[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
DEVELOPING TRUE HIGH SPEED RAIL
IN THE NORTHEAST CORRIDOR--
STOP SITTING ON OUR FEDERAL ASSETS
=======================================================================
(112-1)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
JANUARY 27, 2011
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
FRANK A. LoBIONDO, New Jersey Columbia
GARY G. MILLER, California JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida
SAM GRAVES, Missouri BOB FILNER, California
BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California RICK LARSEN, Washington
TOM REED, New York MICHAEL E. CAPUANO, Massachusetts
ANDY HARRIS, Maryland TIMOTHY H. BISHOP, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL H. MICHAUD, Maine
JAIME HERRERA BEUTLER, Washington RUSS CARNAHAN, Missouri
FRANK C. GUINTA, New Hampshire GRACE F. NAPOLITANO, California
RANDY HULTGREN, Illinois DANIEL LIPINSKI, Illinois
LOU BARLETTA, Pennsylvania MAZIE K. HIRONO, Hawaii
CHIP CRAVAACK, Minnesota JASON ALTMIRE, Pennsylvania
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana HEATH SHULER, North Carolina
BILLY LONG, Missouri STEVE COHEN, Tennessee
BOB GIBBS, Ohio LAURA RICHARDSON, California
PATRICK MEEHAN, Pennsylvania ALBIO SIRES, New Jersey
RICHARD L. HANNA, New York DONNA F. EDWARDS, Maryland
STEPHEN LEE FINCHER, Tennessee
JEFFREY M. LANDRY, Louisiana
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
(ii)
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Bloomberg, Hon. Michael, Mayor, city of New York................. 8
Hart, Thomas, Vice President, Governmental Affairs, U.S. High
Speed Rail Association......................................... 8
Rendell, Hon. Ed, Co-Chair, Building America's Future............ 8
Scardelletti, Robert, International President, Transportation
Communications International Union............................. 8
Todorovich, Petra, Director, America 2050, representing the
Business Alliance for Northeast Mobility....................... 8
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Maloney, Hon. Carolyn B., of New York............................ 56
Mica, Hon. John L., of Florida................................... 58
Nadler, Hon. Jerrold, of New York................................ 65
Shuster, Hon. Bill, of Pennsylvania.............................. 69
Slaughter, Hon. Louise M., of New York........................... 70
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Bloomberg, Hon. Michael.......................................... 73
Hart, Thomas..................................................... 76
Rendell, Hon. Ed................................................. 81
Scardelletti, Robert............................................. 90
Todorovich, Petra................................................ 95
SUBMISSIONS FOR THE RECORD
University of Pennsylvania School of Design, Department of City
and Regional Planning, executive summary of report entitled,
``Making High-Speed Rail Work in the Northeast Megaregion''.... 10
ADDITIONS TO THE RECORD
Fitch Ratings, report entitled, ``High Speed Rail Projects:
Large, Varied and Complex''.................................... 100
Northeast Corridor Infrastructure and Operations Advisory
Commission, report............................................. 119
Virgin Rail Group, Tony Collins, CEO, written testimony.......... 128
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DEVELOPING TRUE HIGH SPEED RAIL IN THE NORTHEAST CORRIDOR--STOP SITTING
ON OUR FEDERAL ASSETS
----------
Thursday, January 27, 2011
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 10:10 a.m., at
Grand Central Station, Northeast Balcony, New York, New York,
Hon. John L. Mica [chairman of the committee] presiding.
Mr. Mica. I call to order the Committee on Transportation
and Infrastructure of the United States House of
Representatives. Welcome, everyone, to this field hearing. This
is the first field hearing for our committee; and we are
pleased to be in Grand Central Station in New York City.
The order of business today will be: First, we will have
opening statements by the principal leaders of the committee:
Myself, chairman of the full committee; Mr. Shuster is chairman
of the Rail Subcommittee. Then we will hear from the Democrat
leader and the ranking member of the full committee, Mr.
Rahall, the gentleman from West Virginia.
We will hear from Ms. Brown, who is the Democrat leader and
ranking member of the Rail Subcommittee.
We are going to start with a little different order. We
will allow each of those individual members to give opening
statements. After those opening statements, we're going to
begin hearing from our witnesses. Mayor Bloomberg is a bit
delayed. We will hopefully keep the program on schedule and we
will hear from him as he arrives.
When we have heard from the Mayor and Governor Rendell, we
will allow other members who are with us today for opening
statements or questions, however they would like to utilize
their time.
We have been joined by several other members of the New
York delegation. This is one of the largest gatherings, I
think, historically, of the House Transportation Infrastructure
in New York City. And we are pleased to be here and discuss a
very important topic.
The title of today's hearing is ``Developing True High
Speed Rail in the Northeast Corridor.'' And that's also part of
a report that we released entitled ``Stop Sitting on our
Federal Assets.'' Last fall we produced that report.
And certainly, the Northeast Corridor is one of the most
valuable Federal assets that the American people have an
interest in; and that's our interest in being here. And as I
said, we'll start with my opening comments here.
This hearing, in fact, is being held as a follow-up to the
Transportation and Congressional report. You see the title
here, ``Sitting on our Assets.'' The Federal Government has
misused the taxpayers' own assets. One of the most valuable and
potentially productive Federal assets in the United States is,
in fact, the Northeast Corridor. This 437 mile stretch of
incredibly valuable real estate covers the distance between
Washington, our Nation's capital, and Boston, Massachusetts.
Halfway up the corridor, here in New York City, we are
right now in America's business and financial and the world
center of those activities. This is also our Nation's most
congested and densely populated area; yet New York City is not
served by true high speed rail, and true high speed rail may
not be realized here for more than three decades to come.
Unfortunately, this is a valuable national transportation
asset and the development of true high speed passenger rail on
the Northeast Corridor has been largely ignored. President
Obama last year said there is no reason why Europe and China
should have the fastest trains when we can build them right
here in America.
High speed trains move in Europe at an average speed of 186
miles per hour. Amtrak's Acela chugs along an average between
D.C. and New York at 83 miles an hour. On Amtrak yesterday, on
my ride up here, they travelled at the lightning speed, an
average speed of 65 miles an hour between New York and Boston.
By comparison to Europe and Asia, the Acela is moving at a
snail's pace.
America's current plan is to bring true high speed rail to
the Northeast Corridor--and actually, I misstated that--to
bring what they call high speed rail to the Northeast Corridor.
Amtrak's plan would require $117 billion and would not be
completed until 2040. This is their plan.
This low speed schedule of bringing true high speed rail
service to the Northeast Corridor or any level of high speed
rail to the Northeast Corridor, would never allow President
Obama to meet the goal he has stated before the Nation just two
nights ago in the State of the Union address; that within 25
years, our goal is to have 80 percent of Americans access to
high speed rail.
Now, Mr. Shuster told me that the Northeast Corridor
accounts for 20 percent of the population of the United States.
So maybe that plan does not include the Northeast Corridor,
that's the 20 percent that's been left out; just do the math.
My hope that this timetable can be dramatically improved.
Let me say, we're going to do everything possible to work with
the administration, everyone on both sides of the aisle, to
improve that schedule.
Entering into public-private partnerships to assist in the
financing of high speed rail development on the Corridor, I
believe can get the project done much faster and dramatically
bring down costs. We can also bring down the amount of money
that the taxpayer would have to put into the project; that is,
with some private sector investment funding.
Unfortunately, one of our Nation's most valuable assets,
including some of the most prime real estate in the world, has
been left behind. Instead of providing visionary transportation
to link America's crowded corridor, we continue to support an
antiquated and unproductive corridor that struggles to meet the
needs of its many users.
Finally, why should Members of Congress, from more than a
dozen states here today, care about the Northeast Corridor?
Let me state some of the reasons.
First, the Northeast Corridor is a tremendously, incredibly
valuable Federal asset.
Second, we're the stewards and the trustees of these
assets. I believe we have an obligation to all Federal
taxpayers and the citizens of these great cities.
Third, this is our Nation's most congested corridor, on the
land and also in the air.
Fourth, 70 percent of our chronically delayed air flights
in the country, chronically delayed in the country, 70
percent--get this--start right here in the New York air space.
So there are benefits to the entire country by us being
here today and actions to move this project forward.
Fifth, Amtrak, I can tell you--this is my 19th year of
following Amtrak--will never be capable of developing the
Corridor to its true high speed potential. The task is too
complex and too large scale, and can only be addressed with the
help of private sector expertise, those who have done this
before, those who can do it in the future. And also, they will
never get the funding for it with the plan they have currently
proposed.
Sixth, bringing true high speed rail to the Northeast
Corridor will benefit the entire Nation.
So those are some of the reasons that I think we have got
to move ahead.
The large turnout today by members of the Transportation
and Infrastructure Committee, and New York area members, is a
testament of the high level of interest and commitment to new
and innovative transportation solutions.
I want to thank everyone for attending today, and
particularly thank our witnesses in advance. I look forward to
your testimony. I particularly want to thank Governor Rendell.
He is here and he is going to speak in a few minutes. He took
Amtrak and took public transit, I think two subway lines to get
here today. That's remarkable, and we appreciate not only
getting here today, but his continual leadership on this issue.
We will have Mayor Bloomberg in just a few minutes, and we
appreciate both of their long term support.
Mr. Mica. Due to the schedule, the demands, I again will
proceed with hearing first from our ranking members. And I will
turn to my good colleague, new partner in this endeavor, the
gentleman from West Virginia, and welcome again his input for
this important topic, Mr. Rahall.
Mr. Rahall. Thank you, Mr. Chairman. I appreciate it. I
appreciate the opportunity to be here in New York City as the
committee begins its hearings on Amtrak and high speed rail in
the Northeast Corridor.
In the 2008 Congress, we charted a new course for passenger
rail in the U.S., an enactment of bipartisan legislation, the
Passenger Rail Improvement Act. That law created two new
national programs for the development of high speed intercity
passenger rail.
It also reauthorized Amtrak, which currently holds 69
percent of the air rail market shared between Washington, D.C.
and New York.
After years of battling starvation budgets for Amtrak,
Congressional efforts to eliminate certain routes, the Bush
administration's budget proposal to destroy Amtrak in
bankruptcy; we're all proud to report that for the first time
in decades, the 2008 act set forth a new path for investing in
one of America's greatest assets, Amtrak.
In addition, that law created a process for the U.S. DOT to
issue a request for proposals through the private sector, to
finance, construct and operate high speed rail service in the
ten dedicated corridors in the Northeast Corridor.
Accordingly, DOT, eight private sector proposals were
submitted and then forwarded to the Volpe National
Transportation System, DOT Research Center, for review. The
Volpe Center then recommended five proposals for DOT
consideration.
The French National Railway submitted four proposals for
development of high speed rail in Florida, the Midwest,
California and Texas. And the California High Speed Rail
Authority submitted the fifth proposal.
I would note that no private sector proposals were
submitted for the Northeast Corridor. In the year after the
2008 act, Congress provided the most significant investment in
passenger rail since the creation of Amtrak in the 70s.
The American Recovery and Reinvestment Act of 2009 provided
$8 billion for the development of high speed inner city
passenger rail; and $1.3 billion for Amtrak capital
improvements. In addition, 2 and a half billion dollars for
passenger rail for fiscal year 2010.
These grants for the first time in the history of Amtrak
have enabled the national passenger railroad to release the
brakes, to pull the throttle out of survival mode and turn its
full attention to future service and equipment improvements to
meet growing demands, including the development of high speed
rail in the Northeast Corridor, a plan that Amtrak unveiled
last September.
While I'm pleased with continuing efforts to invest in and
improve the Northeast Corridor, one thing I believe that this
Congress needs to remain focused on is developing a national
program. After all, it was a national vision that led to
creation of the world's most advanced highway and aviation
networks, helping to spur unprecedented economic growth to
foster new communities, connect cities, towns and regions, and
create millions of jobs.
The Federal Government, the states and local communities
and the private sector have all worked together to recognize
that national vision. But it did not happen overnight. It took
60 years and $1.8 trillion to get where we are today.
That same national vision was established by Congress in
2008 and reiterated by President Obama in his vision for high
speed rail, combined with those same partnerships, is what is
needed today to develop a truly national rail system in the
United States.
Thank you, Mr. Chairman, for the time. I look forward to
hearing from today's witnesses.
Mr. Mica. Thank you.
I yield to the chair of the Rail Subcommittee, the
gentleman from Pennsylvania, Mr. Shuster.
Mr. Shuster. Mr. Chairman, thank you for holding this
hearing today in this historic building. My colleague leaned
over and said he doesn't think a building like this could be
built again. It's a beautiful structure, and it's great to be
here. It's great to have this hearing on true high speed rail
in the Northeast Corridor.
I would also like to welcome Governor Rendell and Mayor
Bloomberg for their efforts on building infrastructure; and of
course, the Governor for the success he's had in Pennsylvania
with some of your projects over the years.
It is an exciting time to be a member of the Transportation
Committee. There's a lot of progress to be made in this
country. I believe we in the Committee are going to be able to
tackle and address many of those, especially the need for high
speed rail in this corridor.
I believe it's important to the future to have high speed
rail as a better way to move large numbers of people on
passenger rail. My home state of Pennsylvania, and I think the
governor will touch upon the Keystone Corridor. I'm not going
to go into the details; he will hopefully touch upon that.
He made the investment in Amtrak and improved the Keystone
Corridor from Harrisburg to Philadelphia. I'm a poster child,
somebody that 20 years ago said, ``I'll never get out of my car
again to go on the rails, I want to use my car with
flexibility.'' Today, I don't travel to Philadelphia from
Washington. I take the train from Harrisburg because of the
convenience of it, the reliability of it. It's a great success
story, when it comes to passenger rail in United States.
Unfortunately, the United States is far behind the curve.
Our friends in Europe and Japan have decades on us working on
high speed rail. The Japanese have a train that travels over
300 miles an hour. And the Chinese are spending $300 billion
dollars to build 8,000 miles of high speed rail. They say
they're going to complete that in the year 2020.
Our competition in the world is doing it. We need to keep
up with the competition. For a hundred years, the United States
was the unquestionable leader when it came to passenger rail
trains. Unfortunately, the rail delivery industry, the
passenger rail industry, highways and aviation caused its
demise.
But the times are changing. We want to get back on the
rails. Look at the population of the United States. Just in
2006, we crossed the 300 million person threshold in America.
By 2039 there'll be 400 million American citizens.
We need to figure out ways to move that population,
especially in urban areas. Look at the map. Not everybody lives
in the Northeast Corridor, Florida and Arizona. But the
Northeast Corridor continues to be the most densely populated
area of the United States. And again, we need to figure out a
way to move people effectively and efficiently, and I believe
high speed rail is the way to do that.
Unfortunately, the President had stimulus money and a
vision, but he took that stimulus money and he spread it too
thinly across the Nation, instead of focusing on the Northeast
Corridor. In his State of the Union address on Wednesday night,
he talked about building high speed rail in America, having
access for 80 percent of the population.
I don't believe that's realistic. I believe if he were
truly committed to high speed rail he would start here in the
Northeast Corridor, for many of the reasons the Chairman said.
Twenty percent of the population lives here. The existing line
is here, and we need to upgrade it. I believe we will be able
to have high speed rail, which will spread throughout this
country over time.
This corridor is critical, the investment is critical, and
we need to attract the private sector to this effort. I
believe, Mr. Chairman, we need to have the private sector
involved to produce a high speed rail corridor that can be
built in a relatively short period of time.
Again, I want to thank the Chairman and thank our witnesses
for being here today. I look forward to hearing your testimony.
Mr. Mica. Thank you.
I am pleased to yield to the former chair of the Rail
Committee, and current ranking member, my colleague from the
state of Florida, a great advocate of transportation, Ms.
Brown.
Ms. Brown. I want to thank Mr. Mica and Mr. Rahall for
holding this first hearing of the 112th Congress, on the issue
I think is so important for this country. I also want to thank
my colleagues. We have 14 members here from all over the
country. We have people from the New York delegation joining us
and people from the New Jersey delegation joining us. It is a
lot of excitement about the rails.
And I also, looking at the audience, want to thank some of
our stakeholders. Labor is here. They are very interested in
what's happening. Business people from all over the country are
here. So there is a lot of interest in what is going on with
rail.
Also, Amtrak is in the room. And I personally asked they be
at the table, because I thought it very important that they who
run the Northeast Corridor be involved in giving us information
as to what works, what does not, and what kind of investment
needs to be made in the system.
We invested a lot of money in the highway system, $1.3
trillion in our Nation's highway system; and $484 billion
dollars in aviation. And since 1970, when Congress created
Amtrak, we have invested just $67 billion in passenger rail.
I got to tell you, I love this new bipartisan working
together. But keep in mind, for eight years under the Bush
administration, every budget that arrived to Congress was
zeroed out for Amtrak. I want to thank President Barack Obama
for the first time making a major investment in high speed
rail, for the first $8 billion.
I know that's a beginning. Keep in mind, China is putting
$300 billion, and that's our competition. We need to work
together to augment the system. But we also need to work with
our partners and stakeholders as we develop a system. It is not
the Federal Government telling the state and local governments
what to do.
I think there are a lot of stakeholders involved, and as we
develop how we're going to develop the Northeast Corridor in
the United States, it is going to be as, like military people
say, one team, one fight, working together.
Thank you very much, Mr. Chairman, for holding this
hearing. I'm looking forward to hearing from the presenters.
Mr. Mica. Thank you, Ms. Brown.
We are pleased to go ahead and begin the hearing with our
witnesses. We have four of the five witnesses who will be
before us here. We'll go ahead and proceed in that order.
I'll just say that we in fact gave Amtrak--it took us three
hours to get here last night, and they had more time than
anyone will have with all of the Members of Congress to brief
us on the train. We were captive to their system. And I thought
we had a great discussion, which went on for some time.
Let me tell you, first order of the day, this is going to
be a fairly brief hearing. I like brief hearings; it is
scripted, as you know. But we do have an opportunity for some
discussion here.
When we conclude this hearing, we will have an open forum
upstairs--the MTA's board room, as many people as want to
participate, will follow this with a discussion. And there will
be an open discussion. Some people sitting here have good
questions and good ideas. I welcome you to participate. It will
be open, it will have to be orderly and limit some of your
time. But I will be operating the committee in a different
fashion, so that hopefully we can get productive input and
exchange.
Amtrak will also be available at that session too, and
others who we couldn't get in this panel.
Then, our final business of the day, since we have many new
members, 19 of the Members of the Committee on Transportation
and Infrastructure who did not serve in Congress before; and
we're going to take them down to show them the mega-New York
project. And we'll also be briefed by Mayor Bloomberg and some
transportation staff on the projects that New York City has
going.
These projects are important, not only to New York City and
this region, but the Nation. And we need to have the
information about these.
And finally, we're going to move forward in the Northeast
Corridor. The sleet and the snow, the slush, whatever, if we
can get here today, we are going to make this work and give a
new meaning to ``The Great White Way.''
With that, I yield----
Voice. I have a statement from Carolyn Maloney to be
included in the record.
Mr. Mica. Carolyn Maloney, without objection, so ordered.
She asked me to express her strong support for development
of the Northeast Corridor. She is a champion of it. She has
another commitment and could not break away, otherwise she
would be here. I view her as a true valuable partner, along
with the others that are here today.
With that, let me introduce our first witness. This
gentleman has left the most important position in Pennsylvania
government. He has been a tireless advocate of improving the
Nation's infrastructure. He is on the other side of the aisle,
but that doesn't mean squat to me. I view him as, again, one of
the strongest voices in America for moving our infrastructure
forward, getting people working again, getting us on the right
track to moving the economy and people around this country and
our Nation.
I am pleased to welcome for the Transportation Committee; I
recognize at this time Governor Ed Rendell.
Welcome, sir.
TESTIMONY OF HON. ED RENDELL, CO-CHAIR, BUILDING AMERICA'S
FUTURE; THOMAS HART, VICE PRESIDENT, GOVERNMENTAL AFFAIRS, U.S.
HIGH SPEED RAIL ASSOCIATION; PETRA TODOROVICH, DIRECTOR,
AMERICA 2050, REPRESENTING THE BUSINESS ALLIANCE FOR NORTHEAST
MOBILITY; ROBERT SCARDELLETTI, INTERNATIONAL PRESIDENT,
TRANSPORTATION COMMUNICATIONS INTERNATIONAL UNION; AND HON.
MICHAEL BLOOMBERG, MAYOR, CITY OF NEW YORK
Mr. Rendell. Good morning, Mr. Chairman. Thank you,
Chairman Mica, Ranking Member Rahall, and Members of the
Committee. Thank you very much for coming here and having these
hearings.
I'm going to start off by saying I agree with everything
Mayor Bloomberg said, because I read his statement. He is not
here, but remember I agree with everything he said.
I also want to recognize, of course, Chairman Shuster from
Pennsylvania, and Congressman Meehan, a friend of mine from the
Philadelphia area.
Congressman Meehan, it's nice to see you here.
The Committee, and your statements have recognized it, the
four members who spoke, that passenger rail has been seriously
underfunded for decades and decades in the United States. We
recognize what is going on in other parts of the world.
Not only in the way high speed rail operates, as
Congresswoman Brown said, but the difference in funding in
China, our biggest economic competitor, is making, compared to
what we are making. So I'm not going to go over those.
Let me say, President Obama, as Congressman Rahall said,
deserves credit as the first American president to put
significant dollars into passenger rail; over 10 and a half
billion dollars distributed in the last 18 months.
It was a great start, and the President and Secretary
LaHood deserve praise for going down that road. But I think we
need to get real. The way we are doing high speed rail right
now in America will amount to nothing. It will amount to
nothing for two reasons.
One, it's too diffuse. You cannot do high speed rail
politically. In the first allocation, the Federal Government
gave $7.9 billion to 36 states. In the second, $2.5 billion to
23 states, but for 54 separate projects.
It won't work. It's not enough money to make a dent in any
project. And first of all, he has to convince the American
people that high speed rail is viable, it makes sense, and it
can be cost effective.
The answer to the question Chairman Mica posed, why start
in the Northeast? Because we've got to make sure there's one at
least in California, in Florida, or in the Northeast Corridor.
We know these systems work, they're viable, it's sustainable,
many people will ride them.
If we don't do that, we won't get the American people to
give support for high speed rail funding at all. So first, it's
too diffuse. Let's concentrate on one or two or three projects.
The Northeast Corridor is number one. America 2050 just
released a report in which it ranked the top ten potential
corridors for high speed rail: New York to Washington, number
one; New York to Boston, number two.
If we were a business, we would look no further. That's
where we would put our money. When it comes to high speed rail,
we have got to become more like a business.
So, second reason: It's too slow. We're spending money to
go from 80 to 110 miles an hour. The Chairman said it was slow
speed rail, snail speed rail. I have described it as mid speed
rail.
By the way, I'm here in my capacity as the co-chair of
Building America's Future. I'm also here in the capacity as a
former governor who invested a lot of state resources in
passenger rail.
It's too slow. We're going to compete with all of those
countries. Do you know they're testing high speed rail systems
in Shanghai that go 360 miles an hour? In France, 357 miles an
hour? And we're talking about spending billions of dollars to
get to 110 miles an hour. It makes no sense. We've got to get
real.
And I think there are two road maps for getting real. Road
map number one is the Amtrak plan; $117 billion over 30 years
to cut the cost of the speed from Washington to New York from
162 minutes to 96. You get Washington and New York down to 96
minutes, you will end the air shuttles, and you will improve
dramatically the air traffic delays in the corridor with the
Nation's busiest airports.
New York City to Boston from 215 minutes to 84 minutes; an
hour and 24 minutes. The speed on Amtrak realized is 220 miles
per hour.
It's not just Amtrak. The University of Pennsylvania School
of Design, one of the very best in country, did a student
project. These students, four of them are here today. They
developed a plan that I'd like to submit to the committee on
making high speed rail work in the New York mega-region. It's a
plan that would cost $98 billion and take 30 years.
Why so long?
The only way that high speed rail really works is with
dedicated tracks. It can't share tracks with freight rail, it
can't share tracks with commuter rail, because it would never
achieve the speeds necessary. You have to build dedicated
tracks, and that means right of way. If China can spend $300
billion in ten years, I believe we can spend $100 billion in a
lot less than 30 years.
That's a task that I think the Congress should address
itself to.
Mr. Mica. Mr. Shuster moves that that report be made part
of the record. With unanimous consent, without objection,
Governor, we'll get that in right now.
[The executive summary of the report follows; the full
report can be found online at http://studio.design.upenn.edu/
hsr/node/81.]
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Mr. Rendell. I arranged to brief the Vice President on this
report, as well.
So, cost. Amtrak needs $17 billion in track costs, right?
In human terms; Congresswoman Brown made the point that China
is spending $300 billion to lay 16,000 miles of high speed rail
connecting all of their major cities.
We should not fly airplanes on any flight less than 500
miles. It should be high speed rail. That's the way it's done
in Europe, that's the way it's done in Japan, that's the way
it's done in China. It is almost embarrassing what we are doing
in the United States.
Now, what are the benefits of spending a lot of money,
investing a lot of money? The Penn study, Mr. Chairman, the
Penn study shows that the overall benefits for spending $98
billion dollars will outstrip the cost by $70 billion. If you
take the Department of Transportation's study, it shows that
for every billion dollars in infrastructure we produce 25,000
jobs. This effort would create two and a half million jobs by
itself.
These are well paying jobs that can't be outsourced. And
where would the materials come from to build out this high
speed rail? From American factories, from American steel plants
and concrete plants, asphalt plants and lumber plants, a number
of plants.
We would be buttressing American manufacturing, we would
make the construction industry take off, we would create jobs.
Would it help the environment? You bet it would. Congressman
Mica, over and over again, given the statistics, we would be
stronger by having a high speed rail system that absolutely
works.
Air traffic, it would change the face of air traffic in
America. The build-out of high speed rail, of course, would
demonstrate to the country that it can work. The estimates are
that a high speed rail system traveling 220 miles an hour from
Boston to Washington would make almost a billion dollars a year
in profit. So we can do it with government dollars, we can do
it with private dollars, we can do it with a combination of
dollars.
We should build this dedicated train line and we should
have competition on the line. Competition. Amtrak will run it?
Fine. It should open to private competition, as well. We know
what happens when there is competition. It's best for the
riding public.
Lastly, the field of dreams: If you build it, they will
come. Absolutely, no doubt, Congressman Shuster--the Keystone
Corridor line. In Pennsylvania, Amtrak and the state both
invested 72 and a half million dollars, $145 million for the
rail line.
The trip used to take two hours from Philadelphia to
Harrisburg. When it took two hours we had 890,000 riders a
year. Within two years, once we speeded up and got to 110 miles
an hour, now we have--from a ridership of 890,000 to 1.1
million, a 22 percent increase by just shaving a half hour off
of the time.
I think it was Congressman Shuster or Rahall who said that
Amtrak now has 69 percent of the air and rail traffic from New
York to Washington; 69 percent now. Ten years ago it had 37
percent. The Acela changed airport travel from 37 percent of
the air rail traffic to 69 percent. Boston to New York used to
be 20 percent by rail, now it is almost half, 49 percent by
rail.
If you build it, they will come. We need to get serious. We
cannot do this by politics. The original grants given out to
Pennsylvania, we had a number of applications, and we were
awarded $27 million. And no governor is ever ungrateful about
receiving--no governor ungrateful, proved me wrong.
Generally, no one is ungrateful for the award of money. But
that $27 million didn't make a dent in Pennsylvania. Most of
the money handed out didn't go to major projects. It was money
wasted. It was done to say we gave Pennsylvania some money,
Senator Spector, it can't be all that bad, et cetera.
We can't do this politically. It is too important.
Infrastructure in this country generally can't be done
politically. High speed rail cannot be done politically. Find
the routes that make the most sense, the routes that will
produce big ridership, routes that are sustainable economically
and that can demonstrate to the American people that it can
work; and the American people will not only ride it, they will
support it.
Mr. Mica. Thank you, Governor.
I will go ahead and recognize the next witness out of
order, Mayor Bloomberg. And then we'll have everybody available
for the members to either make opening comments or ask
questions.
So I'd like to welcome Mr. Thomas Hart, the Vice President
for Government Affairs for the U.S. High Speed Rail
Association.
Mr. Hart, you're recognized.
Mr. Hart. Thank you, Mr. Chairman. I appreciate you holding
this hearing.
On behalf of the United States High Speed Rail Association,
its president, Andy Kunz, who's here today, and 250 members, I
extend greetings to the prestigious bipartisan Transportation
and Infrastructure Committee. I also want to recognize ranking
member Rahall, Subcommittee Chair Shuster, and ranking member
Brown.
I am here representing the U.S. High Speed Rail Association
as its Vice President for Government Affairs General Counsel.
The U.S. High Speed Rail Association is a not-for-profit group
with a vision for advancing a state of the art, nationwide,
true high speed rail dedicated track, to be completed in phases
around the country.
The U.S. High Speed Rail Association is pleased to share
its thoughts on high speed rail development in the Northeast
Corridor. In fact, this past November, we hosted an
international conference featuring Secretary Ray LaHood, Karen
Ray and othersl. Over 400 attendees in New York that focused on
the Northeast Corridor. This was a priority of the association
and a priority of mine, personally.
Today, we are delighted to express our common interest and
vision with the Chairman. We believe the rapid creation of a
true high speed system in the region, funded in part by the
private sector through innovative public-private partnerships,
is in the Nation's interest.
We are encouraged by Amtrak's recent hiring of Al Engel, a
seasoned veteran of the high speed rail industry. And we're
also encouraged by the recent focus of the high speed rail
industry and this corridor by the Federal Rail Administration.
They both have to step up their efforts, Mr. Chairman.
We agree with you that we do not have 30 years to develop
high speed rail in the Northeast Corridor. With the price of
oil rising again towards $100 a barrel, it is of the utmost
importance that we develop the new rail systems to offer new
transportation systems not dependent on oil.
Ironically, increased oil prices translate into increased
rail ridership, which in turn improves the business case for
high speed rail. We already saw this happen in the summer of
2008, when oil hit $147 a barrel, and ridership on America's
rail system rose to record levels.
So we have a sense of urgency today. We've all heard of the
advantages of the Northeast Corridor. It is a demographic
region for high speed rail development, and it will spark
investment by the private sector.
However, it's not without challenges that the Northeast
Corridor has an opportunity for high speed rail. The states
along the proposed routes, as Governor Rendell knows all too
well, have a combined deficit of over $45 billion. They are
currently dealing with widespread deteriorating infrastructure.
Also, any major regional investment will require political
bipartisanship, and that's what I like about this committee and
the leadership on both sides; they do work together. We must
encourage the governors to do the same thing among the seven
states in the Northeast Corridor.
One of the most troubling aspects of the Northeast Corridor
is that, unfortunately, it is not shovel ready. That's because
of the absence of a comprehensive environmental impact study,
lagging regional planning, and finally, token investments in
the high speed rail corridor, as Governor Rendell just spoke,
over the past few years and decades.
Nevertheless, these challenges can be overcome by consensus
building and efforts of the government and private sector.
Amtrak is not offering a true high speed system now. High
speed trains regularly operate at speeds of 185 to 250 miles
per hour. Although Acela is the best that Amtrak offers, it
falls short of the potential of a true high speed rail line to
deliver service to consumers and profit to its operators.
While we strongly support high speed rail in the Northeast
Corridor, we also support high speed rail in the corridors of
California, Chicago and Florida. They are dependent, however,
upon private sector investments.
We were also delighted to see President Obama announce
continued Federal investment in high speed rail. That
announcement came just two days ago in the State of the Union.
But more capital is needed. We must spark private investment in
this industry.
For example, the British government just recently auctioned
off a 30-year lease. After building the HS1 system linking
London to the Euro Tunnel, they leased it to private industry
and recaptured $3.4 billion. It was sold to a consortium of two
Canadian pension funds.
This concession returned 40 percent of the original
construction cost. That's a model that we must look at in
developing our own public-private partnerships in this area.
The key to success for public-private partnerships is
lowering risk and maximizing rate of return. The incentives can
be created through Federal legislation. In the next few weeks,
the United States High Speed Rail Association will propose the
Private Investment in Infrastructure Act of 2011, looking at
the best practices throughout the country and throughout the
world, to create specialized benefits such as guaranteed loans,
tax credits, deferred payments and other concessions to
increase investments in operations and construction in the
Nation's rail lines.
We have one opportunity right in front of us now, to create
a public-private partnership to fill the $300 million gap for
high speed rail funding in the state of Florida. The private-
public partnership team that developed that model will be
successful in bringing high speed rail, not only to Florida,
but throughout the Nation.
We believe in this association that market forces will make
the business case for high speed rail and fill the $300 million
gap needed in Florida to bring high speed rail to that state.
In closing, Mr. Chairman, we advise the committee and
attendees at this hearing to continue this discussion at our
upcoming High Speed Rail Summit in Washington, D.C., February
8th, 9th and 10th on Capitol Hill.
Thank you, Mr. Chairman, for your time and leadership; and
the High Speed Rail Association is looking forward to working
with you in the future and other Members of this Committee.
Thank you, Mr. Chairman.
Mr. Mica. Thank you for your testimony and participation.
I notice that the Mayor has arrived. I'll give him a minute
to get his thoughts ready. We'll go ahead and hear from Petra
Todorovich. She is the director of America 2050, and she's
representing the Business Alliance for Northeast Mobility.
Welcome, and you are recognized.
Ms. Todorovich. Thank you very much, Mr. Chairman. Good
morning, Ranking Member Rahall and Members of the Committee.
Thank you for the opportunity to appear before you today to
discuss the future of high speed rail in the Northeast
Corridor.
I'm speaking on behalf of the Business Alliance for
Northeast Mobility, which is a coalition of over 30 leading
business and civic groups from Boston to Washington, D.C. We
came together in 2006 to support appropriations for Amtrak in
the Northeast Corridor, because of its indispensable role in
the Northeast mega-region's economy.
I am here to inform the committee of the Business
Alliance's strong support for bringing the Northeast Corridor,
first to a state of good repair, and to explore dedicated,
world class high speed rail service on the corridor; in order
to create jobs and boost the economy in the Northeast mega-
region and the Nation as a whole.
The Northeast Corridor moves approximately three quarters
of a million people each day to their jobs or to major downtown
business hubs of the corridor. These movements are critical to
the Northeast's $2.6 trillion economy, 20 percent of the U.S.
GDP.
Imagine if today, 750,000 additional passengers were
suddenly added to Interstate 95 and the Northeast's major
airports, already the most congested in the Nation. Our
transportation networks would come to a standstill, as they
regularly do already, because of their inadequate capacity and
failure to meet existing demand.
High speed rail is a way to expand capacity and economic
growth in the Northeast mega-region without further dependence
on foreign oil.
In 2008, the Business Alliance strongly supported the
passage of PRIIA, the Passenger Rail Investment Improvement
Act, which provided a dependable rail authorization for Amtrak
and created the High Speed Intercity Passenger Rail Program,
for which high-speed rail funding was appropriated in the
Stimulus Bill and the Fiscal Year 2010 budget.
Unfortunately, we've only begun chip away at our $8.7
billion backlog in deferred maintenance that has accumulated on
the Corridor, due to inadequate Federal funding.
As a coalition, our top priority has been to secure funding
to bring the Corridor to a state of good repair, which we see
as a Federal responsibility stemming from the Federal
Government's creation of Amtrak and the critical role this
Corridor plays in the economies of the 12 Northeast states and
the Nation as a whole.
While the immediate and urgent challenge is to maintain the
Corridor's existing infrastructure, we are also looking ahead
to the improvements needed to accommodate the growth of the
Northeast economy. Specifically, we support building two new
dedicated high speed rail tracks along the length of the
Corridor, to significantly reduce trip times and substantially
increase capacity, convenience and reliability, while
dramatically enhancing the global competitiveness of the
Northeast.
The recent Amtrak and Penn Design studies that Governor
Rendell mentioned have demonstrated the feasibility of building
world class high speed rail here, slashing trip times to less
than two hours from New York to Boston, and New York to
Washington, while providing up to twelve high speed rail trains
per hour, compared to the one or two trains we currently have
per hour on the Corridor today.
The cost, as you have heard, are estimated at $5 billion a
year for 30 years, or about $117 billion. And upon completion,
the Amtrak plan estimates generating a $900 million annual
operating surplus, with revenues from fares, food and other
services, outweighing total operation and maintenance costs.
It also envisions an interoperable system, which new high
speed rail lines interconnect at key points with existing
Northeast Corridor operations, facilitating a comprehensive
service plan.
Such a plan will enable all communities in the mega-region
to have access to the new service and benefit from this public
and private investment.
The Northeast Corridor has the population density,
concentration of employment, connections to rail transit
networks, and proven demand between city pairs to justify this
investment.
For example, the recent America 2050 study documented that
in the five largest metro regions in the Northeast Corridor
alone, almost 19 million people work within 25 miles of a major
train station. More than 34 million people live within 25 miles
of a major train station. And more than one-third of the
inhabitants of the major metro areas in the Northeast Corridor
are within walking distance of a rail transit station which
connects to inner city rail stations on the Northeast Corridor.
These figures of population and employment density around
rail in the Northeast dwarf every other mega-region in the
Nation. Further, as these high speed rail lines are built, they
reinforce private investment around the employment hubs and
train stations, insuring that population and job growth can
occur in a way that reduces our dependency on foreign oil.
But it is critical that we get started in building these
plans while we still have the momentum of a new national
commitment to high speed rail in America. Unfortunately, the
mainline Northeast Corridor was largely excluded from major
capital grants awarded in the first two rounds of high speed
rail grants in 2010, because we lacked an up-to-date
environmental impact statement for the corridor.
A year later, the EIS has not yet begun.
In December, the Business Alliance sent a letter to
Transportation Secretary Ray LaHood, asking for his leadership
to expedite the corridor-wide EIS process, and we met recently
with his staff to discuss the details.
We are anxiously awaiting the start of the EIS process,
which should consider all of the major proposals for providing
high speed rail service in the Northeast Corridor, including
the recent Northeast Corridor Master Plan that was completed by
12 states with Amtrak, the Penn Design Plan, the Amtrak plan.
Once scoped, we ask for the help of the committee in
looking at the ways the Northeast Corridor EIS process can be
tiered and shortened so we do not waste another two or more
years waiting for its completion to start construction.
Finally, we do believe that the private sector has an
important role to play beyond the traditional engineering and
construction contracts placed by public agencies in delivering
large capital projects, such as the East Side Access project
before you today.
We would like to meet with you, Mr. Chair, and the
Committee members, to discuss specific proposals for public
private partnerships in the Northeast Corridor.
However, the necessary precursor to private investment and
implementation is agreement on the vision. And for this, we ask
for your leadership. We ask for your support of a bold vision
for the Northeast Corridor. And we ask for you to work with the
Northeast states and Amtrak and the business community to agree
on a practical strategy for accommodating the 21st century
transportation needs of the Northeast and national economy.
Thank you very much.
Mr. Mica. Thank you for your testimony.
We will wait on the Mayor a second here.
And I want to hear from labor first, and we've got a
representative of the people who are doing all the work on
these projects, Mr. Scardelletti. We want to welcome and
recognize the International President of the Transportation
Communications International Union.
Welcome sir, and you are recognized.
Mr. Scardelletti. Thank you, Mr. Chairman. Thank you very
much, Mr. Chairman, Ranking Member Rahall and members of the
Committee.
Before I make my remarks, I want to take a moment to bring
you greetings and from, and frankly acknowledge the thousands
of dependable rail workers on the Long Island Railroad, Metro
North, New Jersey Transit, Amtrak. They're all on the job
today, up and down the Northeast Corridor, to provide safe,
reliable transportation to our country's people; many of whom
work right here in this building, this terminal, and many of
whom work a couple of blocks down the street at Penn Station.
My name is Robert Scardelletti, and I'm the International
President of the Transportation Communications Union. Our union
represents over 50,000 members, most of whom work together with
another 120,000 railroad workers, who represent eleven other
rail unions, which are identified in my written testimony.
We work in both freight and passenger rail, as well as on
commuter lines throughout the United States. TCU is the largest
union on Amtrak, representing six separate crafts and classes
under the Railway Labor Act.
TCU has been a long supporter of high speed rail in the
Northeast Corridor and throughout the United States. Amtrak is
by law the Nation's rail carrier, and the only current provider
of high speed rail through Acela Service Express.
Amtrak and a dedicated work force will celebrate 40 years
of service in May, after being established by Congress to
provide a national rail passenger service to the citizens of
our country; because, frankly, the private companies could not.
Over ten years ago, Amtrak launched Acela Express, the
Nation's first and most advanced high speed rail service. It
has now become extremely popular in the region, sold out almost
every train.
Actually, Amtrak transports more passengers in the
Northeast Corridor than all the airlines combined within this
area. Most importantly, Amtrak has a dedicated and experienced
work force: Ticket agents, baggage handlers, carmen, on-board
service crew, supervisors, machinists, electricians, train
dispatchers, signalmen, maintenance of way workers, sheet-metal
workers, firemen and oilers, engineers and conductors.
Those workers are critical to operating the current and
future high speed rail service. You cannot oppose funding and
then criticize that Amtrak does not provide a good service. If
our country is committed to providing a world class high speed
rail system in the Northeast Corridor, than it needs to treat
Amtrak as an asset and provide Amtrak with a dedicated, long
term funding source.
The government should expand on Amtrak's success and
embrace their vision for a more ambitious high speed train that
will travel the Northeast Corridor up to speeds of 220 miles an
hour, significantly cutting trip time.
Amtrak's plans would be a major step forward in building
the Northeast Corridor for the future; and yes, the plan
requires a major commitment by our government.
This new high speed rail system will create thousands of
new jobs. These are jobs, under the rail laws of the United
States, that will be good paying jobs with benefits, the kind
of middle class jobs the country needs. In other words, the
kind of middle class jobs to sustain and fulfill the American
dream.
Congress must reject privatization of the Northeast
Corridor. We know from experience that passenger rail is better
left to the public sector. This is because of the unique safety
and security concerns associated with high speed rail.
To achieve quality high speed rail service, significant
ongoing investments must be made in rolling stock, signal
equipment, stations, tracks and employee training.
It is unfortunate that Amtrak could not be part of this
hearing today to brief the Committee on its plan for the future
of the Northeast Corridor and the NextGen High Speed Rail
service. While this service can and should be expanded, we do
not understand how the public will benefit by allowing a
private operator to take over one of Amtrak's most successful
routes.
In conclusion, the framework of successful expansion of
high speed rail in the Northeast Corridor for the coming
decades is already in place. Amtrak in this proposal is treated
as a national asset to be used to its fullest potential.
And one more comment. A lot of comparison was made to
Communist China. They won't need an immediate environmental
study. In fact, they don't need anything. It's a dictatorship.
If they want to put a train line through your house, your house
is coming down, like they did when they built the Three Rivers
Gorge electrical plant. Tens of thousands of citizens, whatever
they call them in China, were evacuated, whether they wanted to
or not.
So I don't believe that it's proper for our government to
compare ourselves to a Communist regime.
That's all I have. Thank you.
Mr. Mica. Thank you for your testimony.
Now, we have in our midst probably one of the great
political leaders in the country, and I have had the
opportunity to work with the Mayor of New York and Governor
Rendell, both of them, along with Governor Schwarzenegger from
California, who led a national effort to bring high speed rail
to the country.
I can't tell you how much I appreciate the leadership of
Mayor Bloomberg. We would not have the provisions in the PRIIA,
the Passenger Rail Investment Act, it would not have been
signed into law in the last administration without his help, I
can tell you that. And I salute him today. The last time when
we came together we had to delay our meeting. He had an
emergency. This Mayor takes care of his city. The city is
first.
I remember that day, Mayor, you had a collapse of a crane,
people were killed, I think, and injured. And we delayed our
meeting. Then we spent quality time. And a lot of politicians
give you a lot of hot air, and they pat you on the back.
And within, literally, a few hours' time after we finished
our discussion, he was supportive of the effort. I was in the
minority. I couldn't have done squat without this guy. And he
helped us to move that Federal legislation forward.
We have not passed a passenger rail reauthorization in
eleven years; and it wouldn't have been done without Mayor
Bloomberg.
Now, here I am, Mayor. I hope this isn't an omen, but today
you've had another serious natural challenge. But you've met
it. I got up this morning and looked out of my hotel room and
then you see again, members who haven't been here, the splendor
of one of the great cities in the world, and this financial
center. And I'm so frustrated that it's not connected by true
high speed rail.
Mayor Bloomberg, Governor Rendell has said he agrees with
everything you said; and you haven't said it, but I wanted to
let you know.
Again, I can't thank you enough for your leadership, for
your being with us today. I know you have a limited amount of
time, so we're going to recognize you with as much time as you
need. And thank you for being here today. We look forward to
hearing the other witnesses also.
Welcome, and you are certainly recognized.
Mr. Bloomberg. Mr. Chairman, thank you very much for those
kind words. They were not deserved. My recollection is that the
last time you were here we had Florida weather for you. Your
wife was here helping our economy, and Governor Rendell as
well, what he'd rather do when he's here, spend money so he can
generate sales tax revenue. That's the way we pay our people.
And I just want to say thank you to and to Ranking Member
Rahall for inviting me, and Subcommittee Chair Shuster; and
Jerry Nadler, my Congressman.
I apologize for being late, but I've been up since 4:30
this morning implementing the mayor's program to prevent a
drought this summer. People call it snow, but we have to look
on the bright side.
Anyway, it's appropriate that you're holding this hearing
in Grand Central. Like the Erie Canal or the Transcontinental
Railroad and the Interstate Highway System, it is a monument to
our Nation's tradition of dreaming big and investing in our
future. Together, the transportation networks opened up new
markets and made us the global economic superpower that we are.
But that was a long time ago. And today, our Nation invests
just over 2 percent of our GNP in infrastructure; while Europe
invests at least twice that rate, and China almost three times
that rate.
In 2007, I visited Shanghai and I landed at the airport and
got on what they call a Maglev train, a magnetic levitation
train that travels at--I think it was running at a slow speed,
because at night it was going only 250 miles an hour. I had a
full cup of coffee and I watched the clock when I started, took
the trip and landed. It didn't vibrate once. It was really
quite amazing.
Other countries are trying to do the same thing, create
other modes of transportation that are much more efficient,
much more rapid and answer the needs of a global world. And
Asia, Europe and the Middle East, they're building bullet
trains and we're just sitting here. What is America waiting
for?
I don't want to spend money we don't have. I'm sympathetic
to the cost of debt. I'm sympathetic to encumbering our
descendants with the cost of building things. But this is not
wasted money. Infrastructure is one of those things that gives
us a future.
And I would venture to say no one here remembers whether
Central Park was built on time and on budget; whether the Erie
Canal or Transcontinental Railroad, any of these things that
transformed this country and transformed the world, were on
time and on budget.
The bottom line is, there are certain infrastructure things
that you just have to do. I couldn't be happier to be partners
with Governor Rendell and Governor Schwarzenegger in trying to
urge this country to make those kinds of investments. They are
our future. And if we want to leave our children something, we
want them to be able to look back and say ``You are the parents
who had the courage and the foresight to dream big and to go
ahead and do things,'' where maybe there at the time we have to
raise some money, somebody else is there at the time we finally
cut the ribbon; but at least we've done the right thing.
We have a bipartisan coalition Ed and Arnold put together,
called Building America's Future. It's been working to build a
consensus around this country, and your committee's strong
interest in high speed rail is something that I'm glad to hear.
The consensus is emerging around the Nation that it should be
built here in the Northeast.
As you know, the Northeast is the Nation's largest economy.
The region is home to the Nation's major centers of business,
government, finance, medicine, entrepreneurship and education.
And it is where you have multiple cities very close together,
where rail does make some sense.
Other parts of our country, the cities are far apart and
there are other alternatives. We have 162 Fortune 500 companies
who make their headquarters here in the Northeast; and 7 of the
world's top 20 research universities. They have to be able get
around, and they have to be able to attract the best and
brightest from around the world if we're going to have a
future.
Most of our population is in dense cities, close enough to
each other to travel by trains, much more convenient than
flying. And Europe is a good example. They do not have short
flights. They have come to rely on trains that are reliable and
affordable because they've had the courage to make the
investments.
At the same time, because all of this activity, the
Northeast is approaching, you should know, a transportation
crisis. Our airports are among the most clogged, our highways
are among the most congested, and our train corridor is among
the most heavily used in the country.
And all of that is just going to get worse as the regional
population is expected to grow by 40 percent by the year 2050.
That doesn't just affect New York, it affects the whole
country. As Chairman Mica noted, the New York clogged airports
are responsible for flight delays around the country and around
the world.
If you want to reduce those delays and engineer growth
driving the American economy, you need to unclog the fuel
lines. And I think one of the best ways is with high speed
rail. High speed rail adds the equivalent of about 1900 lane
miles of interstate, except of course this would be interstate
with a speed limit something like 220 miles an hour, which
really make an enormous difference.
High speed rail in the Northeast would be a boon for our
region and country in other ways, as well. It would generate
tourism and travel, raise property values, cut pollution and
our dependence on foreign oil; and by reducing congestion on
our highways and our airports and on our commuter trains, it
will increase economic activity. We estimate that high speed
rail would generate more than $7 billion of economic activity
and create 100,000 new jobs by the year 2040.
Because the businesses and industries are brought closer
together, they inevitably see greater profits, creativity and
greater productivity.
President Obama and Congress have taken the first good
first step by allocating $10 billion for high speed rail. And I
was encouraged the other night when the President affirmed his
commitment in his State of the Union speech, setting a goal for
80 percent of Americans to have access to high speed rail
within 25 years.
That is certainly a laudable goal. But we all know that the
money isn't there for that yet. So we ought to start with what
makes sense economically right now. I think at the moment it's
fair to say we're not doing that. Funding for high speed rail
projects has been divided across 36 states, spreading our money
so thinly we run the risk of achieving nothing at all.
In fact, the current Federal plan allotted just over 1
percent of all high speed rail spending for the Northeast, and
that simply doesn't make any sense; especially because the
Acela at the moment is the only profitable line run by Amtrak;
and the Northeast is the only corridor that has demonstrated a
high demand for high speed, at all.
What we need is a new approach to spend the Transportation
Department's money, one that is not dictated by politics, but
based on economics. You might not get all the high speed trains
you want, but we will get the high speed trains we need.
I understand the politics. Everybody in this country has
got to pull together. Everybody contributes and everybody wants
to get the benefits. But in some cases the benefits are going
to be in one part of the country and then they'll spill over
into others. In other kinds of endeavors, like the Interstate
Highway System and building airports, every city can share in
that.
But high speed rail only fits certain parts of the country,
but it is something that's good for all of us.
Before I close, let me just mention one final idea that we
should explore, to see the feasibility. High speed rail could
cost over $100 billion and take a generation to build. While
government should take the lead, we should make sure that we
have the structure and rules in place that don't discourage
private investment.
I listened to my friend down on the left and there is the
argument for public transportation, and there is the argument
for private transportation. I take public transportation to
work every day. The subway works fine, it's a public system.
I've always thought that it is very well run. Jay Walder came
up with me. He's the guy who runs the MTA.
But there are also places in this country where we've had
experience with the private sector. And just don't have the
luxury of ruling out anything. Competition is good. I think the
best thing for government is to have the private sector compete
with government. That's what holds our feet to the fire, that's
what makes us more efficient and more accountable.
And this country really does need to make smart investments
in the 21st century, but we don't have all the money, we don't
have enough money. So we do have to reach out to the private
sector, as well. High speed rail in the Northeast Corridor, I
think, is one of the smartest investments we can make.
And it really is the the future. So thank you very much.
For those of you who don't live in New York City and perhaps
it's one of the first times you've visited, welcome. I
represent 8.4 million people who want to say thank you to all
of you for everything you do. We always go to Congress to ask
for things. We seldom go to Congress to say thank you, but we
have a lot to be thankful for from Congress. And Jerry, thank
you in particular for all you do to represent us.
Thank you.
Mr. Mica. Thank you, Mayor, and thank you for your
leadership.
What we'll do is, change the order a bit. We have a couple
of our senior members with all our junior members here.
I will recognize Mr. Nadler. He's up for either comment or
question. Mr. Nadler, thank you for having us here in New York.
He's a senior member. I worked with him on the
Transportation Infrastructure Committee.
Mr. Nadler. Thank you very much. Let me ask for consent to
include my statement for the record.
Mr. Mica. Without objection, so ordered.
Mr. Nadler. Thank you.
Obviously, we need high speed rail. Obviously, what
Governor Rendell said and some others, about not diffusing
efforts to get visible results, it makes sense. Also, to build
a constituency where the American people see that they're
getting something for their money and see real results. Then
you can start getting someplace else, too.
Also, obviously, we are in a situation where there's a lot
of austerity people talking are talking about. I don't agree
with some of it, but some of it is obvious. And the
Republican's committee suggested zeroing out Amtrak again,
doing no high speed rail. I hope the Republicans as a whole
don't go along with that; who knows. It's a situation that
makes it daunting to get these funds.
And I have a couple of questions. First of all--I forgot
who commented on this--why can't we start some of the projects
that will be good, either if we develop the separate high speed
rail or if we don't?
In other words, projects that are necessary, cost money to
bring the corridor up to good repair and to improve the
existing corridor; but will also be necessary as precursors to
a new high speed rail system. Why do we have to wait for an EIS
on that? We should be able to go ahead with that rapidly.
And my second question is: Yes, we clearly want the private
sector involvement to the maximum extent we can get it. But, as
we saw, no private company submitted any kind of bid for the
Northeast Corridor high speed rail. We put up the bid.
The question really is, how can we get the private sector
to cooperate with the public sector, because neither is going
to do it alone?
Mr. Mica. Ms. Todorovich.
Ms. Todorovich. Thank you, Chairman.
Yes, Congressman, I can address the first question. We do
believe the Northeast states may proceed in completing projects
on the corridor that are already covered by existing Northeast
Corridor EIS, completed, I understand, in 1978 or '79.
Between that EIS and other EIS's in the corridor, there are
projects such as signaling systems and overhead catenary
replacement that can get started right away. And what needs to
happen is, those projects need to be identified. Someone needs
to do that work.
There was recently created the Northeast Corridor
Infrastructure and Operation Advisory Commission, which was
created by PRIIA, and which includes a representative of each
of the Northeast states, Amtrak and the FRA.
That commission could be the commission to do this work.
They've only had two meetings yet. The next meeting is March, I
believe. And they haven't really gone through that process yet.
But we would encourage them to get started right away, working
with the FRA. We think the FRA would provide leadership on
this.
Mr. Mica. They will be at our discussion, which will
proceed after this hearing.
I might, as a general member, yield briefly. On the no
private sector proposals coming in--and I share this with the
ranking member. Having drafted those provisions in law, I
followed it very closely.
I can tell you, everything was done to discourage and
dissuade, and actually make certain the private sector did not
offer a proposal.
If I have to, I will subpoena people in and we will reveal
what took place. I don't want to have to do that, but I'm
telling you it's not going to happen again, and we will have a
private public partnership considered and the opportunity to
compete.
And for the labor brothers and sisters that are listening,
they can take it from me as the chair of this Committee, that
we will protect their position. And whatever construct is
brought forth, they will be protected.
But if you leave things the way they are going--when I came
on the Committee we had 29,000 Amtrak workers, and we now have
19,000. If that is the future people want to look to--and not
have high speed rail, true high speed rail, to see increasing
employment and opportunities for these workers, and make
certain they get the benefits and salaries and see the future
they deserve.
Sorry, Mr. Nadler, I took some of your time. Your time is
not expired.
One more question from other members.
Mr. Rendell. Number one, we will not come up with the money
for a project like this without private sector involvement.
What I'd say to my labor friends is, I'm a good Democrat and
give labor support all the time. That's a fact of life.
Chairman Mica is right. The number of jobs will grow, two
and a half million new jobs if we do this corridor project
correctly. A lot of those jobs, the vast majority, will be
union.
Secondly, private sector's rate of return. On small stuff
you can't get the rate of return. In Pennsylvania, we had
plenty of offers including a top bid was * * * billion dollars;
because there was a predictable rate of return. High speed rail
is different than a turnpike or a highway. But the projections
and the studies have shown across--the Acela is profitable.
This, over the long run, could be extremely profitable. I
think the Mayor said almost a billion dollars a year in profit,
operating profit. We can get plenty of private sector interest
in that.
Mr. Mica. We want to go through the panel and try to get
everybody in the discussion. We have another senior member, the
gentleman from Tennessee. I'm going to yield to him and also
yield the chair to him for a couple of minutes. And then we
need to go next to our members.
Mr. Duncan. Thank you very much, Mr. Chairman. I thank all
the witnesses for very helpful testimony. I have one question.
It has, really, two parts; both relate to cost.
First of all, we heard today about the fact that it would
cost $117 billion, specifically, to build this over a 30 year
period. Realizing it's very, very difficult; in fact, it may be
impossible to really estimate what the cost will be 20 or 30
years from now.
And most transportation projects, the Big Dig in Boston is
a prime example, cost way more than what we originally
estimate. What can be done to see that these costs don't far,
far exceed what the estimates are at this moment in time?
Secondly, I think Mr. Nadler started to touch on it. The
newest Fenway Airport is a few years old. It took 14 years for
completion. It only took 99 construction days, and the delays
were almost entirely because of environmental laws, rules and
regulations.
What can we do? We are taking two to three times as long on
all types of transportation projects because of the
environmental rules and regulations. Mr. Scardelletti touched
on it. He said dictators do it faster. Even nations with
dictatorships do it much, much faster.
Mr. Rendell. Let me answer the first. Pennsylvania is
number one in Congressional ratings for a state spending
stimulus highway and bridge money. The reason we did is, I knew
the stimulus was coming, I got the contractors in and got the
bureaucrats in.
And I said to the contractors, ``We're putting out an RFP
for this work. You're not going to get 120 days to respond. You
guys want work, you'll get 30 days to respond.''
``Bureaucrats, you are not getting 90 days to review it.
You'll get 45 days to review it.''
Guess what? They did it. They did it. We build in such
incredible time gaps developing EIS, it's just untenable. It's
not necessary. One of the things that you must do in any
infrastructure project, high speed rail, anything else: Do
legislation not to eradicate EIS, but to make them more timely.
You can do that.
I always say if someone walked into a law firm and said,
``I need an opinion on this complex matter by Tuesday,'' and
it's Thursday afternoon; the head of the law firm says, ``Our
law firm's got the highest reputation. You'll never get that in
four days.''
If that person pulled out a check for $2 million, my guess
is that everyone in that law firm would be working 24 hours a
day for the next four days.
There's no excuse for the time it takes. We are not a
dictatorship, we're not abusing people's rights. If you examine
the EIS process, walk the EIS to its end, it will drive you
crazy.
The time it takes to do things can be done in a much
shorter timeline. To rebuild the bridge in Minnesota, do you
know how long it took? Anybody on the Committee?
Voice. 437 days.
Mr. Rendell. A brand new bridge in Pennsylvania takes a
minimum of two, two and a quarter years. If we want to, we can
do it.
Mr. Bloomberg. The Empire State Building was built in one
year. I think it was actually one day short of a year. In New
York City we have an environmental agenda that I think is
probably more aggressive than anyplace else in America that I
know. We really care about the air we breathe and the water we
drink and the future we're going to leave our kids.
And yet, with all of that, we've done an awful lot of
projects. Every one of our 1400 bridges is up to standard.
We're building a new water tunnel, we're building two new
subways. You can get it done.
But let me address the first part of your question as to
why these projects are so over budget.
I'm old enough--I grew up in Boston. I remember, not the
Big Dig--I remember when the Southeast Expressway was first put
through and they ripped down the North End and everybody moved
out from Medford, where I lived. The project went through a
whole cycle of a road being built and then being torn down and
buried.
I think the real answer to your question is that people are
afraid of big projects, they're afraid to actually give a real
quote for what's likely to happen with mission creep as you add
new things. And in the real world nobody is going to stand up
and say, ``OK, let's do it.''
So the only way, in a tactical sense, to make progress is
to start out with a quote that we all sort of know is very low
and unrealistic in time and in money; but that at least they
get it going.
And we can later on yell and scream and ``should have'' and
``would have'' and ``could have''; but at least we have the
project done. That is true with big software projects, that's
true with big construction projects. We're just not politically
willing to be realistic and--wink, wink, it works.
Mr. Duncan. We need more penalties.
Mr. Mica. We're not going to speak to that, because I want
to get through the members. I've got a number of upstaters. I
was born in Binghamton, a salmon that swims upstream back to
New York.
We have Mr. Hanna, a new number from upstate New York. Let
us recognize him for a question or comment.
Mr. Hanna. I defer to my friend Tom.
Mr. Mica. We've got another New Yorker. I'm proud to have
more New Yorkers. Let's go to Mr. Reed. And Mr. Reed is the
Vice Chair of the Rail Committee; and he is from the Rochester
area.
Mr. Reed. Corning.
I'm a fellow Mayor, and I share a lot of his concerns. It's
much different in the city of Corning.
The question I have is, I'm in a public private
partnership, and I think Mr. Hart touched on it a little. He
referenced the British sale recently.
I've always tried to look down over the horizon. And under
those sessions, under those sales, was the discussion or the
agreement ironed out, about who is going to take care of the
maintenance and replacement after we build this?
Say we build this in the next 30 years. Who is going to
take--across the public and private partnership, P3--who takes
responsibility for maintaining and improving that down the road
in Britain, and do they incorporate that in their agreements?
Mr. Hart. Yes. On point with Congressman Nadler and Duncan:
You can build that into the concession, into the agreement; and
they are doing that in Florida now. Passing through the risks
factors in construction, passing through the operation and
maintenance obligations to the private firms, to help bring the
contracts to certainty. That's how you keep it on time, on
budget.
Because the private sector is good at limiting their risk.
Once they have a contract and an obligation, they'll see to it
that the operation is done on time.
What is particularly impressive about the systems in Europe
and some in Asia, if you are operating a train, a high speed
rail system, and you're five minutes late in arrival, they will
refund your money 100 percent.
Can you imagine that type of obligation being readily being
accepted by the private sector American transportation system?
They will do that if they have the opportunity to manage and
operate the system from inception, and they understand the
rules of the game at the beginning.
So yes, sir, that's a good idea to reduce risk and increase
certainty by bringing in the private operators.
Mr. Rendell. We were not going to sell the Acela, we were
going to lease it; which meant we controlled how fast the tolls
would go up, we governed part of the contract. We controlled
and oversaw the schedule of maintenance.
Now if you sell it, you're counting on the private sector
to maintain it by itself. And you might say, the private sector
will not maintain it, it's all about maximizing profits.
No; because if they want people to ride the train, as
opposed to driving, that system's got to be well maintained and
function to arrive on time. The profit motive is built in. But
if you're really worried about maintenance, you lease these
projects, and the government has control over them going
forward.
Mr. Mica. Thank you.
Let me yield next to Mr. Meehan from Pennsylvania, a new
member of the Committee. And you can give an opening statement
or ask a question.
Mr. Meehan. Thank you, Chairman Mica, for the opportunity
to be part of this very important moment. And I appreciate that
Governor Rendell took the time to come and took two different
subways to get here. I'm noting how life changes when the state
police aren't here. The governor's been a great proponent of
transportation in Pennsylvania.
We asked this question a couple different ways, Governor.
But I worked on the one thing that, really, I think addresses
the major concern all of us are going to have as we look at
funding long term commitments to transportation.
I'm aware right now that lot of the way that we fund
transportation now is through taxes, which frankly is going
down. We lost $35 billion dollars, which is a good thing, I
guess, since we're not consuming as much oil.
But what have you learned from the work you did when you
tried to look at a way to make the turnpike operable? That
would give a sense of being close as you can guarantee those
nay sayers, that the private sector will step in and give you a
sense of confidence in the financial commitment that allows you
to match that with the government commitment?
Mr. Rendell. Three things.
One, the government will lease and not sell.
Two, we were prepared to do what Congressman Mica said with
the unions, we were prepared to guarantee rates of employment
in the contract lease, the contract with the private operators.
And three, we're going to control the rate of return by
agreeing to follow a schedule. And if you do sell--I'm not
saying necessarily you should--you've got sudden competition.
If you are a private operator of the Pennsylvania Turnpike,
you want to maintain that very, very well, because as you know,
Congressman, there's I-80, just above the turnpike, and it is
free. So you better maintain it well or people will drive on to
alternate routes. That's number one, and I think it's very,
very important.
Two, in terms of how we finance, the private sector has to
be part of it. I sound like a broken record, over and over
again. You all realize that * * * The only political
subdivision in this country that doesn't have a capital budget?
Mayor Bloomberg would not have done the incredible things with
New York City infrastructure without a capital budget.
For the first time, Pennsylvania is decreasing the number
of structurally deficient bridges, 1600 bridges at the same
time, because of the money invested in our capital budget and
because of the stimulus.
The Federal Government is the only political subdivision
without a capital budget. It pays for paper clips with a 40 day
life span the same way it helps to build bridges with a 40 year
life span. No business would do that, no other government would
do that.
I know that the OMB and CBO want a capital budget. I think
Congress should take control away from the bean counters and do
what everybody else does; get a capital budget. The American
Society of Civil Engineers says we need $2.2 trillion just to
keep the American infrastructure in fair condition. That's not
even talking about high speed rail.
If you did have a capital budget, $2 trillion, $3 trillion,
it would be doable. We would figure that we're going to need so
many jobs, we'd revitalize American manufacturing. I can't
understand why nobody pays any attention to the capital budget.
Mr. Mica. The Mayor has asked to respond.
Mr. Bloomberg. There's a difference between government and
private development. The private side has some capital, there's
additional sources of capital. There is expertise, from my
experience, in both the private sector and the government, and
you can get expertise in either one.
So what are the real differences? There's two things. Being
able to adjust the size of the work force to the need, and
being able to charge whatever the market will bear. If you
don't want to have those two things--it's a perfectly
reasonable position--then the taxpayer is going to have to
subsidize it.
And the taxpayers have got to decide, do they want to
guarantee jobs and do they want guaranteed below market rates
for what you charge straphangers and people who go through toll
booths, or people who get water by the gallon? Or do they want
to let the markets do that? But you can't have it both ways.
Those are four reasons, four differences between the private
sector and the public sector, for financing any of this stuff.
Mr. Mica. Thank you.
I recognize now the gentleman from Ohio, Mr. Gibbs. He is
the new chair of the Water Resources Subcommittee. Our
Committee welcomes you. You're recognized for an opening
statement or question.
Mr. Gibbs. Thank you, Mr. Chairman. It's a pleasure to be
here for what's going on in this corridor. It's interesting to
realize this corridor was part of the congestion, and I agree.
That's the reason why I'm here from Ohio.
I guess I wanted to try to expound on it a little bit. I
think Mayor Bloomberg kind of hit on it the most. I was in the
Ohio Senate last year and served on the Transportation
Committee. And I was really concerned about the proposal that
came to Ohio as part of that $8 billion from the Feds, and $400
million from Ohio, to build quote, what they think is high
speed rail.
It turned out it wasn't going to be high speed rail in
Ohio. It was 39 miles average speed.
And the second lesson to be learned is, it was going to be
on the freight system.
The question was, who is going to have priority, freight or
passenger? I think everybody here pretty much said--I know the
governor did--it has to be a separate system. I agree with
that.
I think we have to keep in mind the situation the Federal
Government has gotten themselves into now, budgets and economic
deficits and debt. And I think that to move forward, there's
going to have to be a public private partnership. I don't think
we can expect the taxpayer to do everything. I think Mayor
Bloomberg hit on that a little bit. We have to work on that.
So I think that one lesson I learned in Ohio, we also have
to have connectivity. You can't build a high speed rail system
from Point A to Point B and don't have place for people to go
off the high rail system. That's what you've got here,
Washington, D.C. to New York, you've got a place to go. I think
that's great. We didn't have that.
I want to say, too, we have to make sure there's a proposal
out there that makes economic sense. The private sector has to
buy in and be part of that partnership. And when you move
forward across the country, you diffuse, dilute the funds, as
mentioned. In Ohio we're glad we have a new governor who's
returned that money, not * * * To cost more money to begin
with.
So you lose credibility when you advocate for high rail,
press for a project that doesn't make any economic or common
sense. So I'm glad to hear that. We can move forward and have
projects that make sense and private sector capital is
involved, with private business can have competition, and then
that might be something to look forward to.
But my second reason for being involved in this is because,
as Chairman Mica said, 70 percent of the air traffic congestion
problems arise in this corridor, and has an impact throughout
the country.
Mr. Chairman, I don't have a question.
Mr. Mica. Thank you for your statement and participation.
I yield next to another subcommittee chair. The gentleman
from California who is going to chair the Economic Development,
Public Buildings and Emergency Management Subcommittee of the
House Transportation Committee; the gentleman from California,
Mr. Denham, for his opening statement or question.
Mr. Denham. Thank you.
Good morning. I represent an area in California recently
granted a large sum of money for high speed rail. It is being
started in a small town called Borden, which I represented for
eight years now. The problem was, I went and asked anybody in
my district where the town of Borden was. They said that was
the town that was there 70, 80 years ago.
So my concern is, as we move forward, my question to Mayor
Bloomberg and Governor Rendell, as co-chairs with Governor
Schwarzenegger of the organization Building America's Future:
What is the goal of this organization, and how important is it
to build America's future to achieve high speed passenger rail
in the Northeast Corridor? And what safeguards are put in place
to insure that decisions aren't made out of the blue for
political reasons, or money being spent--an expanded budget
that continues to grow outside of what the taxpayers already
approved?
Mr. Rendell. There is no question that's a problem. If we
see a problem it doesn't make any sense to spend a whole lot of
money for low speed; it's not going to accomplish anything. We
know how precious dollars are. We want every dollar to be spent
well and bring us maximized return on our investment.
The answer to your question is, problems like this, in my
judgment--I'd like the Mayor to follow up. We think projects
like this should have to go to something like a National
Infrastructure Bank. The President has talked about creating
one. It should be staffed by transportation experts, former
state DOT directors, academics, people who work in the
business, people from finance. They would make the decisions,
totally devoid of politics; and employ a cost benefit analysis.
The Penn study did a great cost benefit analysis.
That's how major transportation projects should be decided.
Not who's a powerful Congressman--no offense to the men and
women on this panel--but it should be on a cost benefit
analysis: What is the national benefit? What is the regional
benefit? What is the economic benefit? What is the
demonstration benefit?
It can only be done by taking it out of the political
process. Who would set the criteria for an infrastructure bank
and make its decisions? Congress. You would write into the bill
an agency that creates what the infrastructure and the criteria
could be; even decide what the weighting would be. Improvement
of the environment, reduces CO2 to the environment. There has
to be criteria taken into consideration.
Benefit to existing business, cutting cost, that would be
considered. All things that enter into cost benefit analysis,
that's how we should be deciding major projects.
By the way, that is not in any way an expression of lack of
confidence in the men and women of Congress.
Mr. Bloomberg. I would answer differently. I think if
there's a local interest with their money on the line, they
will insure that the project has some value. They may make
mistakes. But you want to get it down to the lowest level of
whatever you're trying to build is actually used.
So, I've always thought that Congress made a terrible
mistake with all the stimulus money by not having a local
component. ``You'll have X dollars, but you have to put in a
certain percentage of that yourself.''
That's local politicians, the local public, the local
community boards, the local press, would insure there is a need
for the project; because they would have some of their own skin
in the game, if you will. Instead, Congress comes and says,
``We're going to build something,'' and you find out that the
town wasn't there for 70 years.
Get down to the operating level, and then you will get a
lot more real feedback in terms of whether it's a valuable
project.
Mr. Rendell. We have a very significant match, and the
local has a much greater share * * * Transportation project * *
* Federal Government share.
Mr. Mica. Thank you.
I yield to the gentleman from Minnesota, and he is the new
vice chair of the Aviation Subcommittee, Mr. Cravaack.
Mr. Cravaack. Thank you. I want to be the first guy not to
have to tap his microphone this morning.
Thank you, Mr. Chairman. I appreciate the time. I thank the
panel. I appreciate your being here today and taking the time
from your valuable schedule.
I truly admire the passion that you all have for the
Northeast Corridor; and I applaud the move of the government
and/or private sector cooperation.
But I also come with a caution. I come with a caution from
the American public who sent the 112th Congress to Washington,
D.C. to be fiscally responsible. And my question is--and it's a
generic question:
Where will it leave the Nation in order to come up with the
financing? How much more are we going to borrow from--as Mr.
Scardelletti so aptly put it--from Communist China?
How much more in debt is this Nation going to become, which
is now rapidly approaching our gross domestic product?
So I applaud and I therefore strongly encourage this
distinguished panel, so that we all can advance this project
forward, to seek a private sector competition and to invest and
attain the best transportation system at the most efficient
cost to the American taxpayer.
Additionally, I applaud--I thought my name was hard--Ms.
Todorovich, for bringing up another point of government
bureaucracy in the environmental impact study and how long it's
taken to obtain this.
I would look very well into trying to expedite this project
and trying to get an environmental impact statement out to the
public, so we can start moving this project forward. We in
Minnesota have our own challenges with environmental impact
studies, as well. So I agree with you wholeheartedly on that.
So, bottom line is, I thank you very much for the passion
that you all have. I look forward to this committee and working
for this project and maintaining a fiscal responsibility to the
American taxpayer.
So thank you.
Mr. Rendell. On the debt issue, we've run up a lot of debt
very recently and gotten very little for it. Give us the debt
to do this work, this infrastructure, and you will get millions
of new jobs, we will get the revitalization of American
manufacturers. That's important. It is probably the number one
issue in the mind of the public right now.
Number 2, the November 2010 election. Deficit reduction and
spending cuts were paramount in the election itself. Yet 61
percent of transportation ballot initiatives were approved by
voters throughout the country by an overwhelming amount of 64
percent yes votes, for either increased tolls, taxes or
increased borrowing.
The American people get investing in infrastructure as
something important to them, to their quality of life, to
public safety, and to job creation, real, good paying jobs, as
the union representative said.
So if we're going to have debt, let's get something in
return on the investment.
Mr. Mica. Thank you.
Waiting patiently for his opening statement or question,
the gentleman from Indiana, Mr. Reed. I thank you for your
patience.
Mr. Reed. Thank you, Mr. Chairman. I'm happy to be here in
New York City. As the Chairman said, I'm from Indiana, and my
governor and the state has done a few novel things with the
infrastructure in my state. It's called for major moves that
resulted in now over 200 infrastructure project being funded,
primarily by the turnover of the management of the interstate
highway system in our state to a private company, leaving the
state government with almost $4 billion being distributed, as I
said, to 200 projects across the state.
My question is for Mr. Scardelletti. Related to the fact
that I grew up in Illinois, my dad was a coal miner, I was
raised with respect for the workers. And I'm here today because
of my dad's well paying job in the coal mines.
That being said, I'm also familiar with the history of the
safety record of the coal mining industry, starting out in the
early part of the 20th century; and the government involvement
in regulation and work rules which have been developed over the
years, to help make the work environment very safe in that
industry.
And my question is: On public-private involvement in
projects such as that, does it matter if there are good jobs
for the government or good jobs for your members working for
the private sector at the organization level?
I'm curious why there would be resistance to any job
creation, whether public or private, and what the downside to
that would be; knowing that, in my view, local, state and
Federal Government has passed laws historically to promote
worker safety and worker rights.
So, thank you.
Mr. Mica. Thank you. I want to thank each of our panelists,
too, for their participation. I want to go now to questions.
I owe a public apology to Ms. Hayworth as she didn't get to
make a commentary. I didn't realize she had to leave early.
She's not on the panel but she was great to come out today in
support of this effort, and I request unanimous consent that
her statement be made part of the record without objection.
So ordered.
Now I'll go to questions, a round of questions. Ms. Brown
has been patiently waiting to ask a question.
Ms. Brown?
Ms. Brown. I do have a question. First, from a previous
statement, I want to clear something up. It's very important
that we don't mislead the people in this room. When we came up
with the $8 billion dollars, we received, the Federal
Government received, the Department of Transportation received,
over 270 applications.
And keep in mind, those proposals were put together by
region. When the person said he didn't know, he was just
elected. Keep in mind, that mayor, that community, put in an
application. We didn't just award a grant. It was applied and
they went through an extensive study. Just to keep the record
straight.
And when you mentioned--keep in mind, whatever system we
developed, we're looking at a system that is completely
external. There is no system in Europe or Asia that is an
integrated system like we are in the Northeast Corridor. So
when we develop a system, let's keep that in mind.
Because one of the things--this is the second time for the
English to put their proposal out. The first time they had to
take it back because of the number of accidents occurring in
the system.
So all of these facts you have to keep in mind as you
develop a comprehensive system. Let's keep that in mind.
Let me go to my question.
The Republican Committee in their proposal last year, that
would eliminate all funding for Amtrak, which we experienced
for eight years in the Republican administration, which would
force the railroad into bankruptcy; strand hundreds of
thousands of commuters, and eliminate a minimum of 20,000 jobs
nationwide.
The Committee also proposed to resend the $2.5 billion of
the high speed rail fund it awarded to the states that goes to
the 2008 Federal funding level. There was no high speed rail
program in 2008.
My question is, how do we educate members the importance
of--we are talking about high speed rail, we're talking about
high speed, more speed, in all of the hearings they always talk
about high speed is important. What is also important is
reliable train times, knowing it will come at 8:00 every day.
How do we develop and educate new members who may come from
areas that don't understand the importance of developing a
comprehensive system?
And the union person, I also want to know whether or not
you think that those are union jobs? Because when I travel
those systems, it is interesting. How many jobs are in the
system and how safe the systems are?
Mr. Hart. Congresswoman, I'll take a quick shot at that.
We are very focused on a public awareness campaign, and it
is not only targeted to Members of Congress, but to the public
in general. Most of the public is not aware of the value that
rail transportation contributes to America. Freight rail,
passenger rail, high speed rail. It is very important that
people understand the benefits that rail transportation
provides.
And also, the outstanding record that Amtrak has done in
certain markets. And it is not at all in the interest of
America to zero out Amtrak's budget. It is important, though,
that Amtrak realize it must do better in operating its system
and upgrading its focus as a priority urgency to bring high
speed rail to Americans.
Mr. Mica. Mr. Scardelletti, a question was directed to you.
Mr. Scardelletti. Thank you for you comments.
The rail labor unions have been involved in the railroad
industry since the 1800s. And through all these years we have
established a wage scale and benefit level that is clearly what
is described as middle class. And they're good jobs and most
people who work on the railroad work their entire life; and
then they retire on a pension that's funded by our employers
and by the employees for the rest of their life.
There are Federal laws, safety laws, and I don't think
anybody can match that. But if we are privatized, the private
sector--what I see in this scenario is, it's all about beating
down the worker to the new wage level, which is 12 bucks.
Everybody wants to pay 12 bucks, to compete with our friends in
China; which is insane, in my opinion.
You mentioned the zero funding. You work for a company that
every year a group, the president of the United States wants
zero funding, put you out of business.
How in the world are you going to take that company, to try
to make improvements, when half of the government wants to put
them out of business? It's not going to happen. We have all
these things you're talking about now.
We would have them today, if a series of presidents of our
country, both parties, would have took the initiative to say,
``Let's invest in Amtrak and have high speed rail, like the
French government and all the other governments did to create
their high speed rail.'' Our country didn't do that. Our
Congress, half for it, half against it, and we just get by.
What we do, we get by.
But it's been here throughout all the fights, all the
Congresses and all the zero budgets, it's still here, 40 years.
Amtrak still provides the best service that can possibly be
provided under the conditions that our government mandates to
Amtrak. You can't do all these things. You can straighten the
rail out, you have to end all these curves in the Northeast
Corridor, and you will get your fast trains.
There's no will to do it from our government. It is up to
the government. We could have had it. We wouldn't even have
this conference. We'd have high speed rail and the other
countries would be talking about us instead of us talking about
them. That's what I see.
Mr. Mica. We're now seven minutes into this, and I would
like to yield to Mr. Shuster and then continue quickly.
Mr. Shuster. Thank you, Mr. Chairman.
To keep the record straight, the stimulus, as my good
friend points out--there was criteria put in place. We think
the FRA used, but we don't know, because they won't share that
information with Congress--when they put those dollars out
there, if they used the criteria to do that. I have my doubts,
and now that we're in the majority we might be able to find out
exactly how those dollars were spread throughout the country.
I agree with the governor and the mayor that dribs and
drabs around this country are not going to get us high speed
rail.
Respectfully, I don't think Amtrak is currently capable of
putting this kind of program into place--maybe a partner to it,
but I think we have to have private sector dollars invested.
The Amtrak plan is out there, spend $52 billion for the next 30
years. It won't get us high speed rail.
We need to partner with private sector dollars, and to
bring the private sector in to give them a piece of the action
and a return on their investment. So I think there are people
out there who are willing to do it as long as we in Congress
and the stakeholders are willing to be involved.
Again, Amtrak spending $52 billion over 30 years won't
increase capacity. And, in fact, they said 20, 40. If they
spent $52 billion they would be maxed out on capacity. So we
really have to look at this in a smarter way. We've got to make
sure that the money being invested makes sense. We need all the
stakeholders involved.
Mr. Scardelletti, rail labor is extremely important to
this. We've got to look beyond the way the country has done
things in the past. I think your brothers and sisters in
freight rail are doing very well for themselves. They're
working for private companies.
Again, the question that was put out there and I want to
ask you: Does it really matter, if we get the guarantees for
labor unions to be part of this system? Does it really matter
if it's private sector or public sector or the company that you
are working for?
Mr. Scardelletti. Here's my experience. Amtrak started 40
years ago. I know what we have. In my opinion, part of the
objective in moving to the private sector is to reduce
everything we have.
Mr. Shuster. But in the freight system you are getting more
dollars. When you work without a contract for several years the
Federal Government won't negotiate with you. The private sector
folks are doing quite well. And, I might add, are increasing
job opportunities.
Amtrak over the last ten years has lost 10,000 jobs;
800,000 over the years. I think if we take a new model, a new
approach to this, not only can we stabilize, I think we can
increase the employment in the high speed passenger rail
system.
Mr. Scardelletti. You use that remark you made about the
loss of jobs. We have lost the same amount of jobs in freight
railroads, or more. The loss of jobs is a result of technology
that we can't stop. For example, we had carbon paper, that's
how you did everything. You made carbon copies and you had a
copy machine and you had a lot of people and the equipment
broke down a lot and you had to repair it a lot.
Today's equipment is far more efficient. On the internet *
* * There is no paper. This is where the jobs went, just like
in any other corporation. Could Amtrak put more trains on the
track? We have more riders than we ever had. So that's not why
we lost the jobs.
We lost the jobs because we're more productive as people,
and all people are today in all industries. And technology has
literally--if you had ten people, you might need one, or none,
because the computer does it. That's where the jobs went.
That's all I'm saying.
Mr. Shuster. If you had high speed rail and it grew, these
jobs would follow, whether on the train, whether they're
producing new----
Mr. Scardelletti. I don't disagree with you. If you gave a
company established in 1970 the motivation and the money to do
what you want, and they didn't do it, that would be a whole
different hearing. I might agree with some of what you said.
Instead, you beat them down at every turn of the corner. You
beat them down, discouraged employees. How would you like to
work for a company where you didn't get a raise for years?
Mr. Shuster. I haven't got a raise in three years. I'm in
Congress. Sometimes you have to deal with that.
Mr. Mica. I thank the gentleman. His time has expired. I
hope you guys can stay around for the discussion.
I yield to our ranking member, the gentleman from West
Virginia, Mr. Rahall.
Mr. Rahall. Thank you, Mr. Chairman. I appreciate the
yield.
You know, we had matters in this Committee on
Transportation and Infrastructure in the past over worker
protection. Bob, you recall them very well; 13C protection for
transit workers. But I have a great deal of confidence that
this year we'll be working together and there's not going to be
these wholesale attacks on worker protection. Certainly not in
the Northeast Corridor, where it's needed more than ever.
I said that the other day in our Committee. I hope our
politics ends at our committee's doors when we work on these
issues of transportation.
Mayor, I understand your criticism for the lack of any
local match. You stated that was one of the problems with the
stimulus program. Of course, the goal of the stimulus program
is to get 100 percent of it out there as quickly as possible.
But in the PRIIA act, we have established for the grant
program where a 20 percent local match is required; and that
just started in 2010. So I hope those issues, yours about local
concern, which I share, will be resolved in the PRIIA act as it
gets implemented.
One of the criticisms that we heard on the PRIIA act--or
rather, one of these processes set in place for the PRIIA act--
in 2008, for the DOT to request proposals from the private
sector for financing high speed rail service grants in certain
corridors, including the Northeast Corridor. Yet no one has
submitted a proposal to DOT.
So my question would be to you, or to other members of this
panel: Why have there not been private proposals submitted to
DOT?
Mr. Bloomberg. I think the answer to that is that nobody
thought the government would let the project satisfy the
demands of the market. The government would constantly
intervene and prevent the investor from charging what the
market will bear; preventing the developer from adjusting the
size of the work force based on the needs of the system.
And if you stack the deck against them, all you're doing is
transferring the problem from one to another. There's no reason
why the other side would want to take that on.
I was struck by Congressman Cravaack's comment on China.
And one thing; when you think about China--nobody is more of a
capitalist than I am. And I really don't think that capitalism
is the only system, I don't think that we should privatize
everything in government. There are certain things, at least in
New York City--which I have a little bit of expertise in--that
work quite well with government. I'm quite proud of what we
have done here.
But it is true that the Chinese must be doing something
right, because they're the ones that are loaning us the money
so we can subsidize things like Amtrak. Whereas, if you took
the amount money that we spend on Amtrak and divide it by the
number of riders and offer everybody that amount of money,
they'd mostly walk.
This is ridiculous. Nobody needs--I'm the biggest proponent
of high speed rail service. But you have to get serious. Do you
want to build out or do you want a jobs creation program?
And one of the problems with the stimulus thing is, we
talked about wanting to get people working quickly, and we also
want to do infrastructure. Remember shovel ready and that sort
of thing? Go back to the way we came out of the Depression. We
built all of the major municipal buildings; we built the
railroads; we built the bridges.
That's what we did with that money, but it took a while to
get going.
We can't have it both ways. If you're going to create jobs
right away, you're going to waste most of it. If you want to
build for the future, you have to plan and you have to say,
``OK, if the project doesn't justify the investment, we're not
going to do it.''
That politically today may just be so naive and so
unrealistic that we can't do it. That's what you guys and women
have to wrestle with. What are you trying to do? And you can't
do everything.
Thank you, Mr. Chairman. I have to go worry and make sure
we clean the snow.
Mr. Mica. Thank you, Mayor, for being with us. And I know
Governor Rendell only has a couple of minutes. He changed his
entire schedule.
Mr. Bloomberg. Anything Ed says I'm in favor of.
Mr. Mica. Thank you both for coming on a difficult day, for
your leadership. You guys have been fantastic. The Committee
owes you a debt of gratitude. We hope you continue to work with
us. We're all headed in the right direction. We have a couple
of bumps in the road before we get there.
Voice. One question to the Mayor. Is that your snow shovel
outfit?
Mr. Bloomberg. I don't have a Class C license, so I
couldn't drive a plow.
Mr. Mica. Governor, I'll excuse you. You can go ahead and
scoot if you have to leave.
Mr. Rendell. Thanks very much for you all being here. It's
impressive that so many came out, given the weather forecast
and impediments. I also want to say to all of you, I know we've
got proposals for spending the money.
I think the President was right last night. We've got to
cut the deficit, but we've also got to keep investing. There
isn't a business out there that's successful that doesn't
invest in itself. If you stop investing, you stop growing as a
country. If you stop growing as a country, you'll be a second
rate power relatively soon. You've got to find a way to do
both. The only way to do both is to forget about the election,
and spend this year trying to find real solutions to real
problems.
The fact you are here, the fact that the Chairman and * * *
Really supply advice and leadership on this. We can do big
things in America again. This is a big thing. You shouldn't shy
away from this because it's difficult. You shouldn't shy away
because of cost. It's a lot of money. We could put people to
work. We can make this transportation system first class. We
can lead the world again.
Mr. Mica. What I'd like to do is, I know you're leaving,
and thank you again, Governor, for being with us. We have the
other three panelists. If you would please join us in our
discussion, our open forum is open to the public. We'll try to
start that a little early, maybe about 12:45. That will give
members and other folks a few minutes to reconvene.
If you have any closing comments, Mr. Scardelletti?
Mr. Scardelletti. Mr. Chairman, I want to make one--I'm not
trying to be obstructionist. The Mayor said about the subsidy
to Amtrak, ``you could walk.'' That is really unfair. Who is
going to walk? Where are you going to get these millions of
people, how are you going to move them? You could say the same
thing about bus, air and highways, how much money our
government put it highways.
How much money does our government put into highways? How
much money does it put into airways? So that's not the right
thing. That's not the kind of thing that is conducive to good
debate, to say that kind of comment.
Mr. Mica. Thank you.
We have to give the opportunity to respond.
Ms. Todorovich, any closing comments?
Ms. Todorovich. Yes, thank you.
Quickly, on the local match issue. No high speed rail
system around the world has been built with significant local
contributions. If we rely on 20 percent local match from each
of the 12 states in the Northeast, it's never going to happen.
I think the governor pointed out that there's a $47 billion
combined deficit among these states. So there's a paradox, in
that the Northeast mega-region is the place in the country most
suited for high speed rail anyplace in the United States, with
the density and the population.
But it's also the most difficult place to build this system
because we're crossing all these state boundaries.
If this committee is serious about building two dedicated
tracks for high speed rail, I think you have to develop a new
public authority or a public benefit corporation, or some type
of entity that has the ability to finance and raise revenue and
hold firms accountable and get this project done.
If we rely on an infrastructure advisory commission--
everything is advisory--it's never going to happen. That's
something that I would look to all of your leadership for.
Mr. Mica. Great comments.
Mr. Hart.
Mr. Hart. Chairman Mica, thank you and the members here
today for giving me the opportunity to present a couple of
thoughts.
Congressman Rahall, your point about private sector
investment. I've been involved in this for a while. I want to
continue to advocate for private investment.
The most important thing to public-private investment is
consistency. They hate change, and they're not going to invest
big money if one government supports high speed rail, and a new
governor or new legislature comes in and cancels it.
And that is why the Florida project is so important, and
why Chairman Mica's leadership, along with Congresswoman Brown,
in compelling a new model, where the shortfall in the match can
be made up by private sector investment.
And that is going to happen. It will be a $300 billion
investment from some entity. And there are eight private
companies that are competing in Florida. Let them compete and
let them make the commitment to invest, take the risk in
management and operations, maintenance and operations; they
will do it, if the level of playing field is consistent and the
commitment to high speed rail is consistent.
The Tampa-Orlando route is not the worst route in the
country. It's also not the best route, but it is a start. The
route from Orlando to Miami is extremely opportunistic for
investment. So continuing to motivate the private sector, give
them the opportunity to put the money up, and they will do it.
Thank you. That's my closing comment.
Mr. Mica. Thank you, Mr. Hart.
We are pleased, again, to be here in New York, and pleased
to have Mr. Nadler who is a senior member of our T&I Committee.
I'd like recognize him.
Mr. Nadler. Thank you, Mr. Chairman.
I wanted to start with Mr. Hart. Mr. Hart observed, I think
correctly, that you are not going to get private sector
investment on a long term project if you have very uneven
public sector involvement.
Things can change on a dime, because today you have an
administration and a Congress willing to put money, and
tomorrow you don't. Maybe next year you do again. You need
certainty in planning.
This leads me to the conclusion that, obviously, if you're
going to have high speed rail--or for that matter bring up a
rail up to a state of good repair--we have to have it in the
public sector. However much the private sector wants to get
involved, we must have some certainty in the public sector. We
must have some guaranteed funding source.
We must have assurance that, depending on the vicissitudes
of this election, after this election, we don't double the
financing, and after the next election zero it out, and after
the next election after that, triple it.
You have got to have some guaranteed funding source at some
reasonable level, which may go up and down from time to time
but returns to a reasonable level; so that, number one, the
public sector can participate; and number two, so you can get
the private sector to participate in either one of them.
I would ask Mr. Hart or the Governor to comment.
Mr. Hart. I agree with you, Congressman. That's very
important and I consider it to be political sustainability;
financial sustainability, environmental sustainability.
Political sustainability is the objective here, and it will
spark private sector investment. We do need a dedicated fund,
revenue for high speed rail; and Amtrak needs additional
funding, as well.
So I agree with your observations.
Mr. Rendell. Congressman, I would say that's another reason
for an infrastructure bank. If we did it, Congress has control
of the amount of its capacity. But that's going to be there
administration after administration. It's going to make a
binding commitment for the long term, whatever the public
subsidy will be, obviously matched by the private sector. It's
going to have the ability to make those long term commitments.
Mr. Mica. I yield to Mr. Reed.
Mr. Reed. Thank you, Mr. Chairman.
I have a closing comment in response to my colleague, Ms.
Brown from Florida, about the proposed cuts out there;
specifically Amtrak.
My philosophical point is: The freshman class gave up a
tremendous amount to go to Washington, D.C. We were charged by
the American people on November 2nd to get our deficit under
control and make the hard decisions and cut spending down in
Washington, D.C.
I am committed and I am aware, Mr. Chairman, that we are
having this discussion as to where we're going to spend our
Federal dollars in a public session, with all these people
here, so that this debate can be open, it can be vigorous.
And I am so pleased that our leadership down in Washington
has been engaged in the open rules, so that this discussion can
continue on the floor of the House. Because the pros and cons
of each dollar being spent has to be discussed in public.
Through that public dialog and through that public scrutiny,
we'll get certainty. Because there will be a commitment from
the American people to know our dollars are being spent wisely.
And I'm just honored to be part of this debate and I
appreciate the Chairman, and we're going to have this debate
publicly. And those final decisions will be made with that
participation.
And I yield the rest of my time.
Mr. Mica. I thank the gentleman.
Any other members that seek a last comment or recognition?
Thank you so much for coming out today. Thank you,
Governor. Thank you Ms. Todorovich. I want to thank labor, Mr.
Scardelletti, Mr. Hart of the High Speed Rail Association.
There being no further business before the Transportation
Infrastructure Committee of the U.S. House of Representatives,
this meeting is adjourned.
And I invite you to participate in the open discussion that
will follow.
[Whereupon, at 12:18 p.m., the committee was adjourned.]