[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





                 THE FEDERAL RAILROAD ADMINISTRATION'S
                HIGH-SPEED AND INTERCITY PASSENGER RAIL
                 PROGRAM: MISTAKES AND LESSONS LEARNED

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

                                (112-65)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 6, 2011

                               __________

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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
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana         DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
Tennessee

                                  (ii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                               Panel One

LaHood, Hon. Ray, Secretary of Transportation, United States 
  Department of Transportation...................................    10

                               Panel Two

Capon, Ross B., President and CEO, National Association of 
  Railroad Passengers............................................    39
Geddes, R. Richard, Adjunct Scholar, American Enterprise 
  Institute......................................................    39
McDonald, Joan, Chair, Northeast Corridor Infrastructure and 
  Operations Advisory Commission.................................    39
Orski, Kenneth, Editor and Publisher, Innovation NewsBriefs......    39

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Edwards, Hon. Donna F., of Maryland..............................    59
Gibbs, Hon. Bob, of Ohio.........................................    60
Johnson, Hon. Eddie Bernice, of Texas............................    63
Johnson, Hon. Timothy V., of Illinois............................    64
Price, Hon. David E., of North Carolina..........................    66
Rahall, Hon. Nick J., II, of West Virginia.......................    68
Richardson, Hon. Laura, of California............................    70
Slaughter, Hon. Louise McIntosh, of New York.....................    74

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Capon, Ross B....................................................    76
Geddes, R. Richard...............................................    87
LaHood, Hon. Ray.................................................    95
McDonald, Joan...................................................   109
Orski, Kenneth...................................................   114

                       SUBMISSION FOR THE RECORD

Capon, Ross B., President and CEO, National Association of 
  Railroad Passengers, response to question from Hon. Richard L. 
  Hanna, a Representative in Congress from the State of New York.    82
LaHood, Hon. Ray, Secretary of Transportation, United States 
  Department of Transportation, responses to questions from Hon. 
  John L. Mica, a Representative in Congress from the State of 
  Florida; Hon. Jeff Denham, a Representative in Congress from 
  the State of California; Hon. Laura Richardson, a 
  Representative in Congress from the State of California; and 
  Hon. Larry Bucshon, a Representative in Congress from the State 
  of Indiana.....................................................   104

                         ADDITION TO THE RECORD

Hammond, Paula J., Chair, States for Passenger Rail Coalition, 
  written statement..............................................   120





 
                 THE FEDERAL RAILROAD ADMINISTRATION'S
                   HIGH-SPEED AND INTERCITY PASSENGER
                       RAIL PROGRAM: MISTAKES AND
                            LESSONS LEARNED

                              ----------                              


                       TUESDAY, DECEMBER 6, 2011

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to notice, at 11:06 a.m. in 
Room 2167, Rayburn House Office Building, Hon. John Mica 
(Chairman of the committee) presiding.
    Mr. Mica. I would like to call to order the House 
Transportation and Infrastructure Committee, and welcome you to 
our hearing today. The title and subject of this hearing is 
``The Federal Railroad Administration's High-Speed and 
Intercity Rail Program: Mistakes and Lessons Learned.'' And we 
have some distinguished panelists.
    We have two panels today. And I think in between we are 
going to squeeze in a small Members panel. We have had a couple 
of requests for Members to speak who are not on the committee, 
but their districts are affected by some of these projects. So 
we are going to provide some opportunity for a couple of the 
Members after we finish with Secretary LaHood. And then we will 
turn to our second panel. But we are delighted and pleased this 
morning to welcome the Secretary of Transportation, Ray LaHood, 
and my former colleague, who will lead off today for the 
administration.
    The order of business will be opening statements first by 
Members, and then we will go to Mr. LaHood. And as I said, we 
will have one or two Members not on the committee who have 
requested to come forward with some brief comments. And then we 
will go to our second panel today. So with that, the order of 
business will be, again, Members' statements.
    And I want to open with my statement and, again, thank the 
Secretary for his participation, and others.
    As some of you may know, I have been a long, strong, 
committed advocate to high-speed passenger rail service in the 
United States. I was delighted to work in the past to put 
provisions in PRIIA, which was signed into law by President 
Bush. That was the first rail operations and Amtrak 
reauthorization in, I believe, 11 years. And I took great pride 
in working on trying to set up a blueprint and some guidelines 
for beginning the process of instituting high-speed rail in the 
United States.
    I was also pleased when President Obama made high-speed 
rail one of his top priorities. And, in fact, I think it was 
his commitment and direction in which we had some $8 billion 
firmly anchored to high-speed rail.
    All that being said, I am here today--and actually tried to 
give some of these projects as much time and leeway as possible 
to move forward and see what develops--but I am here today in 
this hearing to say that I am very disappointed in some of the 
things that have happened. I have to give some credit where 
credit is due, but as far as high-speed rail we have hit an 
impasse. I am very concerned about the progress of actually 
achieving a successful high-speed rail program.
    And the failure to date, particularly on high-speed rail, 
actually sets us, I think, further behind. There are many 
critics to various forms of public transportation. And 
unfortunately, it gives them more ammunition to undermine what 
should be positive alternative means of transportation, which 
is efficient, which helps with our energy problems, which has a 
whole host of benefits.
    Unfortunately, some of the high-speed rail funds--and we 
have not only the $8 billion that was in the Recovery Act and 
committed some 2\1/2\, almost 3 years ago now in January, we 
had $2.5 billion in regular appropriations, bringing the total 
for high-speed rail in the country and improvements to $10.5 
billion. Of that, some $400 million has been rescinded and gone 
back to deficit reduction.
    Unfortunately, three States have returned money for 
projects that did not get off the ground, or fell off the 
track, so to speak: Ohio, Wisconsin, and my State of Florida. 
Actually, it is quite startling that more than a third of the 
funds have been returned, which is another setback for the 
program.
    More recently, our one hope of actually achieving high-
speed rail--and I have given that project as much leeway as I 
possibly can in trying to see what would develop--but again, 
the one potential where we had to achieve high-speed rail on an 
average of at least 110 miles per hour--that is not reaching 
110 miles an hour, that is not reaching 150 miles an hour at 
some point in the journey. I am talking about the average 
speed, which is the measure by which, internationally, high-
speed rail is evaluated.
    But our one hope, California, appears to be in disarray. In 
fact, we are devoting an entire hearing to that next week, to 
see where that one project is going. We have problems with, 
first of all, the route that was chosen. I went out with Mr. 
Denham and actually looked at some of it--Fresno to 
Bakersfield, mostly populated by agricultural community and 
interests. We will hear from those folks next week.
    But again, the site that was abandoned, southern California 
or the Bay Area, where you have significant populations to be 
served and at the present time have incredible congestion, both 
of those corridors--again, it is an initial operating segment 
that was chosen.
    The more disturbing news is within the last month now the 
projections on the cost may double the original $40-some 
billion and reach over $90 billion. Furthermore, it appears 
that there will be a 13-year delay. We are now looking at, 
what, 2033, which would mean either subsidization of a ``dog 
operation'' and give us more heartburn, as far as anyone ever 
seeing a viable high-speed rail operation in the United States.
    And finally, I was informed last week that even if they 
built this segment--again, trains to--at the short operating 
segment, not serve any fixed large population--that the 
equipment that would be available at that point would only be 
contemporary slow train vehicles, which could not achieve high 
speed.
    So, I am very concerned about the progress of California. 
We will hear more about that next week. So we have $3.8 
billion, the biggest amount going of the $8 billion and a total 
of $10 billion, going to California. There is $10.1 billion, as 
I said, left over after the return of $400 million.
    Then the next issue that I have with the whole process of 
selecting these corridors is--well, of course it is not 
something I raised, but also GAO in March 2010 said that the 
process that FRA had followed in selecting these lacked 
transparency and some of the manner in which these were chosen 
did not really make a whole lot of sense.
    We have three what I call pseudo-high-speed rail projects, 
and maybe you will hear of those touted as a success, most of 
them centered in Chicago, two of the three, Chicago to St. 
Louis. That is going to run an average of 71 miles an hour. Now 
that is not incremental high speed, that is not high speed. And 
it doesn't hold much hope for the future. Chicago to Detroit, 
that route goes at 64 miles an hour on average, a snail-speed 
train followed by a Portland to Vancouver so-called and named 
high-speed rail project, which is 65 miles an hour.
    These are, again, a bait and switch for high-speed rail, 
and will continue to give high-speed rail a bad name in the 
United States because they will not operate at high speeds, and 
act as merely a mirage of high-speed rail.
    Finally, Amtrak and some of the projects--and they are--
hosted by them, spread around the country--will get another 
$3.6 billion. Of that there is $900 million that was redirected 
to the Northeast Corridor. But if you take that $3.6 billion 
and amortize it over 3 years, you have a current subsidy of $49 
a passenger on Amtrak, and you attribute the cost of that $3.6 
billion and amortize it over 3 years, you are looking at a 
subsidization during these 3 years of $99, just a $1 under $100 
per ticket for every Amtrak passenger, based on 30 million, 
which is their current ridership. So that is disturbing.
    So, I have to say, sort of in conclusion, we need a 
success. I believe that the most logical place to put high-
speed rail--have said it before, I am from Florida--is in the 
Northeast Corridor. You are from--members of the panel--are 
from around the country. But we can all benefit by a success of 
high-speed rail in the Northeast Corridor. Unfortunately, there 
too we have seen delays. It has taken now 3 years to finally 
issue an RFP to do an environmental study. That environmental 
study RFP went out in August. To date--and this is December--
there is no award for doing the environmental study in the 
Northeast Corridor. So we still lag behind in moving forward 
with that project in the Northeast Corridor.
    We will all benefit by the Northeast Corridor, one, because 
it is the most densely populated area--20 percent of the U.S. 
population resides in that corridor. We own the corridor. It is 
the only corridor that we own. Between the Federal Government 
and the States, they own almost the entire distance between 
Washington, DC, and Boston.
    We, of course, operate Amtrak's other service over freight 
rails, 22,000 miles of them. We also will benefit as a Nation, 
because 70 percent of our chronically delayed flights are in 
this area, whether it is summer or winter causing the meltdown 
of air transportation. And most of it will emanate from the 
northeast region, so we can all benefit by, again, having one 
success in our most densely populated area on a corridor that 
we already own. Half of Amtrak's passengers of the 30 million 
are in that corridor. So, again, it just makes sense.
    Finally, let me say I had offered an alternative and 
suggested separating out the Northeast Corridor into a separate 
entity. I did meet a slight bit of resistance on that. And I 
announced recently that I was willing to look at having Amtrak 
and--if there wasn't an Amtrak, we would have an Amtrak; I have 
supported a nationwide service system. But I am willing to work 
with Secretary LaHood, Mr. Boardman and others to come up with 
a plan. And we don't have to create a separate entity and 
transfer the assets out. But what we do need is to attract 
private sector capital and move this project, which Amtrak now 
has projected would take 30 years, and would cost $117 billion.
    Now, Congress cut off funds to high-speed rail in the 
coming fiscal year. And Congress certainly is not going to give 
Amtrak $117 billion, based on its current record, lack of plan 
or progress in the Northeast Corridor. So we have got to work 
together and we have got to find a solution to have a success 
and put high-speed rail and transportation projects where they 
make sense, and move forward on these important projects.
    So, I'm willing to work with the administration, with other 
Members of Congress, and in an effort to, again, end the 
failure that we have seen, and hopefully have a pattern for 
success for high-speed rail in the future.
    So, that is my opening, rather lengthy comment. I will 
defer to Mr. Sires.
    Mr. Sires. Thank you, Mr. Chairman, for holding this 
hearing today. I represent some of the most densely populated 
areas in the country. And I want to thank you for being here. I 
always been a proponent of not only the Northeast Corridor, but 
especially local train and also freight, because of the 
district that I represent.
    I am sorry to see some of the problems that we are having 
with Amtrak and some of the expanding--or some of the programs. 
I wish we could speed it up. But I know that there is progress 
that is being made. The Northeast Corridor, I think, is 
probably the only place where you have the population to 
sustain a real high-speed rail. And that was always my argument 
with local rail in some of the areas of the country where they 
don't have the population to sustain intercity rail. You know, 
my district, I think it is something like a quarter of a 
million people going through New York City every day.
    I just wish that we could speed up some of this--some of 
the issues that are holding back some of this--the work. And I 
want to thank you, Secretary LaHood, for knowing that the 
Portal Bridge going into New York City is one of the bridges 
that is 100 years old, and is getting a whole face lift and a 
new bridge. It really means a great deal to my district.
    And that is basically what I have to say. Thank you.
    Mr. Mica. Thank you so much. We will turn to the chair of 
the rail subcommittee, the gentleman from Pennsylvania, Mr. 
Shuster.
    Mr. Shuster. Thank you, Mr. Chairman. Mr. Secretary, good 
to see you again. I am going to abbreviate my typical speech 
that I give on this issue. Mr. Szabo is sitting behind there, 
smiling. I think he could probably recite it verbatim. But I 
appreciate having this hearing, and I agree with the chairman 
and many other Members.
    With respect to the President's vision of high-speed rail 
in this country, I just don't believe it is going to happen 
because we don't have the money. Number two, I don't really 
think we have the need to have 80 percent of the American 
population have access to high-speed rail. I do believe there 
are corridors in this country that need high-speed rail; we 
should be focused on them. We should be absolutely focused. And 
we are not, in this present form that we are taking. We are 
spreading money all over the country. It is no surprise that 
Ohio and Wisconsin have turned down these large sums of money, 
because they realize they are going to be strapped with 
operating costs that are going to drive them further into debt.
    I really believe if we focus on the one true high-speed 
rail corridor that we have today that desperately needs it, it 
is the Northeast Corridor. We own the tracks, so we don't have 
to go round and round with our friends in the freight rails on 
it. We own the tracks, we can do separations where we need it. 
And as my friend from New Jersey mentioned, there is a bridge 
up there, and it is a huge bottleneck. We should focus the 
money there. Regarding the tunnel in Baltimore, I know some of 
the money is coming back to make those improvements.
    But if we are really serious about getting high-speed rail, 
we need to find one place to do it in the country to do it 
right, spend the money to do it right, learn from it, and then 
take it to these other corridors that will emerge in the 
future.
    The California corridor, the money being spent there, the 
more I see of it--and you see the numbers; they have gone from 
$40 billion to $100 billion to maybe 20 years to who knows--
and, Mr. Secretary, you have been in Congress, you have been in 
Government long enough to know that if they are saying $100 
billion or $90 billion, you know it is going to be more than 
that. And I have been to southern California. And they are 
telling me that between $1 billion and $1.5 billion you could 
truly have significant impact on intercity rail transportation 
between San Diego and Los Angeles. That is where we ought to 
start in California. The northern city of San Francisco and 
that corridor and the southern California.
    So, again, I urge you to go back and sit down with the 
President and Mr. Szabo and really reevaluate what we are doing 
here, because I just don't believe that we are going to be able 
to have high-speed rail across this country because we can't 
afford it and because the American people really aren't 
clamoring for that. They are clamoring, though, to have better 
intercity rail at higher speeds. The Keystone Corridor is a 
great example. It is not high speed, but the ridership has gone 
up 40 percent over the last 4 or 5 years, and it continues to 
grow, Harrisburg to Philadelphia. And that is not high-speed 
rail, but it is higher speed, more frequency. Those are the 
things that I think will benefit the traveling public and 
America, if we focus on those areas.
    So, again, appreciate you being here today, look forward to 
your testimony, and I yield back.
    Mr. Mica. I would like to recognize the ranking member, and 
the gentlelady from Florida, Ms. Brown.
    Ms. Brown. Thank you, Mr. Chairman. And I am glad we are 
holding this hearing today to focus on progress and pitfalls of 
implementing high-speed and intercity passenger rail in the 
United States.
    All of our international competitors are beating us to the 
punch. They have invested billions of dollars in passenger rail 
systems that have significantly reduced highway and aviation 
congestion. While here, in the United States, we fail to 
provide adequate funding for passenger rail, and waste $115 
billion a year in fuel and lost time sitting in traffic.
    Let's step back and look at this committee progress, or 
lack thereof. Over the past year we have no surface 
transportation bill, no FAA bill, no water resource bill. And 
to top it off, we are here today arguing about a High-Speed and 
Intercity Passenger Rail Program that has already been defunded 
by the Republicans.
    Our country is building huge infrastructure projects in 
Iraq, giving tax credits to the company, taking jobs overseas, 
and building massive bridges in the United States with Chinese 
steel. Yet, the committee leadership here today is trashing a 
program that would improve passenger rail throughout the 
country and put thousands of people to work.
    Since today's hearing is titled, ``Mistakes in FRA High-
Speed and Intercity Passenger Rail Program,'' I thought I would 
make a list of a few mistakes that I have seen since enacting 
the Passenger Rail Investment and Improvement Act of 2008 and 
Recovery.
    First of all, we fail to dedicate any significant funds for 
passenger rail. Our main competitor, the Chinese, have invested 
$350 billion in rail. Let me say that again: $350 billion. They 
see the importance of moving people, goods, and services.
    Then we invite private companies that I have had several 
meetings with over the world, including some of the biggest 
rail operators and manufacturing business today to invest time 
and resources into vying for parts of the U.S. high-speed rail 
market, only to slam the doors in their face by canceling 
projects and cutting Federal funds.
    Look at Wisconsin. Just yesterday, Talgo announced it is 
going to shut down its Milwaukee train manufacturing operations 
in 2012, killing over 4,700 jobs because Wisconsin Governor 
Scott Walker rejected Federal funds for the high-speed line 
between Milwaukee and Madison when he took office. It is worth 
noting that--talking about mistakes--that the government later 
reapplied for a portion of the funds he rejected. That is 
absurd.
    And let me talk about the poster child of mistakes, my home 
State of Florida. The mistakes started when Governor Jeb Bush 
shut down the high-speed rail authority in Florida before they 
were able to study the most desirable Orlando to Miami route. 
Our current Governor, Rick Scott, was able to come up with one 
of the biggest acts of stupidity--returning $2.4 billion in 
awarded funds. A ridership study which was paid for by 
taxpayers' dollars indicates that it would have made money. The 
study estimates that the ridership, at more than 3 million the 
first operating year, would increase to 4.7 million in the 10th 
year. Revenues were estimated at $4.2 million in the first 
operating year, rising to $38 million in the 10th year.
    And with respect to jobs, something we have all been 
talking about and are supposed to be focusing on, 30,000 jobs. 
You know, well, what kind of jobs are we talking about? We are 
talking about engineering firms, steel, cement factories, and 
construction jobs. Those are real jobs. What a loss. What a 
loss. I want to welcome Secretary Ray LaHood, and thank him for 
his efforts in working out the agreement that averted a 
possible rail strike during the holiday season. I really think 
you are one of the bright spots in transportation. And I 
welcome you here today. And I want to thank you for your 
leadership.
    Mr. Mica. Thank the gentlelady. Mr. Denham, gentleman from 
California.
    Mr. Denham. Thank you, Mr. Chairman, thank you for holding 
this hearing, something that is of great concern to us who are 
representing California, especially in the Central Valley. Here 
not only to hear about the mistakes and lessons, but what we 
always continue to hear about is the investment.
    Now, to me, as a small business owner, the investment means 
there is a return on investment at some future date. So, 
really, what I think what we have to look at here is: What is 
the public benefit, and does that outweigh the cost to 
taxpayers?
    The concern that I have in the California project is there 
is a real failure to plan. There is not a defined Federal 
obligation. How much of our transportation dollars are we going 
to spend in California? We have got $3.6 billion right now 
already obligated. Where do we come up with the other $95 
billion on the new costs that have been projected? What is the 
State's obligation on that? What is the local obligation? And 
where are the private investors that we continue to hear about?
    Recently the ridership numbers have--certainly have been 
great doubt. They have pretty much fallen apart on the 
California side of things. And now we have extended it by 
another 13 years.
    So, certainly as we are defining an investment, and we are 
going to ask a private investor or a private company to invest 
in this project, we have got to be able to define what the 
project is. Who is obligated on each of those various areas? 
And how much are the taxpayers obligated to, as well?
    We get compared to other countries quite frequently. There 
are other countries that are certainly spending billions of 
dollars on high-speed rail. And their cost per mile of track is 
much lower than what we have here, in California or across the 
Nation. So as we start to compare with other countries, we need 
to look at how they are doing things not only smarter, but less 
expensive.
    In California, we have the CEQA environmental law, which is 
much greater than NEPA. Why do them both? If the President and 
the administration's commitment is to do high-speed rail in 
California, wouldn't we waive some of the high cost of the 
environmental process that we have seen the Federal Government 
waive in the past for other priority projects? So those are 
going to be some things that I will be looking at as we take a 
look at the investment of our taxpayer dollar.
    And then, finally, we have been hearing about shovel-ready 
jobs for quite some time now. The stimulus package was passed 
in 2008. And yet in 2011 going into 2012, we still do not have 
one shovel in the ground. To me, a shovel-ready project means 
if you are going to go out and ask taxpayers to spend money on 
a shovel-ready project, that means it is ready to put a shovel 
in the ground. Three years later, going on 4 years now, still 
no shovel and no plan on putting a shovel into the ground. I 
believe that if the high-speed rail project in California is 
not going to get moving quickly, then that money ought to be 
diverted to shovel-ready projects that would be committed 
quickly: goods movement, people movement, building highways. 
But letting a pool of money just sit out there, I think, is 
irresponsible.
    Mr. Chairman, I yield back.
    Mr. Mica. Thank the gentleman. Mr. DeFazio?
    Mr. DeFazio. I am waiting to hear from the Secretary, sir.
    Mr. Mica. OK. Ms. Johnson?
    Ms. Johnson of Texas. Thank you, Mr. Chairman. I simply 
want to welcome our Secretary and ask for unanimous consent to 
put my remarks in the record.
    Mr. Mica. Without objection, so ordered.
    We haven't yet--we got a little late start.
    Mr. Rahall. I will just ask, Mr. Chairman, my remarks be 
made part of the record, as well, so we can go ahead with the 
Secretary.
    Mr. Mica. Without objection.
    Other Members seek recognition on the Democrat side first? 
Ms. Edwards. Then we will come back----
    Ms. Edwards. And the same, Mr. Chairman. I will simply ask 
that my remarks be made part of the record.
    Mr. Mica. Without objection, so ordered.
    All statements will be included. Any other comments, 
Members seeking recognition? Mr. Gibbs, I guess, is next? I am 
sorry, Ms. Schmidt, not Mr. Gibbs. Sorry.
    Ms. Schmidt. Thank you. First off, I want to thank the 
Secretary for coming today.
    Mr. Chairman, in your remarks you talked about the 
subsidies that we have for Amtrak, $49 per rider over a 3-year 
period. I would like to also highlight another subsidy, and 
that is the food service. Last year we lost almost $61 million 
in the food service on Amtrak. If you buy a hot dog for $4.50 
it costs $6.60 to produce that hot dog for your plate, which 
means the taxpayers are left holding the bag of $2.10. I do 
have a bill that I have given--that I put in the hopper a few 
weeks ago to correct that. And I do hope that this is a simple 
fix to save the taxpayers almost $61 million. And I do hope 
that we can come together and remedy that.
    And by the way, I also want to thank you for the signage 
issue for highways. You have made a whole lot of people in the 
State of Ohio very, very happy. Thank you for your leadership 
on that, and I yield back.
    Mr. Mica. Another Member on our side? Mr. Gibbs, you are 
recognized.
    Mr. Gibbs. Thank you. Thank you, Mr. Chairman, for holding 
this hearing. I think it is appropriate that I make an opening 
statement because when we talk about mistakes and lessons 
learned, Ohio is probably an example of some lessons learned.
    I served on the State Senate during--in the Transportation 
Committee--during the consideration of our so-called high-speed 
rail project that would connect Cleveland, Columbus, and 
Cincinnati. After the details of the project came to light, 
Ohio rejected the Federal funding, due to the impractical, 
inefficient, and expensive problems inherent to the project.
    First, the supposed high-speed rail was more like snail 
rail. The proposed Ohio passenger rail service would only reach 
a maximum speed of 79 miles per hour, with an average speed of 
39 miles per hour. According to the 2009 Amtrak study, the 
estimated travel time from Cleveland to Cincinnati would have 
been 6 hours and 30 minutes, substantially slower than the 4 
hours it would take to drive the car. Combined with the fact 
that the average round trip ticket was priced--was projected to 
be $190, it is hard to believe that many Ohioans would see any 
real savings.
    Cost to the taxpayer is another serious issue. A 2009 
Amtrak study determined that the project would require $500 
million to $700 million in startup costs, plus millions of 
dollars in annual operating subsidies. Further studies have 
suggested that ridership would average only 1,315 riders per 
day, resulting in extremely low rate of return.
    Aside from the long travel times and high costs, there are 
several other impractical elements to the project. For example, 
unlike some larger cities, Ohio lacks the interconnectivity 
necessary for passenger rail to work. When a rider gets off the 
train at a Columbus station, where would they go from there? 
There is nowhere to go.
    Additionally, this proposal would share with freight lines, 
and any move to go faster than 79 miles an hour would require a 
totally new system.
    In the Northeast Corridor, true high-speed rail may be 
feasible. Earlier this year I visited the Northeast Corridor 
with Chairman Mica and members of this committee. And it 
quickly occurred to me that if true high-speed passenger rail 
is going to work, it would work in the Northeast Corridor. The 
Northeast Corridor has the population, the congestion, and the 
interconnectivity that makes sense for a project like this, as 
well as the need for alleviating the highly congested roads and 
airports.
    While this region of the country looks promising for cost-
effective development, for Ohioans $190 per ticket for a 6\1/
2\-hour ride from Cincinnati to Cleveland simply didn't make 
economic sense.
    Thank you, and I yield back.
    Mr. Mica. Thank the gentleman. Mr. Capuano?
    Mr. Capuano. Thank you, Mr. Chairman. Mr. Secretary, 
welcome. Great to see you again. Welcome back to the committee.
    Very briefly, I just want to be very, very clear. Anybody 
who wants to give the money back to you, we will take it in 
Massachusetts. I just want to be on record very clearly. We 
will take it, we will use it, we will improve our rail, and we 
will say thank you to you and anybody else who wants to give it 
back. And I look forward to a couple of hundred million, maybe, 
any time you are ready. Thank you.
    Mr. Mica. Thank you, Mr. Capuano. And I will be supporting 
you, as long as it is dedicated towards the Northeast Corridor.
    I had one more Member. Mr. Hanna?
    Mr. Hanna. Thank you, Secretary LaHood, for being here.
    I want to just take a minute and say thank you and 
recognize the DOT commissioner from my State, New York. And in 
particular, Joan, I would like to thank you for your 
responsiveness in the recent hurricane and disaster in our 
district. You set an example for the whole State with--through 
Irene, and for the whole country, through those disasters of 
Irene and Lee. And you expedited permits, and you did things 
concurrently, and it was a big help, and I am grateful. So 
thank you for being here, ma'am.
    Mr. Mica. Other Members seek recognition? Mr. Cravaack?
    Mr. Cravaack. Thank you, Mr. Chairman and Ranking Member 
Rahall, for holding this important meeting today. And I would 
like to welcome Secretary LaHood, and I look forward to your 
testimony, sir. I look forward to the fact-based hearing on 
high-speed passenger rail that includes a discussion of 
benefits, and perhaps, most importantly, all the costs 
associated with high-speed rail.
    Too often, in some parts of the country, the proponents of 
high-speed rail exaggerate its collective benefits while 
downplaying, obscuring, or misrepresenting the actual capital 
costs and the eventual long-term operating costs to the 
American taxpayer.
    Moreover, I am concerned that the bulk of this 
administration's high-speed rail plans will only be viable as a 
result of this administration's energy and environmental 
policies that are continuing to drive up energy costs to the 
American public.
    Thank you again. I will be brief, and I look forward to 
your testimony. And I yield back.
    Mr. Mica. I think we have now heard from all Members who 
seek recognition. I appreciate the Secretary, again, being with 
us and also having an opportunity to hear from some of the 
members of our committee.
    And we will now yield to our distinguished Transportation 
Secretary, Mr. LaHood. Welcome.

TESTIMONY OF THE HON. RAY LAHOOD, SECRETARY OF TRANSPORTATION, 
           UNITED STATES DEPARTMENT OF TRANSPORTATION

    Secretary LaHood. Thank you, Mr. Chairman. I am delighted 
to be back on a committee that I served on for 6 years. And 
also, to the Ranking Member, Mr. Rahall, to both of you, thank 
you for your leadership on transportation. Over the last 3 
years I think we have worked well together, and I look forward 
to continuing to do that.
    The reason I am here is simple. I asked to be here. High-
speed rail is a signature initiative for President Obama and 
this administration. But most of all, it is an important 
initiative to the American people, whose representatives have 
submitted more than 500 applications requesting $75 billion to 
build high-speed rail projects. And all that since 2009.
    In fact, when Florida's Governor decided to send back his 
State's $2 billion of high-speed rail money, 24 States and the 
District of Columbia and Amtrak submitted requests for $10 
billion. Another powerful testament to America's enthusiasm for 
high-speed rail.
    So, I am looking forward to our conversation about 
President Obama's vision, President Obama's plan, and 3 years 
of successes achieved and progress to build on.
    The fact is, high-speed rail has been a priority for 
decades at the local, State, and Federal levels. And among 
members of both parties. Let me read you something that I just 
came across. And I quote: ``It is the policy of the United 
States to promote the construction and commercialization of a 
high-speed rail transportation system.'' That is a quote from 
the 1991 transportation bill signed into law by President 
Herbert Walker Bush.
    Just 1 year later, one of my outstanding predecessors, a 
Republican, former Transportation Secretary Andy Card, 
designated the first five high-speed rail corridors during a 
recession. And if you think this was an historic anomaly, I 
remind you that the Republican House and Republican Senate 
passed another transportation bill reiterating America's 
commitment to high-speed rail in 1998. I remember, because I 
was one of 337 Members of this body who voted for it.
    So, what has changed today is that we have a President and 
a Vice President who are putting their money where their mouth 
is. We are not just asking--we are not just writing reports and 
filing them away. We are hiring workers, laying track, and 
building stations.
    High-speed rail is coming to America. It is here. Three 
years ago, President Obama started with a vision. He envisioned 
an American in which 80 percent of the people can have access 
to high-speed rail. And we know that as this system emerges, 
jobs, economic development, and economic competitiveness will 
follow.
    In the short term, we are creating manufacturing 
construction jobs. These are American jobs building the next 
generation of America's infrastructure. Once track is laid and 
stations are built, we are spurring economic development, 
quality jobs, and American-owned small businesses all along the 
United States rail corridors. What is more, our investment in 
train tracks, in train sets, don't just give travelers more 
option, they improve existing rail lines for freight cars.
    We have invested in the last 3 years a half-a-billion 
dollars in our Class I freight rail system in America. Now we 
have done that selfishly, because that helps us get into high-
speed rail. But that is the first time that anybody can 
remember that kind of investment was ever made in what is the 
best rail--freight rail--system in the world: ours. A half-a-
billion dollars.
    President Obama's administration is working every day to 
eliminate bottlenecks and choke points in America's freight 
rail. I have been to tower 55 in Texas. I have been to the 
CREATE program in Chicago. All over America we are making 
investments in freight rail. One-third of our competitive TIGER 
grants went to projects that speed delivery of products from 
factories, farms, and businesses to customers across the United 
States and around the world. And in the long term, high-speed 
rail will bolster America's economic competitiveness.
    You know we are being out-competed right now, today, all 
over the world, but in particular in Asia, on countries that 
are building roads, building airports, building bridges, and 
building high-speed rail. We used to be the leader. If we don't 
catch up here pretty quick, we are going to be in second place.
    We know our Nation will be home to 100 million additional 
people by the year 2050. That is the equivalent of another 
California, Texas, New York, and Florida, combined. Our 
highways and airports simply can't handle the growth. We need 
to do something, or we will be crushed under the weight of our 
own expansion.
    So, how are we bringing President Obama's vision to life? 
What is the plan? Well, we have designated an integrated 
network with trains moving at different high-end speeds, based 
on the needs of the market, just like in rail systems overseas. 
Not all the trains overseas go the same speed. Where it makes 
sense, we are building state-of-the-art high-speed lines on a 
par with anything in Europe or Asia.
    Feeding into this true high-speed core will be regional 
service. We know that everybody is not going to drive a car to 
a train station. There will be regional service. There already 
is, faster than most trains we have today.
    Finally, we are building out our energy corridors. This is 
happening already. These are local lines along which 
entrepreneurs are opening shops. These rail lines will become 
economic corridors for jobs, just like the interstate highway 
was. This integrated approach is exactly what rail operators 
have done in countries around the globe. Some trains are fast, 
other trains are faster.
    So, how far have we come during these last 3 years? We have 
put American workers on rail job sites in 32 States and the 
District of Columbia. Projects in Illinois, Maine, Minnesota, 
North Carolina, Oregon, Vermont are coming in ahead of schedule 
and under budget. The same time, we are supporting jobs at 
manufacturing plants in industrial States like Indiana, and at 
suppliers in States like Arizona and Arkansas. And everything 
from tracks to ties to train sets to construction material for 
new stations is being built by American workers, American 
workers building America's infrastructure.
    From here, the future is bright. During the next 6 months, 
more than $1.1 billion of new job-creating construction 
projects will commence. We have invested in increasing the 
Acela speed from 130 miles per hour to 186 miles per hour. We 
have invested in bringing 110-mile-per-hour service to the 
Midwest. We will soon break ground on a new line between 
Portland and Seattle. We continue planning for a southwest 
network from--that connects Dallas to Houston and Oklahoma 
City. And we are committed to helping the people of California 
achieve their vision for high-speed rail.
    This is not Ray LaHood's vision; this is California's 
vision. This is the people's vision, people that have worked on 
high-speed rail in California for 15 years. It is not a cheap 
project, but it is an essential one. Its costs are in line with 
those of similar projects that have been successful around the 
world. And we are in it for the long haul. We will not be 
dissuaded by the naysayers, by the critics, some of whom you 
are going to hear from later on today. We are not.
    High-speed rail is in America, coming to America, and 
expanding in America. There is no going back. The dollars to 
support all of this were included and paid for in every budget 
that President Obama has submitted to Congress. All of this was 
included in the President's outline for a long-term 
transportation bill which charted a course in proposed funding 
for the next 6 years. All of this was included in our push for 
high-speed rail projects as a part of the American Jobs Act. 
And all of this is anchored in our shared history.
    We have always met tough challenges by doing big things. We 
have always done big things.
    And transportation has always been bipartisan, always. When 
I was here, sitting where you are sitting, I was voting for two 
transportation bills. Both of those bills passed with over 400 
votes in the House. There are no Republican or Democratic 
bridges. There are no Republican or Democratic railroads. We 
have had a rich history in this country of bipartisanship when 
it comes to transportation, because transportation puts people 
to work. It puts friends and neighbors to work. That is why it 
has been bipartisan.
    Our blueprint for building high-speed rail is the same as 
America's blue print for building the interstate system. We are 
right at the point where America was at when we started the 
interstate system. We didn't know where all the lines were at. 
Do you think they knew where all the lines were at when 
President Eisenhower signed the interstate bill? Of course not. 
Do you think they knew where all the money was coming from? Of 
course not. Fifty years later, we have the best interstate 
system in the world because people had a vision.
    When the United States first started going from planning to 
paving, we didn't know where all the routes were going to be. 
We didn't know where every penny was coming from. But President 
Eisenhower set a goal. He had a vision. Through 10 
administrations and 28 sessions of Congress--that is when I 
say, ``High-speed rail is coming to America,'' because through 
10 administrations, 10 Presidents, and 28 sessions of Congress, 
we got it done. That is what America has always been about.
    We didn't invest when times were good. We have a proud 
history investing when times were tough, because transportation 
puts people to work. Through boom years and bust years, through 
eight recessions, we built the best roadway system in the 
world. And we should do no less for high-speed rail.
    Members of this committee, our parents and grandparents 
dreamed big, planned big, built big so we might have the chance 
to lead. What the previous generation did for us is left us an 
interstate system. State of the art. We should do no less for 
the next generation. I am not going to benefit from high-speed 
rail, but I have four grown children and nine grandchildren. 
They will. We should do what generations did for us. Think big, 
build big, and leave the next generation of transportation 
high-speed rail.
    I am happy to answer your questions, Mr. Chairman.
    Mr. Mica. Well, thank you, Mr. Secretary. And again, we 
appreciate your commitment to transportation, and particularly 
to a successful high-speed rail program.
    I outlined some of the problems that we have had, and 
hopefully--the title of this hearing, again, is lessons learned 
from some of the mistakes that we have made. And one of the 
things that you just cited is that--in fact, we built the 
interstate back in the 1950s, with President Eisenhower. On 
Tuesday, we heard the President say, ``We've lost our ambition, 
our imagination, and our willingness to do the things that 
built the Golden Gate Bridge and Hoover Dam and unleashed all 
the potential in this country.''
    I went back to look and see how long it took in the 
planning process and approval process and then the construction 
process. And then I look at the Northeast Corridor.
    For example, it has taken 3 years to get out an RFP on an 
environmental study, and that hasn't yet been awarded. Can you 
tell us the status of the award of doing the environmental 
study for the Northeast Corridor, which is essential to move 
that----
    Secretary LaHood. What I will tell you, Mr. Chairman, is we 
have taken our cues from what you have told us. We are 
investing in the Northeast Corridor.
    Mr. Mica. Yes, and you----
    Secretary LaHood. We just announced an investment of almost 
$1 billion. I will get you the specific date when I believe the 
environmental will be done.
    Mr. Mica. Again, if you can't give it to me now----
    Secretary LaHood. I will give it to you.
    Mr. Mica [continuing]. Been helpful. After many, many years 
we finally got, in March of 2010, the designation of the 
Northeast Corridor, and I thank you. But we cannot move forward 
until that is awarded. And I guess back in August, the 
proposals had come in. We just need an award. So I think that 
is very important to moving forward.
    And then, wisely spending the money. I supported the money 
for the Northeast Corridor. We heard Mr. Sires, who was here, 
talk about additional funds and others--Mr. Capuano wants some 
for Boston. But what we don't want to do is spend that money in 
a half-baked process without a good plan to build the whole 
corridor. And I don't think $117 billion over 30 years is the 
way to go, and in dribbles and drabbles.
    Mr. Boardman testified, sat in the same chair and said he 
believed that we also had to attract private capital into that 
process. But the whole process is contingent on going forward 
with just a regular order of environmental study, and that is 
delayed.
    You said not all trains in Europe are high-speed. But every 
high-speed rail train goes between 110 and 150 miles an hour, 
on average. We don't have a single proposal to reach that speed 
with any project that is under consideration. And we have had a 
setback now in California.
    Do you see any way to achieve high-speed rail in an 
expedited----
    Secretary LaHood. The line between Chicago and St. Louis 
will go 110 miles an hour, Mr. Chairman. When----
    Mr. Mica. That is the high speed.
    Secretary LaHood. Let me just finish. In California it will 
be high speed--it will go 200 miles an hour when that project 
is finished.
    We are also--the investments we are making in the Northeast 
Corridor will get to higher speeds, which is what I said in my 
testimony.
    So the investments we are making--the figures that you used 
are the current figures. With our investments, trains will go 
higher speeds. Are they all going to go the same speed? No. 
California, 200 miles an hour. Illinois, 110 miles an hour. The 
Northeast Corridor, higher than they are doing now. That is why 
we are making the investment.
    Mr. Mica. Again, the speeds that I have, average speed, 
Chicago/St. Louis, 71 miles an hour, on average----
    Secretary LaHood. That is the current speed, Mr. Chairman.
    Mr. Mica. Chicago to Detroit----
    Secretary LaHood. Before we made the investment.
    Mr. Mica [continuing]. Sixty-four miles an hour. Now, these 
are----
    Secretary LaHood. Before the investments.
    Mr. Mica. Yes. Again, I am just telling you what we are 
told, that after they make the investments these will be the 
average speeds. And this is information provided by your 
department on the project----
    Secretary LaHood. Mr. Chairman.
    Mr. Mica. Yes?
    Secretary LaHood. After the investments, Illinois, 110 
miles an hour. After--when California is complete, 200 miles an 
hour. On the Northeast Corridor, higher speeds than now once we 
invest the $1 billion that we just announced.
    Mr. Mica. There is a public article about some of the 
stress and problems by Mr. Phillips and appeared recently in 
Trains magazine. It talks about the turmoil at Amtrak. One of 
my concerns is I recently learned that Al Engle, who was the 
vice president for the high-speed rail under Amtrak was either 
fired or dismissed, we are not sure. I believe he has been 
replaced. But the reports are that there is turmoil right now 
in Amtrak, not only on high-speed rail, but overall.
    Secretary LaHood. I don't run high speed--I don't run 
Amtrak, Mr. Chairman. I have plenty of things on my agenda. I 
am not in charge of Amtrak. Mr. Boardman is. I can't answer for 
him. I don't have any idea who you are even talking about 
there.
    Mr. Mica. Well, again, we just gave $900 million to Amtrak, 
and I think that we should conduct some oversight. I mean that 
is--I can account for about $1 billion going into Amtrak. And 
when we have reports of the person in charge either being fired 
or dismissed on that project, it does raise concerns.
    Finally, I invite you to again look at some successful 
models. I would like to see Amtrak more successful. You did 
help Ms. Brown and I on an Auto Train facility in Florida. We 
finally made the connection at Lorton. Years ago they put a 
facility in. People deserve more than a tented, hot--a facility 
that was a replacement for a storm--we appreciate that. But my 
concern is that we have a great project like Auto Train, but we 
don't have people that can manage and expand that service. We 
should be running a larger number there, and also in the 
Northeast Corridor of passenger service in other quarters.
    Mr. Shuster and I put a provision in the PRIIA law that 
allowed for the private sector to pick up some of these routes 
and show what they can do on money-losing routes or successful 
routes, and make them more successful and less costly to the 
taxpayers. That process has been slow during the past 3 years. 
Not much has been done. And I understand a rule is about to be 
issued.
    Is that forthcoming? Can you tell the committee the status?
    Secretary LaHood. It is about--we are getting close.
    Mr. Mica. OK. And if you could give us a--maybe in writing 
to the committee, the--some specifics on when you plan to make 
that decision, we would be grateful.
    Secretary LaHood. Absolutely.
    Mr. Mica. All right. With that, I will yield to Mr. Rahall.
    Mr. Rahall. Thank you, Mr. Chairman. Mr. Secretary, I 
certainly commend you for your testimony today and your--the 
fact that you asked to be before us.
    You are right in your nonpartisan remarks. There are no 
American bridges, American railroads, or--I mean no Democratic 
railroads or bridges or Republican bridges or railroads, they 
are all American bridges. And we all want to be nonpartisan 
when it comes to transportation. But I still think you are the 
best Republican in this administration.
    Let me----
    Secretary LaHood. I think I am the only one.
    [Laughter.]
    Secretary LaHood. The bar isn't very high.
    Mr. Rahall. You know, I understand a lot of my colleagues 
wanting to put everything in the Northeast Corridor. You know, 
that is not the only part of this country that is experiencing 
growth. I think we have to look at rural America, we have to 
look at the West and Midwest. The passenger rail system in this 
country should truly be a national program. You have compared 
it to our interstate program, and how it took 60-some years to 
get our interstate systems to where they are today. And that 
could be very much the case with passenger rail service, as 
well.
    But there is growth in other parts of our country. There 
are people aching to be relieved of congestion that exists in 
rural America. Congestion is just not a big city problem any 
more. And passenger rail service is a way to alleviate that, 
along with improved infrastructure. So, I commend you for that 
national vision that you have, and the vigor with which you 
have expressed it here this morning.
    And, I know your application process, the DOT application 
process, has come under some severe criticism. But I commend 
you for that, too. I think you have been very transparent in 
that process, as confirmed by a GAO report released in May of 
this year that called the accusations against that program into 
question, and said--and I quote--that ``the FRA selection 
process was an example of good grantmaking.'' So, I commend you 
for that. You have involved all the stakeholders. It has been a 
transparent process. And bravo to you.
    Let me ask you a question about the Buy American 
provisions. You touched upon that in your testimony, as well, 
and a lot of us on my side of the aisle have introduced a 
stronger Buy American bill in the last week or two.
    There are loopholes--gaping loopholes, I would call--in the 
current Buy American provisions that allow companies to 
subdivide, et cetera, and escape Buy American provisions of 
current law. Do you think they need to be strengthened? Can we 
close those loopholes, legislatively?
    Yet, at the same time, as my legislation does, it allows 
you the waiver authority if there is a national interest issue 
involved. If we are incapable of making the product up to 
sufficient standards in this country, or we would drive up the 
cost above a 25-percent increase, it would grant you that 
waiver authority.
    Secretary LaHood. Well, Mr. Rahall, I would say this. I 
think we have a very, very strong commitment at DOT to Buy 
American. And we have been complimented numerously for the idea 
that Buy American is very important. We want to make sure that 
every one of these dollars goes to American companies and 
American workers. That is our number one goal. And if you want 
to strengthen that, go for it. We will take any encouragement 
we can. We are committed to Buy American, more than anything 
else. These are American tax dollars, and they should go to 
American workers and American companies. And that is why we 
have just been very disciplined about making sure that these 
dollars do go to American companies and American workers.
    Anything you can do to help us on that we will appreciate.
    Mr. Ribble. [presiding.] Thank you. And the chair 
recognizes the gentleman from Pennsylvania, Mr. Shuster.
    Mr. Shuster. Thank you very much. Again, Mr. Secretary, it 
is great to have you here today. And I would point out to the 
committee there is another Republican in the administration who 
came from the Armed Services Committee, Mr. McHugh, who is 
Secretary of the Army. So it is fitting that the Secretary of 
Transportation is a Republican and former members of two 
committees that have been bipartisan. And we hope to continue 
to be bipartisan.
    Part of the problem, though, with bipartisanship these days 
is that we don't have the money. We just don't have the money. 
And that is when I come back to--as I said, with this--with the 
way some of this money has been spent on stimulus, you put it 
out on projects, some of them may get speeds up to 110, others 
they are not going to get up there. And again, as we pointed 
out, Wisconsin and Ohio rejecting them because it is just--it 
is a tremendous drain on their treasury.
    So I come back to you talking about the vision. There was a 
vision Abraham Lincoln had for connecting this country with 
railroads, an important vision to the entire Nation. And 
Eisenhower with the highway system, something we had to do to 
connect this vast, vast country together. Aviation, vast spaces 
we have to travel. And when you come to passenger rail today 
the need is not the same as it was in the past. But it is 
present in some of these corridors, and that is what I come 
back to: Focus on these corridors. To send out the money in 
dribs and drabs as we have I don't think is going to accomplish 
the President's vision, which I believe is wrong, to think we 
are going to have high-speed rail available to 80 percent of 
the country.
    So, I get now to my question of the Northeast Corridor. You 
know, why isn't there a focus? I mean what are you--why are you 
opposed to saying with all this money--taking the money from 
maybe even California and focusing it on the Northeast 
Corridor, when we own the tracks, when the numbers, the number 
of people who live in the Northeast Corridor, 18, 19 percent of 
our population on 2 or 3 percent of our landmass, it is 
absolutely ripe for high-speed rail. So why wouldn't we focus 
on that like a laser to get it done there, a place that I 
believe will be highly successful and we can learn tremendous 
lessons to take it to these other emerging corridors, 
especially in these times of very, very short, very small 
budgets that we have to work with?
    Secretary LaHood. Well, we do believe in the Northeast 
Corridor. But we also believe in America. We believe there are 
people in other places in America that would like to have a 
train to ride. We have just invested $1 billion in the 
Northeast Corridor. We just had the Northeast Corridor 
designated for rail. We are paying attention to it.
    Look it. When we started this 3 years ago, there were 
different Governors in different States. I don't have to tell 
all of you that. You know that. There is a new Governor in New 
York. He wants high-speed rail. That didn't exist when we 
started 3 years ago. There is a new Governor in Connecticut. 
And I have met with these Governors. These Governors are our 
partners. We need partners.
    Amtrak has been a good partner. For all the criticism and 
how people love to decry Amtrak, Amtrak is making money, 
ridership is up. I was on a train to New York City this 
weekend, from Washington to New York, completely full. From New 
York to Washington on Sunday, completely full. Ridership is up 
on Amtrak. We are making investments in Amtrak. They are as 
good a partner as any State that has stepped up and wants to 
get into the passenger rail business.
    We are not going to just invest every dollar in one part of 
the country. That is not fair. It is not fair to people who get 
elected to this House who have people in their States that want 
to get into the passenger rail business. That is simply not 
fair.
    Mr. Shuster. You make my case for me. You were on a train 
from Washington to New York. It was full. Absolutely. That is 
why we need to focus there.
    Secretary LaHood. And it was on time. And they made money.
    Mr. Shuster. The train that exists in California between 
San Francisco and Los Angeles isn't full. I don't believe there 
is enough money in California to ever complete that project. 
You have got a State that is as close----
    Secretary LaHood. Well, I----
    Mr. Shuster [continuing]. Close to being bankrupt as you 
can, and so why don't we--look. I am for passenger rail in this 
country. I am just not for spending this money on high-speed 
rail lines that aren't going to be built, that the American 
people aren't clamoring for.
    My good friend from West Virginia said there are people in 
this country that are aching for relief. You know where they 
are aching for relief to have passenger rail, where we should 
be spending some of this money? Los Angeles to San Diego. For 
half of what we are investing in the central corridor they 
could have significant improvements to move people around.
    And anybody--Mr. Secretary, I know you have been to 
southern California. All you have to do is walk out the front 
door of your hotel and you see massive congestion. So, why 
aren't we really focusing on these places that really have 
tremendous needs? As far as I can tell from San Francisco to 
Los Angeles, the roads are not backed up. They are not sitting 
in tremendous traffic jams. That is occurring in southern 
California and northern California.
    So, I encourage you--again, I am in favor of high-speed 
rail where it makes sense. I am in favor of improving passenger 
rail systems. As I say, I use it all the time as an example. I 
hope you do. I know Mr. Szabo and I have spoken about it. The 
Keystone Corridor. That is an example of passenger rail, it is 
not high-speed rail, and people are getting on it.
    I am the poster child for railroad passenger rail service. 
Twenty years ago, as you know, my father sat on this committee 
and I told him, ``I will never get out of my car and ride in a 
train, because I want the freedom, as most Americans do.'' But 
today, if I am going to Philadelphia from Washington or from my 
district, I go to Harrisburg and get on the train, because I 
don't want to deal with the traffic.
    And I think American people--when you have frequency and 
reliability you don't have to go 150 miles, 180 miles an hour. 
And it is a lot less expensive to upgrade those, as we are 
seeing in some of these corridors in the Midwest. I think that 
is really where our focus should be.
    And I see my time has expired. One other thing I just want 
to bring up, not to get a response from you, but there is a 
procurement issue that is coming up. Mr. Szabo and I have 
talked about it. This is not the right venue, but I hope to 
stay engaged with you on a procurement issue--Mr. Szabo is 
shaking his head back there--that is important to the United 
States when it comes to purchasing locomotives for some of 
these different routes around the country.
    So, again, thank you for being here, and I would urge you 
to go back and reevaluate the Northeast Corridor and some of 
these other corridors that have a desperate need today, and we 
can be successful. And with that I yield back.
    Mr. Mica. Thank the gentleman. Yield to the subcommittee 
Ranking Member, Ms. Brown.
    Secretary LaHood. Mr. Chairman, if you wouldn't mind, he 
just----
    Mr. Mica. Did you want to respond? I saw you----
    Secretary LaHood. I do.
    Mr. Mica [continuing]. Nod your head affirmatively, and Mr. 
Szabo----
    Secretary LaHood. I was not agreeing with him.
    Mr. Mica. Oh, OK.
    [Laughter.]
    Mr. Mica. Oh, I am sorry.
    Secretary LaHood. Which I will----
    Mr. Mica. I apologize. Mr. LaHood----
    Secretary LaHood. Which I will be very clear about.
    Mr. Mica [continuing]. I apologize, go right ahead.
    Mr. Shuster. I am glad you cleared that up, Mr. Secretary.
    Secretary LaHood. Mr. Shuster, we don't make this stuff up. 
The ideas for this map that was included in my testimony today, 
these corridors, Ray LaHood didn't make this up. These 
corridors came from people who live in these States who want 
passenger rail.
    So, if you don't like the idea where a rail line is going 
in California, then you need to talk to the people in 
California who have been working on high-speed rail for 15 
years, including some Members of Congress who have personally 
come to me and told me where they think there would be a good 
investment of money, just like the people in the northwest, 
just like the people in the Northeast Corridor, just like the 
people in the Midwest, and all--this is a reflection of what 
people in America are asking for. It is not a reflection of 
President Obama sitting down at a map and drawing a line, or 
Ray LaHood.
    This came from the people, and the people want this, 
irregardless of whether you think they do or not. The people in 
California want this, people that have been working on it for 
15 years. People in Mr. DeFazio's area in the northwest want 
this corridor. We didn't make it up. And we are making 
investments where we think they are good investments where over 
time, over a period of time--it took 50 years to build the 
interstate. We are not going to build high-speed rail 
overnight. It is going to take some time. We are doing what the 
people want.
    Mr. Shuster. Well----
    Secretary LaHood. And also elected representatives of the 
people, by the way.
    Mr. Shuster. With all due respect, Mr. Secretary, my 
daughter wants a brand new Jeep Grand Cherokee luxury SUV. She 
can't afford it, nor can I afford it.
    Secretary LaHood. Well----
    Mr. Shuster. And that is part of the problem in this 
situation.
    Secretary LaHood [continuing]. I am glad you didn't think 
that when you came to me about the Keystone line, because you 
thought it was a good idea and we thought it was a good idea, 
and we found the money to make the investments. And that is 
what we are doing for other representatives in Congress.
    Mr. Shuster. You are absolutely right. Where it makes 
sense. I am not coming to you asking you to invest in high-
speed rail from Harrisburg to Pittsburgh. That goes right 
through my district, and I haven't done that. Where it makes 
sense I support it. Where it doesn't make sense, again, I think 
we are wasting our money. And we should be focused on areas 
where we can see tremendous success stories that are out 
there--that we will be able to see that.
    Mr. Mica. I thank the gentleman, I thank the Secretary. And 
now we will go back to Ms. Brown.
    Ms. Brown. Thank you, thank you, thank you, Mr. Secretary. 
Thank you so much for being here. You are just such a bright 
spot. I have to tell you.
    In 1980, Senator Graham--then Governor Graham--appointed me 
to a committee to bring high-speed rail to Florida. In other 
words, in Florida we have been working on it for over 30 years. 
It has been on the ballot, the people passed it, the House of 
Representatives and the Senate and the Governor at the time 
signed the bill supporting it.
    What I want to know is how can we protect the taxpayers, 
the Federal taxpayers' dollars, when you have the kind of 
investments that Florida have made over the years? And how can 
we--and I am looking at it--how can we recoup? We can't have 
one Governor coming up and saying, ``Well, I don't want it,'' 
and all of the investment that we made over the years--how can 
we get the Federal taxpayers' dollars back? Because regardless 
of what my colleagues who don't understand say--some of them 
clearly don't understand--we applied for the funds. No one 
asked us to apply. And it was extensive--we did environmental 
work, and studies, and partnerships.
    I mean someone thanked you a few minutes ago for a project 
in Florida--by the way, it was stimulus--you know, we hate the 
word stimulus, but it was stimulus dollars that put people to 
work. Thank you, thank you. Florida, that was Florida.
    So, can you tell us how can we deal with these States that 
are causing overall problems, as far as taxpayers' dollars are 
concerned? I want my money back.
    [Laughter.]
    Secretary LaHood. Well, look it. There was only one person 
in Florida who didn't want high-speed rail, Congresswoman.
    Ms. Brown. I understand that.
    Secretary LaHood. Thank you for your leadership, thank you 
to Mr. Mica for his leadership. I am not going to go into 
political science 101 about how you get your money back. I 
think you know more about that than probably anybody on the 
committee here. So, good luck.
    Ms. Brown. Would you like to talk about--you know, there 
has been a lot of discussion about where these projects should 
go, and basically that, you know, it should go to the Northeast 
Corridor. I support that. This area is already developed. And 
when you go to Europe, I mean, there are different forms of 
speed, as you mentioned. And then there are some areas in this 
country that we can develop that will be true high speed.
    But how can we educate people who have, clearly, no 
understanding of the process? They come here, their vision is 
one route from one area to the other. They don't understand the 
importance of getting people out of that little car and getting 
them into other modes of transportation. I mean that is the 
future of our country. We are the caboose----
    Secretary LaHood. Well----
    Ms. Brown [continuing]. And we started the train system.
    Secretary LaHood [continuing]. We have to continue to make 
progress. As we make progress, we will show success and we will 
prove that the vision that we all have about passenger rail is 
a good vision, and it is one that the people want. It will take 
some time to do that. We will continue to invest in those 
places in the country that are ready, willing, and able to move 
ahead with it. And as we have success, I think that will tell 
the story.
    Ms. Brown. And all the hearings that we have had here, when 
people come from other countries, they have indicated once you 
have some success then the other part of the country will 
demand it.
    Some people that live in some areas have not even gone to 
the outskirts of their town. So, they have no idea of the 
freedom--for example, being able to get on a train in Orlando 
and go from Orlando to Tampa, or from Orlando to Miami, 200 
miles, 1 hour and 15 minutes.
    I mean that is the future of our country. It is going to 
happen. And it is going to happen for Floridians. One person 
will not stop us. It is going to happen.
    I mean the amount of people that could be working now. I 
saw a ``60 Minutes'' piece where a person was unemployed, 
living homeless, a construction worker. How many jobs would 
that project have generated in Florida, construction jobs?
    Secretary LaHood. Thousands of jobs for the people that 
were going to build the rail lines, thousands of jobs for 
people that were going to build the cars. And all along the 
corridor, all of the small businesses that would have 
benefitted from that, that would have hired people. Thousands 
and thousands and thousands of jobs.
    Ms. Brown. You know, I have heard people say, ``Well, those 
are temporary jobs.'' What are they talking about?
    Secretary LaHood. Every job in America is important. And 
the idea that people that were going to build the rail line was 
a temporary job--it was an important job, and it was a job that 
would have paid a good salary and given people the opportunity 
to get experience and then--you know what the plan was. Once 
the Orlando to Tampa, then Orlando to Miami. That would have 
been the next leg, and would have provided more jobs, with 
experienced workers who built the Orlando to Tampa.
    Ms. Brown. Well, tell me about the study that was done that 
we paid for, the Federal Government paid for. Can you just 
briefly--we had it up on the----
    Secretary LaHood. The ridership study?
    Ms. Brown. Yes, sir. Yes, sir.
    Secretary LaHood. Yes, the ridership study showed that the 
ridership would be there for the rail plan from Orlando to 
Tampa. And everybody, including the newly elected Governor, 
knew that. He knew the ridership would be there. On the day 
that the Governor made the announcement in Florida there were 
nine companies----
    Ms. Brown. Yes.
    Secretary LaHood [continuing]. From foreign countries who 
were ready to invest in Florida high-speed rail. As soon as the 
agreement was signed they were ready to invest in American 
jobs, and Built-in-America in Florida. And that all went away.
    Ms. Brown. Yes, sir. In closing, I understand the day that 
he made the announcement members of the Chinese Government were 
in Tampa with CSX, and they wanted to know what was the 
problem, when money was not the issue. If money is not the 
issue, what is the problem? Why it is that we turned back $2.4 
billion? It is a disservice to this country.
    I yield back the balance of my time.
    Mr. Mica. I thank the gentlelady. Mr. Denham.
    Mr. Denham. Thank you, Mr. Chairman. Happy birthday, Mr. 
Secretary.
    Secretary LaHood. Thank you, thank you.
    Mr. Denham. I don't think anybody has said that to you yet 
today. Thank you for sharing your birthday with us today.
    Secretary LaHood. Thank you. My birthday present will be 
when I win you over, Mr. Denham.
    [Laughter.]
    Mr. Denham. I hope the facts can win me over. That is my 
biggest concern right now.
    And, you know, I agree with you, that you know, these 
projects, these roads, these high-speed rail, they are not 
Republican or Democrat. But the question is, are they good 
investment or bad investment? And that is where I have been 
trying to get the proof on.
    California, you know, you continue to talk about that being 
a good investment, although the numbers have ballooned to $98.5 
billion. So my question to you is, sir, where does that money 
come from?
    Secretary LaHood. There is not enough money here in 
Washington to do what the people in California want to do. And 
so we have encouraged companies that were going to invest in 
Florida and other places to go to California. I have had a 
couple of meetings with Governor Brown about this. I have 
arranged meetings with Governor Brown and investors from China 
and Japan that could possibly--discussions are still going on--
come to California, establish opportunities for jobs to build 
the infrastructure, to build the train sets so that these 
Californians can go to work. They are doing them.
    It is going to take private investment, there is no 
question about it. And there are companies that are in 
discussions with California officials to make investments.
    Mr. Denham. But you do agree with the $98.5 billion number, 
that at least that--we are dealing--we are starting with a 
factual baseline of that was going to be the true cost.
    Secretary LaHood. It is going to be expensive to build the 
high-speed rail. If that is the figure today, that is the 
figure today. It will be different tomorrow. Look it. The 
longer----
    Mr. Denham. Well----
    Secretary LaHood. These--there is an inflation factor here. 
When this project started it wasn't $95 billion, it was less 
than that.
    Mr. Denham. No, it was $33 billion.
    Secretary LaHood. And when----
    Mr. Denham. Now it has over tripled.
    Secretary LaHood. When we are here 3 years from now, it is 
going to be higher than that. So the answer is you got the 
right figure today.
    This is an expensive project. But all of the money is going 
to American workers to build American infrastructure. It is not 
as if the money--it is going to our people. It is going to your 
friends and neighbors. It is going to your constituents to pay 
their salaries, to build the train sets, to build the 
infrastructure. That is where the money is going to.
    Mr. Denham. At what----
    Secretary LaHood. And if we can get private investors--
pardon me?
    Mr. Denham. At what cost? So I am with you. I want to 
create American jobs, too. The shovel-ready projects that we 
talk about, I would love for the shovel to actually be in the 
ground creating these jobs. But at what cost?
    I mean if it is a $98.5 billion project, are we saying $1 
million a job is a good job, $2 million a job is a good job? At 
what price do we throw money at a project that you can't define 
numbers on?
    Secretary LaHood. This money is going to small businesses, 
going to big businesses, going to contractors, and going to 
American workers.
    Mr. Denham. Yes, sir.
    Secretary LaHood. That is where the money is going.
    Mr. Denham. I understand that. And my time is limited. My 
question is the American public wants to know at what cost. Is 
it $98.5 billion? And if that is really the cost, where does 
that money come from? Because right now, California voters that 
approved a $9.95 billion bond, 10 percent of the overall cost, 
they want their money back. Today's Sacramento Bee shows that 
64 percent of the people are now opposed to it. People that 
went to the ballot box and voted for the $9.95 billion bond are 
now opposed to it, and want that pulled back.
    So, if the Federal Government's commitment is $3.6 billion, 
which they have already allocated as stimulus dollars that 
haven't put a shovel into the ground, where does the other $95 
billion come from? If there is a private investor out there 
that wants to spend $95 billion, bring them on. Give me their 
names, I would love to see the plan that they have. I would 
love to see them not only invest, but I would like to see them 
get a return on their investment. But we continue to talk about 
investing with no plan on what the return to the taxpayer is.
    So, you know, every transportation project we look at, we 
have a plan. We know what it is going to cost in the 
environmental phase, the planning phase, construction phase. We 
know how many jobs we are going to create. But yet, this big 
picture of high-speed rail, which sounds warm and fuzzy, isn't 
sounding warm and fuzzy any more, because we don't have any 
concrete numbers.
    So I would assume that, if you are going to throw more 
stimulus dollars, if you are going to throw more of the 
taxpayers' dollars at this project, that you have to have some 
kind of plan, other than maybe there is a private investor out 
there that might want to put some money into this.
    Secretary LaHood. California has a plan. I will be happy to 
share it with you. I would suggest you talk to Jim Costa about 
it. He has worked on it when he was a State assembly person, he 
has worked on it since he has been a congressman. Governor 
Brown has a new team of people in place. California has a plan. 
That is why we are funding it.
    Mr. Denham. Mr. Secretary, do you have a plan?
    Secretary LaHood. Absolutely. Here it is in pictures. And I 
can give it to you in writing, too, if you like.
    Mr. Denham. I would--I am here to not debate you, but to 
understand what the Federal Government's obligation is. Right 
now you have obligated $3.6 billion of stimulus dollars to a 
project that is not shovel-ready. If California has a plan, 
they must be relying on the Federal Government somewhat for an 
additional lump sum of money above the $3.6 billion. What is 
that number?
    I think not only as a member of this committee I should 
have that number, but my taxpayers in the district that have 
committed $9.95 billion should understand what that number is.
    Secretary LaHood. We will share it with you.
    Mr. Denham. I look forward to seeing it.
    Mr. Shuster. [presiding.] The gentleman's time has expired.
    Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. First, Mr. Secretary, 
I would like to congratulate you. You mentioned Buy American. 
But I would point out that the Federal Transit Administration, 
under the leadership of the former Secretary and President 
Bush, was actually using Federal taxpayer dollars with routine 
waivers to build prototype transit vehicles overseas. That came 
to an end with this administration. We are not funding research 
and development for manufacturers in other countries. That was 
crazy.
    I appreciate the tightening up the Buy American, and we 
have some of the tightest rules here in rail, and we need to 
tighten up elsewhere. Like what happened in California, I hope 
the gentleman shares the same sense of outrage about the so-
called segmentation of the Oakland Bay Bridge and the Chinese 
getting a new factory paid for by U.S. taxpayers. And we will 
offer him an opportunity to cosponsor a bill that will fix that 
loophole in the future.
    I just want to talk, and I don't have many questions. I 
have been quiet, which is unusual for me. But, look, these 
things take a long time. I remember talking to former Senator 
Hatfield, a good friend, about him riding an electric train in 
Oregon over to the main electric line and being able to go to 
Portland or down to Eugene when he was a kid in times that 
rivaled today's interstate highway, without an accident or an 
interruption.
    We lost that. We are trying to get it back. We have been a 
little slow coming up with the funding in Oregon, but we have 
now bought two Talgo train sets with help from the Federal 
Government. Washington State has two. We have a plan partnering 
with Washington State--and we have been working in partnership 
with the mainline rail roads to build sidings and things so we 
can move our trains more quickly. And the biggest problem is 
at-grade crossings, and it takes a long time and a lot of money 
to deal with at-grade crossings. But we have a plan that is 
feasible, with a little Federal help, to get to 79 miles an 
hour going to Portland.
    Now, that doesn't sound like any big deal, but guess what? 
If we can do that, I won't be driving my car to Portland any 
more because about every other time now there is an accident, 
there is a delay, it is so congested. That will be faster than 
I could make it on an optimal day. That is a viable plan. But 
it is going to take continued partnership with the Federal 
Government, and more planning.
    This is where we are looking for some Federal help. We are 
looking at using that old electric rail line, our heritage, 
which is now a Class II railroad and not very frequently used, 
and upgrading that to have true high-speed rail. So we have a 
short-term plan with the power, with the plan to do the at-
grade crossings, with the plan to partner with the main line to 
improve the speeds.
    And we have had growing ridership, despite the pathetic 
speeds we get now. I rode the train up to Portland last year. 
It took 2\1/2\ hours. If we get to 79 miles per hour, we are 
going to do it in an hour and 30 minutes or less. So, you know, 
we cannot break faith.
    I got this corridor designation working with a guy named Al 
Swift who used to be in Congress. We were one of the first of 
five high-speed rail corridors proposed in the country, back 
when nobody wanted one. Well, guess what? Everybody wants one 
now. It is kind of funny that this is such a bad idea, yet 
everybody in America wants one of these things. My State has 
finally gotten on board with some investment, in partnership 
with the Federal Government. Washington State has done a much 
better job. And it isn't just the Portland to Vancouver, to 
correct one thing; it is the Eugene to Vancouver, B.C., vision 
that we put in place back then.
    But it is going to take a little patience, and a little 
more time. We spent 70 years ignoring and destroying the rail 
system in this country. And we are only in the second year of 
trying to rebuild it. Now, I don't want to just throw money 
willy nilly, but for people who have good plans in a region 
that isn't only the Northeast United States--which, by the way, 
last time I checked has relatively declining population 
compared to States in the West; I think they are losing 
representatives all through that region, so I think that means 
we are growing faster.
    Yes, it is congested, and yes, I want to help them. But we 
got to help the rest of the country, too, especially the parts 
that are growing faster, where the problems aren't as expensive 
to deal with before we become that congested.
    So, Mr. Secretary, if you have any response to any of that, 
I would be happy to hear it.
    Secretary LaHood. Well, Mr. DeFazio, on the Buy American, 
we certainly thank you for your support and your leadership on 
high-speed rail. On a number of other transportation issues you 
have been an outstanding leader, and we appreciate your 
support.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Shuster. Thank you, Mr. DeFazio. And again, the 
gentleman from New Jersey piped up down there and said, 
``Congestion, density, population density, that is where high-
speed rail needs to focus on.'' And I have no--if you have a 
good plan, as I said to the Secretary, and as the Secretary 
pointed out, the Keystone Corridor makes sense. I went to the 
Secretary because I support that and said, ``Let's spend money 
where it makes sense.'' So it is about where--making sense. And 
I don't hear people all over the country clamoring for high-
speed rail. In some parts they do, but it is not something that 
is a phenomenon happening all around the country.
    And with that, who is next in the lineup? The gentleman 
from Minnesota.
    Mr. Cravaack. Thank you, Mr. Chair. Thank you, Mr. LaHood. 
I appreciate your passion today.
    A big thing I have got a question on. I agree with you 100 
percent. This is not a Republican issue, it is not a Democrat 
issue, it is an American issue. Because it is the American 
taxpayer that has to foot the bill, and that is one of the big 
things. To pay for these jobs and projects, to pay for these, 
the money has got to either be taxed, or it has got to be 
borrowed to pay for these projects.
    The high-speed rail makes sense where it is, you know, 
high-density areas. It doesn't make sense in other areas. The 
high-speed rail is what the people want. I have heard you say 
this again. But we have to discern wants versus needs. It is 
imperative that we do that.
    How do you set your priorities? Especially when we have 
decaying roads, we have decaying bridges--in Minnesota we are a 
little sensitive to that--and we are trying to get NextGen off 
the ground, as well. How do you set your priorities of where we 
are going to spend the precious taxpayers' dollar, and to which 
project?
    Secretary LaHood. Well, we set our priorities with our 
partners, and that includes the Congress, people that sit on 
this committee, people that sit on committees in the Senate, 
and our partners in the States, Governors and transportation 
officials. That is how we set our priorities.
    And, look it, we know there is not an unlimited amount of 
money. But in a country where you have a $3 trillion budget, 
over $3 trillion, you have to have priorities. And the purpose 
of the Transportation Committee is to set those. And we follow 
the guidance of Congress in--when you write a transportation 
bill, when you hopefully some day pass an FAA bill we can get 
to NextGen, which is a priority for us. That is our number one 
priority, when it comes to the FAA. We need a bill.
    So, I would encourage all of you, before the next deadline, 
pass a 5-year bill. We haven't had a long-term plan for 5\1/2\ 
years. We set our priorities with you. That is where we get our 
priorities.
    Mr. Cravaack. You said a $3.5 trillion budget; $1.6 
trillion of that money is borrowed. Forty-seven percent of our 
debt is foreign-owned. Thirty percent of it just ticked up 
recently to the Chinese. You say you are concerned about the 
next generation, but you seem to have no problem about putting 
the burden of the expense of these projects on the back of the 
next generation. That is what I am very concerned--that is why 
I came to Congress. I am concerned about how much money that we 
are placing on the next generation.
    In 2025 Medicare, Medicaid, Social Security, and the 
interest that we pay on the debt is going to take 100 percent 
of the revenue incurred by the United States. So my question 
is, do we want to increase--are you saying to pay for these 
projects we should increase taxes to pay for it? Should we 
borrow more from foreign entities that really don't like us 
that much? Or should we be able to analyze what is a need and 
what is a want in this great United States, and make sure we 
take care of our roads, make sure we take care of our bridges, 
and make sure that we don't have airplanes flying into one 
another and congested airports.
    Now, I understand the difference between a want and a need. 
And right now, what I don't see is a dramatic need to create a 
high-speed rail system throughout the United States at this 
point in time in some rural areas, where they just don't need 
it.
    For example, in between Duluth and Minnesota, if you want 
to--Minneapolis. If you want to put a high-speed rail that goes 
in between there, you better leave another car for a boat, 
because every third car that is on that 35 Highway that is 
going up and down between Duluth and Minnesota has a boat 
behind it, because people go up there for tourism. They are not 
going to take the train between Minneapolis and Duluth for 
that.
    Now, I understand it is a sensitive issue. My--again, sir, 
as a leader, as the Secretary of Transportation of this great 
country of ours, I ask you to put that in part of your purview 
in making a package of what we, as the American people, need to 
spend our money on, and what we are willing to ``indebt'' 
future generations of this great country to pay for, because 
that is exactly what we are doing. A newborn baby born today 
this very second, their part of the bill is 50 grand. Since I 
started campaigning about 2\1/2\ years ago, that has gone up 
$5,000.
    So, that is just my message to you, sir. I look forward to 
any response you may have.
    Secretary LaHood. You have--you all decide what the 
priorities are, pass the transportation bill, figure out where 
the money is coming from, and we will follow your guidance on 
this.
    Mr. Cravaack. Thank you very much, sir. And I will yield 
back.
    Mr. Shuster. Thank the gentleman. And Ms. Johnson from 
Texas.
    Ms. Johnson of Texas. Thank you very much, Mr. Chairman, 
and thank you, Mr. Secretary, for being here.
    I have listened with interest and understand full well 
these are very, very austere times. But I am also trying to 
find a project that yields response before investment. In my 
judgment, you have to make the investments first, but there has 
to be some project that this--especially the Republicans--think 
we can do without revenue first.
    Can you give me an example of how we can enhance revenue 
and create jobs without first making an investment?
    Secretary LaHood. Well, if we continue to make investments 
with transportation dollars, we know that that creates jobs. It 
doesn't just create projects, and it doesn't just solve 
transportation. It does create jobs. The one thing we know 
creates jobs would be a transportation bill, an FAA bill, 
either one of those. And we hope you all will pass both of 
those, soon, so we can get America back to work. We know what 
we do puts America to work.
    Ms. Johnson of Texas. Thank you. I believe that very 
sincerely. But it appears to me that many of the people on this 
committee think that we can get all that done without first 
making an investment.
    Secretary LaHood. You have to make the investment.
    Ms. Johnson of Texas. Thank you very much. Thank you, Mr. 
Chairman.
    Mr. Shuster. Mr.--oh, excuse me.
    Ms. Brown. Do you yield the rest of your time?
    Ms. Johnson of Texas. I would like to yield the remainder 
of my time to Congresswoman Brown.
    Ms. Brown. Thank you. Mr. Secretary, yesterday I mentioned 
in my presentation that Talgo announced that they were closing 
down the Wisconsin manufacturing plant because of what has 
happened in Milwaukee. Is there anything that we can do to 
encourage them to relocate in areas where we are making some 
investments?
    Secretary LaHood. Well, I know there are a lot of Governors 
that are trying to encourage them to come to their States. So 
we will see where they end up.
    Ms. Brown. But, do you think at this point they are just 
going to shut down?
    Secretary LaHood. I didn't see that news account, 
Congresswoman, so I don't know much more than what you have 
just told me. But I know there are Governors that have talked 
to Talgo about relocating.
    Ms. Brown. Yes. I mean the point is when you have these 
companies that want to invest, invest in the United States, 
they want to partner--I mean we talk the talk, but the point 
is, when we are shutting down and cutting programs, it is just 
not worth the investment. That is what they are telling me--
particularly what has happened in Florida--over and over again, 
where it costs money to even apply to be partners.
    And, you know, it is a long-term investment. And when we 
cut it off, it is a problem for them. They can't trust the 
Federal Government as real partners--or necessarily the Federal 
Government; it is the State, you know----
    Secretary LaHood. I think that these companies that I have 
talked to from China or Japan or other places in Europe, they 
think we are pretty good partners at the Federal level.
    Ms. Brown. Yes, sir.
    Secretary LaHood. And I think, as these Governors approach 
them from different States, they will have to make a judgment 
about whether it is in their best interests to do that.
    Ms. Brown. Thank you. OK, I yield back.
    Mr. Shuster. The gentleman from New Jersey, Mr. Sires.
    Mr. Sires. Mr. Secretary, first of all, let me just say I 
never had the pleasure of serving with you here. But now that 
you are here, and your passion and determination and your 
commitment to transportation, it is commendable.
    Secretary LaHood. Thank you.
    Mr. Sires. I wish I had served with you.
    Secretary LaHood. Thank you.
    Mr. Sires. And I have to say that, as someone who has been 
a local official and worked on a local issue of transportation, 
I hope the--this focus on speed rail does not take us away from 
passenger rail. It seems to be a big focus. Because in my 
district, passenger rail has been a godsend.
    I remember being a local official in what they call the 
Hudson Bergen Light Rail. And all the comments that were made 
about where we were going to get this money, how long is it 
going to be, I have to tell you it has been the best thing that 
has happened in my district. Because growth along all the 
stations is immense. Jersey City has just--it is the gold 
coast. And it is all because the light rail--Hoboken, New 
Jersey, there was just one part was developed, now the west 
part of it, because of the light rail, that moves people around 
and takes you into the city.
    I know we had a little incident with the tunnel going into 
New York recently--I hope you don't hold that against us when 
we do the next tunnel, because the driving engine in my region 
is New York City, in terms of creating jobs. People come as far 
back as Pennsylvania into New York City.
    And one of the things--you know, people talk about debt. I 
have to tell you. I was sick when I first got here, voting on--
there was a vote for the war in Iraq, where we were placing 
$100 billion for 5 years, infrastructure construction in Iraq. 
And my district, it needs all the infrastructure money it can 
get. And we are spending $100 billion when they are going to 
blow it up 3 months later, and not paying for it.
    I mean those are the kind of things that just make me sick, 
you know, when we talk about this debt that we incurred. I just 
feel that, you know, the creation of jobs, transportation, 
areas that really need it certainly are a worthwhile 
investment. And, obviously, what is $50 billion today is going 
to be 60 tomorrow. But if it creates jobs, it brings business 
to the area, where the business hire people, I think it is an 
investment that America cannot miss.
    So, I don't really have a question. And I love the fact 
that we are buying stuff made in America. I think that really 
tops it off. So let's invest not only in passenger rail, but 
also freight. You know, the Lincoln Tunnel in New Jersey now is 
$12 to get through. And they had a big billboard--and I think I 
told this to the chairlady--just before going into the tunnel, 
and it had President Lincoln on it. And you know what the 
billboard said? It said, ``President Lincoln. A great 
President. Lousy tunnel.'' And now it is $12. So you can 
imagine how important this was to have light rail, passenger 
rail bringing people into the city.
    So, I commend you for your determination. I commend you for 
your--you know, I can see why the President picked you. Thank 
you very much.
    Secretary LaHood. Look it. New York and New Jersey are the 
transportation Meccas in terms of airports, in terms of rail, 
in terms of highways, and also in terms of light rail. We are 
going to continue to make investments.
    One of the things that I told Governor Christie, when he 
and I finally agreed on how we were going to resolve the ARC 
project, is--because he said something that--similar to what 
you just said. We have big transportation needs, what he said, 
and he said, ``I hope you don't--this issue with the ARC and 
our disagreement doesn't disadvantage us.''
    And my statement back to him was, ``Absolutely not. Where 
we have Governors and mayors and congressmen and Senators that 
want to get something done on transportation, we will be a 
partner.'' And we are going to continue to be partners in New 
Jersey, because New York and New Jersey has huge, huge 
transportation issues. And where we have leadership, like we 
have now in the New York Governor's office, and in the New York 
mayor's office, and in offices all over New Jersey, including 
Members of Congress, and in the Senate and in the House, you 
will have good partners with us.
    Mr. Sires. Thank you very much.
    Mr. Shuster. Just--you talk about New Jersey and New York 
and some of the problems they face there. Seventy percent of 
the chronically delayed flights come out of that air space 
across the country. So high-speed rail in the Northeast 
Corridor, getting some of these flights out of the air from 
Washington to Boston, Washington to New York, would be a great 
help to the air space.
    Secretary LaHood. Mr. Chairman, you just made the case for 
passing an FAA bill.
    [Laughter.]
    Secretary LaHood. If we want to get to NextGen, we don't 
need any more extensions.
    Mr. Shuster. I am all----
    Secretary LaHood. We have had 22 extensions. We have gone 
5\1/2\ years beyond the time of the last bill. We need an FAA 
bill. I hope you will pass it.
    Mr. Shuster. We did pass it in the House. I think a couple 
of times we have tried to do that. But we are all committed to 
passing that, because I agree with you 100 percent.
    And with that, I yield to Mr. Denham 5 minutes.
    Mr. Denham. Thank you, Mr. Chairman. Mr. Secretary, again, 
thank you. I am looking forward to getting the plan on how this 
money is going to be invested. I would ask that you submit that 
to us before next week's hearing, which is specifically on 
California high-speed rail.
    On the overall picture of transportation funding, you had 
said something I found interesting. I am a freshman here. This 
is my first year, my first transportation bill. I do believe 
that Congress should have a set of priorities. And certainly 
Congress should have a pool of money for transportation 
projects. I do believe that improving our infrastructure can 
create American jobs.
    But you had mentioned Congress presenting that, coming up 
with the presentation. I would assume, just like in California, 
when I served in the State Senate, the Governor comes up with 
his proposal on priorities, that the administration would come 
up with a list of priorities on what you think the 
transportation projects should be across the Nation, and how 
money should be best spent, as well as where the revenue for 
that would come from. Do you have a plan on the overall 
transportation project?
    Secretary LaHood. Yes, sir. I will be happy to share it 
with you. It is a $550 billion plan that the President has put 
forth. It is a comprehensive transportation program, and we 
will be happy to share it with you.
    Mr. Denham. Thank you. And the pay-for on that?
    Secretary LaHood. The pay-fors will be included.
    Mr. Denham. So there is a revenue stream for----
    Secretary LaHood. Absolutely.
    Mr. Denham. And do you----
    Secretary LaHood. You want--do you want to get into great 
detail? I think it would be better if I just--I will share it 
with you, and then if you want me to come and visit with you 
about it, I will be happy to do it.
    Mr. Denham. I would love to see it. I would love to--I 
would welcome the meeting. Can you give me just an example of 
the broader aspects? Are we--I don't need to go line by line on 
the revenue, but I would like to at least get a good 
understanding of whether or not----
    Secretary LaHood. Use of the highway trust fund, which has 
been diminished over the years, but is set aside for the use of 
transportation. It is the way we have always paid for it. And 
then there are some other provisions in there. And I don't have 
them at my fingertips, but I will be happy to share them with 
you.
    Mr. Denham. How much is in the trust fund, currently?
    Secretary LaHood. How much is the trust fund? Well, look 
it. It fluctuates. I mean I don't have the figure today. I will 
get it. I will put it on the record for you. I am sure one of 
those smart staff people up there knows exactly what the figure 
is.
    Mr. Denham. He says 220. So, ballpark, where does the other 
330 come from?
    Ms. Brown. Excuse me----
    Secretary LaHood. Congressman, I will be happy to share the 
revenue part of it with you, as well as the plan. Look it, if I 
say something here on the record and it is not quite accurate, 
somebody is going to point that out. I will share it with you, 
so I can get it accurate.
    Mr. Denham. OK. But are we looking at--I mean that is a big 
number. Are we looking at bonding? Tax increases----
    Secretary LaHood. If--you asked me if the President has a 
plan. The answer is yes. Does he have the revenue to pay for 
it? The answer is yes, and I will be happy to share it with 
you.
    Mr. Denham. Thank you.
    Secretary LaHood. Actually, the committee has it. I mean we 
have submitted it.
    Mr. Shuster. I appreciate the gentleman's questions. And 
again, we are going to have a hearing on California next week.
    And so, we certainly would look forward to making sure we 
have it. I don't know for sure, but we would like to have it in 
our hands before next Thursday's hearing.
    And with that, Mr. Capuano?
    Mr. Capuano. Thank you, Mr. Chairman. Mr. Secretary, again, 
thank you for coming and doing this today.
    I want to be real clear. I am a big supporter of high-speed 
rail. I particularly like the national long-term vision. I 
think it is the right vision, and I think it is the right goal 
to have. At the same time, it is also a goal, like anything 
else, that you and I both know can't be achieved quickly. It is 
going to take some time, as the interstate highway system was 
done. It was done over a long period of time. And we are now 
into the next round of repairing some of the things we have. 
And for me, that is where the Northeast Corridor comes in.
    I understand fully well and support the concept of bringing 
rail all across this country, including intercity and 
everything else. But when it comes to the Northeast Corridor, 
the only way--and I guess here has been my concern--the 
problems that I have found on the Northeast Corridor are like 
anything else. It is already in a--the most heavily congested 
area in the country, it is difficult to deal with some of these 
issues.
    Right now you are dealing with one of the most important 
ones, it is that junction in New York City. We talked about how 
New York impacts air traffic, but it also impacts rail traffic 
to a great degree. I will tell you. I ride the rail from Boston 
to New York, and as often as I go I don't do it from Boston to 
DC because of the holdup in that New York area. It just makes 
the ride too long and too unpredictable.
    Some of the things you are doing are fine. Some of the 
things, however, will need national leadership from the FRA and 
others, which is not the natural bent. And I will give you an 
example.
    I mean if there is a stretch of rail in Connecticut that 
needs to be addressed, some people in DC want to see it as a 
Connecticut problem, when the fact is it is not. It is national 
problem, because it prevents Amtrak and others, the high-speed 
rail, from actually being a high-speed rail.
    Even as we have now, I will tell you--I guess they have 
stopped doing it, but I laughed the first time that I rode the 
high-speed rail, when they announced for a matter of 30 seconds 
that the train had hit a speed of 100 and whatever miles an 
hour, and then we slowed right down. And then we sat outside of 
Penn Station for an hour. Now, this is several years ago and, 
again, that is being addressed.
    But what I guess I want to say is as you are doing the 
long-term vision--and I also want to say one other thing before 
I forget it. As far as the amount of money that goes, you are 
never going to have enough money to do it. You know it and I 
know it. The demands we have for transportation are 
significant, we will never meet them. So I am not worried about 
how much. We will debate the how much in the greater scheme of 
things. But to me, the questions to you are most properly 
addressed in whatever it is you get, if it is $1, $1 billion, 
or $10 billion, what will you do with it? Priorities, that is 
the issue.
    Some of them you do need to come to us for, and I 
appreciate that and I agree with it. Some of them you don't. 
And for me, the question is--and it is not really a question 
but a comment--when you do these things, I would strongly 
encourage you to talk to your people to let them know that 
sometimes a Federal vision, a national vision, requires 
national muscle to tell local and State people that these are 
the priorities you are going to have.
    If you have to go to a given State or a given region and 
say, ``This is what we are doing, because this is a problem''--
again, this junction that you are doing in New York, I can't 
remember the name of it, is a classic example. It may not be 
seen as a problem by the very people in that State--in this 
case it would be New York--who say, ``Well, it is not a problem 
for us, it is your problem.'' It is the same thing--and I think 
that is the problem all along the Northeast Corridor, is that 
it was built not as a national rail. It has kind of become one 
over the years.
    But the only way to get through some of these things, and 
to make this money worth spending, is for the Federal 
Government to get in there and say, ``Here is what we are 
doing. Here is what we are doing now. This is the tunnel we are 
going to fix. This is the intersection we are going to fix. 
This is the holdup we are going to fix,'' to actually take what 
we already have and make it into what it could be, which is a 
true--maybe not true, but as close as we can get to a true 
speed rail. And I know you are doing it, but I really just 
wanted to take my time to encourage you to do it more.
    And as far as the other projects go--and I am not even 
kidding--it is going to take many, many Members of Congress 
from my seat, and many, many Members--and many Secretaries of 
Transportation to get this done. In the meantime, as you are 
fighting, trying to get the California and the northwest and 
all the other projects done, as they get held up, as you have 
debates in California--the truth is, I don't know how I feel 
about the California rail. I know there is issues, I have heard 
some of them. But rather than sitting and just pushing it, 
which you should do, in the meantime don't let the others go 
south.
    And a classic example is the northeast rail. We had to 
wait, really, to get the scraps from other States to get much 
done. And there is still money that is not obligated, and there 
are projects on the Northeast Corridor that need to be done. 
And all I am saying is while you are fighting the--which I 
agree with--don't let the existing structure go unimproved when 
we know what to do, and we know how much it is going to cost.
    And with that, Mr. Secretary, it is not really a question, 
more of an encouragement.
    And also a thank you. You have done it, I just want you to 
do it even more.
    Secretary LaHood. Thank you.
    Mr. Shuster. I know the Secretary had a hard stop about an 
hour ago, he got twice what he bargained for. But I just want 
to encourage them----
    Secretary LaHood. Donna has been here from the beginning.
    Mr. Shuster. I know she has. And I just want them to know 
the Secretary has been here an hour longer than he--than we 
negotiated. So if you would ask your questions, we want you to 
have that time. But if you can put anything in writing to 
shorten it, I am sure he would appreciate it.
    Secretary LaHood. Take your time.
    Mr. Shuster. Go ahead.
    Secretary LaHood. Take whatever time you want.
    Mr. Shuster. Ms. Edwards, one of the great players of the 
congressional football team.
    [Laughter.]
    Ms. Edwards. Thank you, Mr. Chairman.
    Mr. Shuster. She played football, too.
    Ms. Edwards. Thank you. And--middle linebacker, thank you 
very much.
    [Laughter.]
    Ms. Edwards. Thank you, Mr. Secretary, and I appreciate 
your time and your passion, and I really do share it.
    I was looking at, you know, some of the numbers, and 
appreciate also that Maryland was a recipient of about $90 
million for bridge work and tunnel work, as part of the 
Northeast Corridor. And while I share the view and the passion 
of so many of our colleagues on this committee for the 
Northeast Corridor, I also understand the importance of 
creating a national vision. And we wouldn't want to take away 
from that.
    I looked at the numbers for the initial grantmaking. First 
of all, about--you had $57 billion in requests for $8 billion 
that was available. I happen to have believed, at the time when 
we created this, that we needed to have more of an investment, 
because I knew that the demand was there. And I think that, 
from your testimony as well, speaks to the demand.
    I also note that of the $8 billion, the overwhelming 
majority of it actually did go to the Northeast Corridor, if I 
am correct in looking at those numbers. And so I am a little 
bit unclear--and I will just go right to the question--when the 
interstate highway system was developed, and the vision had to 
spread out across the Nation, I remember looking at a 
documentary several years ago about a small--the story of a 
small town that had fought tooth and nail not to be part of 
that highway system. And this documentary told the story of 
that town and how it died over time, because it wasn't included 
in the vision.
    And so, I wonder if you could talk about the vision for a 
national rail system, with that in mind, and understanding that 
it is going to take us some time to get there, even though 
there are some profitable corridors in which to invest.
    And then, secondly, I would like you to address, if you 
would, why it is you think that the Northeast Corridor didn't 
receive an application for private investment. I find that 
curious because, frankly, I have always thought that, really, 
if you want infrastructure as a Nation, that the citizens of 
Montana and Maryland ought to invest in our infrastructure as a 
Nation, and not necessarily be dependent on private investment. 
And so I am curious as to why the most profitable and dense 
corridor of our rail system didn't receive applications for 
private investment.
    Secretary LaHood. I think that during the last 3 years 
there has been new leadership at Amtrak, and they have put a 
team of people together. And I think during that process maybe 
they were busy trying to straighten a few other things out. But 
now they have straightened things out. Ridership is way up, 
profits are up. They are making money. And I think that they 
understand that they need to find some other partners that can 
be helpful to them.
    But--and the other part of it is that the Federal 
Government has basically been the only partner that Amtrak has 
really had. And--but I think Amtrak now understands that they 
need to look around and see what other opportunities are there.
    I can--Congresswoman, I can cite you examples of light 
rail, bus service, streetcars, high-speed rail. If you build 
it, they will come. The ridership will be there.
    And all along these corridors, what happens is what 
happened along the interstate system. Lots of small businesses 
that hire 4, 5, 6, 12 people. And these really become the 
opportunities for people all along these communities. These 
corridors, whether they be rail or streetcar or light rail or 
bus or high-speed rail become economic corridors, once they are 
there, because of all the people that are using the services 
and the small businesses that pop up along train stations or 
next to train stations.
    And the classic example here in Washington, DC, is Dulles 
Airport. I am sure people thought whoever had an idea to build 
an airport out there, they thought that person was crazy. Why 
would you do that 50 miles from Washington, when you have an 
airport right in downtown Washington? And look what happened? 
Look at the corridor that exists there now.
    The Silver Line will be complete. But the Silver Line will 
be used mostly by working people who can't afford a car or a 
gallon of gasoline, but are going to the airport to work, or 
going to one of those businesses that are along the corridor 
there. That corridor is a corridor of economic development, and 
those exist all over America, where people had good visions for 
what happens when you build a road, build a bus line, build a 
light rail, build a streetcar line, or whatever.
    Ms. Edwards. Mr. Secretary, thanks for your leadership.
    Secretary LaHood. Thank you.
    Mr. Shuster. Ms. Richardson.
    Ms. Richardson. Yes. Thank you, Mr. Chairman. And, Mr. 
Secretary, let me start off by saying you looked quite dashing 
last night.
    Secretary LaHood. Thank you.
    Ms. Richardson. Three quick questions for you, and one 
comment to my colleagues.
    First of all, I just want to remind everyone that all roads 
to glory always lead west. So we appreciate your efforts. And I 
thank Ms. Edwards for at least allowing California to stay on 
the map.
    Mr. Shuster. Will the gentlelady yield? Did you mean 
western Pennsylvania when you said that?
    [Laughter.]
    Ms. Richardson. No, sir. I meant the real west, where the 
gold was found, and----
    Mr. Shuster. Just want to check.
    Ms. Richardson [continuing]. And you know, the shores of 
California.
    But my three questions are very brief. First of all, sir, 
my question is I know Mr. Denham--I had an opportunity to 
participate in a hearing with transportation with Mr. Mica. And 
initially in our proposal in California it started off that the 
segment would be in the Central Valley. There has obviously 
been multiple discussions. And it is my understanding that any 
future proposals has to include the Central Valley.
    Are you still, you know, committed that it has to be the 
Central Valley? Or is there openness to other potential routes?
    Secretary LaHood. It is the Central Valley. And again, this 
is not stuff we make up. We go to the stakeholders that have 
been involved in these projects for 15 years, and we take our 
cues from them.
    But we also have made investments in--we made a $450 
million investment in Transbay. That is not in the Central 
Valley, by the way. It is at the other end. It is at the start.
    So the idea that we are just--this is kind of a dead-end 
thing in California is not accurate. We made a half-a-billion-
dollar investment in Transbay, which is in San Francisco, in 
downtown San Francisco, which is one of the demarcation points 
for the high-speed rail. Everything is not in the Central 
Valley, but we are in the Central Valley. We have made a 
commitment there. That is where people want us to be. And so 
until somebody tells us differently, or they have a different 
plan, that is where we are going to be.
    Ms. Richardson. OK. I just wanted to clarify. My other two 
questions were not related, but I think very important, timely.
    If we have a CR, one of the things I found with the 
airports is that some jobs are not considered essential 
positions. And I went to a particular room where people, if 
there is an accident or a major issue--one lady was retiring 
and I was told that they weren't able to backfill her position.
    Have you had an opportunity to reevaluate if there is any 
positions that are currently not listed as essential that could 
be included if--in the event our budget success is not as we 
hoped?
    Secretary LaHood. We need for Congress to pass an FAA bill. 
We do not need any more extensions. We simply do not. We need 
Congress to pass a transportation bill. We have gone 2\1/2\ 
years beyond the last bill. There is nothing that we can do 
creative right now in transportation, because we are operating 
on a bill that expired 2\1/2\ years ago.
    There are certain provisions that OPM uses to define 
essential employees, and that is what we go by.
    Ms. Richardson. OK. And then my final question is regarding 
TIGER funding. I know we are in our second round here, and it 
is very positive, and State and local governments are excited 
about the opportunities.
    I just wanted to point out to you in my particular region 
it is my understanding that--like, let's say if the Port of Los 
Angeles receives TIGER funding, then the Port of Long Beach, 
because it is within the same region, even though on its own 
merits they are the two largest ports in the country, Port of 
Long Beach would be somewhat in a disadvantage, because of some 
of the wording. Are you familiar with that concern?
    Secretary LaHood. Well, a port would not be disadvantaged 
if another port got a TIGER grant.
    Ms. Richardson. OK. It is my understanding in the funding--
--
    Secretary LaHood. You know, I would just say this. We are 
right in the middle of our deliberations. I don't know if these 
ports have submitted TIGER grants or not. But I really 
shouldn't be talking about specific projects, but I will say 
this. A project will not be disadvantaged because of its 
proximity to another project.
    Ms. Richardson. OK. That was not what was communicated to--
--
    Secretary LaHood. Well, if I have it wrong, I will correct 
the record and I will get back to you this afternoon. I will 
check it out.
    Ms. Richardson. Thank you sir, and thank you for your 
service----
    Secretary LaHood. Thank you.
    Mr. Shuster. And if--the gentlelady from Florida has one 
question I believe she wanted to----
    Ms. Brown. Thank you. Thank you again, Mr. Secretary, for 
coming, being so gracious with your time, particularly on your 
birthday. I want to say happy birthday.
    Secretary LaHood. Thank you.
    Ms. Brown. And I do want to mention--I didn't mention it 
earlier, because I didn't think it was appropriate, but you did 
look very nice last night.
    Secretary LaHood. Oh, thank you, Ms. Brown.
    [Laughter.]
    Ms. Brown. Goodness. But the last question. The GAO report 
mentioned that the good grantsmaking process was very 
transparent, and you all did a good job. They did make some 
recommendations. Many of my colleagues want to tell you where 
to put different, you know, funds and how to do the grants, and 
we don't like the way you've done it, then we have some 
problems with it.
    Do you want to say anything to that? Because I think you 
all did a yeoman's job. And I mean you have been just such a 
bright spot, I have to tell you----
    Secretary LaHood. We have tried to make these decisions 
based on the merits of the projects. And--but look it. As a 
former Member of Congress, I know these projects are important. 
And I am not offended at all when a Member of Congress calls me 
to put in a plug for their project. And--but they all get fair 
consideration.
    And I am very proud of the fact that the $48 billion that 
we got under economic recovery has all been spent. And there 
hasn't been one bad story about this money. There were no 
boondoggles, no earmarks, no sweetheart deals. We created 
65,000 jobs with 15,000 projects. I am proud of that.
    It goes to my point: Transportation creates jobs. You pass 
a transportation bill, a lot of friends and neighbors will go 
to work. We proved it with $48 billion, all spent correctly, 
all spent by the way Congress told us to spend it.
    Ms. Brown. I think one of the problems is for the first 
time ever in the history of the United States you have people 
that really don't want America to succeed, really don't want to 
put people to work, because we know that if we invest in 
transportation for every billion dollars we spend, we generate 
44,000 jobs. And for the first time ever, we have a committee 
that is just not committed to putting people to work.
    And my position is let's get to work. Like you say, let's 
pass the FAA bill. Let's pass the transportation bill. Let's 
put American people to work. Thank you so much for your 
leadership.
    Secretary LaHood. Thank you, thank you.
    Mr. Shuster. It is always good to have the gavel, because 
you get the last word. And there are people in this Congress 
that want to put America back to work, we just don't think that 
the Federal Government spending money helped to create jobs. In 
fact, we have got a tremendous debt crisis. You know, our 
financial house is in disarray. There is incredible uncertainty 
out there amongst our small businesses. That is why they are 
not investing in their businesses.
    So, you know, there is a group of us up here that really 
want to see America succeed, because we know that the Federal 
Government is not going to be the job creator, it is the 
private sector. But there are things the Federal Government is 
charged to do that we should do and we should invest in, and 
one of those is transportation. That is why I am on this 
committee, because I believe.
    If only that stimulus bill that was passed would have 
really been serious about creating jobs, serious about 
rebuilding our infrastructure, we wouldn't be having this 
discussion here today. We would probably be slapping each other 
on the back and saying what a great job it was we rebuilt this 
highway, we rebuilt that, we expanded this, we built that. I 
mean it would have been a tremendous story to tell, if we would 
have spent just maybe $250 billion out of the $800 billion, 
instead of $60 or $70 billion, depending on how you calculate 
it.
    So, again, there are those of us in Congress that really 
want to put the American people back to work in a meaningful 
way that will be sustainable, and that is by keeping taxes low, 
putting regulatory certainty out there, and investing in 
transportation and infrastructure.
    So again, Mr. Secretary, thank you for spending your 
birthday with us. You got twice what you bargained for. And 
again, I will have to concur with my colleagues. You did look 
dashing last night.
    [Laughter.]
    Mr. Shuster. So again, happy birthday, and thanks for 
coming.
    And the next panel, as soon as the Secretary makes his way 
from the table, we will get you set up for the next panel.
    Ms. Brown. Excuse me. I do want to tell you that the Talgo 
news--yes.
    Mr. Shuster. Are we missing Mr. Geddes? Mr. Geddes missing 
in action out there? Well, we are going to go ahead and get 
started. But yes, we are going to go ahead and get started with 
our second panel.
    And then our second panel is made up with the Honorable 
Joan McDonald, who is the chairperson of the Northeast Corridor 
Infrastructure and Operations Advisory Commission; Mr. Ken 
Orski, editor and publisher of Innovation NewsBriefs; right on 
cue, Mr. Richard Geddes is the adjunct scholar at the American 
Enterprise Institute. And Ross Capon, the president and CEO of 
the National Association of Railroad Passengers.
    Thank you all for being here with us today. And with that, 
we will start with Ms. McDonald. You may proceed. And please 
keep your testimony to 5 minutes. Thank you.

     TESTIMONY OF JOAN MCDONALD, CHAIR, NORTHEAST CORRIDOR 
  INFRASTRUCTURE AND OPERATIONS ADVISORY COMMISSION; KENNETH 
ORSKI, EDITOR AND PUBLISHER, INNOVATION NEWSBRIEFS; R. RICHARD 
  GEDDES, ADJUNCT SCHOLAR, AMERICAN ENTERPRISE INSTITUTE; AND 
   ROSS B. CAPON, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF 
                      RAILROAD PASSENGERS

    Ms. McDonald. Good afternoon, Mr. Chairman, Representative 
Brown, and members of the committee. I am Joan McDonald, 
commissioner of the New York State Department of Transportation 
and chair of the Northeast Corridor Infrastructure and 
Operations Advisory Commission.
    The commission is made up of 18 commissioners representing 
8 States, the District of Columbia, U.S. DOT, and Amtrak. 
Another five States, four freight railroads, and one commuter 
agency are nonvoting representatives. We all bring unique 
perspectives to the table. We all agree the Northeast Corridor 
and its connecting feeder services are critical transportation 
assets, and are closely tied to the economic future of the 
entire northeast region.
    As has been mentioned earlier today, the Northeast is the 
densest region in the Nation. It is home to 4 of the 10 largest 
metropolitan areas, generating 20 percent of the U.S. GDP. 
However, this density creates significant transportation 
challenges for the region.
    Some 260 million commuter and intercity riders, and an 
estimated 30 million ton-miles of freight are moved over the 
corridor each year by more than 2,200 daily trains. The service 
we have today is not enough to meet the future needs of our 
region and our Nation. The corridor is congested in many 
locations, and demand for rail service is growing.
    For much of its history, the Northeast Corridor has 
suffered from underinvestment. We now face a considerable 
backlog in state-of-good-repair needs that require billions of 
dollars of investments. Amtrak's Northeast Corridor master plan 
estimated that $52 billion is needed over the next 20 years, 
just to maintain reliable service for all users of the 
corridor.
    Addressing capacity needs beyond 2030 will add 
substantially to that total. While our corridor's needs are 
significant, there is not a clear consensus long-term vision 
for the future of the corridor. The charge of the commission, 
as we see it, is to bring together diverse interests, develop a 
unified, long-term vision for the corridor, and establish that 
consensus on a plan to secure the public and private 
investments needed to implement the vision. By coming together 
to coordinate these activities, the States, Amtrak, and the 
Federal Government can achieve a level of success that far 
exceeds the potential reach of any individual entity.
    Critical to the process is the passenger rail corridor 
investment plan being led by the FRA in cooperation with the 
commission, the Northeast States, and Amtrak. The Northeast is 
a compelling market for high-speed rail service, and compares 
favorably to other nations that have successful implemented 
high-speed rail. The question we need to answer is: What is the 
right path forward? And how do we fund it?
    The commission's approach is cooperative, fact-based, and 
nonideological. We will look to do what is best for the long-
term economic growth of the northeast region. We will seek 
opportunities to partner with the private sector, while 
ensuring that the public interest is protected.
    The Northeast Corridor benefitted from the $1.3 billion in 
capital funds appropriated to Amtrak in the economic recovery 
act, and received another billion dollars in high-speed rail 
program grants. And I must add that during that process each 
State endorsed the other States' proposals for consideration to 
U.S. DOT. These projects are creating jobs and helping to 
improve rail service.
    In my home State of New York, under the leadership of 
Governor Cuomo, we are advancing a number of important projects 
on the Northeast Corridor mainline, and our empire corridor, an 
important feeder. One of my short-term goals, as chair of the 
commission, is to facilitate close cooperation between FRA, the 
States, and Amtrak, to ensure that all of these projects move 
forward as quickly as possible.
    Despite the importance of the funding we have received so 
far, much more is needed. The commission is working to identify 
priority projects that need to move forward as soon as 
possible.
    On behalf of my fellow commissioners, we appreciate this 
committee's strong support for the Northeast Corridor, and look 
forward to working with you. A strong Federal partnership is 
critical to our success. Thank you, and thank you for the 
opportunity to testify today.
    Mr. Shuster. Thank you, Ms. McDonald.
    And with that, Mr. Orski.
    Mr. Orski. Thank you, Mr. Chairman, for the opportunity to 
testify before you. As requested, I shall only briefly 
summarize the key points of my testimony. The committee, I 
believe, has my full statement.
    Mr. Chairman, let me state at the outset that I do not 
question the merits of or the need for the intercity passenger 
rail service, nor do I question the desirability of high-speed 
rail, a technology that I believe we should pursue in this 
country. What I do question is the manner in which the 
administration has gone about implementing its $10 billion 
initiative.
    The administration's first misstep, in my judgment, has 
been to misleadingly represent its program as ``high-speed 
rail,'' thus conjuring up an image of bullet trains cruising at 
200 miles per hour, just as they do in western Europe and the 
Far East. In reality, the administration's rail program will do 
no such thing. A close examination of the grant announcements 
shows that, with one exception, the program consists of a 
collection of planning, engineering, and construction grants 
that seek incremental improvements in existing facilities of 
Class I freight railroads in selected corridors used by Amtrak 
trains.
    Now, those improvements may result in some cases in top 
speeds of 110 miles per hour. But the average speeds will 
increase only modestly. Average speed is a more accurate 
measure of performance and service quality than top speed, for 
it determines trip duration, which is, after all, what really 
counts, from a traveler's perspective.
    Had the administration candidly represent the HSR program 
for what it is--and that is an effort to introduce useful but 
modest enhancements in existing intercity Amtrak services--it 
would have earned some plaudits for its good intentions to 
improve train travel. But by pretending to have launched a 
``high-speed renaissance,'' when all evidence points to only 
small incremental improvements in speed and trip duration, the 
administration, I believe, has suffered a serious loss of 
credibility. Its pledge to bring high-speed rail to 80 percent 
of Americans is not taken seriously any more.
    The administration's second mistake, in my opinion, has 
been to fail to pursue its objective in a focused manner. 
Instead of identifying a corridor that would offer the best 
chance of successfully deploying the technology of high-speed 
rail, and concentrating resources on that project, the 
administration has scattered $9 billion on 145 projects in 32 
States. Indeed, the program bears more resemblance to an 
attempt at revenue sharing than to a focused effort to pioneer 
a new transportation technology.
    Ironically, the Northeast Corridor has received scant 
attention. And yet, as other witnesses and members of the 
committee have pointed out on repeated occasions, this is where 
high-speed rail has the best chance of succeeding. It is 
probably the only rail corridor in the Nation that has all the 
attributes necessary for viable high-speed rail service, and it 
is also the only corridor where passenger trains do not have to 
share track, and thus are not slowed by freight traffic.
    Now, to its credit, the administration belatedly recognized 
the potential of the Northeast Corridor, and made some useful 
grants. Now, these grants are a small beginning in what will 
hopefully become a restructured high-speed rail program 
refocused on the northeast program--corridor.
    Finally, a comment about the role of the private sector. As 
Chairman Mica and you, Mr. Chairman, have observed more than 
once, there is a clear need for substantial financial 
participation by the private sector, in view of the constraints 
of the Federal and State budgets. The density of travel in the 
Northeast Corridor and its continued growth should, in 
principle, generate sufficient stream of revenue to attract 
private capital.
    However, this is still an untested hypothesis. We simply do 
not have enough experience with public-private partnerships in 
the passenger rail sector to confidently predict the response 
of the private investment community, its assessment of the 
risk, rewards, and expected rate of return on investment in 
such an enterprise.
    Thus, I believe that an early step, Mr. Chairman, in the 
process should focus on thoroughly exploring the potential of 
private financing and ascertaining the private investors' 
interest in this venture, both domestically and 
internationally. And this, I might add, should include an 
examination of the lessons learned from the Channel Tunnel 
project, the largest rail infrastructure project totally 
financed by the private sector. Thank you, Mr. Chairman.
    Mr. Shuster. Thank you, Mr. Orski.
    And with that, Mr. Geddes, you are recognized.
    Mr. Geddes. Thank you, Mr. Chairman, and all the members of 
the committee, for inviting me to once again appear in this 
hearing. My name is Rick Geddes, and I am an associate 
professor in the department of policy analysis and management 
at Cornell University, and a visiting scholar at the American 
Enterprise Institute.
    Let me state from the outset that I am a firm supporter of 
high-speed passenger rail in the United States, and those 
corridors and on those routes where it makes economic sense. 
Such corridors are likely to have the population densities, the 
proven ridership or the indications thereof, and the public 
transportation options at stations necessary to yield positive 
social benefits to additional investment.
    The hearing today focuses on concerns about recent attempts 
to expand high-speed rail through the High-Speed and Intercity 
Passenger Rail Program. I believe that two errors were made. 
The first, which has been highlighted, is the issue of trying 
to spread taxpayer funds out over too many projects across the 
country, rather than focusing resources on improving existing 
corridors with demonstrated demand. The second was in not 
creating the institutional structure and public policies 
necessary to attract and retain private investment. I wish to 
discuss each of these in turn.
    The social returns on investing in high-speed rail are 
likely to vary widely across different possible routes. In 
particular, the market population must be sufficiently dense to 
support high-speed rail. And for several reasons, the Northeast 
Corridor is likely to yield the highest social returns to 
additional investment.
    First, population densities in areas served by the 
Northeast Corridor are very high, with over 50 million people 
living in the corridor, even though it represents only 2 
percent of the Nation's landmass.
    Second, one of the main concerns in constructing any new 
high-speed rail line is forecasting ridership. This issue has 
not been discussed today, and I think it is critical. How is 
ridership going to be forecast? The record of ridership 
forecasting for new passenger rail lines around the world is 
very poor. The estimates typically are overestimated, while the 
costs of construction are typically underestimated. This has 
been documented in detail by a professor at Oxford University, 
Bent Flyvbjerg. Ridership in the Northeast Corridor is known. 
So only changes in ridership induced by new investment need to 
be estimated. A major hurdle is thus already overcome.
    Third, much of the necessary right of way is already in 
hand. Although additional right of way may be needed to 
accommodate improved high-speed rail service, this greatly 
reduces uncertainty regarding the cost of installation. 
Uncertainty surrounding both the costs and the benefits of 
additional investment in the Northeast Corridor are low, 
relative to new lines.
    Fourth, cities along the Northeast Corridor, such as 
Washington, New York, and Boston, feature well-developed local 
transit systems that facilitate passengers' use of intercity 
passenger rail systems.
    These considerations all suggest that scarce public dollars 
should be directed first to making much-needed improvements to 
high-speed passenger rail in that corridor. That is likely to--
where the marginal returns are the highest.
    In my view, the second concern was a failure to create the 
institutional structures necessary, and to focus on those 
structures to attract private investment to high-speed rail, 
and instead relying almost exclusively on taxpayer funding. 
There are many advantages of including private participants, 
which I outline in my written testimony. Private investment, I 
believe, can play a major role in improving passenger rail on 
the Nation's entire network. But I believe it is important to 
separate the Northeast Corridor financially from the rest of 
the system, because that corridor is most likely to be able to 
operate without subsidies, without operating subsidies, and 
because the rest of the system operates mainly on freight train 
tracks, unlike the Northeast Corridor.
    On the Northeast Corridor I believe a public-private 
partnership should be structured so that firms wishing to 
operate passenger rail service would bid against one another on 
the basis of the size of an upfront concession payment for the 
right to operate. That upfront payment could then be used to 
help fund necessary improvements to the infrastructure on the 
corridor.
    This approach is also fair, since future riders would 
effectively be paying for the physical infrastructure 
improvements that they would be using. Private investment in 
passenger rail infrastructure can also be used on other parts 
of the network. But the nature of the bidding must change. That 
is why I believe it is important to do the Northeast Corridor 
separately. I am happy to explain that later.
    Future efforts to improve high-speed passenger rail in the 
United States should focus on attracting private investment and 
on first renovating existing routes, where I believe the social 
returns to the next dollar of investment are the highest, 
rather than on constructing a--or trying to construct a number 
of new lines. Those returns are likely to be highest for 
renovations and improvements on the Northeast Corridor.
    To mitigate taxpayer costs, improve performance, and 
enhance innovation, the private sector should be engaged as a 
full partner through public-private partnerships, and I believe 
that is possible.
    Thank you once again, and I look forward to answering your 
questions.
    Mr. Shuster. Thank you, Mr. Geddes.
    And with that, Mr. Capon, who has been here before a number 
of times. Good to have you back. You may proceed.
    Mr. Capon. Thank you for having me back. Thank you, Mr. 
Chairman and Ms. Brown. I wanted to acknowledge the presence of 
the volunteer chairman of our association from Fort Myers, 
Florida, Bob Stewart.
    Perhaps the most singular ``lesson learned'' is that it 
takes a Federal partner to advance passenger train 
improvements. In our view, it was essential that a substantial 
part of the funds in this program go to upgrading conventional 
services. In spite of pleas from the States for over 15 years, 
Federal funds generally have not been available to support 
State investments in conventional intercity passenger trains. 
One exception, a happy exception, is the Keystone Corridor, 
where Amtrak was able to match, dollar for dollar, I believe, 
Pennsylvania's investment. And that became a success story.
    But back in 2002, AASHTO put out a fairly thick book, their 
first report on intercity passenger rail transportation, that 
documented the many conventional corridors around the country 
that were crying out for investments. President Obama, when he 
launched this program, made it clear that part of the funds 
would go to upgrading conventional service. The administration 
also, of course, made an effort, in Florida, California, and 
more recently the Northeast Corridor, to do ``true'' high-speed 
rail.
    But back to conventional rail. The need for conventional 
rail as an important part of the transportation network is 
illustrated both here and abroad. There is a table on page 2 of 
my statement that shows that in France, where they have a well-
developed TGV high-speed rail system, the non-TGV share of 
intercity rail is 70 percent. That reflects the fact that it is 
the network that counts, and high-speed rail works, as I think 
the chairman has pointed out, where there is a network not just 
of commuter trains, but also of connecting intercity trains.
    In this country, California's three conventional corridors, 
the ones that exist today, account for 18 percent of all Amtrak 
passengers. The Downeaster, I think, deserves particular 
mention--this is the train between Boston and Portland. Before 
this train started running, so many people said it would be a 
flop. It was too slow. It wouldn't go to Boston's South 
Station, it wouldn't go beyond Portland. It makes too many 
stops. And today, it is considered very successful. In fact, I 
have heard that a major reason that--the second major reason 
that Massachusetts students go to University of New Hampshire 
is because of the accessibility that the Durham station on the 
Downeaster line provides to the university.
    The conventional rail projects also improve the freight 
network because the added track capacity that results from 
these projects is available 24/7, whereas the passenger trains 
are not using those tracks 24/7.
    The elimination--the trends in the aviation industry 
underline the growing need for passenger trains. And just on 
November 29th it was reported that as Southwest Airlines gets 
out of the Pittsburgh-Philadelphia market, the nonrefundable 
round trip fair for US Airways apparently is going to jump from 
$118 to $698.
    I have heard people talk in Ohio about how they really wish 
there was a train to take from Columbus to Cleveland, 
especially when they are trying to drive on a nasty day.
    Nearly 90 percent of the portfolio, as the Secretary's 
written statement points out, is invested in five key 
corridors. So I don't see this as revenue sharing. I see this 
as being concentrated, for the most part, on conventional lines 
that desperately need and have been waiting for improvements. A 
lot of this investment is just beginning to take place. And the 
silver lining, as I point out in my written statement, is that 
at a time when a lot of cries are heard for more stimulus, the 
rail program is just starting to generate valuable jobs in a 
much bigger way. In fact, North Carolina DOT has a chart that 
shows that 2013, 2014 is going to be when employment for its 
rail projects peaks.
    The GAO report said that the administration ``established a 
fair and objective approach for distributing these funds and 
substantially followed recommended [grantmaking] practices used 
throughout the Government,'' and that ``an application's 
technical review score was largely the basis for the selection 
deliberations.'' So we think that the administration did, on 
balance, a good job.
    The fundamental problem that we have, as you have pointed 
out, is the shortage of money. But that is just as much a 
problem with the Northeast Corridor. If 100 percent of the 
money had gone into the Northeast Corridor, people would still 
be looking at the price tag on getting the job done, and they 
would see a gap between needs and available funds perhaps even 
bigger than the gap that has already been observed with regard 
to California.
    But we commend the committee for holding this hearing and 
for its tremendous interest in intercity passenger rail, and we 
look forward to working with you as the program goes forward.
    Mr. Shuster. Thank you. Thank you very much. And with 
that--before I go to Ms. Brown--let Ms. Brown start the 
questioning--just your last, very last point there. I believe 
that if you take care of the bridges that cross New Jersey to 
New York, you take care of the Baltimore Tunnel, and you take 
care of the catenaries on the Northeast Corridor, I have been 
told you can reduce the time from New York to--from Washington 
to New York by 15 or 20 minutes. And if you are--when you get 
15 or 20 minutes, you get more--I think you start to 
incrementally also get more people riding the train. So I think 
that that is a step in the positive direction.
    You know, obviously, it is going to be a big bill to do the 
Northeast Corridor the way it is. But I think along the way--
and I will give you a chance to rebut that, if you want to, 
but----
    Mr. Capon. OK.
    Mr. Shuster [continuing]. Let me get Ms. Brown first to go 
ahead.
    Ms. Brown. Thank you very much. I am going to start with 
Ms. McDonald. I think this is the second time I have heard you 
or someone from your organization this year, because I came up 
to New York for the hearing. And let me just thank you all.
    You know, when I listen to my colleagues, or experts that 
is, they call themselves experts on the discussion, they act as 
if the Northeast Corridor is just one area. How many different 
cities, communities, groups are involved? And they act as if 
they can just go into these communities that are already 
developed and just say, ``Well, we are going to run through 
there at 200 miles an hour.'' They don't have a clue. And it is 
not my job to give them a clue.
    Ms. McDonald. Well, you know, we are in a Federalist 
country, and we have--as I stated, the commission has 18 
members. It is a collection of eight States, the District of 
Columbia, U.S. DOT, and Amtrak. And I think, you know, in a 
part of the country that is very much home rule-oriented, the 
fact that these States come together, and major cities in this 
country--Boston, Philadelphia, New York, Washington, 
Wilmington, Baltimore, and work collectively for the corridor 
is extremely important, because when you get on a train you 
don't know when you are crossing a State line.
    You know, when you get on a road, you don't know if it is a 
State road or a local road. It is the transportation network. 
And the Northeast Corridor commission is looking at it as a 
network, and it is highly critical that we keep that message 
clear.
    Ms. Brown. And I agree with you. I mean I was in 
Connecticut, I was able to get on a train at 5:00 in the 
morning or 6:00 in the morning and go to New York. The key is 
not just how fast it will go. In the testimony that I have 
heard, it is knowing that it is going to be there at a certain 
time every day. Reliability.
    And that is--and it is also homeland security. I mean when 
we had 9/11 or other incidents, the only thing that was moving 
was the train.
    Ms. McDonald. And to that point, reliability is a key 
factor on determining whether someone will take a train or not. 
And as I mentioned in my testimony, on the corridor it is 2,200 
trains a day. And that includes freight rail, commuter rail, 
and intercity passenger rail.
    Ms. Brown. And the key is to keep it separated. Keep it 
safe.
    Ms. McDonald. The key is to keep it reliable and safe. That 
is correct. And it is--and as many people have said today, when 
the goal on a high-speed rail line--it is an average speed--is 
to make sure that when you say you are going to leave your 
destination at a certain point in time and arrive at your final 
destination, that that reliability is there.
    Ms. Brown. Yes. And of course, when I have been on trains 
in other countries, that has also been the key. They run a 
certain speed going into the cities, but it is different when 
you are out in the countryside. But they also have it separated 
so that cars can't integrate into the system. There are many 
factors.
    If we could fix some of those tunnels, which is very 
expensive, that would cut down on the time. And bridges.
    Ms. McDonald. Yes, in the Northeast we have some of the 
oldest infrastructure in the country, and--except for the 
tunnels, which have their own interesting challenges, we suffer 
from severe weather changes. So all those are factors. And, as 
I mentioned, the disinvestment that has occurred over the last 
decades contributes to why the need is so great.
    Ms. Brown. Thank you. Mr. Capon, I have a question about 
the Talgo--the announcement that I mentioned. Talgo is shutting 
down its Milwaukee train. This was announced yesterday in the 
Milwaukee paper. And we are going to lose 4,700 jobs because 
Governor Scott Walker rejected Federal funds for the high-speed 
rail line between Milwaukee and Madison when he took office. It 
is worth noting that he went back and tried to apply for a 
portion of that $810 million he had earlier rejected.
    Can you give me some insight as to what we need to do, 
dealing with the politics of the time and the investment that 
let's say this company made or the community made in bringing 
this, the Talgo, to this community?
    Mr. Capon. Yes. Well, I was actually at that plant within 
the past 2 months. And I believe the city of Milwaukee put $22 
million into restoring it. It was an old automobile plant, I 
believe. And obviously, we disagreed with the Wisconsin 
Governor's decision.
    I think that one of the things--one of the most encouraging 
things that I have seen in the 30-plus years I have been doing 
this job--is the number of places where trains have become 
established and accepted where they didn't exist 10 or 20 years 
ago. And in fact, we earlier this year gave our Golden Spike 
awards to the two Republican Senators from Maine, because of 
their strong support of Amtrak and the Downeaster.
    Downeaster is a classic example of a service that did not 
exist before 1991. Mainers were watching the legislation that 
the House Appropriations Subcommittee had this year that would 
have eliminated the ability of Amtrak to provide any support 
for the State-supported trains. I got a phone call on Sunday 
night November 13th from a Portland, Maine, reporter--just 
before the appropriations deal was announced--who was--you 
know, just wanted to get any glitter of information he could, 
because the Downeaster is such an important fixture up there 
now.
    So, my theory, the best success is success. In other words, 
if we have more and more Downeasters, more and more people that 
have trains in their lives, that makes it much harder to turn 
it into a partisan issue, which--I think really did happen in 
Florida, because we heard, you know, about high-speed rail for 
15, 20 years.
    Ms. Brown. Thirty, sir.
    Mr. Capon. Thirty.
    Ms. Brown. Thirty.
    Mr. Capon. Excuse me. And then all of a sudden in the 
last----
    Ms. Brown. I was--30.
    Mr. Shuster. Could you wrap up, please? We want to get to 
the next questioners.
    Mr. Capon. The last X months it was no longer ``high-speed 
rail,'' it was ``Obamarail.''
    So I think that getting more of these projects going, and 
getting more satisfied customers is the key, ultimately, to 
getting more support.
    Mr. Shuster. Thank you very much.
    Ms. Brown. I agree with you, and thank you very much.
    Mr. Shuster. Thank you.
    Ms. Brown. And let me just say I am going to figure out 
what we are going to do. Because when we invest taxpayers' 
dollars, we have got to make sure that we have a way of 
recouping, and taking the politics out of it.
    Mr. Shuster. That is awfully tough to do, but we will work 
with you on that.
    Ms. Brown. Thank you.
    Mr. Shuster. A question for--first of all, the--my 
colleague from Florida brought up that it is not always about 
speed, it is about reliability. And I was--related to me that 
the folks at Virgin Rail that run one of the western rails from 
Manchester to London, they--it is--one of their lines, it was 
about an hour and 15 minutes, and they thought they could get 
it down to 55 minutes by some improvements. So as any good 
company that provides a service to people, went to their 
customers and said, ``Hey, we want to reduce the time from an 
hour and 15 to 55.''
    And overwhelming, the response came back as, ``No, we don't 
want it to be less than that,'' and it perplexed them. So they 
looked at it even closer. Well, why, exactly? And the average 
commuter said, ``An hour and 15 minutes gives me time to get on 
the train, get my coffee, set up my computer, and I get about 
an hour's work done. If you have 55 minutes, I get my coffee, I 
sit at my computer, I got maybe 40, 35 minutes.'' So they 
rejected it.
    So, it is not always about speed. It is about the service, 
the reliability, what makes sense to the traveling public. So 
you know, I think that is an important point that my friend 
from colleague pointed out--or my friend from Florida pointed 
out.
    My question first is just a yes or no to all of you, just 
yes or no. Do you believe that Amtrak needs significant reform? 
It is a yes or no. If you don't think--it is a question of 
significant reform. I will take that as a----
    Ms. McDonald. I can't say maybe?
    Mr. Shuster. No.
    Ms. McDonald. Yes.
    Mr. Shuster. Mr. Orski?
    Mr. Orski. Yes.
    Mr. Shuster. Geddes?
    Mr. Geddes. Yes.
    Mr. Shuster. Mr. Capon?
    Mr. Capon. No.
    Mr. Shuster. I believe it does. And you know, it is--and we 
can talk about a lot of the underinvestment over the years, and 
there has been some significant underinvestment. But we still 
need to find ways--one of my colleagues today pointed out about 
the fact that you buy a hot dog for $4.50, and it costs them $6 
to produce it. I mean that is just stupid, if we are operating 
a business like that. So, I believe that it needs significant 
reform.
    Mr. Orski, you have said--and I agree with you, and I 
wonder if you could talk a little bit about the administration 
25 years, 80 percent. That is really a false expectation. Based 
on what they have been doing over the past year, can you--do 
you still have that same thought, or do you think it is worse? 
What are your thoughts on that?
    Mr. Orski. Yes, Mr. Shuster. I do think that, had the 
administration candidly represented the HSR program for what it 
is, it could have earned some credit for doing useful things by 
improving rail service incrementally. Its biggest mistake has 
been to really hype the program to represent it for what it 
really is not. It is not a high-speed rail program, it is a 
program of passenger rail improvements which, in themselves, 
are a useful measure. But it is certainly not what the 
administration and the President himself had represented from 
the very start.
    Mr. Shuster. I agree with that. Mr. Geddes, in your study--
one question I ask. I don't know if you have looked at this, 
but you talked a little bit about forecasting, its poor 
forecasting. Do you know and have you looked at when they are 
forecasting, do they take price elasticity into their equation 
to determine if people are going to ride or not ride? At what 
price they are going to ride or not ride?
    Because I have been on the Keystone--I ride the Keystone 
Corridor. And in prime time it is $39 one way and in off times 
it is $29. And I have just, you know, sketched out the cost for 
me to go to Harrisburg to Philadelphia, what it costs me in the 
car with parking and all those things. And it seems to me that 
they could raise the price. And especially the business--the 
traveling business people are going to pay $5, $10, $20.
    So, in your looking at Amtrak and pricing and forecasting, 
do you know if they take price elasticity into figuring that 
out?
    Mr. Geddes. Yes. Thank you, Mr. Chairman. I think that 
there are actually two different academic literatures that we 
would be referring to. One is the literature on forecasting 
ridership for a new project, sort of a mega-project, and what 
would the likely ridership be on that. The other literature 
would be regarding exactly what you are referring to of price 
elasticities on existing lines. And suppose we were to raise 
the price by 10 percent. How many riders would we lose? And 
would that increase or decrease our revenues? So I am certain, 
you know, there is a literature for passenger rail on 
elasticities.
    But there is this other literature that I am referring to 
in my testimony that has been reviewed exhaustively by Bent 
Flyvbjerg at Oxford about we are going to build a new big 
project. What do we expect the ridership to be? And then he 
goes back and looks at what the actual ridership was. And he 
finds that many of the ridership projections were wildly 
overstated. And particularly relevant for today's discussion is 
that they were most overstated on a lot of the passenger rail 
projects. So you have to be very, very careful about the 
ridership projections for new passenger rail projects.
    Mr. Shuster. Right. And I think you were all here for the 
Secretary. I don't believe the Secretary is making up any of 
his numbers, but I believe the folks in California on the high-
speed train, they are making stuff up. Because I have seen, you 
know, their--the price they are charging is low, the numbers 
are inflated. I mean it is crazy. So I think that is a real 
problem, and across the board with Government. When the 
Government is involved in pricing things out, they never get it 
right.
    Mr. Geddes. I am happy to follow up with any elasticity 
information----
    Mr. Shuster. Sure.
    Mr. Geddes [continuing]. That would be helpful.
    Mr. Shuster. I thank you. I appreciate it. Now, you 
mentioned about bidding, the bidding process. Can you expand 
upon that?
    Mr. Geddes. Yes, certainly. So one of the key things in 
public-private partnerships is how the bidding is conducted, 
what the nature of bidding is. And what I was suggesting in my 
testimony is that a logical approach to bidding for the 
Northeast Corridor on the right to operate the trains--a 
concession--you mentioned Virgin Rail in the UK, and you know, 
that would be an example of a private operating company that 
could come in. And Amtrak could be another bidder, as well. 
Perhaps a concession might last 10 years, or something of that 
nature. But you would lay out all the terms of service in 
detail.
    Reliability has been a point of emphasis here. You could 
lay out exactly what schedule you want, with enforceable 
penalties and rewards for bad or good performance, and then bid 
on the basis of which company will give you the biggest up 
front concession payment.
    I am thinking about some lease--this is not fantasy, this 
has been done on toll roads around the world where, you know, 
there is an existing toll road. You get an upfront lease 
payment in exchange for a private operator to operate the road. 
And I am suggesting in this case to use that lease payment to 
help improve the infrastructure in the Northeast Corridor. And 
the effect of that is to have future riders paying for the 
infrastructure improvements that they will be using, which I 
think is an inherently fair approach.
    Now, bidding off the Northeast Corridor may have to take a 
different structure, because I don't believe that the other 
non-Northeast Corridor routes are self-sustaining, even in an 
operating cost type of a sense. Some people would say, ``Oh, 
well, you can't use a public-private partnership in that 
case.'' Well, that is false. You can still use a public-private 
partnership, even if it requires an operating subsidy. It is 
simply that the nature of the bidding for the PPP has to 
change.
    Mr. Shuster. Right.
    Mr. Geddes. You bid on the basis of the lowest subsidy you 
will accept, rather than the biggest payment you will make. And 
that has a wonderful, I think, public policy outcome, in that 
you get not only transparency in exactly what the subsidies 
are, but you get the least subsidy, the smallest subsidy you 
need to operate that route. So taxpayers, in effect, get the 
most value for money through this bidding type of approach, 
even on non-Northeast Corridor routes.
    Mr. Shuster. Well, thank you for that. And I am going to 
have another round of questions for myself. So, Mr. Capon, I am 
going to give you, the next time, an opportunity to rebut me.
    And with that, Mr. Cravaack, if you----
    Mr. Cravaack. Thank you, Mr. Shuster. Mr. Capon, you claim 
that if--in your testimony--that if the high-speed rail program 
focused solely on the Northeast Corridor, national support and 
enthusiasm for the program could not have been sustained.
    So, are you saying that the program was correct to spread 
the money thinly over numerous projects in the interest of 
garnering political support, rather than focusing on the 
Nation's best opportunity to actually have a high-speed rail 
system?
    Mr. Capon. Well, I am saying two things. I am saying if all 
the money had gone to the Northeast Corridor, you would not 
have begun to address the list of projects that Mr. Shuster 
just asked me about. The magnitude of the needs in the 
Northeast Corridor are that great.
    Number two, I am saying that, as the Secretary said, 90 
percent of the money went to five major projects. There are 
small amounts of money that went to States to start rail plans 
that don't have rail plans, which I think is worthwhile. But 
that was a tiny fraction of the money. The 90 percent of the 
funds, the five projects are the Pacific Northwest, the 
Cascades, the California routes, the Midwest, the Northeast to 
North Carolina. These are all projects--these are all lines 
that are heavily used, heavily used trains where the 
improvements are needed.
    And I can agree that some of the rhetoric that the 
administration has used does not track, as he said, with all of 
these projects. But that does not mean that the projects are 
not worthwhile.
    Mr. Cravaack. Fair enough. And I am all for making sure 
that our Federal dollars are spent in the right places. 
Whatever makes sense, let's go into--explore that. What doesn't 
make sense, I think, we are wasting the Federal dollars.
    And I have a--I am kind of curious. In March of 2011 the 
GAO noted that the Federal Railroad Administration applied its 
established criteria for weighing the merits of rail projects 
during the eligibility and technical reviews. But the GAO could 
not verify if this criteria was used for the final selection 
process, because the rationale given for the final selection 
was typically vague.
    In your testimony, you described how the GAO found that the 
FRA established a fair and objective approach for distributing 
act funds and substantially followed recommended discretionary 
grand award practices used throughout the Government.
    To clarify, or perhaps reconcile, do you know how these 
priorities were set in this administration's decision to award 
high-speed rail funding?
    Mr. Capon. First of all, the stuff that I said was--were 
quotes from the report. But I realize that----
    Mr. Cravaack. Right.
    Mr. Capon [continuing]. It was also the points that you 
made. I do not know the details of that. I know, from having 
worked this job for over 30 years, where the States had 
established successful programs, and when the money goes to 
those programs and I see the ridership generated--intuitively, 
it looked like commonsense good decisions. But I can't give you 
the nuts and bolts answer that I think you were looking for.
    Mr. Cravaack. Right. OK, great. This fiscal climate kind of 
alluded to Secretary LaHood. Where do you propose the Federal 
Government obtain the funding for this ongoing Federal 
commitment? I mean we committed $1 billion to Amtrak. I mean 
that is a commitment, as far as I am concerned. But where you 
find, in regards to what our debt is, how do we justify 
spending hard-earned American taxpayer dollars into rail 
projects--and I don't mind doing that, providing it makes 
common sense. And that is my--so where do you think we should 
be able to get the funding?
    Right now we have a $3.5 trillion budget. And 
unfortunately, $1.6 trillion of that money is borrowed. In 10 
years we are handing our children a $23.5 trillion debt. That 
is what we have done.
    Mr. Capon. Right.
    Mr. Cravaack. So we have to be very judicious with our--
with the American taxpayer dollars, and not spend ourselves--we 
are in the shadows of Greece. We are in the shadows of Italy. 
And if we don't have a viable economy and we do not have a 
Government that is not imploding, I mean these trains aren't 
going to mean a thing.
    So, where do you see this funding coming from?
    Mr. Capon. Yes. First of all, I heard two parts of the 
question. One is how do we justify the expenditure. And I think 
the justification for the expenditure goes to some of the 
points the Secretary made, in terms of the population growth 
that is expected, the fact that we can't pave over the country 
and try to do this all with highways and aviation and still 
have a quality of life that is worth living. So I think that 
the justification is there.
    Now, where do you get the money? Everyone says that the 
gasoline tax increase is a nonstarter. But it is worth noting 
that the U.S. Chamber of Commerce is in favor of a gasoline tax 
increase. Also, Maryland just opened this toll road, the 
InterCounty Connector. I bought an E-Z Pass for my car, even 
though I only use it twice a year to cross the Bay Bridge. I 
firmly believe that tolling highways is another source of 
revenue that is going to be used a lot more.
    I am not necessarily in favor of what is entrapment, speed 
traps that are designed to raise revenue, but that is another 
issue.
    I could create, I guess, a lot of enemies by getting beyond 
transportation and talk about the subsidies in the energy field 
and agriculture. I mean I guess everyone has their list of 
somebody else's ox that they would like to gore. But from a 
good Government standpoint I would say that, as an automobile 
driver, we are not paying our full share, and that that is one 
of the major potential funding sources.
    And there was a TRB report, Transportation Research Board, 
from about 12 years ago that said where you could show impact 
on aviation congestion that you could justify using aviation 
user funds on high-speed rail development.
    Mr. Cravaack. Thank you, sir. My time has expired, I yield 
back.
    Mr. Shuster. Thank you. And with that, Ms. Brown for 
another question.
    Ms. Brown. Thank you, thank you. I would just like to 
continue to say that this is transportation, and this is 
investment, and that is what we need to be doing here. I mean 
the fact is we have our debt--we ran two wars on the credit 
card, and all of a sudden we want to pay for it out of social 
security and transportation. And transportation is what puts 
people to work. And all of the economists indicate that what we 
need to do is invest and put people to work to grow the 
economy.
    But Ms. McDonald, let me just ask you a question. There has 
been a lot of criticism regarding the transparency of the 
program. Can you describe the New York experience? And would 
you agree that this is an example of good grantsmanship? 
Because basically, what experience did New York have in 
applying for the grant? The stimulus money, I think that is 
what we are talking about.
    Ms. McDonald. Sure.
    Ms. Brown. That, you know, we need shovel-ready projects, 
as if you can go out and start digging before you do the 
environmental studies and other things that go into it. I don't 
have time to educate the Members about what goes into having it 
ready. But if it is ready, then if there is funding, when it 
comes along, there is a lot of prior planning. None of this 
happened overnight. In Florida we have been working on high-
speed rail for 30 years. All right.
    Ms. McDonald. Sure. New York State DOT released a rail plan 
which covered all aspects of rail, both freight rail, intercity 
passenger, and commuter rail in 2009. And that served as the 
basis of our requests for funding from Federal Railroad 
Administration.
    We actually found--and most of this process was initiated 
before my tenure began on February 1st of this year--we found 
the process extremely--I won't say easy, but extremely 
straightforward to navigate, putting in the grant applications 
to the Federal Railroad Administration. What I applaud FRA on 
was the fact that for each grant that you were requesting, you 
had to identify service outcome agreements. And those are tied 
to whether they claw back the money or not in the future.
    And in New York's instance, particularly on the Empire 
corridor between New York City and Albany, New York, that right 
of way is partially owned by Metro North Railroad, our commuter 
railroad, and partially owned by CSX. We had----
    Ms. Brown. I know.
    Ms. McDonald [continuing]. A very intense negotiation 
with----
    Ms. Brown. I know.
    Ms. McDonald [continuing]. CSX, Amtrak, and New York State 
DOT, and I am here to tell the committee that it was an 
extremely favorable outcome. And----
    Ms. Brown. Well, I can tell you it took a lot of work.
    Ms. McDonald. It did take a lot of work.
    Ms. Brown. It really did.
    Ms. McDonald. But I will quote our colleagues in FRA and 
some of my new friends at CSX Railroad that said this agreement 
that normally takes--a negotiation that normally takes 3 to 5 
years we completed in 4 months. And it was with the guidance of 
FRA all along the way. So it was a very productive process. It 
will result in improvements to freight rail, and it will result 
in improvements to passenger intercity rail and commuter rail 
all along that corridor.
    Ms. Brown. OK. Mr. Capon, I want to ask you that--you know, 
there is a lot of discussion about high speed, as if it was 
just one grants program. But it was high-speed and intercity 
passenger rail. Can you talk about the difference between the 
two?
    And do you happen to know how much the United States has 
invested in passenger rail compared to highway and aviation? 
Because it is just a lot of discussion about how rail doesn't 
pay for itself. No form of transportation pays for itself, the 
last time I checked. It is the Government deciding that we are 
going to compete. And we are not competing in Florida with 
Mississippi and Alabama, we are competing with people from 
other countries. And it is important for us to understand the 
importance of moving goods, people, and service, and keeping 
them separated, and keeping it safe.
    Mr. Capon. Difference between high-speed rail and what some 
people call higher speed rail, which is, you know, improving 
conventional, I guess there are different definitions. I think 
there is one in the Federal statute that is 110 miles per hour.
    The point I was going to make is that for the traveler, 
they are not necessarily looking at the top speed or the 
average speed, they are just looking at the running time. How 
long does it take me to get there? What does that tell you? 
That tells you that you can get a Seattle-Portland businessman 
on board a train at a lower speed than a Chicago-St. Paul 
businessman.
    And, by the way, when I first came to Washington, 3 hours 
was the limit. You know, you couldn't get a businessman to ride 
more than 3 hours. I think the tolerance is now more than 3 
hours.
    You asked also about funding. I think that there was 
actually an article yesterday where Senator Lautenberg said 
that the Federal highway spending last year of $40 billion was 
more than the Federal Government had spent on Amtrak in its 
entire history. And I think during that same period the Federal 
investment in highways was about--over $1 trillion. And there 
was actually a fact checker that said--check with the FAA--and 
gave the approval for the accuracy of what the Senator had 
said.
    Ms. Brown. Well, sir, just don't confuse us with facts up 
here. Thank you.
    Mr. Shuster. I thank the gentlelady for pointing that out 
to the witnesses.
    First of all, I will go to Mr. Capon, and you can rebut. As 
I think you said, talked about the Northeast Corridor, it is a 
massive bill. And my response was it is massive, but it is 
beneficial, I think, to take--if you are able to reduce it by 
20 minutes with several billion dollars, let's do it, and that 
will improve ridership and hopefully revenues. I believe it 
will.
    So, you can rebut that----
    Mr. Capon. Yes, well----
    Mr. Shuster [continuing]. But you can't take my whole 5 
minutes. I know you are passionate about trains, but be 
succinct.
    Mr. Capon. No, I certainly support the investments in the 
Northeast Corridor. My point was the projects that you listed 
will go well beyond the $10 billion.
    And probably job one over everything is that some of the 
investments, including ones that you mentioned, if they don't 
get done within our lifetimes, the corridor is going to 
collapse and shut down, and that would be the worst outcome 
possible.
    Mr. Shuster. Right. And that is why I think spending this 
money all over the country was wrong. It should have been 
focused where we get the best bang for the buck.
    And with that, I forgot Mr. Hanna. I apologize. I yield you 
5 minutes for questions.
    Mr. Hanna. Thank you, Chairman. Mr. Geddes, what is the 
rationale behind allowing a company that is not financially 
stable, like Virgin Rail in Europe, of course, to bid on a 
project where you can't predict the stream of income, either 
positive or negative, whether it is a subsidy or a pay-in by 
the company? How can you justify that when the--at the end of 
the day, the only backstop is the U.S. Government?
    Mr. Geddes. Sure. I don't want to comment on Virgin Rail's 
financial condition, specifically, but----
    Mr. Hanna. Better than Amtrak's.
    Mr. Geddes. Right. But in general, in terms of private 
involvement, I think your point is very well taken, because 
there is inherent risk in any investment, whether it is 
investment in maintenance and upgrades in a track, or 
investment in an entirely new high-speed rail line. It is 
always risky.
    The question--and the risk doesn't go away simply because 
it is entirely public investment. The risk is simply borne on 
the back of taxpayers. The risk is still there. That is a 
critical point. It is just borne by taxpayers. When you include 
the private investor, you get equity investors, typically, who 
bear some of that risk in return for an expected rate of 
return. But they take some of the risk off of taxpayers and 
bear it themselves. Some projects will perform well, some 
projects will perform poorly.
    Mr. Hanna. Right, I get that. And that is kind of obvious. 
The point is, where do you go when the money is gone? How do--
where--shouldn't there be some threshold of capacity, some 
bond, some potential to go somewhere for that amount of money?
    Mr. Geddes. You mean if the project fails----
    Mr. Hanna. If the----
    Mr. Geddes [continuing]. And the private investor----
    Mr. Hanna. If the project fails to make money, and the 
public demands the service, the Government is left with its 
back against the wall to pay the bill.
    Mr. Geddes. Well, first, I mean, it would be like any 
typical hierarchy in a bankruptcy proceeding, where the first 
people to go are these--like equity investors.
    Mr. Hanna. But the point is--excuse me--you typically don't 
let people in on a project that aren't viable, regardless. To 
bid something--Ms. McDonald would not let a--someone bid a DOT 
road that didn't have a bond, that wasn't bondable. How do you 
come up--shouldn't we be looking for companies--multinationals, 
perhaps--that are large enough to actually be the backstop, as 
opposed to the U.S. Government, over some----
    Mr. Geddes. Oh, sure----
    Mr. Hanna [continuing]. Period of time?
    Mr. Geddes [continuing]. Absolutely. Yes. I think you and I 
are in complete agreement on that. I believe we should be. And 
there are--I mean a lot of them are outside the United States. 
But internationally, there are very large companies that are--
Transurban and Fluor are building the hot lanes on the DC 
Beltway. So they are the backstop.
    Mr. Hanna. Mr. Capon, do you--can you tell me how you would 
estimate the value of the pressure it would take off--and I 
apologize, as I am late, if you have already discussed this--
the pressure this high-speed rail project would take off of, 
say, LaGuardia and Boston and the Thruway, and all the roads in 
between?
    I mean how do you add that value into what we can use to 
justify doing this?
    Mr. Capon. You asking me?
    Mr. Hanna. Yes, sir. I am sorry.
    Mr. Capon. Well, the overall transportation efficiency of 
the network becomes greater to the greater extent that air 
traffic--short distance air traffic is inefficient. The airline 
executives know it. And they are--they would love to have the 
slots at LaGuardia for longer flights. And if--so that if the 
proportion of short trips on taking on rail dramatically 
increases, that increases----
    Mr. Hanna. No, obviously. But I am talking about the math 
itself.
    Mr. Capon. OK.
    Mr. Hanna. How do you attach a value to that? Have you ever 
looked at that side of the equation?
    Mr. Capon. The only thing I can tell you off the top of my 
head is that I know the German Government about 10 or 15 years 
ago did a fairly elaborate and forward-looking analysis of the 
rationale for their rail investment that I think guided some of 
the kinds of things that you are alluding to.
    Mr. Hanna. But it has not been done, that you know of? Do 
you know--something to look at, maybe. Thank you.
    Mr. Capon. Thanks.
    Mr. Hanna. I yield back.
    Mr. Shuster. I thank the gentleman. I think that is an 
interesting point you bring up, and something we ought to look 
into.
    Ms. McDonald, I want to make sure I am clear. Your position 
on public-private partnership with the Northeast Corridor, is 
that something you support?
    Ms. McDonald. I do. I support looking at all alternatives--
--
    Mr. Shuster. OK.
    Ms. McDonald [continuing]. For making it viable.
    Mr. Shuster. So I think it is--you are obviously--New York, 
you are on the commission--it is critical to make sure that New 
York is on board. Because I think, in the end of the day, it 
is----
    Ms. McDonald. Yes.
    Mr. Shuster [continuing]. Something we have to do.
    Ms. McDonald. And, you know, we--I think we, all of us that 
are in the transportation industry, we will be able to see the 
benefit of----
    Mr. Shuster. Right.
    Ms. McDonald [continuing]. Of some of the successes and 
failures over the last 10 years of these public-private 
partnerships that----
    Mr. Shuster. Right.
    Ms. McDonald [continuing]. Really looking at the revenue 
stream, and what it can generate, and what impact that has on 
fares. You know, some of the experience on the automobile toll 
side, the revenues haven't realized--so a lot of interesting--
--
    Mr. Shuster. Right.
    Ms. McDonald [continuing]. Issues that would need to be 
addressed.
    Mr. Shuster. And Mr. Orski, private companies being 
involved is critical?
    Mr. Orski. Yes. Very much so, Mr. Shuster. Nevertheless, I 
think this is still an untested hypothesis, that the private 
sector is willing and able to participate, let us say, in the 
Northeast Corridor.
    There is some experience, however, internationally. And I 
did cite to the Channel Tunnel, a project that was supported 
totally by private capital. So I would suggest that in any 
analysis of private participation in the Northeast Corridor, 
one of the first things we should do is investigate the 
interest of private investors, both domestically and 
internationally, in participating in the project.
    Mr. Shuster. Well, you are absolutely right. And that leads 
to my next and final question to Mr. Geddes.
    In your research, have you found out there are companies, 
private companies, interested in investing not only in the 
Northeast Corridor, but some of these other rail lines that 
we--I put in some language in legislation to go and find some 
of these nonprofitable lines and see if there is interest out 
there in the public sector--in the private sector.
    Mr. Geddes. Yes. My research indicates to me that it is, in 
some sense, very mechanical. If the private sector investors 
are compensated for the risks that they are assuming, they will 
invest. And if they are assured of getting that--we are--
typically here we are talking about long-term investment. This 
is not 1 or 2 years, this is a long-term investment. They have 
to be assured of getting that investment over that long period 
of time. That is why I emphasized the institutional structures 
that you need to make public-private partnerships work, 
particularly in something like passenger rail.
    But I believe it is almost mechanical, in the sense that if 
that return is offered to compensate for the risk that you are 
assuming, they will invest. And if it is not, they won't. They 
will go look overseas, which is what--tragically, in my view--
infrastructure investment in the United States, with the 
deepest and broadest capital markets in the world, is going to 
other countries.
    Mr. Shuster. Right.
    Mr. Geddes. China and India, we talk about them 
constructing infrastructure. They are building it through 
private investment, largely.
    Mr. Shuster. Right. And I have talked to some of these--
Herzog is a company that is interested in the United States. Of 
course, Virgin Rail, they have been in to see me. Veolia, 
Keolis, all doing that. All--some of them have operations 
already in this country and they are up and running.
    So, again, I have got to get to another meeting, so I am 
going to end this. I appreciate all of you being here today.
    As long as you don't filibuster me, Mr. Capon. I know you 
have a passion for passenger rail. Thirty seconds, go.
    Mr. Capon. OK. I just want to make clear that my no answer 
to your question on Amtrak reform does not mean I regard Amtrak 
as a perfect organization.
    Mr. Shuster. That is----
    Mr. Capon. And I would like also to put something in the 
record for--in response to Mr. Hanna's question. I think I may 
have something that----
    Mr. Hanna. OK.
    Mr. Capon [continuing]. That deals with that.
    Mr. Shuster. That would be great. Again, thank you very 
much. And I appreciate with respect to your passion for 
passenger rail. But you sometimes go on like a Senator.
    [Laughter.]
    Mr. Shuster. And in the House we have got the 5-minute 
rule, which I try to adhere to.
    Again, I want to thank all of you very much for coming 
today. I really appreciate you taking the time and helping to 
educate us here and bring us up to speed on some of these 
issues that we are discussing.
    So, again, thank you very much. And it is--I ask for 
unanimous consent for Members to submit statements and 
questions for the record within 3 business days.
    And with that, the meeting is adjourned. Thank you very 
much.
    [Whereupon, at 2:17 p.m., the committee was adjourned.]


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