creating jobs, but they are helping 
communities invest in innovative projects. Some of these were 
already going on in Nevada under the Regional Transportation 
Committee, but these dollars have certainly sped that up.
    And I hope we will hear from our witnesses about what other 
communities are doing planning on sustainable transportation 
projects. Are people getting more excited about it? Are you 
changing your way of looking at things to push towards this 
sustainability with more bus rapid transit and that sort of 
thing? Because not only are we creating jobs, we are improving 
communities through these dollars, and I very much appreciate 
it.
    Mr. Oberstar. Thank you for that report. Good to have that 
information and your Nevada perspective.
    Now we begin with our first panel, with Mr. Mobley, Gregory 
Mobley, Colombus, Indiana constructor laborer; Dave Rock, 
electrician at New Flyer, a bus manufacturer located in 
Minnesota and elsewhere; Alfred H. Foxx, Director of the 
Baltimore Department of Public Works; Doran Barnes, Executive 
Director, Foothill Transit; Joyce Eleanor, Chief Executive 
Officer, Community Transit; Jeff Theerman, Executive Director 
of Metropolitan St. Louis Sewer District; and Kelly Johnson, 
Airport Director for Northwest Arkansas Regional Airport 
Authority, representing AAAE.
    Mr. Mobley, welcome.

  TESTIMONY OF GREGORY MOBLEY, COLUMBUS, INDIANA CONSTRUCTION 
 LABORER, LABORERS INTERNATIONAL UNION OF NORTH AMERICA LOCAL 
741; DAVE ROCK, ELECTRICIAN, NEW FLYER OF AMERICA, INC.; ALFRED 
H. FOXX, DIRECTOR, BALTIMORE DEPARTMENT OF PUBLIC WORKS; DORAN 
 BARNES, EXECUTIVE DIRECTOR, FOOTHILL TRANSIT; JOYCE ELEANOR, 
  CHIEF EXECUTIVE OFFICER, COMMUNITY TRANSIT; JEFF THEERMAN, 
  EXECUTIVE DIRECTOR, METROPOLITAN ST. LOUIS SEWER DISTRICT, 
REPRESENTING THE NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES; 
AND KELLY JOHNSON, A.A.E., AIRPORT DIRECTOR, NORTHWEST ARKANSAS 
     REGIONAL AIRPORT AUTHORITY, REPRESENTING THE AMERICAN 
               ASSOCIATION OF AIRPORT EXECUTIVES

    Mr. Mobley. Thank you.
    Mr. Oberstar. With those arms and shoulders, I think you 
could just clean this place up pretty fast.
    Mr. Mobley. Thank you, sir.
    My name is Greg Mobley. I am a construction laborer from 
Columbus, Indiana, and I want to tell the Committee today how 
the stimulus bill helped put me back to work and also tell the 
Committee how much more work is badly needed.
    But first I want to thank Chairman Oberstar, Congressman 
Mica, and other Members of this Committee for inviting me here. 
It is my understanding that this Committee is one of the most 
important when it comes to making the kinds of investments that 
create jobs, put men and women like myself to work and helps 
build our Country. I thank you for that.
    In the construction industry, it has been like the Great 
Depression. At my union, LIUNA Local 741 in Bloomington, the 
out-of-work list grew and grew last year to the point that one 
in five were unemployed. Personally, I was out of work for six 
months, from December of 2008 to June of 2009. My wife and I 
saw our life savings dwindle.
    Every day without work was a day of sitting at home, being 
nervous, unsure, and worried about what would happen in the 
next week, the next month, the next year ahead. We didn't spend 
a dime that we absolutely didn't have to. We skipped the movie 
at the local theater. We skipped the drink or dinner with 
friends. We skipped the treat or gifts for our nieces or 
nephews, who we care for like our own.
    Friends of mine had it worse. One told me, after rounding 
up enough cash to make his house payment, he was still unable 
to afford his property taxes. A lot of us suffered in silence, 
but the effects of being without a job showed. I and millions 
of workers like me want to get up every day and go to work 
building roads and bridges and other basics in our Country. 
That is what we are ready, willing, and able to do. Without 
work, you don't just enjoy life a lot less and worry a lot 
more. You don't just fear losing a car or losing your home; you 
can lose your purpose.
    Investments in projects under the American Recovery and 
Reinvestment Act helped many of us. I have worked on two such 
projects this year, Lafayette Road in Indianapolis and US-27 in 
Union County. My crew and I removed and replaced deteriorated 
and unsafe concrete, sculpted sidewalks, and built curbs. It is 
good, honest work and it put money in our pockets and allowed 
us to support our families. It also improved local 
transportation, making life better for the people who live in 
Indiana.
    This work did more than give us a paycheck and fix roads. 
It is impossible to overstate how good it feels to have a good 
job to go to every day, to catch up on your bills after months 
of falling behind. The work we do also helps the mom and pop 
shops stays in business because we can enjoy some of the simple 
things in life like dinner and a movie at the local restaurant 
and theater, or a drink with our friends after a hard day's 
work.
    I am proud of the work I have done because of the Recovery 
Act. We help build America and make it better. I can point to 
the real things I build and tell my wife, my nieces, and my 
nephews I built that.
    In my opinion, the Recovery Act was the right medicine, but 
the truth is it was not nearly enough medicine to be a cure. 
Without the stimulus work, there is a possibility I would be 
out of work longer this year than last year. It put me back on 
the right track, but there are 1.5 million men and women in the 
construction industry today who are still looking for work. 
Even though there is no shortage of potholes or old bridges or 
highways that need work, there aren't a lot of projects coming 
down the pipeline. I can see trouble ahead for me and others 
like me.
    I think it is time we invest in America for a change. The 
investment in roads, bridges, and transportation under the 
American Recovery and Reinvestment Act was a great start. Mr. 
Chairman and Members of this Committee, I want to thank you for 
the work you do to invest in the United States. We need to 
invest more in our Country to again be the Country that does 
what it takes to lead the world with the best highways and the 
most modern transportation systems. I and millions like me are 
ready to work and we are ready to build America.
    Once again, I would like to thank the Committee for the 
opportunity to be here. Thank you.
    Mr. Oberstar. I want to thank you for putting a personal 
face as a witness to the stimulus program. You are the visible 
testimony to the success of this program, and that is what we 
intended to have happen, have people like you, American 
workers, who, through no fault of their own, were out of work 
and now called back and given an opportunity.
    We heard similar testimony some weeks ago from Joyce Fisk, 
a truck driver on a construction project on Interstate 35 in 
the southern end of my district. When I went out to the job 
site, the foreman had pulled the truck over and asked her to 
come out and say hello, and she jumped down, threw her arms 
around me. I had never met her before.
    She said, thank you for my job. Two months ago my husband 
and I were sitting at our dinner table, we had finished dinner, 
sent our 10-year-old, Austin, to bed and we just looked at each 
other. Where do we go from here? Our health insurance ran out 
in December. This was August of 2009. We have lost our 
unemployment compensation, that ran out three months ago. We 
have enough savings to pay the next two months on our mortgage, 
and are we going to be able to send Austin to summer camp. Then 
we just cried and hugged each other and went to bed, and the 
next morning Knife River called and said we won'the bid on I-
35, report for work on Monday. And if I get my 600 hours in, I 
will get my health insurance restored, Gene will get his health 
insurance restored. They both work for the same company. We are 
paying the mortgage and Austin is going to summer camp.
    You said it well. When you lose your job and you are out of 
work for that long, you lose your purpose. Powerful testimony. 
Thank you.
    Mr. Rock.
    Mr. Rock. Hello. My name is David Rock and I am from 
Mentor, Minnesota. I am a CWA Local 734 President and employee 
of New Flyer of America, located in Crookston, Minnesota.
    Welcome, Chairman Oberstar, Minority Representative Mica, 
policymakers, Committeemen. It is a great honor to be speaking 
before you today.
    A little history on where I work. New Flyer is a company 
based out of Canada, a transit supplier established in 1930 as 
Western Auto and Truck Body Limited.
    In 1941 the company introduced the Western Flyer. The 
company was renamed New Flyer Industries Limited in 1986 and 
then renamed to New Flyer.
    Over the next 15 years, New Flyer established a solid 
reputation for innovation for design through development of new 
products.
    In 1996, New Flyer of America opened a plant in Crookston, 
Minnesota. This allowed them to be a Buy America company. 
Growth was fast and in 1999 opened another assembly plant in 
St. Cloud, Minnesota. This created over 850 direct labor jobs 
in these two communities.
    In 1990, the CNG, which is compressed natural gas, and LNG 
liquid natural gas, propelled buses were built at the Crookston 
plant. Natural gas, being a clean burning fuel technology, to 
this day is still a big part of New Flyer.
    Later in 2002 New Flyer secured an order to build North 
America's first fleet of 218 articulated diesel hybrid buses 
for King County Metro in Seattle, Washington, establishing New 
Flyer as a leader in the hybrid bus production. These buses 
were delivered in 2004. During this time, New Flyer partnered 
with San Bernardino County in California to build the first 
gasoline electric hybrids.
    In 2004, electric trolley buses were built for Vancouver in 
British Columbia. BC Transit, in 2007, awarded New Flyer the 
contract to build the world's first fleet of hydrogen fuel cell 
buses. The first of these buses were delivered in 2008 and the 
remainder were built in 2009. This fleet was highlighted in the 
2010 Winter Olympics at Whistler, British Columbia. Ballard 
fuel cells made in Canada and Siemens electric drives were used 
in these buses.
    Well, enough about New Flyer history. Let's talk about me. 
I was born a third generation farmer in the French-speaking 
community of Terrebonne, Minnesota.
    I graduated in 1971 and attended technical college for 
electrical. In 1974 I purchased 320 acres of land and 11,000 
laying hens, got married that same year. I guess I needed help 
with the chickens. Well, in 1978 I expanded to 400 acres and 
increased the flock to 20,000 laying hens. Having my first of 
four children that year, at 25 years of age, I thought I was on 
top of the world.
    Well, guess what? My bad experience with a bad economy 
began in the 1980's with bad commodity prices, and I rented 
everything out in 1992. I found a job at a combustible waste 
and recycling waste center, where I received training for 
boiler operator and EPA licensing for waste combustor operator. 
In 1998 I accepted a New Flyer position in maintenance. Less 
than a year had passed and I applied for an electrical position 
and I got it. New Flyer technology was changing fast and I had 
to learn to keep up.
    As I stated earlier, in 2002, diesel hybrid buses were 
introduced and I became the first of two electricians ever in 
the United States to build diesel hybrid buses in a production 
line environment. I represent over 800 union employees of these 
two plants, all which have experienced and technology and 
training needed to move from being a farmer, store clerk, 
waitress, common laborer, etcetera, with the ability to have 
health insurance and the many benefits that come with a great 
company like this in our community.
    In 2009 I met with Vice President Biden and several other 
cabinet members when they kicked off the Strong Middle Class 
Initiative at the St. Cloud, Minnesota plant in March. What a 
difference it has made for these two plants with ARRA funding 
is the fact that New Flyer has received orders from over 17 
different transit agencies, totaling 638 equivalent units that 
are tied directly to ARRA funding. These include Chicago, 
Philadelphia, Seattle, Washington, Rochester, Milwaukee, 
Charleston, Detroit, Boston, Honolulu, Cincinnati, Miami, New 
Orleans, Fargo, Moorhead, Grand Forks, North Dakota, and 
Gardena, California. Many of these buses would not have been 
purchased without the availability of ARRA funding, and we 
appreciate that.
    Just a note. I just found out we are going back into full 
production the first quarter of 2011, so thank you.
    It has become apparent to me the crisis of financing for 
city governments have become burdensome and almost crippling, 
and I believe that maintaining and operating these vehicles all 
these cities can handle. I would encourage that the Committee 
on Transportation and Infrastructure would continue to support 
financing that would alleviate the pressure of the local 
governments' limited purchasing abilities. That would in turn 
create necessary jobs and the hope and future of the industry 
that we as laborers deem so important for our families in rural 
America.
    Remember, each unit that is added to the production line 
creates nine more jobs, and these are the big time jobs in 
small town America that we have always wished for, so keep the 
dream alive and help us supply everybody with a good means of 
public transportation.
    I would like to thank Monsieur Oberstar and Mr. Mica for 
inviting and letting us tell our story. Merci beaucoup.
    Mr. Oberstar. Thank you very much for that splendid 
testimony. Your own personal history is very similar to that of 
many of our fellow citizens in central, western, and southern 
Minnesota, who started out on the farm and migrated to the 
city. It is a great personal story and I feel very pleased and 
honored to have played a role in bringing New Flyer to St. 
Cloud and authorizing the funding of the access road into the 
place and preventing those who wanted to squeeze it out of the 
market from doing so. It has been a great success story. New 
Flyer is a resounding success.
    Now I am going to ask Mr. Cummings, the Chair of our Coast 
Guard Subcommittee, to introduce our next witness.
    Mr. Cummings. Thank you very much, Mr. Chairman. I welcome 
to this hearing a very good friend of mine, Mr. Alfred Foxx, 
currently the Director of the Department of Public Works for 
the City of Baltimore, and previously the Director of the 
Department of Transportation for the City of Baltimore. Mr. 
Foxx has a long list of accomplishments in developing and 
overseeing transportation and infrastructure projects at the 
local, State, national, and international levels.
    Mr. Foxx retired as a colonel from the United States Army 
Corps of Engineers and his last post with the Corps was 
Executive Director of Civil Works. During his tenure with the 
Corps, he coordinated the construction of locks, dams, 
hydropower facilities, recreational sites, and flood control 
works, and he oversaw regulatory permitting, environmental 
compliance, and administrative responsibilities. He has also 
guided the Corps' responses to natural disasters across the 
Country.
    Most recently, as Director of the Department of 
Transportation for the City of Baltimore, Mr. Foxx managed 1500 
employees and presided over highway and road design, 
construction, and maintenance projects, including those made 
possible by a $35.1 million investment from the American 
Recovery and Reinvestment Act. Mr. Foxx was confirmed in his 
new position as Director of the Department of Public Works for 
the City on September 20th, 2010, and I am pleased to say he 
is, Mr. Chairman, an outstanding public servant who uses the 
people's tax dollars in an effective and efficient manner, and 
we are very, very pleased to have him with us.
    With that, I yield back.
    Mr. Oberstar. Well, thank you for bringing this splendid 
witness to our Committee. The Corps of Engineers is always 
welcome at this witness table. In whatever shape or title you 
have, you are always a Corps of Engineers person.
    Mr. Foxx. Thank you very much, sir.
    Good morning, Mr. Chairman and honorable Members of the 
Transportation and Infrastructure Committee. And I would like 
to specifically acknowledge my Congressman over my district, 
Congressman Cummings, and all of the hard work that he has done 
for the great State of Maryland.
    As Congressman Cummings pointed out, I am the former 
Director of Transportation and had the honor to lead that 
organization for about nine years. I have a working career of 
35 years and am very proud of my service in the United States 
Army Corps of Engineers. I want to thank you for the 
opportunity to speak to you today about the American 
Reinvestment and Recovery Act and its positive impact on 
Baltimore, the transportation infrastructure, the lives of our 
working people, and the improved quality of life of our 
neighborhoods.
    Baltimore is one of 24 jurisdictions in the State of 
Maryland, but it is the only jurisdiction in the State of 
Maryland where we are responsible for the entire transportation 
infrastructure. As an older city, Baltimore is transitioning 
from an industrialized to a service-oriented economy, working 
to become a more technologically savvy city, but an aging 
infrastructure built to support a much older way of life.
    The American Reinvestment and Recovery Act came at a time 
when I, as Director of Transportation, was looking at a capital 
program of zero dollars and non-Federal funds. Even though I 
had Federal dollars, I didn't have enough money to put up the 
match. So we welcomed the $35.1 million that we received from 
the Reinvestment and Recovery Act.
    We were able to put together a diverse package of projects 
to reach across as much of our local economy as possible. The 
great thing about it, the competitive bids that we received for 
these projects was indicative of the economic times we were in, 
particularly in the construction, professional trades, and 
supply businesses. Our bids came in well below the engineer 
estimate, and in some cases 30 to 40 percent below the engineer 
estimate. As a result, we were able to stretch those dollars a 
little farther and put more projects out on the street for our 
contractors and their businesses.
    The Recovery Act gave us the opportunity to address some of 
our bridges with low safety ratings. Argonne Dry Bridge, for 
instance, over the Herring Run, effectively uses these funds to 
employ a range of craftsmen and purchasing of materials from 
local suppliers. The project also builds on future long-term 
investments by the Department of Transportation, Recreation and 
Parks, and Public Works in the rehabilitation of the Herring 
Run Watershed, and the first phase of a greenway in the 
northeast section of Baltimore.
    We were able to add $3 million to an existing project to 
repair the structural elements of our Pennington Avenue Bridge, 
a major corridor over Curtis Creek, located just a few hundred 
yards north of a critical Coast Guard maintenance yard. We 
invested in resurfacing of some of our major corridors that 
were in poor shape, with plans that had been sitting on the 
shelf for lack of funds.
    We are resurfacing Northern Parkway, a major east-west 
arterial that interconnects with our I-83 and is heavily used 
by commuters, residents, neighborhoods, major hospitals, and 
our horse racing fans that come to attend the Preakness every 
year. This project, along with resurfacing of the intersection 
of Park Heights Avenue project, is another example of a 
Recovery Act project that also supports a major neighborhood 
revitalization project in the Park Heights area, creating an 
attractive gateway into this once neglected community.
    Through the Ferry Boat Discretionary Program, Baltimore is 
enhancing its water taxi services to residents and commuters 
attempting to get to jobs and locations along the eastern side 
of the harbor in Downtown Baltimore. Good east-west transit 
service is lacking for these residents, and the water taxi 
provides an alternative mode of transportation, as well as 
avoiding the congestion on the city streets. Approximately 
80,000 passenger trips are provided annually by two water 
taxis, and with the creation of this third route we will add an 
additional 25,000 to 30,000 trips every year.
    For Baltimore, the timing of the American Reinvestment and 
Recovery Act, as I can say, could not have been more critical. 
We know that when we do not consistently invest in our 
infrastructure, it grows worse. Not better, it grows worse, and 
it costs more to fix. These investments we are making will 
compliment our future investment, improve the quality of life 
of our communities, provide meaningful employment, and 
encourage investment by others in our city.
    While we are here today discussing the importance of 
investing in our transportation infrastructure, let me put on 
my public works hat. Let us not forget that unless we make the 
same type of commitment to and invest in our sewers and storm 
drains, our underground utilities, our working dollars will be 
for naught. Let me paint this picture for you, sir. I am sure 
you have seen it over and over again. Millions of dollars spent 
to pave a road, and 30 days later you find a backhoe and people 
out there digging it up to repair a 50-to 60-year-old storm 
drain or sewer line underneath. When they cover that back up, 
you have just reduced the life of that road.
    So as we look at transportation, the transportation 
infrastructure, let us not forget about the investment in the 
utilities underneath the road, particularly in the urban areas.
    I thank you, Mr. Chairman and the Committee, for your kind 
attention, and would be happy to answer any questions you have.
    Mr. Oberstar. Thank you for that very, very important 
engineering lesson at the tail end of your testimony. It is 
something that has often occurred to me and a matter that I 
think we need to bring city engineers together with those who 
devise the AASHTO manual and ensure that somewhere in the 
manual there is a directive to attend to the underground 
utility needs before you put in new pavement. You are so right. 
We see this happening all too often.
    For our next witness, Mrs. Napolitano has an introduction.
    Mrs. Napolitano. Thank you, Mr. Chairman. I couldn't agree 
with you more on your statement, because I see, as a former 
city elected official, where utilities come in and dig, the 
road is not the same, and, unfortunately, they don't 
coordinate, whether it is the electricity, the water, or the 
whatever digging they do, to coordinate it so they can do it 
all at once, and be able to do it prior to any renovations to 
the roadways. Somewhere along the line we need to kind of 
encourage that.
    But I certainly want to welcome Doran Barnes, Executive 
Director at Foothill Transit, who is joined today by Roger 
Chandler, sitting behind him, Councilman from Arcadia, one of 
the member cities, and who also happens to be Chairman of the 
Board of Foothill Transit. It is a regional transit agency in 
my district that serves the San Gabriel and Pomona Counties of 
Los Angeles County. You heard me say about 12 million people? 
Well, they serve over 14 million residents annually.
    I am proud to have worked with Foothill Transit 
continuously for over a decade and a half. They make their 
service more environmentally friendly and efficient for the 
customers, and are always looking for new ways to be able to 
serve their constituency, which happens to be mine. And they, 
for the past decade, have been replacing their old diesel buses 
with clean CNG buses.
    Mr. Mica, you were there. I thank you for joining us. He 
was with us last month to kick off Ecoliner. He wrote on it; I 
wrote on it. It is the newest green project, which is the 
world's first a fast charging electrical bus; 10 minute charge. 
And it will be replacing a lot of the buses that are spewing 
out a lot of the contaminants into the air. We were also joined 
by Congressman David Dreier.
    I do congratulate Mr. Chandler, Mr. Barnes, the transit 
board, and their staff for their dedication to implementing 
these new innovative projects and for continuing to make the 
best use of the taxpayer dollar to present those services.
    I thank the Committee for recognizing Foothill Transit 
leadership by having them as witnesses testifying today, 
especially in dealing with this new transforming technology, 
world technology.
    So, Mr. Barnes, thank you for being here, and I yield back.
    Mr. Barnes. Good morning. Thank you. It is very exciting to 
be here with you today to talk about how we are successfully 
putting Recovery Act dollars to work in Los Angeles County to 
create jobs, to reduce our carbon footprint and improve the 
environment, and to make our communities more livable.
    As Representative Napolitano had mentioned, we are the 
fixed route transit operator for the San Gabriel and Pomona 
Valleys in Eastern Los Angeles County. We are a Joint Powers 
Authority made up of 22 cities plus the County of Los Angeles.
    And one of the things that is very unique about Foothill 
Transit is that, unlike most public agencies, Foothill Transit 
has absolutely no employees; all employee activities are 
contracted out to the private sector. And Congress has 
designated Foothill Transit as a national public-private model 
for transit authorities. What that allows us to do is blend the 
best of the public sector, in terms of setting policy, with the 
best of the private sector.
    Part of our mission has always focused on innovation and 
being an innovative transit operator, and our public-private 
partnership was one of the early efforts at innovation. While 
we were able to move forward a number of Recovery Act projects 
with the funding that was provided, the project that we are 
absolutely the most excited about is our Ecoliner project, 
which is the first fast charge, heavy duty, en route charging 
transit bus that has been available in the marketplace. And we 
have a short video that will tell you a little bit more about 
the Ecoliner, if we can do that at this point.
    [Video shown.]
    Mr. Barnes. That is part of a slightly longer video that we 
have produced; it is available out on You Tube, if you would 
like to take a look at the entire video. But it gives you a 
little bit of an idea about the bus.
    In addition to being an innovative project, the Ecoliner 
demonstrated one of the major goals from the ARRA program, 
which is the creation of jobs; and our partner in this project, 
our vendor partner, is Proterra, which is a Golden, Colorado-
based company. Mark Gottschalk, the Chief Development Officer, 
is here with Proterra, and through this project 40 jobs were 
created. In addition, over 100 vendors were involved in 
providing the parts for the vehicles. These vendors are located 
in 33 States, and the multiplier effect ultimately created 120 
jobs as part of this program.
    But, to me, one of the things that is even more exciting is 
not the 120 jobs that were created immediately, but the jobs 
that will be created as Proterra continues to grow as a 
company. They are establishing a major manufacturing facility 
in Greenville, South Carolina, and they expect to generate over 
1300 jobs during the next five years. When you combine that 
with the supplier partners that will be involved with the 
creation of their product, over 4,000 jobs will be created. So 
not only is the technology advancing immediate job creation, 
but long-term job creation with this exciting environmental 
product.
    On September 3rd we introduced the Ecoliner to the 
communities that we serve, and we were very pleased that 
Representative Napolitano was there to address the hometown 
crowd. Congressman Dreier, Congressman Mica also joined us in 
that great celebration; and Deputy Administrator for the 
Federal Transit Administration, Therese McMillan, was with us.
    What that event created was the introduction of the product 
to the community, but also generated significant press coverage 
at the local level, at the national level, and internationally. 
And that is not only good for the development of this project, 
but it is good for the transit industry on balance. So we are 
very exciting about the buzz that has been created related to 
the introduction of the Ecoliner.
    So the real question is what is next. And for Foothill 
Transit we have three buses that are currently in service 
providing daily transit operating programs for our customers. 
The Foothill Transit board has in place funding to purchase an 
additional nine buses and has identified over a dozen 
additional lines where the Ecoliner can be deployed. So we 
believe this is the beginning and that the ARRA program 
provided the catalyst to be able to move this project forward.
    I very much appreciate the opportunity to share with you 
the story of the Ecoliner and would certainly be happy to 
answer any questions that you might have.
    Mr. Oberstar. Thank you for your enthusiastic testimony and 
the video. I got so fired up last night reading your testimony, 
I wanted to fly right out there and try one of those buses. I 
did in Santa Barbara, where they had an all-electric bus 
project, and that was quite successful in that hilly country of 
theirs. They also had a hydrogen-fueled bus that was operative 
for a few years. I don't know the story of its disappearance 
but, at any rate, these are the technologies of the future that 
we need to stimulate, and I appreciate your testimony.
    Now Mr. Larsen has an introduction for our next witness.
    Mr. Larsen. Thank you, Mr. Chairman and Members of the 
Committee. I am pleased to introduce Joyce Eleanor, CEO of 
Community Transit. CT is the largest transit agency in my 
district, in Northwest Washington State. And as a former member 
of CT's board of directors and a former regular rider on the 
commuter service, I know Joyce and Community Transit very well.
    The agency is known locally and in the State as forward-
thinking and community focused, and that is in large part 
because of Joyce's leadership. From being the first transit 
agency in the State to build its own Park and Ride lot in 1981 
to being the first in the State to offer bus rapid transit in 
2009, CT is always looking for innovative ways to serve their 
customers. They are also respected for their collaborative 
approach to meeting community needs and solving problems.
    They have a great story to tell when it comes to the 
Recovery Act. As early as 2008 CT was pushing for economic 
stimulus funding for transit and highlighting projects that 
were ready to receive funding. And after the Recovery Act 
passed, the agency immediately went to work identifying those 
capital projects to fund and how much to spend on operating 
costs. They applied for a TIGGER grant and were successful. I 
don't want to steal too much of Joyce's thunder, but as a 
result of the Recovery Act CT has saved or created almost 80 
jobs in my district alone.
    It is still struggling in this economy, and I think we have 
heard that from our transit agencies, but thanks to the 
Recovery Act they are better off and, as a result, CT's 
customers and employees are better off as well.
    This story is repeated across Washington State. Estimates 
show that in my State 67,000 jobs have been saved or created 
due to the Recovery Act, including over 15,000 jobs building 
transportation infrastructure in the first year of the Act and 
over 13,000 so far in the second year. Recovery Act funds have 
helped construct a new road on Second Avenue and Ferndale that 
will allow a commercial area to develop. This project employed 
84 people in a local community and will allow for numerous 
permanent jobs in the future.
    Bellingham International Airport received over $3 million 
from the Recovery Act for repaving ramps and taxiways, which 
have created 100 family-waged jobs.
    The Recovery Act is putting money in the pockets of 291,000 
families in Washington State to help them pay for mortgages and 
put food on the table, and it continues to do so. More jobs 
will be created by the Recovery Act; it will continue to 
improve our Nation's transportation infrastructure and it will 
certainly continue to help our transit agencies like Community 
Transit.
    I want to thank you, Mr. Chairman, for inviting Joyce to 
testify and I look forward to hearing her testimony. 
Unfortunately, Joyce and Todd and Larry, I have to go meet with 
the Canadian ambassador to talk about Amtrak's second train, 
which is another transportation issue that we are all dealing 
with.
    [Remarks made off microphone.]
    Mr. Larsen. Well, you might be more successful than us. 
Thanks a lot.
    Mr. Oberstar. All right. Thank you.
    Ms. Eleanor, please begin.
    Ms. Eleanor. Good morning, Mr. Chairman, Congressman Mica, 
and honored Members. My name is Joyce Eleanor, and I represent 
Community Transit as its CEO. We are a mid-sized transit agency 
providing local and commuter service in Snohomish County, 
Washington, which is just north of Seattle.
    Since Community Transit was created 34 years ago, our 
agency has grown to serve nearly 12 million passengers 
annually, including 50 percent of all Snohomish County 
residents traveling into Downtown Seattle each weekday.
    The recession has hit our agency hard. Our agency is 
primarily funded by local sales tax revenues. In 2010, we will 
receive the same level of sales tax revenue as we did in 2005. 
However, since 2005, all of our expenses have grown. We 
estimate the loss of sales tax revenue due to this recession 
will total about $180 million by 2013. This is money that would 
have been used for bus service, bus replacement, and other 
needs. We will never see this money.
    For the past three years we have sustained ourselves 
through bridge budgets, moving money around where we could, 
borrowing from our reserves, and, of course, cutting costs. We 
have cut more than $30 million in programs and administration 
over a three-year period, and that is about a third of our 
annual budget.
    As bad as things are financially, they could have been far, 
far worse. If it were not for the American Recovery and 
Reinvestment Act, things would have been much worse. Thanks to 
Congress, your Committee, the efforts of our local 
representatives, Rick Larsen and Jay Inslee, as well as 
Senators Patty Murray and Maria Cantwell, Community Transit 
secured $17.5 million in ARRA Federal stimulus funds last year; 
and this kept us from having to cut service in 2009.
    Specifically, we were able to use about $3.3 million of the 
FTA 5307 funds for operating costs, split between our direct 
operations and preventive maintenance. This flexible funding 
saved 74 jobs at our agency that would have potentially been 
eliminated if we had had to cut service last year. On behalf of 
our employees, I thank you.
    But the benefits don't stop there. We are also using $10.7 
million of transit capital assistance funding to purchase 23 
replacement buses. These funds allowed us to move forward with 
replacing buses that are now 16 years old, four years older 
than the Federal life cycle. The buses we are purchasing are 
double-decker buses to be used in our commuter service to 
Seattle. Thanks to the ARRA funds, we will be launching a fleet 
of 23 Double Talls, which is what we call them, later this 
year.
    I want to tell you one more thing about our double-deck 
buses. When we first leased this bus in 2007, we leased from 
Alexander Dennis, the world leader in double-deck buses. The 
company is based in Great Britain, and that first bus was 
entirely built in the U.K. As we went out to bid, Alexander 
Dennis changed its manufacturing process to be Buy America 
compliant. They have contracted with the El Dorado Bus Building 
Company in California to create a plant here. They have two 
assembly lines in California with about 30 people working to 
create our 23 buses.
    The Recovery Act also included funds dedicated to clean 
energy, the TIGGER grants. We received $3 million in TIGGER 
funds for hybrid replacement buses. Thanks to the $3 million 
TIGGER grant, 15 of 24 buses that we are buying will have 
hybrid diesel electric propulsion engines. Because hybrid buses 
cost more up front than standard clean buses, we would not have 
purchased these otherwise.
    The buses are being built by New Flyer of America based in 
St. Cloud, and other testimony before this Committee has 
indicated that stimulus funds used for bus purchases have 
maintained and created jobs, and also at many sub-vendors. We 
also received $425,000 in ARRA funds through the Federal 
Highway Administration for redevelopment of a 30-year parking 
lot at the Mountlake Terrace Transit Center. The parking lot 
redevelopment was completed this summer, and it created five 
full-time equivalent construction jobs for the six-month life 
of the project.
    The route ahead for our agency is uncertain. Retail sales 
tax makes up the majority of our agency's funding, and sales 
tax levels are 20 percent below what they were when the 
recession began. As I mentioned earlier, we held off service 
cuts for three years. In 2009, it was the ARRA funds that saved 
our service. However, in June of this year we had to cut 15 
percent of our service to customers. Community Transit is now 
in the midst of creating our 2011 budget. We are proposing more 
staff and program reductions.
    Chairman Oberstar, Representative Mica, you and your 
Committee have greatly helped our agency and our customers with 
the package of stimulus funds you created last year. Any future 
action along the same lines could have the same positive 
effect. And, of course, we applaud you for working on the 
surface transportation authorization. We need the certainty 
that such legislation will provide.
    I thank you for your wonderful work and for the opportunity 
to share our experiences about public transit in Snohomish 
County. Thank you.
    Mr. Oberstar. Thank you for that excellent testimony. I 
will come back to your observations on flexibility for transfer 
of capital funds to operating account later, but it is a 
splendid example of what we heard and what we intended well 
over a year and a half ago.
    Mr. Theerman, welcome and thank you for your presentation.
    Mr. Theerman. Chairman Oberstar, Ranking Member Mica and 
Members of the Committee, thank you for the opportunity to 
appear before you today and for your leadership in providing 
funding for water and wastewater infrastructure in the American 
Recovery and Reinvestment Act. My name is Jeff Theerman. I am 
the Executive Director of the Metropolitan St. Louis Sewer 
District. In addition to my duties at MSD, I also serve as the 
President of the National Association of Clean Water Agencies, 
or NACWA, and it is my pleasure to testify on behalf of NACWA 
as well.
    This past recession had a significant impact on budgets of 
wastewater utilities across the Country, impacts we are still 
feeling today. Harmful closures continue, along with cutbacks 
in manufacturing and construction and significant unemployment. 
These conditions have led to significant decreases in revenue 
for utilities.
    The funding provided by ARRA helped fill the funding gap 
left by these revenue shortfalls and specifically allowed MSD 
to move forward with capital projects we may have otherwise 
been unable to undertake. MSD received a combination of loans 
and grants for many projects within our service area. Direct 
funding was provided for the Argonne and Upper Maline Creek 
projects in central and northeast portions of our service area. 
These projects were constructed to address antiquated sanitary 
sewers whose capacity problems resulted in basement backups and 
sewage overflows. Funding provided a total of $10,980,000 and 
generated 250 new construction jobs to build or rehabilitate 
8800 feet of sewers, resolving both health and environmental 
concerns.
    ARRA loans and grants were used extensively throughout 
Missouri. This, coupled with low construction bids, freed up 
$88 million of SRF funding for the district's Missouri River 
Treatment Plan expansion. All told, these funds will save MSD 
$70 million over a 20-year period and create an additional 564 
jobs during the three-year period of construction of this 
project. It is important to note the savings MSD will accrue 
over this time frame will be used to accelerate additional 
projects for treatment plan disinfection improvements on the 
Mississippi and Missouri Rivers.
    ARRA also authorized the Build America bonds program. These 
funds allowed the district to take advantage of lower-cost 
financing and allowed MSD to issue $137 million in bonds, with 
an estimated savings of $20.5 million in interest that can then 
be used to fund other projects.
    Infrastructure improvements and the jobs required to 
construct them are essential to St. Louis. With unemployment in 
our region at 9.5 percent, and with construction hours worked 
dropping to 50 percent of 2008 levels, ARRA funds allowed our 
construction industry to remain afloat.
    MSD will be spending billions of dollars constructing sewer 
infrastructure improvements over the coming decades, relying 
heavily on private contractors to provide high-quality 
construction services. If our economic situation leads to a 
serious decline of private companies in the construction 
community, our infrastructure investment programs will suffer 
from increased cost and a lack of qualified contractors.
    For these reasons, in Missouri we welcome stimulus funding 
for the need it addresses, the employment it continues to 
bring, and the relief it provided for many workers who faced 
the stark reality of sudden and extended unemployment.
    Many communities have similar stories, and for these 
reasons, to the extent additional stimulus efforts are 
necessary, we urge you to include a robust investment for clean 
water infrastructure. Investing in water and wastewater 
infrastructure provides significant economic and environmental 
returns to the communities in which those investments are made, 
as well as to the Nation's economy as a whole.
    I thank this Committee for its leadership in seeing to it 
that our critical water infrastructure is a key component to 
Federal economic recovery efforts, and I look forward to any 
questions Members of the Committee may have regarding my 
comments.
    Mr. Oberstar. Thank you very much for your personal, that 
is, your St. Louis perspective, but also that from NACWA. We 
are grateful for the support that your national organization 
has given to our efforts to reauthorize the SRF, the State 
Revolving Loan Fund program, which has stalled in the other 
body, as we quaintly say, for the last four years. Actually 
more than that, for the last six or eight years. We are going 
to continue pressing the case for the $15 billion four-year 
authorization bill. By the time we get to that, I think we will 
need more like $20 billion.
    I will now yield to Mr. Boozman for an introduction for our 
next witness.
    Mr. Boozman. Thank you, Mr. Chairman. It is a real pleasure 
to have Kelly Johnson with us today. Kelly is the Airport 
Director of the Northwest Arkansas Regional Airport, and I have 
had the opportunity, being here five terms, to work with a 
number of different individuals, administrators throughout 
Arkansas and throughout the County, and I would rank Ms. 
Johnson at the very, very top of that list as far as being 
capable and just doing a tremendous job administrating our 
airport. Our airport is a very young airport, it has been one 
of the fastest growing airports in the Country, and nobody does 
a better job of stretching their dollars and taking care of 
taxpayers' money.
    So, again, it is a real pleasure to have you here today, 
and I certainly enjoyed working with you in the past and look 
forward to working with you in the future. Thank you.
    Ms. Johnson. Thank you, Congressman Boozman, and thank you, 
Mr. Chairman, for the opportunity to be here today. It is my 
distinct privilege to be the Director of the Northwest Arkansas 
Regional Airport and also serve as First Vice Chair for the 
American Association of Airport Executives. The Northwest 
Arkansas Regional Airport, or XNA, as we lovingly call it, is a 
small hub airport that serves five cities and two counties in 
Northwest Arkansas.
    I would like to begin by thanking Congress for including 
infrastructure provisions in the American Recovery and 
Reinvestment Act. I would also like to thank the Members of the 
Committee for your tireless efforts to pass an FAA 
reauthorization bill that would also stimulate the economy and 
create jobs.
    The Recovery Act included $1.1 billion for ready-to-go 
airport construction projects. The FAA has already issued 331 
grants for 367 airport construction projects at airports around 
the Country. According to the FAA, 268 of these projects have 
already been completed.
    Last year, XNA received $9.5 million in Recovery Act grants 
to construct an alternate landing surface. This funding will 
help us complete a critical safety project at our facility, as 
well as saving and creating jobs in our community. Our one and 
only runway is rapidly deteriorating due to a condition known 
as alkali-silica Reaction. This is a chemical reaction that 
often causes concrete in runways, highways, and bridges to 
crack and expand. The deterioration has been so bad that we 
have spent approximately three-quarters of a million dollars in 
the last two years alone repairing the pavement to prevent 
foreign object debris which could damage aircraft and 
jeopardize safety.
    We are constructing the alternate landing surface so that 
we can close our crumbling runway and begin a major 
reconstruction project, instead of continuing to throw money at 
dramatically increasing repair costs. If this project hadn't 
taken place, we could have been forced into the position to 
close our airport and repair our deteriorating runway. A 
shutdown would have impacted Fortune 100 companies, including 
Wal-Mart, Tyson Foods, which are headquartered in Northwest 
Arkansas, as well as smaller businesses that rely on air 
service into and out of our airport. Without the Recovery Funds 
Act, we simply would not have been able to proceed with this 
critical safety project as quickly as we did.
    We estimate the construction of the alternate landing 
surface has created approximately 100 direct jobs, as reported 
on a quarterly cumulative basis, or 25 full-time equivalent job 
years. However, it is important to note that that estimate does 
not include the indirect or induced jobs that have been 
retained or created as a result of the project.
    The Recovery Act also included bond-related provisions that 
are helping airports move forward with critical infrastructure 
projects that have been delayed because of the collapse of the 
bond market. For instance, the bill excluded private activity 
bonds from the Alternative Minimum Tax for bonds at airports 
issued in 2009 and 2010. The AMT provisions have been 
enormously successful. The FAA estimates that approximately 40 
airports have issued more than $10 billion in bonds that 
benefitted from the temporary AMT provision. The AMT relief is 
expected to save airports approximately $1 billion in reduced 
financing costs.
    Our airport refinanced more than $30 million in bonds this 
year, taking advantage of the non-AMT opportunity. This has 
resulted in making our bonds, which we market weekly, much more 
attractive to investors.
    The Recovery Act also created the Build America Bonds 
program to help State and local governments reduce their 
financing costs and build infrastructure projects. Several 
airports have successfully issued approximately $2 billion in 
Build America Bonds to refinance projects at their facilities.
    Mr. Chairman, I would like to discuss a few other steps 
that Congress could take to help airports create jobs and 
stimulate the economy. First, we urge Congress to pass an FAA 
reauthorization bill that raises the cap on passenger facility 
charges and increases airport improvement program funding. It 
has been three years since the FAA bill expired. We hope that 
you and your Senate colleagues will work together to send a 
multi-year bill to the President's desk before the end of the 
current extension, which expires at the end of this year.
    Airports are grateful for the House-passed version of the 
bill, which includes provisions to raise the PFC cap from $4.50 
to $7.00 and increase AIP funding by $100 million per year. The 
higher PFC level alone will generate more than $1 billion per 
year for critical safety, security, and capacity projects, 
without relying on Federal funding. Raising the PFC cap and 
increasing AIP funding will also stimulate the economy by 
creating tens of thousands of good paying jobs every year.
    Third, airports recommend that Congress extend the Build 
America Bonds program, which also expires at the end of this 
year. This would provide airports with another tool to lower 
borrowing costs and invest in additional infrastructure 
projects to help stimulate the economy. Congress could also 
help by extending the AMT provisions that are slated to expire 
at the end of this year. A permanent AMT fix would help save 
airports even more money, allow them to invest in more 
infrastructure projects, and create even more jobs.
    Chairman Oberstar, Ranking Member Mica, and Members of the 
Transportation and Infrastructure Committee, thank you again 
for inviting me to appear before you today, and I look forward 
to answering your questions.
    Mr. Oberstar. Well, thank you. You really raced through 
your statement. You hit all the points, and I especially 
appreciate your appeal for passage of the reauthorization bill 
for aviation. I am going to send your testimony over to the 
other body and ask them to get going with it. This is an appeal 
from the heartland here, right from the very heartland of 
America.
    We passed that legislation in the 110th Congress. In 2007 
we moved that bill. And it bogged down over a number of items 
that were in our bill, not in the Senate, and that the previous 
Administration couldn't agree with and couldn't resolve, one of 
them being air traffic controller pay issue. This 
Administration came into office; they settled that within the 
first five months, the new contract done, ratified by the 
controller's union; and then the issue of the passenger 
facility charge, which is grossly misunderstood by others or, 
if understood, then grossly misrepresented as a tax. It is not 
a tax, it is a fee. And it is not required. No airport has to 
impose the passenger facility charge; if you choose to do so, 
you are allowed to do so. That was initiated as an initiative 
of the Bush 1 administration under then Secretary of 
Transportation Sam Skinner.
    I was Chair of the Aviation Subcommittee at the time we 
passed the authority for the first PFC. It took quite a 
combined bipartisan effort to get that passed and we did it, 
and it has resulted in billions of dollars of investment on the 
hard side of airports, supplementing the AIP program, building 
runways and taxiways and expanding airport capacity, and also 
dealing with those airport needs that are beyond AIP authority 
and which you, your brother and sister airport authorities 
across the Country, have used wisely to enhance capacity and 
deal with the needs of travelers.
    The airlines don't really care what happens to the 
traveler; they just set a time, you come and we will leave when 
you are onboard, and if you not onboard, we will leave anyway. 
But it is the Airport Authority that worries about the 
traveler, to make sure that their passageway to the gate is 
smooth and efficient, and you have done those things with those 
passenger facility charges.
    So there is just one person over there in the other body 
that is holding it up; has set himself up as the authority, as 
the fiscal conscience of the Congress, which is a lot of 
baloney, frankly. I say it and I have said it many times 
publicly, privately, and it is in violation of the bipartisan 
accord we have had for going on 20 years for the PFC.
    Then there is one other little issue that has to do with 
National Airport. Not so little, it is a big conflict of 
interest of legislating a majority, monopoly, almost, a 
stranglehold on National Airport for one airline, U.S. Airways; 
and it is something the other body has to deal with, it is 
beyond our ability to resolve. They have it all tangled up in 
holds and hot holds and secret holds and filibuster threats.
    Let's begin with Mr. Cummings. Do you have any questions of 
witnesses?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Foxx, just one question. You were talking about bids 
coming in at sometimes 30 to 40 percent less than the 
engineering study or whatever. Is that because people were out 
of jobs and out of work, and they were more anxious to get 
opportunities? I just wonder what that says about the regular 
bidding process. You follow what I am saying? That is quite a 
difference, and I was just curious.
    Mr. Foxx. I understand exactly what you mean, sir. Based on 
our engineering estimates, I think it was more indicative of 
the climate which they were facing. All of the contractors were 
looking to get projects so they could put people back to work, 
so they were willing to take some risk and put in lower bids 
than what they would normally put in just to get those projects 
and get people back out there. I am not saying that they would 
take a loss; it is just that they were trying to bid, I would 
say, more realistically on some of the projects that we had.
    Mr. Cummings. So I guess they may have taken less of a 
profit?
    Mr. Foxx. Right, less of a profit.
    Mr. Cummings. And keeping their people working?
    Mr. Foxx. Yes, sir.
    Mr. Cummings. They prefer that. That makes sense. What 
about minority participation? I mean, what kind of minority 
participation were you able to achieve, do you know, with 
regard t those dollars?
    Mr. Foxx. In regards to the dollars, across the board, 
around 36 percent minority participation in all of the projects 
that we have, women-owned businesses and minority-owned 
businesses throughout the city. In many cases we try to 
encourage the prime contractors to increase that amount so that 
we can get more of the smaller businesses on the construction 
sites to help those out. But on average it is around 36 percent 
minority participation in all contracts.
    Mr. Oberstar. Would the gentleman yield?
    Mr. Cummings. Certainly.
    Mr. Oberstar. That is an extraordinary achievement. We 
would like to have more about you achieve that goal. From my 
experience, I would say that is probably the highest minority 
participation of any system in the Country.
    Mr. Foxx. Well, the City of Baltimore promotes minority and 
women-owned business participation in all of its contracts, and 
all of the prime contractors that we deal with pretty much 
agree with that process and try to pull in as many women-owned 
and minority businesses as possible to participate in the 
contracts.
    Mr. Oberstar. You know, it was Mr. Cummings who had a very 
significant hand, as we shaped the stimulus bill, in providing 
the $20 million authority for bonding for minority-owned 
enterprises. It was his suggestion and initiative from the 
Maryland experience, and I thank him for that.
    I thank the gentleman for yielding.
    Mr. Foxx. I talk regularly with the Congressman about 
minority-owned businesses and their participation in all 
contracts in the City of Baltimore.
    Mr. Cummings. Thank you very much. Just one other question. 
You said you had projects that were shovel-ready. How did you 
make a determination as to which projects you take on?
    Mr. Foxx. Well, when we evaluate, we look at the 
criticality of the project and how it would support 
neighborhood revitalization. Some of the projects we looked at 
how it supported the traffic flow, the priority as far as 
traffic flow within the City of Baltimore. For example, 
Northern Parkway, a critical east-west arterial, and we just 
didn't have enough money to repair that, so we invested a lot 
of the stimulus dollars into that.
    Plus, after the disaster in Minneapolis with the bridge, we 
focus a lot on our old bridges, and Argonne Bridge is one of 
them; and that was priority because it has such a low rating to 
get that bridge fixed as quickly as possible, and the stimulus 
funds allowed us to do that. We had the project design; we just 
had to get the money to get it out there and get it fixed.
    Mr. Cummings. Thank you very much.
    I will yield back, Mr. Chairman.
    Mr. Oberstar. Thank you.
    Mr. Boozman?
    Mr. Boozman. Something I would like to know from whoever 
would like to volunteer the answer or just really a comment, 
one of the things that we have really had tremendous problems 
with is just getting projects going. I think the average road 
project takes what now, Jim, nine or ten years, or something?
    Mr. Oberstar. It depends on the nature of the project. A 
simple mill and overlap often takes three years, and transit 
projects average 14 years.
    Mr. Boozman. Exactly. And we saw the bridge, your bridge, 
that was completed in a very short time. That probably would 
have taken many years, years and years, through the normal 
cycle of things.
    So tell me a little bit about some of the problems that you 
have had in getting your projects going and if you have any 
suggestions on how we can cut through some of the time delays. 
Not only is it a time factor, but it is also a money factor 
with inflation and every other reason. So whoever would like to 
comment just for a minute or so.
    Mr. Foxx. One of the things we were asked when we were 
addressing the stimulus funding was to have shovel-ready, and 
in my mind, when it says shovel-ready, that means the design 
had to be near completion so that we could go out on the street 
and award the project. In many cases, if you are running an 
engineering, like in the private sector, as the Director of 
Transportation, I have always had projects in the design phase; 
and you are right, if you started off from concept, it normally 
takes about a year, a year and a half to get an individual 
project designed before you can get it out on the street.
    So we had several projects that were around 60 percent, 90 
percent complete in design, but we just didn't have the 
construction money. And we completed those projects, put them 
out on the street, and that is what we considered; if it was 
around 60 to 90 percent complete in design, we considered that 
as being shovel-ready because it was close to being completed 
as far as the design, and we could put it out, advertise it, 
get a bid on it, and go into construction within a relatively 
short time, six to nine months. So that is the technique we 
used.
    Mr. Boozman. Thank you, Mr. Chairman.
    Mr. Oberstar. Further answer to the gentleman's question is 
that it helps to have a bridge collapse and people die, and 
quickly your public attention is focused on doing things right 
and cutting through. Secondly, we didn't relocate that bridge 
in Minneapolis; it is the same bridge piers, the same location. 
There was no environmental impact statement required; there was 
no right-of-way acquisition necessary; there was no design and 
engineering; they did a design build project.
    And, third, in the management of the project, the 
contractor and the State of Minnesota and the Federal Highway 
Administration all were in the same building, on the same 
Floor, and, instead of sending emails to each other, they 
walked down the hallway to share information and overcome and 
resolve differences or issues or questions. And the permitting 
that was necessary was very minimal, but it was all done ahead 
of the project.
    I yield to the gentleman.
    Mr. Boozman. Well, I think a big part of that is, as you 
say, the agencies, rather than being in a confrontational 
style, it was more of a cooperative style of working together; 
not a gotcha attitude, but this is what we need to go forward 
and ensure that this is done in a timely process. And I know 
you agree with this; we have talked at length.
    These are things that we truly do need to work on, and 
perhaps at some point, once the stimulus funding is done, it 
might be a good time to get some people who have gone through 
the process again just to sit down and say what were your 
obstacles, because I know the big study that we had done, that 
was one of their major things, was getting it such that we 
could get things done in a timely fashion.
    Mr. Oberstar. Exactly. In the course of these hearings, I 
have repeatedly asked State DOTs and wastewater treatment 
agencies and transit agencies to give us their suggestions on 
project expediting. And in the future transportation bill that 
was reported from Subcommittee, we do have, in the Federal 
Highway and the Federal Transit Administration, an office of 
project expediting, which we have taken these lessons, we are 
going to apply them. Of course, it is always subject to further 
refinements and further improvements.
    But we started this with Mr. Young in the current SAFETEA 
legislation, and I crafted that provision; it took 44 pages. 
But delivering projects faster and more efficiently is a 
cornerstone of the future of transportation. We are going to 
work hard on that.
    We are going to also have to speed up our getting to the 
Floor to vote; we have zero time left. Two hundred seventy 
members have not yet voted. We will resume the hearing within 
10 minutes after the last vote.
    The Committee stands in recess.
    [Recess.]
    Mr. Oberstar. The Committee will resume its sitting. 
Apologies to the panel and to the subsequent witnesses for the 
interceding votes. It took longer than anticipated.
    Mr. Foxx, you referenced at some length the water taxi 
service in Baltimore, 80,000 passenger trips you wrote down, I 
wrote down?
    Mr. Foxx. Yes, sir.
    Mr. Oberstar. And you had 35,000 more passenger trips with 
the funding received from the stimulus?
    Mr. Foxx. What I said, sir, is when we add that third route 
from the purchase of a water taxi, we expect another 25 to 
30,000 trips on an annual basis.
    Mr. Oberstar. And describe for me where--I know the 
Baltimore Harbor reasonably well, although I haven't been there 
I would say three years, at least. But describe where that 
service originates and terminates.
    Mr. Foxx. Since you have been to Baltimore, you know that 
the Inner Harbor area is sort of an inverted U.
    Mr. Oberstar. Correct.
    Mr. Foxx. And we have residents on the east side, west 
side. So the service connects basically at, I think General 
Ship is one of the companies there, and it goes across to the 
Canton area on the east side of the Inner Harbor. Overall, it 
is about a 10 to 15 minute trip, but what it does is it saves 
the residents who work over on the east side and commuters who 
are trying to get to the east side, they can park their cars in 
garages or at their home and take the water taxi to get to work 
on the east side; it saves them from hitting the congestion in 
Downtown Baltimore.
    Mr. Oberstar. Is it all passenger, or do you accommodate 
vehicles as well?
    Mr. Foxx. It is all passenger, sir.
    Mr. Oberstar. And where are those passenger vessels 
produced?
    Mr. Foxx. I don't have that with me, sir, but I can give 
you that information.
    Mr. Oberstar. Made in America? They have to be under our 
Stimulus Act.
    Mr. Foxx. Yes, sir, they are. That, I do know.
    Mr. Oberstar. All right. And what plans do you have for 
expanding your water taxi service for the future?
    Mr. Foxx. Right now, we have increased it just recently, 
and as far as future plans, we think that right now the 
addition of the third line will be more than adequate for our 
needs. What we are trying to do is build up an interconnected 
transit system around that Inner Harbor area within Baltimore 
by connecting the bus transit and the water taxi transit 
together and making a complete circuit or transit system. And 
as far as future needs, we will evaluate what we are doing 
right now and then take a look at it.
    Mr. Oberstar. Well, that is exciting for me to hear. That 
is a very important initiative, as you just described it, 
intermodalism, to bring public transit together with the ferry 
service, instead of just depending on the car to get you to one 
point, if you can take your bus, light rail, streetcar, or 
subway and come to a waterfront destination, take the ferry 
boat, save more time, more impact on the environment by using 
the ferry boat, low cost, low emissions, and serve vast numbers 
of people, then we are serving the best interest of 
transportation.
    Mr. Foxx. Yes, sir.
    Mr. Oberstar. We plan to increase substantially, nearly 
double, the funding for ferry boat service in the future 
transportation bill reported from our Subcommittee last year.
    Mr. Foxx. Great news.
    Mr. Oberstar. Mr. Theerman, you referenced in your 
testimony, I wrote it down, but I think it is also in your 
presentation; I will just work from my notes, the increased 
issues that wastewater treatment agencies must deal with; 
nutrient control, sewer overflow, stormwater, water quality 
standards, emerging contaminants. I think by implication you 
also include CSO combined storm and sanitary sewer overflows. 
You talk about emerging contaminants. What are the emerging 
technologies to deal with CSO and with, particularly, 
stormwater runoff?
    Mr. Theerman. Nationwide, clean water agencies are working 
with best management practices to deal with stormwater runoff. 
Green infrastructure is becoming another tool in the toolbox, 
with that being employed in lieu of gray infrastructure 
improvements, all in an effort to resolve water quality 
concerns at the lowest cost. And that list you just read is 
representative of all the competing issues on the water side 
for the ratepayers' dollars. So the prioritization of those, 
the working to solve the most important water quality issues in 
a priority fashion is something NACWA is very intently 
interested in.
    Mr. Oberstar. Holding basins for stormwater runoff were 
tested in the Anacostia River here in the Washington area in 
1968, 1969, 1970. They used huge polyurethane bladders that 
could hold up to 300,000 gallons as a test to channel the 
runoff, hold the runoff, and then pump it back through the 
system when the storm had subsided. Now the District of 
Columbia, the blue plains treatment system are moving into a 
much larger holding tank facility to deal with that runoff 
problem.
    In my district, in Duluth, Minnesota, Kurt Soderberg, now 
recently retired as the Director of the Western Lake Superior 
Center, I guess that smile on your face suggests you knew or 
know Kurt, has three such holding tank projects under 
construction now. Two of those are stimulus grant funded. I 
think that makes an awful lot of sense, rather than tearing up 
streets and putting in new capacity; build these storage 
facilities until after the storm has passed, and then you can, 
at a more leisurely paced, pump that material back through the 
treatment system. What do you think about that?
    Mr. Theerman. I can give you an example from St. Louis. We 
have a large combined sewer area in St. Louis, covers about 75 
square miles. There is about 1800 miles of combined sewers. The 
estimate MSD has developed for separation of those systems into 
two, wastewater and stormwater system, is about $10 billion on 
the public side, with another $10 billion of cost on the 
private side, because literally you are getting into the 
plumbing of most buildings in the combined sewer area. 
Alternatively, we have proposed a long-term control plan with a 
cost of $1.8 billion, but involves storage tunnels and the use 
of green infrastructure, similar to what you are seeing in 
Duluth.
    Mr. Oberstar. Thank you for that. We will be calling on you 
in the future. We passed, in the 110th Congress, and then again 
in this 111th Congress, through this Committee, through the 
House, reauthorization of the State Revolving Loan Fund 
program, which is the replacement for the wastewater treatment 
grant program that the Reagan Administration abolished and 
converted to loans. Difficult as those are for smaller systems, 
they have to pay back the capital, they have to pay back the 
interest, but still it has been a lifelong. For 15 years that 
program has not been reauthorized, it has been continued 
through the appropriation process.
    So I urge you and all your brother and sister agencies to 
appeal to the Senate, release their hold, bring their bill to 
the Floor, have a vote on it. If they don't want to vote for 
it, that is one thing; but to hold it hostage to some ideology 
that we don't even know about, to say that the Senate can't 
even take a stand on an issue is offensive to us in the House, 
and that is on both sides of the aisle. Passage of that bill 
would help immensely to move projects ahead.
    Mr. Theerman. You can have NACWA's commitment to continue 
to work on that with the Committee, sir.
    Mr. Oberstar. I appreciate that. Thank you.
    Ms. Eleanor, you said very well that your revenue income 
has remained relatively constant over a period of years, but 
expenses have grown, particularly on the operating side, and 
the Section 5307 operating funds was very important for your 
system and for others throughout the Country. You should know 
that when the Committee acted on our portion of stimulus, we 
had $12 billion for transit. That was reduced when we went into 
negotiation on the overall package within the House, but when 
we came to the Floor, an amendment by Mr. Nadler of our 
Committee, from New York, restored the $12 billion.
    That, unfortunately, was cut back when we got to conference 
with the Senate on the stimulus. It was testimony right at that 
table from Bev Davis of Atlanta, who said it doesn't make sense 
on the one hand to give us funding to buy new transit vehicles 
and on the other hand to lay people off because we can't afford 
to operate them. Give us the flexibility to shift capital funds 
to our operating account. And we did that, and we are going to 
do that in the future of transportation in which we double the 
funding to $99 billion in the authorization language in our 
bill for transit over six years.
    Now, it is urgently needed. Over the past 15 years our 
Nation's population has increased 14 percent. Automobile use 
has increased 22 percent, but transit ridership has increased 
43 percent. And more people are riding on bus transit systems 
than on rail, but rail travels more miles. But both are 
essential to the future of relieving congestion in our 
metropolitan areas and to connecting the suburbs to the center 
city and the exurbs to the suburbs in the center city, and 
connecting rural America with commuter rail to urban centers.
    That is why we are going to have this significant increase 
in investment in transit for the future to address all of our 
transportation needs equitably, and providing some flexibility 
for operating expense is an issue we are dealing with. We have 
provided five percent flexibility for the major populations, 
those a million population and above, and larger amounts for 
the smaller systems.
    In some of the major metropolitan areas we have heard 
transit agencies say, some agencies, not all, but two or three 
have said don't give us this authority because our State 
legislature will tell us use your capital account for your 
operating expense, and then they don't provide the State 
matching funds, so they are escaping their responsibility for 
transit.
    Now, do you have some insights for us on that issue?
    Ms. Eleanor. First of all, I want to say thank you for 
everything that you have done for transit. It is wonderful to 
see that there are those who understand how important it is. 
Flexibility is important in a transit system. For my particular 
system, before the recession, I would have been overjoyed to 
have flexibility.
    But since the recession we have a problem on both sides of 
our budget. We used to be able to put away money, save money 
for buses out of our annual revenue. We no longer can do that. 
In fact, we are borrowing from our bus replacement fund just to 
keep operating. So by 2013 we are going to be broke in our 
capital program unless we turn it around, and the only way we 
can do that is to downsize our agency.
    That being said, that is only Community Transit. There are 
other systems who desperately need flexibility, and I would 
urge you to continue that fight; I think it is something that 
we do need.
    And as far as the State legislature or others not taking 
responsibility, my personal opinion is if we are going to get 
out of the transportation fix we are in, it is going to take 
everybody funding transit; the State, the feds, the local.
    So, again, I hope I have answered your question, and I want 
to thank you again for everything you do.
    Mr. Oberstar. Thank you for that response. And you are 
right, this is a partnership; we are all in this together and 
each jurisdiction of government has its role and its 
responsibilities to carry forward.
    Mr. Barnes, your testimony was exciting, was very 
illuminating. This Foothill Transit project with Proterra is 
very enticing. How many of these buses do you think you can 
incorporate into your system and how many are likely to be 
requested by other systems across the Country?
    Mr. Barnes. Well, we think that the technology could be 
applicable to as much as 60 to 70 percent of our system. The 
technology is particularly well suited for the traditional 
local style service that has lots of stops and starts, travels 
an average of 12 miles per hour. Where the technology in its 
current form doesn't apply is to our longer haul commuter 
express routes. These would be folks traveling from the suburbs 
into Downtown Los Angeles, where the average trip length is 45 
to 60 miles.
    The technology could evolve to get there, but there is 
additional work that needs to be done in terms of battery 
technology and range extension to accommodate those longer 
trips. But we think there is great applicability. We already 
have one line targeted for full electrification. Our board has 
directed us to start working on a second and we have done 
demonstrations where we have seen the product can work on other 
lines.
    In terms of the applicability to other systems, there are 
over 30 systems in the U.S. that are interested in this 
particular type of technology and we think that as it continues 
to demonstrate its viability there will be even more beyond 
that. So it has great promise for the future.
    Mr. Oberstar. And I take it the technology is not company-
specific; that New Flyer could build these. Mr. Rock, you are 
an electrician. I imagine you would like to get your hands on 
one of these electric buses and see how it works and what to do 
with it when you need maintenance.
    Mr. Rock. That is correct. We would like to be involved in 
that type of technology, and probably are in the R&D 
environment. I don't know that at this time.
    Mr. Oberstar. Ms. Johnson, I have been very impressed with 
the way airports have moved aggressively, efficiently in using 
their stimulus funding. We had $5.25 billion in our Committee 
bill reported from this Committee. By the time we got through 
with the Senate, they had fleeced us. That funding went 
elsewhere and we were left with $1.3 billion. I was invited by 
Bemidji Airport Authority, just outside my district, right on 
the borderline. Congressman Peterson and I share that 
territory, so they invited us for the groundbreaking.
    Well, by the time I got there it was a ribbon cutting. They 
had already built the project. They had already poured the 
concrete for the parking apron. Mr. Mobley, they would have had 
all of your brothers at work on that project and was done. And 
Mr. Van Leeuwen, the Airport Director, said we have the ability 
to advertise for bids, receive bids, and hold those bids for up 
to a year so that when the funding is right, then we can move 
on the project. That is not the case with the Federal highway 
program; they don't have that authority.
    Have you used that in your operations? Have other airport 
authorities done the same?
    Ms. Johnson. We can't hold bids for a year in our 
particular circumstance, but we have a 120-day window. What we 
have found which worked well for us with this particular 
project that I referenced during my testimony, we did a base 
bid and did eight additive alternates. So we added as much work 
as we could allow based on the funding that was received and 
were able to really push the project along that way.
    In addition to that, I just have to commend the FAA for 
really pushing that money out the door. We have a particular 
problem at our airport; our board is very pragmatic in their 
thinking, and when we have money they allow us to go out and 
get engineering done and have projects waiting on the shelf. 
FAA is good at picking those projects that are really needed 
for a particular community or for the basic connectivity of the 
national airspace system. So we do try and do that as much as 
we can, but we do have a limitation. Different States have 
different regulations, so it really does make a difference.
    But a big project with no increase in PFC, with no long-
term bill, trying to build a multimillion dollar project on 15 
CRs is really difficult for a small community to pull off.
    Mr. Oberstar. The aviation investments, I cited these at 
the outset of this hearing, but 155 runway improvements, 139 
airports, 11 million operations, and taxiways at another 78 
airports, 8.1 million operations, and 25 projects for 
modernization of en-route centers. Those are significant 
benefits to a huge segment of the traveling public, 
underscoring the need for the passage of the four-year 
authorization bill. It just exasperates me that we have had to 
do another short-term extension.
    Ms. Eleanor. Well, we certainly appreciate the work of this 
Committee. We know that you understand our needs and that you 
are out there working for you every day, and we want to thank 
you for that.
    Mr. Oberstar. Did you have any obstacle of any kind dealing 
with FAA and the stimulus funding?
    Ms. Eleanor. No, no real obstacle in dealing with the 
stimulus funding, just getting the program ready to go. We have 
a really sort of bizarre situation with a runway that is not 
very old, and trying to get everybody onboard with the fact 
that there really was a problem at XNA did take some time and 
they did require us to do some initial studies. We understood 
that initial let's make sure what we have here we go out here, 
because we are spending $30 million to do this particular piece 
of pavement, then we are going to turn right around and spend 
another $30 million to rehab the existing runway. The nexus of 
that was they got it, they understood that we have one runway. 
Wal-Mart corporate headquarters is nine miles from us; Tyson 
Foods is 12 miles away. Very large economic impact to the 
United States if we can't do business in Northwest Arkansas.
    Mr. Oberstar. Thank you for that testimony, that is 
excellent.
    Mr. Mobley, how long have you been a laborer, member of the 
Laborers Union?
    Mr. Mobley. Fifteen, 16 years.
    Mr. Oberstar. My son, while going through college, worked a 
few summers as a laborer, a card carrying member of the 
Laborers Union, kept his card active from freshman year, 
sophomore year, to junior year so that he could earn decent pay 
and help pay his way through college. During high school he 
worked mowing lawns and he did odd jobs and carefully put his 
funding away.
    By the time he graduated from high school, he had $8,000 in 
the bank. That was enough to pay room and board for maybe a 
semester and a half. But what he earned working on a 
Nordstrom's project out here in Tysons Corner got him through 
that freshman year, and other similar projects.
    What we heard as we were shaping this stimulus bill in 
December of 2007 and through 2008 were the snides and critics 
on the outside saying these are just temporary jobs, these 
aren't permanent jobs. I take exception to that because that is 
your career.
    Mr. Rock, you are an electrician. That is your career. A 
carpenter trains to do carpentry work. That is your career. You 
go from one job to another. What do you say to people who say, 
well, those are just temporary jobs?
    Mr. Mobley. To me, I say it might be a temporary job for me 
that I am there, but it is the impact on everybody else that 
uses those roads; it is jobs for everybody else and it is on 
down the line. I mean, for a few people it might be temporary 
that they are in that position, but at the same time it creates 
long-term use of travel for the trucking industry and anybody 
else. I mean, yes, my job in construction on a particular 
project is short-term, but the benefits for the communities are 
far beyond that.
    Mr. Oberstar. Yes, a factory worker stays in that factory. 
An iron ore miner works in the mines until it is shut down for 
some reason for until the ore is played out. They are in a 
fixed location. But building tradesmen and women move where the 
jobs are. That is your career. That is not temporary for you. 
That particular project is temporary until it is done.
    Mr. Mobley. Exactly. Yes, sir.
    Mr. Oberstar. How many members of your local are without 
employment right now?
    Mr. Mobley. I don't have those figures.
    Mr. Oberstar. That is not really fair. I didn't ask you to 
come with that information, but just give me a horseback 
estimate.
    Mr. Mobley. Members of my union, of the active members, not 
including the retirement, I would say 100 people on the list 
out of 1,500 from my local. I would say that would be a fair 
number.
    Mr. Oberstar. Now, in 1998, the gentleman's portrait there 
on the wall behind you, Bud Shuster, and I worked on the 
Transportation Equity Act of the 21st Century, TEA-21. We 
engineered a 40 percent increase in funding. We also had to 
take on the House Budget and Appropriations Committees, and 
Jim, you will remember that, and the Clinton Administration 
that put fire walls around the Highway Trust Fund, but we 
prevailed.
    And the result of that increase was 3 million construction 
jobs over the next six years. There was no one sitting on the 
benches. We also included $10 million in TEA-21 for training 
for apprentices and other new entrants into the building trades 
because the trades told us we are not going to have enough 
people to do all the work. You are going to have to have new 
hires.
    Well, that was $218 billion in 1998. The bill for the 
future of transportation is $450 billion, more than double that 
amount. And we are going to need training, but we will create 6 
million new construction jobs in the course of that bill. That 
is what we need. That is the long-term future of 
transportation.
    And with the stimulus, and I cited the figures, 35,400-some 
miles of highway improved or rebuilt, reconstructed. That is 
nearly three-fourths of the mileage of the Interstate Highway 
System, or equal to it. That represents 4 percent of the needs, 
4 percent of the state of good repair requirements to rebuild 
our Federal-aid highway system.
    There is a huge job yet to be done. So tell your brothers 
help is on the way. We are trying to overcome all the obstacles 
and objections. Maybe after the elections, things will settle 
down and people will get over the collywobbles and decide to do 
something good for America.
    I want to thank this panel for your testimony and your 
responses and your patience throughout this long morning and 
early afternoon.
    Mrs. Napolitano. Mr. Chair?
    Mr. Oberstar. I am sorry. I didn't see Mrs. Napolitano.
    Mrs. Napolitano. I snuck in.
    Mr. Oberstar. Thank you.
    Mrs. Napolitano. Just a very quick question.
    Mr. Oberstar. I yield to the gentlewoman.
    Mrs. Napolitano. Of Mr. Barnes, because I know that we have 
had numerous increases in regard to the cost of the buses, the 
life span of the buses, and the savings not only in long-term 
life of the bus, but also the environment in savings emissions.
    Would you address that please?
    Mr. Barnes. Absolutely. The vehicle is unique in that it is 
projected to be an 18-year life vehicle as opposed to a 12-year 
life vehicle. So that in and of itself allows the vehicle to 
operate longer, and that is primarily because it is a composite 
body construction which is much stronger, much more durable 
than a traditional steel construction on a vehicle.
    From an energy efficiency standpoint, the early tests are 
showing that this vehicle is five times more energy efficient 
than a traditional diesel coach. So it is a very efficient 
vehicle that has a longer life. It has a higher up-front cost, 
but when you look at that on a life cycle basis, we believe 
that it can actually demonstrate a lower cost.
    Further, because it is an electric-powered bus, there are 
very few parts that have to be maintained. You don t have to 
change the oil. Because it uses regenerative braking, you don t 
change the brakes as often. So again, cost savings can be 
generated along those lines.
    From an environmental standpoint, coming from the Eastern 
San Gabriel Valley, which is very challenged in terms of air 
quality, this is truly a zero emission vehicle. We are 
purchasing renewable energy credits so we know that the energy 
that goes into that bus comes from some sort of renewable 
energy, whether it is solar, geothermal, wind power. It is a 
true zero emission vehicle.
    Mrs. Napolitano. How many buses do you currently have?
    Mr. Barnes. We currently have three and provided that the 
bus meets our performance expectations, we have funding in 
place to order nine more.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Oberstar. I want to thank the panel and we will call on 
you in the future as we continue our work on transportation 
initiatives.
    I will now up bring our second panel. I will start with Mr. 
Cox, President of Corman Construction Company, representing 
ARTBA, one of my favorite organizations in Washington.

 TESTIMONY OF BILL COX, PRESIDENT, CORMAN CONSTRUCTION, INC., 
   REPRESENTING THE AMERICAN ROAD & TRANSPORTATION BUILDERS 
ASSOCIATION; JAMES E. MCCULLOUGH, PRESIDENT, CASE CONSTRUCTION 
   EQUIPMENT/CNH, REPRESENTING THE ASSOCIATION OF EQUIPMENT 
 MANUFACTURERS; YANCY WRIGHT, SUSTAINABILITY DIRECTOR, SELLEN 
 CONSTRUCTION CO., INC., REPRESENTING THE U.S. GREEN BUILDING 
  COUNCIL; AND LAUREN COHEN, ASSISTANT PROFESSOR OF BUSINESS 
            ADMINISTRATION, HARVARD BUSINESS SCHOOL

    Mr. Cox. Good afternoon, Chairman Oberstar. My name is Bill 
Cox, as you said. I am the president of Corman Construction and 
we are headquartered in Annapolis Junction, Maryland.
    I am also the incoming Chairman of the American Road and 
Transportation Builders Association.
    Corman Construction is one of the mid-Atlantic region's 
larger heavy civil contractors. We specialize in the 
construction of bridges, highways, underground utilities, 
tunnels and marine facilities. My grandfather founded the firm 
in 1920 and we are now in our fourth generation as a family-
owned and operated company.
    Mr. Chairman, I am somewhat unique as a witness extolling 
the virtue of the Recovery Act as our firm has received no 
direct ARRA transportation work to date. We have been awarded 
two ARRA projects through the National Park Service, one in the 
District of Columbia and one in Western Maryland. The one in 
Western Maryland is under construction. The one in the District 
of Columbia will start in the next month or so.
    I can guarantee you, however, that despite that fact that 
have not won any transportation work, the markets in which we 
operate would have been devastated without this infusion of 
revenues. In the search for jobs created or saved and other 
metrics, too many people have overlooked the interconnectedness 
of Federal, State, local and private sector investments in 
transportation improvements.
    The Recovery Act's transportation resources strengthened 
the entire transportation construction industry, not just those 
firms that received specific contracts. The Recovery Act's 
transportation investments have kept many of our suppliers and 
subcontractors, without whom we could not operate, in business. 
It has also helped prop up State programs and as a result we 
are now starting to see more diverse projects being bid.
    Mr. Chairman, the effectiveness of the Recovery Act cannot 
be analyzed in a vacuum. I will tell you, however, as a 
contractor operating in multiple States, that many 
transportation construction firms would likely have closed 
their doors without the Recovery Act's transportation 
investments over the past two years.
    There are several key points I would like to make about the 
Recovery Act. First and foremost, the Recovery Act is 
indisputably supporting construction activity and jobs in the 
transportation sector. And this is virtually the only 
construction activity that did not suffer a significant 
downturn during the recent recession, and almost solely because 
of the transportation investments made by the Recovery Act.
    In my home State, Maryland, the Recovery Act has supported 
more than 172 highway and bridge construction projects, pumping 
more than $430 million into our highway construction market. As 
a result, our contractors have been able to preserve hundreds 
of jobs.
    As critical as the Recovery Act was in boosting the U.S. 
transportation sector, it is also clear that our equipment 
purchases and employment levels are nowhere near where we would 
like them to be. This situation is by no means the fault of the 
Recovery Act. To justify investing hundreds of thousands or 
millions of dollars in new equipment, or hiring new employees, 
contractors must be able to make an informed judgment about the 
long-term outlook for the transportation industry.
    Over the past few years, we have seen a collapse of private 
sector construction activity and severe cuts in State and local 
transportation construction investments. In fact, 22 States 
reduced their highway contract awards in their States last 
fiscal year.
    The other clear fact about the Recovery Act is that its 
benefits are coming to a close. The value of new contracts 
awarded for all modes of transportation significantly increased 
in the first year of the Recovery Act. New airport and transit 
contracts awarded in 2010, however, have declined to the 2008 
level. Highway awards are still rising, but at a slower pace 
than in 2009.
    Mr. Chairman, this would not be a surprise to anyone as the 
Recovery Act's transportation investments were never intended 
to be a long-term solution. A long-term transportation 
solution, however, is exactly what our industry and the U.S. 
economy needs now more than ever. We were very pleased to see 
President Obama's announcement on Labor Day of his commitment 
to enacting a six-year reauthorization of the Federal Surface 
Transportation Program. We also appreciate the leadership 
demonstrated by this Committee in continuing to push for a 
multi-year bill.
    As welcome as it is to have the Administration join your 
push, the fact remains that an authorization bill will be one 
year overdue tomorrow. A multi-year transportation bill will 
help generate jobs in the hard-hit construction industry and 
much more. Transportation infrastructure investments provide 
long-term productive assets that improve the competitiveness of 
U.S. firms and enhance the quality of life for all America.
    Mr. Chairman, I know you and this Committee do not need any 
prodding from me to advance a robust, multi-year transportation 
bill. I only hope that the other Members of Congress will 
recognize and embrace this urgent situation.
    Thank you for the opportunity to testify.
    Mr. Oberstar. Thank you for your presentation. And we thank 
ARTBA and particularly Pete Ruane, your man on the ground in 
Washington, for steadfast advocacy that you have demonstrated 
for the future of transportation and for the previous 
legislation from TEA-21 and SAFETEA, even back to ISTEA. Pete 
Ruane has been there and been a steadfast advocate.
    Mr. McCullough, President of Case Construction Equipment.
    Mr. McCullough. Good afternoon, Mr. Chairman and Committee 
Members. As stated, my name is Jim McCullough and I am the CEO 
and President of CNH Construction Equipment headquartered in 
Racine, Wisconsin.
    I am also the Vice Chair of the Association of Equipment 
Manufacturers, and I am here today representing the 
Construction Equipment Manufacturers Sector.
    From my travels and analysis of the global construction and 
equipment markets, I can personally attest that this Nation's 
competitiveness is being seriously challenged. The countries 
that we are competing against understand that to sell more 
product, to access global markets, and to reach more customers, 
they have to get to the market faster, and for that they are 
investing in modern infrastructure, and they are doing it at 
rates that far exceed America. In fact, it is absolutely 
putting the U.S. to shame.
    Despite the competitive threat, and despite dramatic 
warning signs of collapsing interstate bridges and bursting 
natural gas pipelines, the Nation has not come to grips with 
the fact that this Country's very foundation is crumbling right 
under our feet.
    The manufacturers of the U.S. construction equipment 
industry can play a significant role once policy and funding is 
established to turn the situation around. The heavy 
construction equipment industry is a major contributor to the 
U.S. economy and substantially impacts the economy of every 
State and every Congressional District.
    In 2008, the equipment manufacturers, distributors and 
independent maintenance people had a $365 billion impact on the 
U.S. economy, supported more than 2 million American jobs, and 
paid $111 billion in wages, salaries and benefits. However, a 
2009 study by Global Insights showed that during the recession, 
our sector has lost approximately 50 percent of our pre-
recession activities.
    While the numbers in my written testimony show that 
indicators in a recent sector survey are beginning to trend up, 
one must ask the question: Up from where? That trend is still 
not strong and our numbers are nowhere near where they were 
before the economy imploded.
    A year after we completed the Global Insights study, we, as 
manufacturers, are still about 40 percent to 50 percent of the 
volume in revenue our industry produced in 2007. As a result, 
layoffs have occurred significantly inside the production 
facilities and obviously cutbacks have been made across the 
companies of all the manufacturers in the industry.
    So the big news earlier this week that the recession has 
ended, well, Mr. Chairman and the Members of the Committee, let 
me respectfully tell you it doesn't feel that way in our 
business.
    I am pleased to have been offered the opportunity to come 
here today to give the Committee a glimpse of the current 
economic state of the construction equipment industry, and to 
provide some observations of the impact of the stimulus.
    Most importantly, I am here today to urge this Committee to 
continue to push for infrastructure vision, long-term 
commitment, as well as a long-term surface transportation 
funding authorization bill.
    In the survey summarized in my written statement, AEM asked 
our members about the impact of the stimulus funding on their 
business. Just about 20 percent said they are seeing some 
impact from the highway and other stimulus spending, but the 
funding was, a the Committee is well aware, far below our 
transportation system required investment, and the emphasis on 
shovel-ready projects focused the majority of the work on road 
resurfacing, reconstruction and rehabilitation of existing 
bridges and roadways.
    A large number of equipment product lines manufactured by 
our members, such as earth-moving and lift equipment, are 
typically not utilized in these types of projects.
    A long-term infrastructure and transportation bill will 
provide critical funding for bulldozer-ready projects, with 
long-term value to ease congestion and more effectively move 
people and goods.
    As of the end of July, 2010, the State highway departments 
reported that over 15,000 highway and transit stimulus projects 
were underway in some form or fashion. That means that our 
customers were utilizing their existing fleets of equipment to 
undertake this work, but they were not adding labor nor were 
they purchasing new equipment.
    The infusion of additional capital from the stimulus has 
thus kept many of our customers in business and may have 
provided a lifeline to the anticipated increased economic 
activity that a long-term reauthorization plan will provide. 
But it is critical that Congress and the Administration move 
quickly before the end of the current extension to avoid a 
dramatic reduction in funding.
    Mr. Chairman, it was almost a year ago when you joined the 
Equipment Manufacturers Association and our dealers on the 
National Mall for a rally to urge enactment of a long-term 
surface transportation bill. Since then, the construction 
industry has continued to be challenged by uncertainty in the 
North America construction market. This uncertainty is not 
being fueled by the lack of a long-term transportation plan, 
but also by instability in housing, nonresidential 
construction, and other related markets, and generally, a 
trying business environment invaded by the Chinese.
    Without stimulus funding targeted to surface transportation 
projects, our sector and the entire highway construction 
industry would be in dramatically worse economic condition. But 
that stimulus funding is not enough to bring about the dramatic 
improvement we are looking for.
    Thank you, Mr. Chairman.
    Mr. Oberstar. Thank you for your strong statement and for 
your support last year out there on the Mall. I remember that 
event very well, and for the strong support that ARTBA has 
provided this Committee over a generation for advancing the 
cause of transportation investments.
    Mr. Wright, Sustainability Director.
    Mr. Wright. Thank you. I have a little bit of a 
presentation to walk through for you guys, to mix it up a 
little.
    Mr. Oberstar. OK.
    Mr. Wright. I am here on behalf of the U.S. Green Building 
Council. I work for Sellen Construction, one of the largest 
general contractors in the State of Washington. It has been in 
business for 66 years. We have over 600 employees and we mostly 
do projects for folks like Children's Hospital. We are building 
part of the Amazon headquarters, the Bill and Melinda Gates 
Foundation, a lot of large general commercial construction 
work.
    Primarily negotiated. We don t do a whole lot of federally-
funded work, mostly because of the delivery process. And most 
recently, we created a separate entity, and this is where my 
current role is, as director of Sellen Sustainability. We 
created this really to help support our clients around 
sustainability and to continue to evolve the industry across 
the United States.
    I am here today to talk about GSA projects, General 
Services Administration projects. It is called the Fed Center 
South. It is a design-build-delivery process, so very unique to 
the GSA. And I am going to talk about that in a few minutes, 
but it started off with us partnering with a local architect, 
and in a very short time frame we had to be prepared with a 
very strong design and make sure that we had all the numbers in 
place so we can meet the budget.
    The project itself is on the Duwamish River, for the 
client, which is the Army Corps of Engineers. And as you can 
see here in the yellow triangle, that is a portion of the 
building that exists that we are removing, and we are building 
a new structure there. The budget is about $66 million and we 
just started construction on it a few months ago. And so I am 
going to tell you a little bit more about that.
    The design itself, we talked a little bit earlier, you 
mentioned yourself, Chairman Oberstar, about how long some of 
these projects can take. This particular project could have 
taken anywhere from a year and a half to two years to get the 
design process and the bid process in place to get a low bid 
contractor. Instead, by partnering up and doing design-build, 
we were able to come to the table, give this presentation as 
you will see here, these images, finished images, strong 
design, and get all that done in seven months, to the point 
where we just started construction.
    These are a few more images of the design. We are actually 
really focused on making it a restorative project. The site 
itself is a giant parking lot, so there is also contaminated 
soil. We are doing a lot to reclaimate that site.
    The facility itself for the Army Corps of Engineers has 
focused a lot on energy reduction strategies and a number of 
sustainability strategies, as you can see here in this slide, a 
lot of daylight and great amenities to enhance the indoor 
environmental quality.
    The estimated taxpayer savings on an annual energy savings 
basis is about $180,000 a year if you compare that to an 
average office building of similar size. This project is about 
175,000 square feet. And because of the GSA requirements, there 
are a number of sustainability features in place that we are 
pursuing, along with the LEED Gold certification. Right now, we 
are pushing that further into LEED Platinum. We are doing our 
best to do that, even though we are set with a target of LEED 
Gold.
    I was just on site the day before yesterday, before I flew 
out. I took some photos to share with you the process that we 
are going through. This is also a job creation effort, but as 
well a natural resource conservation effort by deconstructing 
the building. If this was a low bid project, it would typically 
just be crushed up with the big heavy equipment and sent away 
to a landfill. But because we have approached this as part of 
our design-build effort, the point was to deconstruct it. We 
have a bunch of laborers out there taking the nails out and we 
are going to reuse all the car decking and all of the beams in 
the new facility.
    So there are about 200,000 board feet of structural timbers 
that are being cleaned up and set aside for reuse. And as far 
as job creation goes, for peak employment over the 2.4 years, 
it is roughly two years and four months of construction 
duration, we see peak employment of about 205, and then our 
average monthly employment is about 74, with an average worker 
hours per month of 11,248.
    Really, what we are here to share is that the delivery 
process makes a lot of sense. Having the right team makes a lot 
of sense. And the effort that your Committee has put in place 
in pushing this money forward on projects like this makes a big 
difference, not only in the private market by setting 
precedents, but also in the market for the Federal Government 
and how we can best reduce waste, and what we can do to help 
share those lessons learned so we can do this on other 
projects.
    Thank you for your time.
    Mr. Oberstar. Thank you for that very engaging presentation 
and the slides that were very vivid in their projection.
    Mr. Cohen, Harvard Business School. Thank you for being 
with us today.
    Mr. Cohen. That is right. Thanks.
    My name is Lauren Cohen. I am a Professor at Harvard 
Business School.
    First, I would like to thank the Members of the Committee 
for inviting me to appear and for holding these important 
hearings regarding progress on the ARRA. So I am actually happy 
to be speaking last, as I am going to take a bit more of a mega 
view on the Act.
    How Government spending impacts the private economy is a 
question that both economists and policymakers have struggled 
with for decades. And I think the ARRA provides an excellent 
example of exactly why.
    At the time it was enacted, unemployment stood at around 8 
percent, and now with unemployment over 9.5 percent some have 
argued that this is proof that the stimulus just didn't work, 
but others might argue that in the absence of the spending, 
unemployment would have been a lot higher, maybe 13 percent.
    And the truth is we just don t know what would have 
happened without the spending, and clearly some of the reasons 
why we decided to spend were because we anticipated future 
unemployment.
    So the point is because anticipated changes in the economy 
caused spending, we can t just look at what happens to the 
economy after the spending and conclude that we are seeing the 
effects of the spending.
    So the way the researchers like to tackle this problem and 
to distinguish cause and effect is to run experiments. So the 
good news is we have actually been running these kinds of 
experiments with spending for many years at the State level. So 
as I am sure you know, when Senators or Representatives ascend 
to the Chairmanship of powerful Congressional Committees, 
Federal money seems to flow to their State.
    The precise timing of this ascension to these Chairmanships 
is actually quite random in the following sense. You only 
become Chairman if you are the next in line and the current 
Chairman retires or is defeated or there is a party change. And 
because we think that these events depend almost entirely on 
political circumstances in other States, ascension to the 
Chairmanship is essentially unrelated to events or conditions 
in the new Chairman's home State. So for example, a Senator is 
often not even up for reelection during the year of his or her 
ascension to this Chairmanship.
    So we studied these randomly timed increases in Federal 
funding to States at different times over the past 40 years. 
And the results were quite surprising, at least to us. So 
first, I want to lay out that during the years following the 
appointment, the State where the Chairman ascends experiences 
about a 40 percent to 50 percent increase in earmark spending 
to the State and about a 9 percent to 10 percent increase in 
total State level government transfers.
    What we focused on in the study is looking at what effect 
that has on the private sector economy. And what we see is that 
focusing on investment, so capital expenditures, employment, 
research and development, and payout to these firms, we find 
strong evidence that corporations retrench in response to 
Government spending shocks.
    So to give you one example, in the year that follows this 
Congressman's ascendancy, and we get this Government spending 
shock, we find that the average firm in the State cuts back 
capital expenditures by roughly 15 percent. These firms also 
significantly reduce research and development expenditures and 
they increase payouts to their investors. The idea is that with 
less investment opportunities, they reduce employees and have 
lower sales.
    And I just want to talk a little bit about this. This shows 
up in both large and small firms that we look at. It shows up 
in large and small States for ascendancies to Chairmanship in 
the Senate and the House. And to give is some more evidence 
that it is spending causing the corporate downsizing, we see 
this corporate downsizing lining up exactly with these 
Government spending shocks.
    So things are going along in a State. When we see these 
Government spending shocks because of these ascendancies, 
corporations start to retrench and they continue until the 
Government spending stops coming in, so the Chairman steps out, 
and then we see corporations start to spend and hire employees 
again.
    What I do want to mention about this is that consistent 
with this Keynesian viewpoint, we find that there are less 
severe corporate responses and retrenchments when unemployment 
is high or when capacity utilization is low. OK? So this is the 
idea that if you have lots of people that are sitting on their 
hands it doesn't have as big of an effect through these factors 
of production market if the Government comes in and starts to 
spend.
    And last, and one of the most convincing pieces of evidence 
to me is that we actually went through 92,000 earmarks and we 
coded them to exactly what industry they applied to. And what 
we found is that it was exactly those industries where 
corporations seemed to be pulling back. So if all the earmark 
spending was going to health care, we saw this concentrated 
exactly in the health care industry.
    So just to conclude, our findings suggest that new 
considerations or new channels through this competition for 
factors of production like labor, land, capital, and these are 
quite apart from standard interest rate or tax channels that we 
usually talk about with Government crowding out, may limit the 
stimulative capabilities of Government spending by deterring 
corporate spending.
    Whether these additional forces are sufficient to 
materially lower the multiplier in fiscal stimulus in a large 
economy like the U.S. remains an open question, but we think at 
a minimum our research suggests that the retrenchment of 
corporations should be taken into account when considering the 
merits of future Government spending.
    So again, thanks for the opportunity to address the 
Committee and I would be honored to take any questions.
    Mr. Oberstar. Thank you for your presentation. I appreciate 
your being with us today.
    Let me begin with Mr. Cox and Mr. McCullough. The question 
I have for both of you, you can answer from a different 
perspective.
    How much of your production, Mr. McCullough, is exported?
    And Mr. Cox, how much of your equipment buying is used 
equipment versus new equipment in this current recession that 
we are experiencing, compared to what it would be during, let's 
say, 2002, 2003, 2004, 2005?
    Mr. Cox. Maybe I will start. Generally, we buy new 
equipment. In the past, we have bought used. With the ever-
changing requirements for emissions from diesel engines, we are 
buying the newest equipment that has the highest tier in terms 
of lowering emissions. So in fact the work we are doing up on 
the Intercounty Connector, we have requirements that we have to 
be above certain tier levels with 80 percent or 90 percent of 
our equipment fleet. So that predicates the fact that most of 
it needs to be new or relatively new.
    Over the past couple of years, we have really not purchased 
any new equipment either used or new.
    Mr. Oberstar. Mr. McCullough?
    Mr. McCullough. Thank you, Mr. Chairman.
    The answer on Case specifically is that we are a global 
company and in many cases to give you an export number would be 
probably a little bit different. We have production facilities 
in Europe and South America, et cetera.
    So I would say on an export basis, coming out of the U.S., 
probably about 15 percent, but if you looked around the world 
on a pie chart, essentially about 35 percent of the volume 
comes from America; 35 percent from Europe; and then the 
balance are Asia-Pacific and Latin America. So we are a global 
company, and in reality the company's survival has really been 
Asia-Pacific and Latin America for the last couple of years on 
the construction equipment side of the house.
    Mr. Oberstar. Well, what I hear anecdotally as I travel 
around the Country meeting with manufacturers and with 
operators of equipment, construction companies, is that they 
are shipping used equipment. One of our big exports in 2009 was 
used construction equipment to China, India and other Pacific 
Rim countries because they didn't have use for it here in the 
United States.
    Mr. McCullough. Yes, probably more strongly starting in 
about 2007 and 2008, particularly as the European markets began 
to slide and the Asia-Pacific and Latin American markets held, 
there was a lot of equipment that left the Country on a used 
basis at not so pretty prices for those that were overloaded.
    The reason is happened was essentially both North America 
and Europe had collapsed about the same time. So what was three 
months of inventory all of a sudden became a year, a year and a 
half supply, and obviously the retailers scrambled to get it 
off their balance sheets. And then after we got to about 2009, 
not so much.
    It is also interesting to note that in the future, these 
outlets aren t going to exist because two regions will be tier 
four and two regions will be tier three. So all of a sudden 
where this opportunity was global to dispose of used equipment, 
you are back to basically the U.S. and Europe can share the 
equipment, but the other two regions are staying on tier three. 
So you won't be able to sell tier four equipment at significant 
price increases over tier three.
    Mr. Oberstar. That is a very interesting analysis, very 
down to earth analysis of the real world.
    What period of time, Mr. Cox, do you and your associates on 
the construction side need? What window of amortization do you 
look at when buying a piece of equipment, with regard to a 
$100,000, a million or two million dollar piece of equipment?
    And Mr. McCullough, what do you and your associate 
producers look at for that window of amortization?
    I ask that because we are trying to pass this six-year 
authorization bill, which would create a period of stability in 
funding and the level of funding.
    Mr. Cox. Maybe I will start. Most of our work is with 
public agencies, State DOTs, Federal Highway Administration, 
National Park Service. We work a little bit in the private 
sector, but most of it is public. And I think the public 
agencies look towards the six-year bill with more interest 
because then they can ramp up their programs. They can start to 
hire designers to design the programs.
    The State of Maryland and the State of Virginia in the last 
five years have gone more to a design-build delivery method, 
not for the majority of their work, but for their major 
projects. And that has shortened the time frame in getting a 
project from a conception stage into, once they get their FEIS 
and their main permit, then they can let the thing as a design-
build and shrink the time for completion as long as they have 
the money.
    So we really look to the States to have a long-term program 
that we can see out ahead and that allows us to then make our 
strategic planning decisions on equipment investment and 
manpower investment as we go forward.
    Mr. Oberstar. Mr. McCullough?
    Mr. McCullough. Yes, Mr. Chairman. I would like to answer 
the question a couple of different ways. Number one, as far 
your proposal for six years, I think that would begin to 
provide some stability to the contractors that specialize in 
transportation itself. But I think relative to the macro 
economy, the biggest issue is that we really don t have a long-
term vision in these other sectors.
    As the economy is recovering, if you really get into 
residential construction, nonresidential construction, which 
probably adds incredible amounts of after-stream value to the 
various people that touch it: first, the water and sewer, then 
the road that goes in, then the curbing that goes in, then the 
housing that goes in, and then all the landscaping and on up to 
furnishing, et cetera.
    The value chain is unbelievable that comes through that 
side of the business.
    Transportation by itself, there are a lot of contractors 
that certainly aren t able to participate in that. So from 
actually the overall health and welfare of the economy and how 
many jobs get added across about 12 different sectors of 
construction is very, very important.
    But on your specific question, most contractors run 
machinery for about 5,000 hours before it goes to the secondary 
market. The life of the machine is usually about 10,000 hours. 
So if you had a crawler hydraulic excavator, which is what you 
will primarily see on these major roads, they basically run 
maybe 65 percent utilization to deem whether they need to 
expand. A lot of customers today will rent until they see that 
they have an order book of jobs that continue on for quite a 
while.
    But at six years, I think you would at least begin to say, 
OK, we have a stable plan here and there would be much more 
effective planning by the contractors than what they are able 
to do today. Plus, you would probably stabilize the labor 
equation much more significantly.
    Mr. Oberstar. That is the best summary I have had of how 
the construction sector and how the manufacturing sector look 
at the life cycle for equipment. I appreciate that very much.
    A further question. I have heard from contractor after 
contractor that, although it doesn't apply, Mr. Cox, in your 
case exactly, but that in 2005, 2006, 2007 they were doing 80 
percent of their business in the private sector and the balance 
in the public sector. And that has just reversed now. Because 
of the stimulus, those who are still operating are doing most 
of their work in the public sector, heavy on highway 
construction.
    Why isn't that private sector coming back? And which 
portions of that private sector construction are not returning?
    Mr. Cox. Well, of course, we know the residential isn't 
returning yet. And you find it difficult for people who 
consider themselves public works transportation contractors 
like ourselves to be competitive in the residential field. We 
have more overhead. We have larger groups. We may pay our 
craftsmen at a higher scale and they have more benefits than 
they have in the residential arena that comes and goes.
    We do compete in the commercial sector when that gets 
going. But of course, I think the difficulty there is that the 
commercial sector, at least in the Washington-Baltimore area, 
was overbuilt going into the recession and it is going to take 
a number of years for it to come back before the banks get to a 
position where they can be lending on these large projects.
    So most contractors now are forced into the public sector, 
and that is one of the reasons why Mr. Foxx earlier was getting 
such low bids on the contracts that he had was that there are 
so many people who are forced to go into maybe a kind of work 
that they didn't do before, but that is the only work there is 
to bid. And in order to keep the doors open and to keep their 
key people, they have to lower their pricing.
    It is a windfall for the State DOTs and the public service 
agencies right now. It will be a problem in the future because 
a number of these contractors won't be able to financially 
survive what they are doing to keep working right now.
    Mr. Oberstar. Thank you. Thank you for those responses.
    Mr. Wright, in your presentation you cited $180,000 dollar 
a year savings. Was that savings on electricity cost on the 
Federal Center in Seattle? And is that an annual recurring cost 
savings?
    Mr. Wright. That is correct. Part of our focus not only 
from the LEED certification perspective, but on the overall 
sustainability goals for the GSA is to focus on energy 
efficiency. So that is on power consumption. That dollar amount 
is based on the first year of operations. It is not necessarily 
taking into account the increases in energy costs over the next 
however long we want to do that.
    Mr. Oberstar. It is of great interest to this Committee 
because we have jurisdiction over 367 million square feet of 
Federal civilian office space. The annual electricity cost is 
$500 million. If we can cut that by 10 percent, 20 percent, 30 
percent, some estimates are 40 percent by installing 
photovoltaic systems and compact fluorescents and other 
lighting systems that save money, we can save the taxpayers a 
huge amount of money just in the Federal buildings system.
    You also cited design-build in your testimony. How much 
time savings did that result in? And how much acceleration did 
it provide for projects?
    Mr. Wright. It definitely helped us get people back to work 
and to keep people working much quicker. I think that in the 
end, for the Federal Government, it resulted in a much better 
product. When you focus on low bid, you end up typically with 
contractors that are trying to find the cheapest ways to get 
things done, versus when you have a set dollar amount and you 
are going to win that project based on the best design in that 
set dollar amount, you end up with a better project, hopefully 
a project that will last 100 years instead of maybe only 30 
years.
    So in that instance, I think it is a better situation.
    Mr. Oberstar. You had wanted to respond earlier. Did you 
have a comment?
    Mr. Wright. On the private side, the majority of our work 
is done on the private side, and the main reason is because we 
have focused on negotiated work, mostly because we could be an 
advocate for the owner and build a better project.
    The area that I am still seeing growth on the private side 
is mostly with health care, and that is mostly because their 
funding is able to come from other resources, and then a little 
bit on the institutional side. I would have to agree with Mr. 
Cox in that the biggest reason we are not seeing it happen on 
the private side with our office developers and other folks is 
because their investments are challenged. As soon as we can 
give them some leverage to get going on a lot of their projects 
that they have teed up, but don t have the funding, don t have 
the bank support, the sooner we will be able to get additional 
people back to work.
    Mr. Oberstar. Thank you.
    One last comment. Mr. Cohen, I listened with great interest 
to your comparison of Committee Chairmanships to funds 
designated for States. And that might apply for the 
appropriation process. I don t think it does in other areas. 
But in the stimulus bill, we specifically designated two 
criteria: one, that preference be given for allocation of 
funding to areas of highest unemployment as measured by the 
U.S. Department of Commerce and the Economic Development 
Administration, which does a monthly evaluation of county by 
county unemployment rates; and secondly, that the projects be 
equitably distributed in each State, although that specific 
language didn't make it through conference, so that not all the 
dollars would be absorbed in the metro area.
    The wastewater treatment organization in Minnesota; the 
Public Utilities Commission said that they would be able to 
spend all their $93 million in Minneapolis. That wouldn't be 
right, and they had a rating system. They evaluate every 
project and rate them from one through 128 of the projects they 
had in that category.
    So those funds were distributed I think very equitably by 
formula without designation, without earmarks, without 
intervention. The only area that we left open for discretion 
was that of the TIGER grants, $1.5 billion for the Department 
to decide where they are going to go.
    And we can have a discussion about whether those were well 
thought out or not, but I think on the whole they were.
    Mr. Cohen. Just quickly on that. I think that that is 
exactly right. Look, we looked at Government spending over the 
past 40 years and State level government funding. So we have a 
lot of observations and a lot of power to really try to tease 
out what these effects are.
    And so all of our data suggests that at least the first 
criteria that you put on, which is that it goes to areas that 
have especially high unemployment, our findings are that those 
are the areas where it has the least effect on the private 
sector, distortionary effect on the private sector. So I think 
in that sense that that is quite good.
    It doesn't erase the need, I think, to continue to look and 
say, look, if we drop $10 billion on a State, then it may not 
be $10 billion of good because we have to look at what the 
private sector does. And if the private sector pulls back by $4 
billion, then we should think of that as only $6 billion of 
good.
    So I think the general idea of our paper is just that. It 
is just that we need to keep this in mind and to that point, it 
seems to be less. It seems to maybe be the private sector will 
hold back by $2 billion if unemployment is high if these 
factors of production aren t being used by the private sector.
    Mr. Oberstar. Thank you. The crowding-out issue has been 
one that we have dealt with for many years. I don t think there 
was much private sector investment to crowd out in the last 
year with the stimulus. It just wasn't there.
    Ms. Napolitano, thank you for your patience.
    Mrs. Napolitano. No, thank you, sir. I am listening with 
great interest to some of the panel's focus.
    Mr. Cox, we couldn t agree with you more on the short-term 
fix not being enough. We have argued that in Committee. We have 
argued it with the leadership. We knew that had to happen, and 
yet we weren t able to get that through.
    But any of you comment on what has been said by some 
individuals in Congress that there were no jobs created by the 
funding that was in the ARRA for transportation projects?
    Mr. Cox. I don t really spend my time looking into the 
statistics. I will say that whether you call them saved or 
created, to me they are the same word. Clearly, when you put 
money on the street in terms of highway construction bill, our 
typical job that we get is somewhere around 30 percent to 35 
percent direct labor. That is our field overhead and our 
craftsmen on the job.
    There is another 20 percent in materials. There is probably 
25 percent in subcontractors, and the balance is equipment.
    I don t know what the labor factors are in the materials 
and the subcontractors, but they are probably reasonably 
similar to what we spend in the general contract itself.
    So there is clearly if you, I don t know that you call it 
job creation or job saving, to me it is the same at this point 
in time. It would have been a job lost had the work not been 
there.
    Mr. McCullough. I believe that you are into one of those 
scenarios that there are pluses and minuses when it was all 
said and one. The Global Insight people will show basically 
about 5.6 million in construction employment, and I would 
consider it to be flat over the last three years.
    So on the transportation side, perhaps people were added. 
On the other sectors, as you go backwards and look, certainly 
there were declines. But did it do any good? I think most of 
the contractors I have talked to that have been able to 
participate would say it has had some value for them. But you 
have probably got 75 percent of the American contractors are 
not really in the highway, roads or bridges business and so 
they are more the small to medium entrepreneurs who are 
literally just going bankrupt left and right.
    Mrs. Napolitano. Thank you.
    Mr. Wright, any comment?
    Mr. Wright. We primarily build buildings so we are not 
building infrastructure like they are. Is there a specific 
question related to buildings?
    Mrs. Napolitano. Well, I am glad you said that because you 
hit upon one of my major focuses, and that is energy. And I was 
asking staff whether or not the building was photovoltaic 
ready. And the reason I ask is because not in my area, but in 
my adjacent area, the International Brotherhood of Electrical 
Workers has partnered with NECA, National Electrical 
Contractors, to green buildings. The IBEW training facility of 
over 1,500 trainees has put photovoltaic, and is now producing 
85 percent of their electrical needs, and the rest goes into 
the grid and they get credit for it.
    So why can t we begin to look at what is already happening 
out in communities right now, and be able to apply that to new 
buildings? I am certainly going to talk to the Chairman about 
our millions of space that we have as Federal buildings, to be 
able to look at how we reduce the amount of energy that we use 
by looking at technology that is there, of training that is 
there, to be able to do that and save the taxpayer and the 
Government money.
    Mr. Wright. It makes a lot of sense. There are two facets 
to answering your question. One is the project does have a 
photovoltaic-ready package. It is part of a betterments package 
we have recently submitted to the General Services 
Administration for approval.
    Mrs. Napolitano. Do you have the infrastructure set?
    Mr. Wright. Well, we are just starting demolition, so there 
is plenty of time still to integrate that package.
    The second answer to your question is we focused, as far as 
the design of this project, we focused on energy efficiency in 
the sense that if we could use the sunlight for light, if we 
can use natural ventilation in some areas, if we can use really 
smart building skins very well insulated, if we can use a 
number of those components to reduce the energy, we reduce the 
energy by 30 percent.
    So back to your number of $180,000 a year, that is 30 
percent over an average building. That is where we focused our 
money because we saw the greatest return on investment with 
that. And now the additive piece would be to add the 
photovoltaics.
    Mrs. Napolitano. I am glad you said that because in IBEW 
and NECA they are also looking at technology that is going to 
be able to hold electricity for later use during the day. And 
there is that technology now being looked at in some areas.
    Yes?
    Mr. Wright. One quick comment related to the training. 
There has been quite a bit of funding sent towards training, 
and so I would like to make a comment in that if we can link 
those to specific projects as much as possible, the benefit is 
that much greater. In other words, if we can make sure that if 
there is a whole bunch of photovoltaic training being incurred, 
that we can get that into a link to specific projects that are 
being funded to be built with photovoltaics.
    Because in our experiences, we have been seeing a lot of 
training take place, but people don t get to go out and readily 
apply it. So we have to have the link to a project for them to 
go apply it on.
    Mrs. Napolitano. We hope to be able to increase the amount 
of manufacturing of photovoltaic panels in the U.S., solar 
panels. Right now, even IBEW is working with Native American 
tribes to establish funds for not only manufacturing, but job 
training for Native Americans. And that is ongoing right now 
with IBEW.
    Mr. Cox, may I have a moment, sir? Thank you.
    Mr. Cohen, I was listening with great interest about the 
report that you have given this Committee in regard to, I call 
it academia's view of what we do and how it is being done. And 
you look at how it impacts, how we don t look at the other side 
of what we are doing. In other words, job creation, and whether 
it is in the public sector, private sector and who is 
benefitting or who is not.
    Did you in your research connect with cities and nonprofits 
to get their view of how they are using the money? How they 
have created or been able to save jobs that we talk about? 
Because I do that all the time. This is part of the job that we 
have.
    But it is really critical for us to be able to have beyond 
academia the input from those that are at the frontline. And I 
would like to have you maybe give some light on that.
    Mr. Cohen. I couldn t agree more. We actually did have the 
chance to talk to some private firms about what happened when 
these Government shocks come in. So we didn't get to talk to 
the Government side, and we absolutely should and we will. But 
we talked to the private sector side and in many of the cases 
that we talked to, they saw some articles that have been 
written about the work that we have done in some papers.
    And so they contacted us, so it is a bit of a selected 
sample, but they did tell us that, look, when this Government 
spending came in, we were planning to do this project, and we 
had hired all the staff, and we were going to build X, and then 
this Government funding came in and built X, and so we were 
kind of out on our hands because we had already planned to do 
this. We had already hired the labor. We had already gotten 
some capital.
    And so in that sense, it was wasted because then they had 
to figure out another way to deploy that capital, which was 
certainly not in the first way that they had hoped, not in the 
best way.
    Mrs. Napolitano. Well, I am glad you clarified that because 
I have been dealing with academia on water since I Chaired the 
Subcommittee on Water and Power, and they have great research 
papers and only academia knows where to find them. So that 
outreach has to go into the policymakers and to those that are 
at the frontline, and to me those are the cities that have to 
deal with the unemployment, with the empty homes, with the 
homelessness. And they are cutting the budgets something like 
33 percent in some cities of mine.
    Mr. Cohen. The cities, the also the private sector. You 
wouldn t disagree that the private sector is important as well?
    Mrs. Napolitano. They are the ones who are going to spend 
the money, generally, if it goes to their cities. For every 
dollar spent in one city, once that goes into their general 
fund. So you know they have a great interest in that.
    Mr. Cohen. Absolutely.
    Mrs. Napolitano. So I just marvel sometimes that we make 
statements of things without going further and checking that 
information with those that are really at the frontline. And 
while I am glad that Harvard is doing this analysis, I wish 
they would go a little further and really get to all the 
participants so that there is a clearer picture of this.
    Mr. Cohen. We obviously can t contact every city in the 
United States.
    Mrs. Napolitano. Not necessarily, but there are 
organizations that are ready to give you that information that 
represent the cities, like National League of Cities, 
Conference of Mayors. All those folks are ready. They already 
had that information because the cities go to them to be able 
to be the voice for us.
    Mr. Cohen. Well, much of our data comes from the U.S. 
Census Bureau who collects it.
    Mrs. Napolitano. Yes, well that is the Census, a separate 
agency then from the Conference of Mayors.
    I lost the Chair, so does anybody else have any input on 
this? Nothing?
    See, you have people who are willing to give you 
information that is maybe critical to be able to make that 
analysis a little more concrete.
    Mr. Cohen. But we have contacted private firms. Are you 
discounting the private firms that we have contacted? Are you 
saying they don t count?
    Mrs. Napolitano. That is private. I am talking about 
cities, those that are actually involved, labor organizations 
for instance, because they have those numbers of the people 
that are unemployed. Some of the organizations in my area have 
65 percent unemployment rate. And these are labor organizations 
that are in the construction industry.
    Mr. Cohen. But the Census also collects data on 
unemployment, unless you think they are not doing their jobs, 
then we have that data from them as well.
    Mrs. Napolitano. Well, thank you.
    Mr. Chair, thank you, Mr. Chair.
    Mr. Oberstar. Thank you for, as ever, for your very 
thoughtful pursuit of issues in the Committee, always provoke 
good thinking and I appreciate your contribution to our 
Committee work.
    And to all of the witnesses on this panel, thank you very 
much for your contributions, for your thoughts, your ideas 
about where we are and where we are headed.
    I think there are many lessons for us to learn from the 
stimulus projects under the jurisdiction of this Committee as 
we shape the future transportation bills, as we also work on 
the future of public buildings investments, and the EPA and all 
the other programs under our Committee jurisdiction.
    We have learned a good many insights into advancing the 
cause of public investment and its contribution to the overall 
productivity of the national economy, and we are grateful for 
your contributions.
    Thank you very much.
    The Committee is adjourned.
    [Whereupon, at 2:36 p.m., the Committee was adjourned.]

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