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



 
                   CALIFORNIA'S HIGH-SPEED RAIL PLAN:
                SKYROCKETING COSTS AND PROJECT CONCERNS

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

                                (112-69)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               ----------                              

                           DECEMBER 15, 2011

                               ----------                              

                       Printed for the use of the
             Committee on Transportation and Infrastructure

                   CALIFORNIA'S HIGH-SPEED RAIL PLAN:

                SKYROCKETING COSTS AND PROJECT CONCERNS






                   CALIFORNIA'S HIGH-SPEED RAIL PLAN:
                SKYROCKETING COSTS AND PROJECT CONCERNS

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

                                (112-69)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 15, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=house&committee=transportation
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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........................................    vi

                               TESTIMONY
                               Panel One

Hon. Dennis A. Cardoza, a Representative in Congress from 
  California's 18th District.....................................    45
Hon. Devin Nunes, a Representative in Congress from California's 
  21st District..................................................    45
Hon. Jim Costa, a Representative in Congress from California's 
  20th District..................................................    45
Hon. Kevin McCarthy, a Representative in Congress from 
  California's 22nd District, and Majority Whip..................    45
Hon. Loretta Sanchez, a Representative in Congress from 
  California's 47th District.....................................    45
Hon. Dana Rohrabacher, a Representative in Congress from 
  California's 46th District.....................................    45

                               Panel Two

Joseph C. Szabo, Administrator, Federal Railroad Administration..    67
Roelof Van Ark, Chief Executive Officer, California High-Speed 
  Rail Authority.................................................    67
Hon. Jerry Amante, Mayor of Tustin, California, and Member, Board 
  of Directors, Orange County Transportation Authority...........    67
Hon. Ashley Swearengin, Mayor of Fresno, California..............    67
Gregory R. Gatzka, Director, Kings County Community Development 
  Agency.........................................................    67
Elizabeth Goldstein Alexis, Co-Founder, Californians Advocating 
  Responsible Rail Design........................................    67
Kole Upton, Vice President, Preserve Our Heritage................    67

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Joe Baca, of California.....................................   111
Hon. Russ Carnahan, of Missouri..................................   113
Hon. Anna G. Eshoo, of California................................   117
Hon. Barbara Lee, of California..................................   118
Hon. Zoe Lofgren, of California..................................   120
Hon. Laura Richardson, of California.............................   121
Hon. Adam B. Schiff, of California...............................   126

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Dennis A. Cardoza...........................................   127
Hon. Devin Nunes \1\.............................................
Hon. Jim Costa \1\...............................................
Hon. Kevin McCarthy \1\..........................................
Hon. Loretta Sanchez.............................................   132
Hon. Dana Rohrabacher \1\........................................
Joseph C. Szabo..................................................   136
Roelof Van Ark...................................................   233
Hon. Jerry Amante................................................   249
Hon. Ashley Swearengin...........................................   255
Gregory R. Gatzka................................................   258
Elizabeth Goldstein Alexis.......................................   270
Kole Upton, Vice President.......................................   278

                       SUBMISSIONS FOR THE RECORD

Hon Gary C. Miller, a Representative in Congress from the State 
  of California, request to submit the following letters with 
  questions to the California High-Speed Rail Authority about the 
  California high-speed rail plan:

        Letter to Michael Rossi, Board Member, California High-
          Speed Rail Authority, from the following members of the 
          California State Legislature: Assemblywoman Diane 
          Harkey, Assemblyman David Valadao, Assemblyman Brian 
          Jones, Senator Doug LaMalfa, Senator Bob Huff, and 
          Senator Bob Dutton, December 8, 2011...................     5
        Letter to Bonnie Lowenthal, Chair, and Kevin Jeffries, 
          Vice-Chair, California Assembly Transportation 
          Committee, from Assemblywoman Diane L. Harkey, 73rd 
          District, November 29, 2011............................    12
Hon. Laura Richardson, a Representative in Congress from the 
  State of California, request to submit the following letters:

        Letter to Hon. John L. Mica, a Representative in Congress 
          from the State of Florida, and Chair, Committee on 
          Transportation and Infrastructure, from the US High 
          Speed Rail Association, December 15, 2011..............    27
        Letter to Ray LaHood, Secretary, U.S. Department of 
          Transportation, and Joseph C. Szabo, Administrator, 
          Federal Railroad Administration, from 94 members of the 
          California State Legislature, October 19, 2009.........    29
Hon Devin Nunes, a Representative in Congress from the State of 
  California, request to submit the following:

        ``Review of `Bay Area/California High-Speed Rail 
          Ridership and Revenue Forecasting Study,' '' Research 
          Report UCB-ITS-RR-2010-1, by David Brownstone, 
          Professor of Economics, UC Irvine; Mark Hansen, 
          Professor of Civil and Environmental Engineering, UC 
          Berkeley; and Samar Madanat, Professor of Civil and 
          Environmental Engineering, UC Berkeley; Institute of 
          Transportation Studies, University of California, 
          Berkeley, June 2010....................................   293
        ``High-Speed Rail Authority: It Risks Delays or an 
          Incomplete System Because of Inadequate Planning, Weak 
          Oversight, and Lax Contract Management,'' Report 2009-
          106, by the California State Auditor, April 2010.......   352
        ``High-Speed Rail is at a Critical Juncture,'' by the 
          Legislative Analyst's Office, May 10, 2011.............   404
        Marc Scribner, Land-use and Transportation Policy 
          Analyst, Center for Economic Freedom, Competitive 
          Enterprise Institute, Freedom of Information Act 
          Request to: (a) Office of the Secretary of 
          Transportation, Department of Transportation, June 21, 
          2011, and (b) Federal Railroad Administration, 
          Department of Transportation, June 21, 2011............   432
Hon. Jeff Denham, a Representative in Congress from the State of 
  California, request to submit letter to Members of Congress 
  opposing funding for California high-speed rail, from State 
  Senator Doug LaMalfa, Fourth District, and attachments: 
  ``Editorial: The Train to Neverland,'' Wall Street Journal, 
  November 12, 2011; and ``California High Speed Rail: The 
  Facts''........................................................    63
Hon. Ashley Swearengin, Mayor of Fresno, California, request to 
  submit the following:

        Letters in support of California high-speed rail to Hon. 
          John L. Mica, a Representative in Congress from the 
          State of Florida, and Chair, Committee on 
          Transportation and Infrastructure, and Hon. Nick J. 
          Rahall II, a Representative in Congress from the State 
          of West Virginia, and Ranking Member, Committee on 
          Transportation and Infrastructure, from the following: 
          Al Smith, President and CEO, Greater Fresno Area 
          Chamber of Commerce; John Hernandez, Executive 
          Director, Central California Hispanic Chamber of 
          Commerce; Dora Westerlund, CEO, Fresno Area Hispanic 
          Chamber of Commerce; Tate Hill, President, Fresno Metro 
          Black Chamber of Commerce; Steve Geil, President/CEO, 
          Economic Development Corporation; Amarpreet Dhaliwal, 
          Chairman, Fresno Council of Governments and Mayor, city 
          of San Joaquin (all aforementioned letters dated 
          December 13, 2011); Ronald E. Brummett, Executive 
          Director, Kern Council of Governments, December 14, 
          2011; Amy Shuklian, Mayor, city of Visalia, December 
          12, 2011...............................................   440
        ``Case for High-Speed Rail Grows Only Stronger,'' by 
          Edwin Lee, mayor of San Francisco; Kevin Johnson, mayor 
          of Sacramento; Chuck Reed, mayor of San Jose; and 
          Ashley Swearengin, mayor of Fresno, U.S. Mayor 
          Newspaper, reprinted from Sacramento Bee, June 7, 2011.   449
        ``Now is the Ideal Time to Make High-Speed Rail Work,'' 
          FresnoBee.com, December 13, 2011.......................   451
Joseph C. Szabo, Administrator, Federal Railroad Administration, 
  responses to questions from the Committee on Transportation and 
  Infrastructure \2\.............................................   147
Roelof Van Ark, Chief Executive Officer, California High-Speed 
  Rail Authority, responses to questions from the Committee on 
  Transportation and Infrastructure..............................   243

                        ADDITIONS TO THE RECORD

Hon. Russ Carnahan, a Representative in Congress from the State 
  of Missouri, request to submit written statement entitled, 
  ``Japanese Corporate Use of U.S. POWs as Slave Labor,'' from 
  Joseph A. Vater, Jr., President, Descendants Group, an 
  Auxiliary of the American Defenders of Bataan and Corregidor, 
  Inc............................................................   114
Aaron Fukuda, Co-Chairman, Citizens for California High Speed 
  Rail Accountability, letter regarding Central Valley concerns/
  opposition to California high-speed rail, to Hon. John L. Mica, 
  a Representative in Congress from the State of Florida, and 
  Chair, Committee on Transportation and Infrastructure, December 
  8, 2011........................................................   452
James T. Callahan, General President-Elect, International Union 
  of Operating Engineers, letter to Hon. John L. Mica, a 
  Representative in Congress from the State of Florida, and 
  Chair, Committee on Transportation and Infrastructure, and Hon. 
  Nick J. Rahall II, a Representative in Congress from the State 
  of West Virginia, and Ranking Member, Committee on 
  Transportation and Infrastructure, December 20, 2011...........   456

----------
\1\ Reps. Nunes, Costa, McCarthy, and Rohrabacher did not submit 
  written statements.
\2\ On page 150, Mr. Szabo indicates that the response to 
  question 7 was submitted on January 23, 2012. The response that 
  he is referring to is the response to question 1 on page 206.

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                   CALIFORNIA'S HIGH-SPEED RAIL PLAN:
                        SKYROCKETING COSTS AND
                            PROJECT CONCERNS

                              ----------                              


                      THURSDAY, DECEMBER 15, 2011

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to notice, at 10:02 a.m. in 
Room 2167, Rayburn House Office Building, Hon. John Mica 
(Chairman of the committee) presiding.
    Mr. Mica. Good morning. I would like to call this hearing 
of the House Transportation and Infrastructure Committee to 
order, and welcome everyone this morning.
    The topic of today's hearing is, ``California's High-Speed 
Rail Plan,'' and its subtitle is, ``Skyrocketing Costs and 
Project Concerns.'' This is the second in a series of hearings 
on the national high-speed rail program.
    And we are pleased to have, as the order of business, first 
of all we will hear opening statements from members of the T&I 
committee. And then we have a Members panel, and we have very 
active interest from Members of the California delegation who 
have been invited to testify. And then we have an additional 
panel with Mr. Szabo and others, officials Federal and local, 
and stakeholders in the California project.
    So, with that as the order of business, we will go ahead 
and proceed, and I will start with an opening statement. And 
then we will yield to Members as they arrive.
    Well, let me say, first of all, I consider myself a strong 
advocate of high-speed rail. We worked on the PRIIA, the 
Passenger Rail Investment and Improvement Act, which President 
Bush signed. And one of the provisions of that bill was to set 
some parameters for high-speed rail. And within that 
legislation there were a number of corridors identified, and 
the California corridor was one of those corridors identified 
as having potential for high-speed rail.
    I have done everything I can to support high-speed rail. I 
was pleased when President Obama initially signaled and 
actually worked and got some substantial funding, $8 billion, 
for high-speed rail, and included that in the American Recovery 
and Reinvestment Act. Congress additionally appropriated 
another $2.5 billion. So we had a total of $10.5 billion, a 
fairly significant amount of money, which you could actually 
have at least launched, hopefully, a successfully model for 
high-speed rail in the country.
    Instead, what we saw take place is that Amtrak, who sort of 
dominated the process, and FRA, who went along with overseeing 
the distribution of funds and grants, ended up getting nearly 
98 percent--Amtrak ended up getting about 98 percent of the 
projects.
    Unfortunately, the entire high-speed rail program has 
turned into sort of a bait and switch operation. And most of 
the projects that we have and nothing of the 70-some projects 
that were approved, and Amtrak has say over, none of them 
really achieve, either by U.S. standards or international 
standards, high speed, and most are snail-speed trains.
    We heard last week a rundown of other projects touted as 
high-speed, some in the Midwest and other locations, which 
achieve--the highest speed, I think, is about 80 miles an hour, 
on average, which does not classify anywhere near 110 or today 
150, which is common in Europe and Asia, and the President also 
often cites as models.
    So, the one hope for high-speed rail of all the projects 
that were chosen was California. And California seems to be 
imploding every day. The California project is turning out to 
be an additional disaster in a long list of projects touted for 
high-speed rail. The major problems that we see with 
California--and I will just summarize them--these are just some 
of the headlines that we picked off the Internet. In fact, 
there were so many of them, I said to the staff, ``Just put up 
a sampling.'' But all of them clearly demonstrate that the 
California project is in dire straits. And the problems are, as 
I identify them, pretty simple.
    First, any project, particularly for transportation, mass 
transportation, has to start with what they call an initial 
operating section--IOS. And they, unfortunately, chose a 
location that doesn't serve many people. There are more cows 
and vegetables, I guess, along the corridor that they chose 
than riders. And by picking the wrong location, I think they 
set off on the wrong foot.
    The second thing that we have found with this project is--
and it isn't something that we came up with, but the State came 
up with--was just within the last month. The cost is--the 
projected cost has doubled from $42.6 billion to $98.5 billion, 
or could be as high as $117 billion, depending on future 
alignments. That is--the cost overruns aren't bad enough by 
itself, but the completion date is pushed back 13 years, from 
2020 to 2033, which means that you would have a huge 
operational subsidy for a very weak ridership passenger route 
until, again, you completed the system. And even then the 
numbers for ridership are questionable.
    And finally, I am told that because of this situation with 
the way the project seems to be imploding, that we will not 
have vehicles that will be able to achieve high speed, even in 
this first segment. So what we will have is another snail-speed 
train at extremely expensive infrastructure cost.
    So, those are my concerns. And again, our committee tries 
to be responsible for looking out for the taxpayer interest in 
these projects. This project, by itself, consumes, I think, 36 
percent of all the high-speed rail funds. It may be as high as 
40 percent. And so, it is a very serious concern to the 
committee that, in fact, we have a huge amount of the money 
that Congress has designated in a project that will not show 
success.
    I would like to see success. I have been a strong advocate 
of the Northeast Corridor, since we own that right of way. 
Amtrak operates service and we have 20 percent of the 
population density of the United States and all the intermodal 
connectors.
    Finally, I have been out to Fresno and looked at the route 
and heard from some of the folks. Unfortunately, some of the 
communities do not have either the population or the fixed 
infrastructure connections or service available to make the 
project a success.
    So, those are some of the basic concerns that I have. We 
want to hear from Members of the California delegation. First 
we will hear from them on our panel, and then those who have 
joined us and will provide their testimony today.
    So with those comments, I am pleased to yield to the 
ranking member, Mr. Rahall.
    Mr. Rahall. Thank you, Mr. Chairman. I have no opening 
statement, just an observation. For the past 10 years I have 
served as ranking member and then chairman of the House Natural 
Resources Committee. And I watched you guys fight over water. 
Now I am coming over here to Transportation and Infrastructure, 
and you are fighting over trains. It is like a never-ending TV 
reality show. That is the end of my comments, Mr. Chairman.
    Mr. Mica. Let's see. We have--in order of seniority, let me 
go now to Mr. Miller, who is a Member of the California 
delegation, and a member of our committee.
    Mr. Miller of California. Thank you. Thank you, Mr. 
Chairman. I enjoyed the ranking member's comment about 
fighting. I think we have some disagreement here without a 
problem. I appreciate my colleagues from California coming here 
today. And Chairman Mica, I really appreciate the time you have 
taken to go to California to look at our cow patch. That is the 
proposed link of the first part of this system.
    But, you know, the problem we have is California is about 
37 million people today. And by 2030, it is going to increase 
by another 25 percent to 46 million. And transportation is a 
huge issue, without a doubt. And many of us here on the panel, 
a few on the right here, we all represent an area that knows 
what Long Beach and the LA County harbor can do to our areas, 
because it is tremendously impactive on us. About $250 billion 
worth of trade goods come through our districts.
    And the high-speed rail proposal has two options. It could 
become a debt-laden drag on the California and U.S. economy, or 
it could lead the way to an--employment, fiscal responsibility, 
and innovation. But the facts that have been presented in the 
past and we look at in the future raise tremendous concern. We 
have to look at ridership, the route, risk mitigation, and 
where the high-speed rail fits in to the future of California.
    Just 3 years ago, they proposed it would be $33 billion to 
draft it and complete it, and now we are talking about $98.5 
billion, money that California clearly doesn't have. And some 
of the projections are using funds that, clearly, Congress 
doesn't have to give, either.
    Current ridership forecasts they are still using 2007 
models. I don't know why that is. It is 2011. So we are using 
outdated ridership numbers already.
    We are looking at high-speed rail building on an interstate 
system comparing to the 1940s, 1950s, and 1960s, where 
significant revenue streams and major Federal participation 
occurred.
    But we are looking at $50 billion in Federal monies that is 
not there to do this project. When you look at qualified tax 
credit bonds, thinking about $12.4 billion. If we are going to 
get 2 percent of that $50 billion, that is a billion dollars. 
That leaves us about a $11.9 billion shortfall.
    Recent polls, about two-thirds who have voted believe 
California should vote on the State high-speed rail project. 
Nearly two-thirds say that they would vote no. Main reason is 
due to the changes in the estimated cost and completion dates.
    Now, I would like to submit for the record a letter from 
California State Legislature and the information requested in 
the letter from the California High-Speed Rail Authority, that 
it may be a part of the record.
    Without objection, Mr. Chairman?
    Mr. Mica. Without objection, so ordered.
    [The information follows:]

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    Mr. Miller of California. Thank you, sir. I am just 
concerned by the 2012 draft business plan. I don't think many 
of the issues have been addressed. We might agree or disagree 
on whether high-speed rail will answer California's 
transportation needs. But under the current fiscal climate we 
have out there, it doesn't make sense to me. It doesn't make 
sense where the first leg would go. I don't know how you would 
get this system in place in a viable way. And once it is there, 
how do we fund it? The revenues generated by it are not going 
to be sufficient, including California, based on the current 
fiscal situation, and it cannot afford to continue to fund the 
shortfall that is in it.
    So, I am looking forward to the witnesses and your 
opinions. And I know we have different parts of California 
here, so I am looking forward to what the different parts have 
to say. And I thank you for your time, Mr. Chairman, and yield 
back.
    Mr. Mica. Well, thank you. I am going to switch--Ms. Brown 
wasn't here, and I need to hear from our ranking members. I 
will go to Ms. Brown, and then we will go back to Mr. Shuster, 
and then we will go back to the California delegation.
    Ms. Brown, you are recognized. Welcome.
    Ms. Brown. Thank you, Mr. Chairman, and here we go again. 
The Republicans didn't vote for high-speed rail funding. They 
cut future funding. Yet, we are holding our second full 
committee hearing on this subject in 2 weeks. We are ending a 
year of work, and still there is no surface transportation 
bill, no FAA bill, no water resources bill. This committee is 
fiddling, while the United States transportation and 
infrastructure is burning.
    I am glad that the current leadership of this committee and 
the House were not in charge when Eisenhower developed the 
interstate highway system. We would have had hearing after 
hearing, talking about what a mistake it was to connect the 
States, how the roads would lead to nowhere, how nobody would 
ever drive from State to State, and how we just couldn't afford 
it. We would also be a third world country, instead of the 
leader of the free world. Thankfully, we had elected officials 
with visions in those days. Our committee used to build 
infrastructure projects and put people to work. That is why I 
have served on this committee for 19 years.
    This week the House and Senate passed a bipartisan pipeline 
bill that improves safety while allowing the industry to 
continue serving its customers.
    If this committee is going to hold hearings about the 
infrastructure in California, we should be holding a hearing to 
find out why the State is building the San Francisco Oakland 
Bay Bridge with 5,300 tons of inferior Chinese steel. Maybe 
some of the people testifying today can explain why the State 
of California's largest public works project in history will be 
stamped ``Made in China,'' while steel workers right here in 
America go without work. We certainly can't blame the EPA for 
that one.
    According to the United States Census Bureau projection, 
the population of California will reach 60 million by the year 
2050. This explosion in population will result in the crippling 
of the aging public transportation infrastructure already 
strained under the weight of its own capacity. California, 170 
miles of roads, are the busiest in the Nation.
    As a result, the statewide cost of the time lost and fuel 
wasted in traffic congestion is estimated at $18.7 billion 
annually. Travelers on California's interstates are increasing 
five times faster than capacity. This is a formula for 
disaster, and anyone who has driven in California's major 
cities knows this all too well, and I was recently there, and I 
can attest to that.
    Looking at air travel, the busiest short-haul air market in 
the country is between Los Angeles and San Francisco, with 100 
daily flights, and more than 5 million passengers annually. 
This is larger than the New York to Washington, DC, market. In 
fact, the LA-San Francisco air route is one of the most 
delayed-prone in the Nation, with approximately one out of 
every four flights delayed by an hour.
    What is the solution to the congestion? According to the 
California High-Speed Authority, to achieve the same capacity 
as the San Francisco-Los Angeles high-speed rail system, 
California would need to construct 2,300 new lane miles in 
highway, 150 additional gates at the California airport, and 4 
new airport runways, to the tune of $114 billion over the next 
20 years, which is equivalent to $171 billion, with inflation, 
far more than it would cost to develop the planned high-speed 
rail system.
    I hope that during today's hearing the panelists and the 
Members who oppose the development of the high-speed rail in 
California will give us some details regarding how they intend 
to finance and address the critical needs of moving people, 
goods, and services in the State that is growing in population 
each year.
    With that, I welcome all of the panelists, and I am looking 
forward to hearing their testimony.
    Mr. Mica. I thank the gentlelady. The chairman of the rail 
subcommittee, Mr. Shuster.
    Mr. Shuster. Thank you, Mr. Chairman, and thank you for 
holding this hearing today. I also would like to welcome my 
five colleagues from California. Welcome today. Look forward to 
hearing your testimony on a subject that we have had two 
hearings--this is our second hearing--and the reason is because 
some of us believe this is a extremely poor investment in the 
transportation system.
    And I would like to remind my partner on the railroad 
subcommittee that 4 years ago when you were in the majority you 
didn't pass out a highway bill. I believe we are going to pass 
one out of this committee early next year. And I would also 
like to remind her that there were $800 billion--I believe most 
of it squandered--that we could have used for a highway bill 
instead, I think it was somewhere around $68 billion--we could 
have spent $200 billion, $300 billion. The needs in this 
country are $500 billion or $600 billion strong.
    So, again, when you want to criticize our side, I think you 
need to take a step back and look what that stimulus bill 
didn't produce.
    And now here we are today, talking about a project in 
California. I think the chairman has laid out all the 
statistics, and I am sure we will hear from Mr. Denham on those 
statistics, so I won't go over those. But I will offer an 
alternative.
    Well, first of all, I just saw a recent poll that said that 
59 percent of Californians would reject the bond package that 
they passed some time ago. And Secretary LaHood was just here a 
week ago saying that this is what the people of California 
want. Well, it appears this is not what they want. They are 
reassessing. And looking at the escalation in cost, that is a 
wise thing for people to do when they see something going out 
of control.
    But also, I would like to offer an alternative solution. 
There are tremendous needs in California in the transportation 
system. I have traveled to southern California on a few 
occasions, and become well acquainted with the problems in 
southern California. I met with the folks there and been 
briefed a couple of times about the needs of rail in southern 
California. We really should be starting on high-speed rail or 
higher speed rails, improved passenger rails in San Francisco, 
the Bay Area, and also in southern California, not starting in 
the center of the State, where there are no congestion problems 
at this time.
    I have a list of 30 projects here that are half of the 
money that would fund these projects from San Diego to Los 
Angeles. It would probably, estimates are, double ridership in 
southern California. It would reduce the trip time from 2 hours 
and 40 minutes to 2 hours if these projects were put in place. 
And these projects can all be completed thereabouts--around 
2017, which falls in line with the timing on the stimulus money 
for these projects.
    And you have tremendous congestion. As my colleague from 
California said, 37 million people, there are almost 20 million 
or a little over 20 million in southern California. So when I 
look at the need for improved passenger rail in this country, 
that is one of the places. The Northeast Corridor has 
tremendous population density, and of course, southern 
California, with high population density.
    So, you know, if we are going to invest money, let's invest 
it wisely. Let's invest it in places that are going to have 
significant benefit by that investment. And again, I think that 
looking at southern California first makes a lot more sense 
than to spend $3 billion of Federal taxpayer dollars added on 
to whatever the ending number is going to be. I am sure--it is 
$90 billion today. By the time this thing gets completed it 
will probably be $120 billion, $130 billion.
    So, this is a timely hearing. I look forward to hearing 
from my colleagues and, of course, the other panelists today. 
And, Mr. Chairman, thank you much. Thank you for having this 
hearing.
    Mr. Mica. Thank you, Chairman Shuster. We will now 
recognize--we will go back to the California delegation on the 
committee. Mrs. Napolitano is next.
    Mrs. Napolitano. Thank you, Mr. Chair. And thank you for 
holding this second meeting on this important topic. And I 
associate myself with the remarks of Ranking Member Brown's 
statement, and also with the last statement made by my 
colleague, Mr. Shuster, in regard to being in southern 
California, the need where southern California has, I would 
say, 13 million, about maybe a third of California's 
population. And that is just LA County, not counting San Diego, 
and the rest of the counties around there, San Bernardino and 
Riverside.
    My concerns are with the initial investment of the 
California high-speed rail project. They spent initial 
investment in urban projects that assist high-speed rail, the 
commuter and rail congestion. That approach would immediately 
solve major transportation problems in California, as we work 
towards a full high-speed rail system. Get me. I am not against 
the high-speed rail. I am against the projects funding being 
inadequate, one.
    Two, it will take away from local projects of 
transportation, eventually. And we all know California has a 
great distinction for taking money from bond monies and 
everything that was supposed to be squirreled away for a 
specific topic. I can name a few, but I won't go into that.
    The high-speed rail separation should be made first, 
because that will help not only speed the delivery of services 
to the rest of the Nation, but will create less impact on the 
local, well, environment, on the road rage, on having to sit at 
rail separations. It is going to use the urban rail corridors 
that need to be grade separated, and that is a priority. They 
will alleviate current problems of congestion, pollution, 
safety hazards. And if it is delayed due to budget concerns, we 
will at least have the grade separations in place.
    My other worry is that, at the current cost, the high cost 
of increase of going from $48 to $98 billion, is who is going 
to pay for it? Most Californians will not be able to ride the 
high-speed rail, if it is projected at $150 1-way ticket to go 
to southern--from southern California to, say, San Francisco or 
Sacramento. Why are we all paying to build high-speed rail if 
only the wealthy can afford a ticket? My constituents need more 
mass rail transit, safer, faster, and cheaper commute. This is 
where we should be focusing our initial investment.
    The Rail Authority has in the past, since its inception, 
done a very, very lousy job of being transparent to the cities, 
to my voters, and of course, to the California delegation. All 
my cities have concerns. We have held meetings with the High-
Speed Rail Authority. And yet I don't believe there has been 
any follow-up, nor has there been satisfaction to be able to 
allay some of the fears my communities have.
    The issues associated is eminent domain, being next to 
homes, businesses, demolishing of current transit centers and 
passenger rail service. They--not quite the thing that you 
would expect of an authority that is trying to get favor of 
passage.
    I am in favor, again, of high-speed rail, just not at the 
expense of the working-class rail transit services delivery in 
a county of over 12 million people. That is a third of the 
population of California, and that is just the county, again.
    I hope issues are addressed before they start building the 
system, and that there will be more transparency in regard to 
breakdown of the actual cost of the faces themselves.
    Thank you, Mr. Chair, and I yield back.
    Mr. Mica. Thank the gentlelady and now recognize another 
California member of the committee, Mr. Denham.
    Mr. Denham. Thank you, Mr. Chairman, and thank you for once 
again being willing to discuss this issue. When I was first 
appointed to this committee, this was one of the issues that I 
talked to you about, and asked you to come to Fresno and take a 
look at our transportation needs. You did that, as well as 
holding a field hearing.
    And I also want to thank Chairman Shuster, who chairs the 
rail committee, also willing to do the same, coming to Fresno, 
seeing our local needs, seeing our farming situation, seeing 
the high volume of traffic that we have coming in--out of our 
ag community. So, thank you both for holding this hearing, as 
well as previous times that we have held things within my 
district.
    I believe in a balanced approach to transportation. We have 
to have a highway bill. We need to improve our highway, as well 
as our goods movement. We need to improve rail, as well as look 
towards the future of high-speed rail.
    Ms. Brown, I will correct you that there are Republicans 
that vote for high-speed rail. I was one of them. The bill went 
through the House, went through the State Assembly, came over 
to the State Senate, and had 26 votes, needed 27.
    And there are some of you in this room that reassured me 
time and time again that if I was that 27th vote to get the 
bond on the ballot, that we would have safeguards in place. No 
ongoing subsidies. The project would be fully funded with 
guaranteed funding. We would also have guaranteed investors, 
which aren't here today.
    And lastly, and more importantly from me, the final thing 
was to make sure that farmers, our number one industry in the 
Central Valley, would be protected.
    Now we are in a situation where the LAO has come out and 
said the bonds would not be sold. And I want to make sure that 
that doesn't happen if those reassurances aren't met. So I 
would like to put a few things up here on the screen right now.
    Dealing with Prop 1A, the $9.95 billion that California 
voters are now on the hook for. Starts off with ``The plan 
shall include.'' Part A, ``A usable segment.'' The initial 
segment right now that we are talking about is north Fresno to 
south Fresno, $5.2 billion: $3.3 billion coming out of the 
stimulus package that was supposed to be shovel-ready projects; 
$1.9 billion coming from Prop 1A, which is yet to be sold.
    The operating segment, which is the real segment, is 
actually $30 billion without any guaranteed funding. Part C 
talks about ``The plan shall include full cost of constructing 
a useable segment,'' which again is $30 billion. Last week we 
had Secretary LaHood here talking about the cost. That was one 
of things, was that I wanted to see a guaranteed funding. He 
was unable to not only present that to me, but his quote was, 
``The costs are today's costs. The $98.5 billion that is 
projected today are today's costs. And those costs could 
continue to change.'' That is his quote.
    Next slide, the sources of all funds to be invested in the 
corridor for the usable segment. Again, we are talking about 
$9.95 billion, the $3.6 billion that came out of the stimulus 
package for shovel-ready projects 3 years ago, still no shovels 
in the ground. That leaves $83 billion missing. Where are the 
private investors to pick up that cost?
    Now, if the President is worried about the 15--is 
guaranteeing the $53 billion over this next 6 years which he 
has in his package, that has to come through Congress as an 
appropriation.
    ``H, the corridor for the usable segment thereof, would be 
suitable and ready for high-speed train operation.'' Again, the 
construction segment would not be suitable for high speed. And, 
``K, the authority has completed all necessary project level 
environmental clearances.'' Is the President willing to waive 
NEPA? Is the Governor ready to waive CEQA? And are there any 
environmental processes already cleared? They have not.
    And finally, prior to committing any proceeds of the bonds 
described, we have to have identified sources, private parties, 
other assurances received from Government agencies which 
haven't yet arrived.
    Mr. Mica. Thank the gentleman. And I guess the last Member 
of the California delegation on our committee, Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman. I had an 
interesting experience last night. I attended a bipartisan 
dinner. So I am going to put a little, I think, calm hopefully 
in this meeting today.
    First of all, I think to call the Central Valley cowpatch 
fruits and vegetables, you know, it is the largest agriculture-
producing State in the United States. It also produces, I 
believe, 40 percent of the food for this United States country. 
And I think it has also produced a great Member in Mr. Denham, 
Mr. Cardoza, Mr. Costa, and my own former boss, Lieutenant 
Governor Cruz Bustamante, and 4 million Americans. So let's, 
first of all, keep the Central Valley in perspective.
    I had an initial briefing. I am looking forward to the 
presentations today. And I think many of us, instead of the 
hype, will find very good answers to the questions.
    I do want to say, though, for the record, that to claim 
speed as a question in California, when the Northeast Corridor 
currently only averages 83 miles per hour, it is really not 
right. So let's tone down, I think, the rhetoric and really 
look at the fairness of the project in this country.
    As a member of the Railroad, Pipelines, and Hazardous 
Materials Subcommittee and cochair of the Congressional Caucus 
on California High-Speed Rail, and vice chair of the 
Congressional Bicameral Caucus, I think right now, when we look 
at the fact that China is operating 13 high-speed railways with 
more than 20 under construction, and by 2020 their network will 
cover nearly 10,000 miles, we must re-evaluate our 
conversations.
    The United States didn't develop a space program or a 
national highway system with the words ``can't,'' and some of 
the words I have heard this morning.
    The recently released California High-Speed Rail Authority 
draft business plan found that without high-speed rail, it 
would cost in California $171 billion to address the needs of 
California's growing population. To achieve the same capacity 
as high-speed rail of what it would provide, California would 
need to construct 2,300 new lanes of--2,300 new miles of 
highway, 115 additional gates at California airports, and 4 
airport runways. Let's talk about CEQA and NEPA with that.
    There have also been many concerns echoed by my colleagues 
about the cost of where the funding would come from. Well, just 
last week I didn't hear many people talking about how we were 
going to pay for that cost with the Northeast Corridor. In 
fact, my colleague--and I won't use any names--in July in Roll 
Call said that the Northeast Corridor is expected to cost $117 
billion. So why is the sudden concern and attack with 
California?
    You know, when I think we are bickering about east coast 
and west coast, it seems like we have stepped back to the 
1920s. This committee has tried hard and has made a case for 
the Northeast Corridor, and I will support you with that. But 
to turn around and kick to the curb California is really only 
doing half of the tail.
    The Northeast Corridor serves the sixth largest economy in 
the world with a GDP of $2.5 trillion. California alone--
Northeast Corridor is more than one State--California alone has 
the ninth highest GDP in the world of $1.9 trillion.
    So, when we talk about winners and losers, east coast, west 
coast, let's not take a step back. We have an opportunity to 
leave this generation with a world-class high-speed rail 
system. And we should really be playing with the American 
people, and not politics.
    And with that, Mr. Chairman, I ask unanimous consent to 
submit statements from my fellow California colleagues who 
could not be here today, as well as a letter from the High 
Speed Rail Association, and the California Assembly.
    Mr. Mica. Without objection, the----
    Ms. Richardson. Thank you sir, I yield back the balance of 
my time.
    Mr. Mica [continuing]. Identified items will be made part 
of the record.
    [Please see the table of contents section entitled, 
``Prepared Statements Submitted by Members of Congress'' for 
statements from the following Members of Congress from the 
State of California: Hon. Joe Baca, Hon. Anna G. Eshoo, Hon. 
Barbara Lee, Hon. Zoe Lofgren, and Hon. Adam B. Schiff, as well 
as Hon. Laura Richardson.]
    [The letters from the US High Speed Rail Association and 
the California Assembly follow:]

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    Mr. Mica. Now, if we have short statements from any other 
members on the committee, we will go to the Republican side 
first. Mr. Bucshon? OK. Anyone on our side? Any quick--Mr. 
Boswell? And we are trying to get to the panel, but you are 
welcome.
    Mr. Boswell. I will be very short. I have no prepared 
statement, I just have a feeling. And I feel strong about it. 
And Ms. Brown and Mr. Shuster, I commend you both for your 
working to get what you have done. You are both capable, you 
are committed, and dedicated, and I thank you for it. And let's 
keep working together.
    I often say--because I am from the Midwest--we are a United 
States. We are connected from New York, California, we got to 
go--you know, we got to stay together. It works all ways, it 
works both ways.
    Now, we think we are sort of the corn belt, and so--in 
livestock, and so on. I continue to say that California is the 
leading agriculture State, fruits and vegetables. We talk about 
that a lot, and we have got to think about those--I have a son-
in-law that is an over-the-road trucker, and he tells me about 
what it is like to be out in California. It is tough. We all 
know that. So, we need to really do something. And I want to be 
supportive of it. I think we all do.
    And I am tired of the fact--and maybe you can tell us about 
it, because I don't have any issue with anybody on our panel, 
none of you. You know, we have got to make things--jobs 
America. We all know that. We talk it to death. But we have got 
to put our trades, our steel workers, our machinists, our 
carpenters are available, and get those materials, and--you 
know, it needs to be made in America. So I hope you can help us 
in your comments about some of that, and why--so on.
    But you know, we have got to put our people back to work. 
And I don't make no apology, and I don't think any of us do, 
you know. If we are going to do projects like this, why can't 
we require that? I am sure the Chinese do, if you are spending 
Federal money. In fact, you know they do. So let's do the same 
thing. You know, fair is fair. And let's do that.
    So, I yield back, Mr. Chairman, and thank you for having 
this hearing. And we need to respond to these things. These are 
investments with a known return. Read the facts. And let's do 
the things that will pay us back, and let's put Americans back 
to work in the process. Thank you very much. I yield back.
    Mr. Mica. Thank the gentleman. And now, what we will do is 
go to our panel of Members who have joined us who are not on 
the committee, and have requested to testify today. And we will 
do it in order of seniority.
    And I will recognize Mr. Cardoza, who represents the 18th 
District first.
    Welcome, and you are recognized.

   TESTIMONY OF HON. DENNIS A. CARDOZA, A REPRESENTATIVE IN 
 CONGRESS FROM CALIFORNIA'S 18TH DISTRICT; HON. DEVIN NUNES, A 
  REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S 21ST DISTRICT; 
HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S 
    20TH DISTRICT; HON. KEVIN MCCARTHY, A REPRESENTATIVE IN 
 CONGRESS FROM CALIFORNIA'S 22ND DISTRICT, AND MAJORITY WHIP; 
    HON. LORETTA SANCHEZ, A REPRESENTATIVE IN CONGRESS FROM 
   CALIFORNIA'S 47TH DISTRICT; AND HON. DANA ROHRABACHER, A 
   REPRESENTATIVE IN CONGRESS FROM CALIFORNIA'S 46TH DISTRICT

    Mr. Cardoza. Thank you, Chairman Mica, Ranking Member 
Rahall, members of the committee. I would like to thank you all 
for allowing me the opportunity to testify. I would like to 
thank Ms. Richardson for her kind words. And I would like to 
start off by also acknowledging what Mr. Rahall said about the 
disagreements that sometimes look like reality shows in 
California.
    Mr. Rahall, this will be my last act this year--because I 
have decided to end my tenure on the ``reality show,'' as you 
put it. But I will tell you that I am very proud of our cows 
and our crops and our students that we produce in our 
universities and the good work that we do. We have been 
devastated in our area by the home foreclosure crisis and the 
economy. And I would like some attention to those questions, as 
well as to some of the things for which we get criticized.
    You know, before I start my opening statement, I am going 
to just mention that this week I cast one of 10 votes in this 
House from the Democratic side of the aisle for a Republican 
bill to build the Keystone pipeline. I did that because I 
thought it was the right thing to do. I took a tough position 
against my own party because I thought it was the right thing 
to do. And I am going to tell you here today that I think 
building the high-speed rail is the right thing to do. 
Sometimes we need to get outside of our partisan comfort zones 
and do what is right.
    Can you imagine, ladies and gentlemen, where we would be if 
no one had had the courage to build the Transcontinental 
Railroad? We would still be riding the Pony Express. This 
country is bigger and better than not having the vision to do 
what is right for the future. It is time to step up and do what 
is right. And I expect the members of this committee to do 
exactly that--what I feel like I did this week, in taking on my 
own President on the pipeline, because we should be able to 
build things in America.
    We have to make this country as great as it should and can 
be again. We built the water infrastructure in the State of 
California, because we had a visionary Governor who thought 
outside the box. He built universities, he built roads, and he 
built a water infrastructure that our State is still relying 
on.
    Ladies and gentlemen, California and our Nation face 
challenges related to the economy and our quality of life. 
There is incredible congestion on California's highways, in its 
airports, costing California's economy--the ninth largest in 
the world; it used to be the fifth--over $14.5 billion each 
year. Travel on our interstate system is increasing at the rate 
of five times faster than the capacity it is being added.
    California, particularly the San Joaquin Valley, where my 
district is located, has some of the worst air quality in the 
Nation. One in six children in Fresno have asthma. My wife is a 
family doctor. When she practiced in Merced, 40 percent of her 
practice had asthma.
    And exacerbating all these other problems are the 
challenges that are presented by our rapid growth. California 
is projected to add 20 million people by 2050, and the Central 
Valley is expected to more than double in size.
    You can't hardly get from my part of the Central Valley to 
the rest of the State--I have to travel an extra 2 hours to get 
to the airport. Mr. Denham does, as well. Mr. Costa is lucky, 
he has an airport in Fresno, but you have to go to a different 
airport before you can really get far out of the area. Same 
with Mr. Nunes.
    We have transportation difficulties. We are faced with 
these simple facts, and it is clear that investment is needed 
to improve our mobility, our quality of life, and our economy 
in the State.
    In both our Nation's and California's history, tough times 
have led to bold, innovative solutions. The opportunity 
presented by high-speed rail today is a continuation of that 
legacy of visionary leadership. From a practical standpoint, if 
we don't construct high-speed rail in order to meet our State's 
needs, we would need to build much more expensive highways. As 
it was said before, new airports, new runways, all require CEQA 
and NEPA permits.
    Ladies and gentlemen, my time has expired, and I have about 
four more pages of testimony. I will submit it to the record. I 
just ask you to think about what is right. Think about the 
vision and future of our country. Are we going to move forward 
or are we going to continue to tolerate the fact that our 
economy is languishing and we are not investing what we should 
be investing in America?
    I think it is time to quit building roads as we have done 
today in Iraq, in Afghanistan, and start investing in 
patrolling our streets, and investing back in the United States 
of America.
    Mr. Mica. Thank the gentleman, recognize the Representative 
of the 21st District, Mr. Devin Nunes.
    Thank you.
    Mr. Nunes. Thank you, Chairman Mica and Ranking Member 
Rahall, for the opportunity to testify today.
    No doubt we will be hearing from each proponent that high-
speed rail means jobs, thousands of jobs, tens of thousands of 
jobs, even hundreds of thousands of jobs. The reality is that 
these jobs claims are part of a fantasy. The more you 
investigate California high-speed rail, the greater you will be 
convinced that California's bullet train is a boondoggle.
    It is ironic that the most strident high-speed rail 
advocates, people claiming to care about the San Joaquin 
Valley, are the very people who refuse to resolve our water 
crisis, as Mr. Rahall referred to earlier, refuse to help our 
dying timber and mining industries that continue to shed jobs, 
and support more rules and regulations that drive business out 
of the Valley and California every day.
    Today I would like to make three points. It is clear that 
high-speed rail is not about jobs. It is about political 
corruption, public deception, and bureaucratic experimentation. 
First, let's discuss political corruption.
    Dan Walters, a columnist for the Sacramento Bee, was one of 
many to observe that the initial phase of California's high-
speed rail, the segment between Merced and Bakersfield, was 
based on politics, not planning. This conclusion is justified, 
based on several factors, not the least of which was the 
election eve announcement of a $700 million stimulus grant, 
which was the subject of certain conditions. Among those 
conditions was a requirement that high-speed rail construction 
begin in the rural central California congressional district of 
an incumbent who was facing re-election.
    Thanks to the stimulus grant, the Golden State's high-speed 
rail project has become nationally recognized as the Train to 
Nowhere. And since few objective observers believe it will 
never be completed, the probability is high that this slogan 
will become reality.
    Consider these basic facts. High-speed rail was originally 
projected to be $15 billion in 1996. Today it is $118 billion. 
My estimation is it will be closer to $200 billion than $100 
billion. In 15 years, they have spent $800 million. Not a 
single inch of track has been laid. California is broke. The 
State is in a perpetual budget crisis. And the outlook is red 
ink as far as we can see.
    The second point I want to make is about public deception. 
Mr. Chairman, high-speed rail's popularity has diminished. And, 
as stated earlier, two-thirds of Californians want this 
referendum back on the ballot to re-vote. Since 2007, no fewer 
than 20 PR firms have been hired and have spent millions of 
dollars on TV, radio, and print campaigns to convince 
Californians to support high-speed rail.
    Moreover, the High-Speed Rail Authority has bankrolled a 
vast array of political consultants to curry favor with elected 
officials. If high-speed rail were widely supported, a 
multimillion-dollar PR campaign would not be necessary. 
Californians are growing weary of the promises made by rail 
advocates, the elusive green jobs, the supposed clean air, the 
shorter commutes, all are part of the fantasy.
    You don't have to take my word for it, Mr. Chairman. I 
would like to submit these reports from the State auditor and 
the legislative analysts who have questioned the assumptions to 
sell this project.
    Mr. Mica. Without objection, they will be made part of the 
record.
    [Please see the table of contents section entitled, 
``Submissions for the Record'' for the documents submitted by 
Hon. Devin Nunes.]
    Mr. Nunes. The third and final point is taxpayer-funded 
bureaucratic experimentation. $800 million have been spent on 
studies, public relations, and staff salaries.
    Here is an important point. The chief of this Rail 
Authority makes $375,000 a year. By way of comparison, the 
president and CEO of Amtrak, who has the responsibility for our 
entire country's passenger rail system, rail that actually 
exists today, is paid $350,000.
    Despite the $800 million and 15 years studying the project, 
they came up with an average rider fare of $162 for a round 
trip. Now, I spent zero dollars, got on the Internet, and 
within three clicks found to ride the Acela train, our fastest 
train in the country, the Northeast Corridor, it costs $350. It 
stretches credibility to the breaking point to suggest that 
California will achieve greater efficiency and lower cost than 
that of the northeast system which connects Washington, 
Baltimore, Philadelphia, New York, and Boston. This is the 
busiest rail line in the country.
    I did a couple more clicks on the Internet. Remember, $800 
million versus my study that cost zero dollars. They promote 
that they are going to get 29 to 43 million passengers on this 
train. Last year the Acela train carried 10.3 million 
passengers. We are being led to believe that the fantasy train 
will carry more than twice as many riders at half the cost of 
the existing system here, in the northeast.
    Mr. Chairman, in conclusion, it has become clear that the 
entire California high-speed rail experiment is a case study in 
how not to run a government program. And with that I yield 
back.
    Mr. Mica. Thank the gentleman and recognize now the----
    Ms. Richardson. Mr. Chairman?
    Mr. Mica [continuing]. The California----
    Ms. Richardson. Mr. Chairman? Mr. Nunes, with--was 
respectfully allowed additional time to complete his comments, 
and Mr. Cardoza, who is leaving this Congress, wrapped up. 
Would he be extended, after the other Members have an 
opportunity----
    Mr. Mica. If he----
    Ms. Richardson [continuing]. To give their comments, 
another minute or two?
    Mr. Mica. If he would like and if we have time. I did----
    Ms. Richardson. Thank you, Mr. Chairman.
    Mr. Mica. Thank you. We will recognize now the 
Representative from California's 20th District, Mr. Costa.
    Welcome, sir.
    Mr. Costa. Thank you very much, Chairman Mica and Ranking 
Member Rahall, and other members of the committee. It is a 
pleasure to be here with you today.
    America has always attempted to be a Nation of bold, 
visionary leaders who dared to think big in times of 
difficulty. We are in difficult times, clearly.
    And I would like to add a positive note on this because, 
frankly, if we--it is important to be transparent. It is 
important to be investigative. And this is the appropriate role 
of this committee. However, if the attitude that I hear from 
some of our colleagues here is to prevail, we would never have 
put a man on the moon. Neil Armstrong wouldn't have landed 
there. We would not have built the tremendous infrastructure in 
the 20th century that made America the number one Nation in the 
world.
    President Lincoln, Roosevelt, and Eisenhower, Republicans 
and Democrats alike, faced difficult challenges when they were 
in office. But without these leaders--think about it--we 
wouldn't have had the Transcontinental Railroad. We wouldn't 
have had the Hoover Dam that was built. We didn't need the 
water at the time, and we certainly didn't need the electricity 
at the time. And we were in the midst of the Depression. We 
wouldn't have had the interstate highway system, if it were not 
for President Eisenhower connecting the entire Nation, as was 
stated before.
    But you want to know tough times? I will recommend you 
tough times. Read this book. Nothing like it in the world. By 
Stephen Ambrose. It depicts the construction of the 
Transcontinental Railroad. You want to know difficult times? 
The Civil War. Our Nation was being torn apart. Inflation was 
running rampant. The first issuing of paper money. The 
President was trying to figure out how to finance the Civil 
War. And--but what did he say? ``We are going to build a 
railroad across the Nation to bind the Nation.'' That is 
vision. That is boldness. That is saying we can do things in 
America, not like some of you, who are saying we can't do 
anything. If that attitude, that negativism--we can't afford to 
be short-sighted.
    And so, the task at hand is this: The problem in California 
and around the Nation is investing in our infrastructure, 
specifically our transportation infrastructure, but also our 
water infrastructure. The negative consequences of not 
investing in our infrastructure, which engineers across the 
country estimate of over $1 trillion, is losing our status as 
the number one Nation in the world.
    It has been said that the busiest air corridor in the 
Nation is the Bay Area and Los Angeles, southern California. 
For every four flights, one is delayed an hour. You heard the 
numbers, in terms of what it would take to, in fact, address 
that: 115 new airport gates, 4 new runways, and 2,300 miles of 
new highways. That is at a cost of $170 billion. The cost of 
this, factored with inflation over 30 years, is $97 billion. 
Don't look at this in a vacuum, look at the comparative 
analysis.
    More of the same, that is what--we have a choice here. We 
have a choice in California, we have a choice across the 
country. And that is why it is appropriate to have this debate 
and the discussion.
    The new draft business plan--and I say the new draft 
business plan, and other witnesses will talk about it--answers 
some of the critical questions that the chairman and others 
have raised, legitimately. Read the new business plan.
    Jobs. Jobs are critical. You know, Mr. Chairman, I won't 
take umbrage to your description of the San Joaquin Valley. My 
family has farmed there for three generations. We are very 
proud of it. It is also the fastest-growing region in 
California, and we are proud of the fact that we are the number 
one agricultural region in the country.
    But we also have the same traffic congestion problems, Mr. 
Shuster, that you have in southern California and the Bay Area. 
You get on 99 and you stand behind those truck convoys, and you 
are in their fog in December through January and February, and 
the mass accidents, unfortunately, that occur. We have the same 
congestion problems in the Valley, and the air quality problems 
that they have in other parts of California.
    So, this is also a jobs effort, not just in California but 
around the country. With unemployment in my area as high as 20 
percent, this is an opportunity to create hundreds of thousands 
of jobs, good-paying jobs, real jobs that are made in America. 
Because the California bond measure has a made-in-California 
provision. And we would insist on a made-in-America provision.
    Now, let me close by saying--some say, ``Well, it is not 
the right time. It is not the right time. We have a deficit. We 
have economic problems.'' Those are all true. But I say it is 
the right time, not only in California but across the Nation, 
to invest in our infrastructure. When borrowing rates are at an 
all-time low, when construction and labor costs are at an all-
time low, now is the time to be investing in our 
infrastructure. Because the dollars will go further today than 
10 or 20 years from now. If they had not invested in Hoover Dam 
in the 1930s, think of what it would cost today. If we had not 
invested in the interstate highway system in the 1950s and the 
1960s and the 1970s, think what it would cost today. You know 
what those projects cost in your respective congressional 
districts.
    Let me say that many members of this committee have said 
recently--as recently as last week and today--that they believe 
in high-speed rail in the United States. And then, when I hear 
some of you say, ``But just not in California,'' I don't get 
that. I believe in the Northeast Corridor. I think some of the 
criticisms that were raised about this project and other 
projects are fair to debate and to address and to resolve. But 
don't hold California's high-speed rail proposal to standards 
that you are not holding to your own freeway projects or to the 
Northeast Corridor. There is an initial sum of funding, there 
is a State match, and you complain about not having a long-term 
revenue source, but where is the long-term revenue source for 
the Northeast Corridor? Where is the long-term revenue source 
for any of these projects?
    Unless you come up with a transportation plan in this 
committee, we are going to have no long-term source for funding 
any transportation projects. That is the bottom line. And we 
look to this committee to come up with some good decisions, 
well-reasoned decisions. And I look forward to working with all 
of you.
    Thank you very much, Mr. Chairman.
    Mr. Mica. I thank the gentleman.
    I recognize the California 22nd District Representative, 
also the majority whip, Mr. McCarthy.
    You are welcome.
    Mr. McCarthy. Well, I thank you, Mr. Chairman. And I 
appreciate you for holding this hearing. I have a longstanding 
concern about the viability of the California high-speed rail 
project. I know you have got a group of Members here from 
California, and some with different opinions.
    The thing I want this committee to look at is what went 
before the voters of California. Because what went before the 
voters of California for the high-speed rail is totally 
different than what is before the voters today.
    It is our responsibility and our stewardship to make the 
decisions of where our tax dollars go. Because this isn't a 
one-time investment. If you look at the project more than 
doubling to $100 billion, if you analyze that people are going 
to take this rail, and you read the project that more than 
twice as many people who ride all of Amtrak is projected to 
ride in this by that study, and that study also says $11 
billion will come with private money, you have to look to 
yourself and also say, ``Does that measure, or is that even 
true?''
    An interesting thing happened, especially in listening to 
my good friend, Mr. Costa from up the road, about the need and 
investment. In my district, just yesterday it was announced for 
space travel venture Microsoft co-founder Paul Allen, aerospace 
designer Burt Rutan fully to go to space with private money. 
They are projected, in their plan, to be able to recoup it. 
They didn't ask for Government money. They did it on their own.
    I also measure an idea that a plan says that the private 
sector will come because this will be profitable. There hasn't 
been any private sector money come. The plan that done the 
research on this says that $11 billion will come after we build 
it. That may make for a very good Hollywood movie, ``Build it 
and they will come,'' but I don't think that is what the 
taxpayers say when they sent us here.
    I believe, when you look at this project from the 
beginning, when you put the accountability to it now, it is 
fundamentally different. And if you do build it and they do not 
come, that means what are you going to give up to subsidize 
everyone who is on that train. That is a responsibility we all 
have to look to.
    That was one of the fundamental reasons why I introduced 
3143, which will freeze all unspent Federal dollars through 
September of next year, while the GAO studies is done on the 
project viability. That is not extreme. That is not taking it 
and saying no. What that is doing is saying we have a 
responsibility to the taxpayers. There is not one person on 
this committee that can say that plan that started out is 
exactly the same. So what you are saying is stop for a minute. 
Let's put accountability to this, and let's actually know. If 
we are just going to put money in, it is not the idea to keep 
throwing bad money after bad money. If it is never going to be 
built, and the project of what you projected to be--that 
private sector money would be there, and it is not there.
    We should hold the standards to this like any other project 
you do. If they said there would be private money in and it is 
not, they shouldn't be rewarded. If they said twice as many 
riders as all of Amtrak is going to ride this--just in our 
Valley, what they predict to ride, the millions of people, if 
you look at actual numbers only 700-some-thousand people take a 
train or a plane right now. The population does not mix and 
match the numbers of what they say.
    That is our job every day, as a Member of Congress. That is 
our job every day to follow back through. High-speed rail is a 
great idea. But what are you going to give up for everybody 
that rides it? In a world where we live with a $15 trillion 
deficit and a State in which I come from that has a deficit 
each and every year, I think we have a different responsibility 
here. That is why I introduced the bill I did. Let's stop, 
let's get the actual accountability to it, and let's make a 
decision that is viable.
    If you ask the California voter today, they want to vote on 
this again. And they want to vote on it again because they want 
to change the vote that took place before. Because they do have 
a right to do that, because the whole plan changed from what 
was before them.
    So, I appreciate having the hearing. It is the right thing 
to do to look into this, and it is right to ask the questions. 
And I yield back.
    Mr. Mica. I thank the gentleman. And let me recognize now 
the gentlelady from the 47th District, Ms. Sanchez. I want to 
rotate, because we just heard from a Republican.
    Ms. Sanchez. Oh.
    Mr. Mica. And Mr. Rohrabacher, being a gentleman, said to 
go to you first.
    Ms. Sanchez. Thank you, Mr. Chairman. I would just say that 
in the beginning you said you would go by seniority.
    Mr. Mica. Well----
    Ms. Sanchez. And I might remind you that if that would be 
the case, Mr. Rohrabacher would have gone first, and I would 
have gone second. So we were a little confused at the end of 
this table.
    Mr. Mica. Well, I did it only because we want to rotate 
Republican/Democrat, majority/minority.
    Ms. Sanchez. Mr. Chairman, you and I have worked on a lot 
of transportation issues together, and I know that you do 
believe in high-speed rail. And I appreciate that your 
committee is taking a look at this project, as we should. All 
of us are responsible for the monies that we spend on behalf of 
the American people.
    You know, I have heard some people be very straightforward 
here today about, ``Let's take a look at this project, and 
let's figure out how we get it done.'' And I have heard others, 
quite frankly, throw out a lot of rhetoric, from both sides. I 
just would like to say to my good friend, Mr. Shuster, who 
complained that we had spent over $800 billion on the stimulus 
package, I will remind you that a third of that was for tax 
cuts, which was a requirement in order for us to pick up the 
votes here in this Congress.
    So, let's really talk about what we need to hear today, and 
that is whether we really need a high-speed rail in California 
or not. I believe we do.
    I mean it really--last night in Los Angeles County--and I 
am not from Los Angeles County, I am from south of there, 
Orange County, I represent the Anaheim area, where we would 
hope the terminus to that, at least one of the phases of that 
project would be, Anaheim--we are preparing in Anaheim, with 
our multimodal interchange there, to receive the high-speed 
rail. There are some local communities who really want this 
project, and we are putting our own monies in to make sure that 
we are ready to get that project when it comes in. We are 
looking forward to the jobs in Orange County.
    The Orange County Business Council, I might add, have--
somewhat Republican-leaning council, did a study of this and 
said that there would be, just in a phase between Anaheim and 
through Los Angeles, 50,000 jobs that would work on this 
project. They are very in favor of this project.
    Last night in Los Angeles County on the 60 Freeway we had a 
big rig turn over and burn to a crisp on that 60 Freeway. And 
it happened to turn over underneath an overpass bridge, which 
disintegrated also in that accident. Because of that--and I 
believe that it happened early in the morning, maybe about 
10:00 in the morning--the freeways were tied up, and nobody 
could move, probably not even for the commuter hour today. I 
saw people on television saying they were trying to get their 
child to school in the morning, and at 6:00 p.m. they were 
still in the same spot, not on that freeway, on a different 
freeway. But one accident tied up all of Los Angeles County. 
And what every person said was that there was no alternative 
way, but to be on the freeways.
    This high-speed rail is an alternative way. And that is why 
we need it. Some say, well, we have air. Well, you know, before 
I became a congresswoman, when I used to take my flight tests 
as a private pilot, I would fly out of Orange County Airport, 
the highest general aviation traffic airport in our Nation. And 
I would have to wait sometimes 45 minutes to be able to get in 
queue because of the planes that got to go ahead of me, the 
commercial ones. And we were all burning fuel. That is a cost 
nobody ever thinks about, unless you're paying for it as a 
student pilot. And now we have increased the capacity, and it 
is still not enough at that airport. And we are projected to 
have a majority of the new flights for the next two decades to 
come out of South County, Orange County. And we will have to go 
up to LAX. And there is a fight, because Maxine Waters's 
airport has to be increased, and people's homes get taken away, 
and the whole thing goes on.
    This problem of aviation, this problem of aviation. Why are 
there so many flight delays? The weather in San Francisco. Why 
are there so many flight delays? The tule fog in Sacramento. 
Why is it that when a big rig or somebody has a crash, the 
whole freeway stops and people can't come into the Basin? We, 
as Californians who use the system, understand we need an 
alternate.
    And we need to invest. It is never an easy thing to invest 
in the beginning. People get voted out of office because we 
decide to invest in a railroad, in a new airport, in a new 
highway, because we take people's homes. But we must have the 
courage to say that we need high-speed rail. And it makes sense 
for the backbone of California to have that in place. And it 
will cost money. And we need to look at it and figure out how 
we make it work.
    Before I came to the Congress I worked in transportation. 
Before I came to the Congress I was an investment banker who 
did infrastructure projects. It is never easy to do these 
projects. But if you want to, and you have the guts to do it, 
you can get it done. And I say that California needs a high-
speed rail.
    Thank you, Mr. Chairman. And I would love to submit my 
written testimony for the record.
    Mr. Shuster. [presiding.] Thank you very much. I appreciate 
that.
    And with that, Mr. Rohrabacher.
    Mr. Rohrabacher. Thank you very much. You know, when I was 
a young person, my father used to tell me that if I was going 
to get anything done I had to face reality. And I remember 
someone compared this delegation to a reality show. And I think 
it is much better to be compared to a reality show than perhaps 
compared to ``Fantasy Island.'' And it is on ``Fantasy Island'' 
that we can keep spending money that we don't have, borrowing 
money from China, and expecting that our economy is going to 
continue even on an acceptable level.
    If we continue with the direction we are going, we know 
even with projects that really make sense, we are having to 
question them and cut some of them. But if we continue to even 
seriously consider projects that don't make economic sense in 
the long run, look with Lincoln--and I respect Mr. Costa, he 
has spent a lot of time on this project, and perhaps 10 years 
ago, when he first started, it would have been easier for us to 
make a decision to go ahead compared to the times----
    Mr. Shuster. Is your microphone on?
    Mr. Rohrabacher. What was that?
    Mr. Shuster. Your microphone, could you----
    Mr. Rohrabacher. Oh, pardon me. So, let me just suggest 
that when Lincoln went forward with the railroad across the 
country, he had at his disposal enormous assets in land. And 
they used the land for the railroads to actually serve as the 
capital for the railroads. And when Eisenhower went forward 
with the interstate highway system, he taxed, what, the 
gasoline, the people who would then be using the interstate 
highway system, in order to pay for the project. That made 
sense. That was reality in those days.
    Our reality is we are spending $1.5 trillion a year more 
than we are taking in, and we are borrowing it from China. And 
for us to have a project that continues to go up in price--this 
project used to be--I think it was first guesstimated at $41 
billion or $43 billion and now it is up to $100 billion. Well, 
one wonders how much it was going to be--it will be in the 
future. And we cannot afford to continue borrowing from China 
for projects that continue to escalate, when we have other 
things that are so necessary in California.
    We are a water-shortage State. Mr. Nunes and Mr. Costa both 
know that their area of the State is really suffering from a 
lack of water. Well, the whole State is going to suffer from 
lack of water, unless we invest about $30 billion more in water 
in California over the years. Well, that makes much more sense 
than spending $100 billion on a train--well, as Mr. Nunes says, 
the Train to Nowhere.
    And let us also take a look--I have been, with Laura 
Richardson's help and support, advocating that we build a 
container movement system from the ports of Los Angeles and 
Long Beach to--inland to the rail heads near San Bernardino, 
which would take 10,000 and 20,000 trucks a day off of our 
roads--Ms. Sanchez has detailed how crowded they are. We 
haven't been able to afford that. And that--by the way, and 
that project would have paid for itself with a container fee. 
And we cannot move forward.
    Our country cannot move forward now with projects like this 
that are well intended and, yes, visionary. Some people say 
that if your eyes are on the stars, you are likely--and that 
is--if you keep your eyes in the stars, you may end up falling 
into a ditch. Well, this could put us into that situation, 
where we have vision in the future, but we have to look and 
solve this problem today. Or otherwise, by the time we build a 
train like this at the cost we are talking about, and the 
condition of our economy and our budget, we won't call it the 
train from nowhere, we will call it the Orient Express, because 
that is the people who will own this country, if we do not 
start acting responsibly.
    Thank you very much.
    Mr. Shuster. Well, I thank the gentleman, and I thank all 
of you. It is typically the custom we don't ask other Members 
of Congress questions. I don't want this to erupt into a full-
fledged debate between our panelists and members of the 
committee. That is the debate that will occur in this 
committee, and then it will occur on the House floor.
    But I would--if some folks have some questions, again, I 
want to make sure we don't get into full-fledged debate with 
our panelists. We save that for the administration folks, when 
we are holding their feet to the fire. Again, typically, we are 
trying to get information and viewpoints from our panelists.
    I would like to say, for the record, though, that a couple 
of people have mentioned my name, which is fine. I do support 
passenger rail. I do support higher speed rail. But I believe 
we have to do it in a sensible way.
    At some point in time California may decide that they have 
the money to spend. I am not going to talk for Californians. I 
think the polls are clear that Californians want a re-do. I 
think they want a Mulligan on this one, because it seems that 
these costs are getting out of hand. And the estimates are 
completely off from where they started.
    I would also like to mention to my friend from California, 
Mr. Costa, that if you have congestion on the highways, maybe 
the better use of this money would be to expand I-99 in the 
Central Valley, and I have heard people talk----
    Mr. Costa. May I respond, Mr. Chairman?
    Mr. Shuster. Certainly. Just let me make--I think that is 
my final point.
    Oh, and it was also said that I said that the Northeast 
Corridor would be $117 billion. That is not my number, that is 
Amtrak's number. My number is I have no idea what the Northeast 
Corridor is going to cost, because I--we want to bring the 
private sector, and there are people interested in investing 
and operating the Northeast Corridor. We want to bring them in 
and let them take a view of it and put bids out there, or 
requests for information, request for proposals as to what they 
think it will be, because Amtrak has really no idea how much it 
is going to cost. That is my view of it.
    But with that----
    Mr. Costa. Thank you. Thank you for raising important 
issue. I support the funding of Highway 99, supported a measure 
that provided $1 billion for that. The trouble is we need more 
funding for that.
    I carried legislation in 1986 and 2002 that provided 
billions of dollars to build the Fresno Clovis transportation 
freeway system. Now, that dislocated hundreds of homes and 
businesses. That was over 20 years ago. I submit today to tell 
you that if it had not been for that multibillion-dollar 
construction project, we wouldn't have the benefits of that 
transportation plan. I don't think Fresno and Clovis want to go 
back to what it was in 1986.
    But it is, I believe, a canard or a bait-and-switch to say 
that the money that we are talking about here can be 
transferred to Highway 99, because it can't. We know what 
happened in Wisconsin, Ohio, and Florida when Governors 
attempted to take Federal high-speed rail money and spend it 
for road projects. It got taken away. And that is what will 
happen with this money.
    And as far as whether or not the voters approve today or 
would disapprove a bond measure, in the financial crash in 
2008, 52.5 percent voted. Now, maybe they wouldn't support it 
today. You may be correct. But we have school bonds, we have 
water bonds, and we have other types of bond measures which the 
voters in California approved. If we are going to wait 2 years, 
4 years down the--when a water project is unpopular, say, 
``Well, we ought to put it back up there, maybe they will 
disapprove it,'' that is an important policy question.
    And so, it seems to me that we--there isn't a silver bullet 
here, in my view. We have to use all the transportation tools 
in our transportation tool box, and high-speed rail is a part 
of it. It is going to happen in this country in the 21st 
century. The question is sooner or later. But it is part of our 
transportation long-term solutions.
    Mr. Shuster. But--again, I don't want to engage in debate, 
but I still say you have got problems in southern California. 
That money would be much better spent to improve transportation 
from San Diego to Los Angeles, where you have 20 million 
people. I just think that--and as Mr. Nunes has pointed out--
this thing is going to be a boondoggle. California, I don't 
believe, is going to be able to afford it.
    And again, that is going to be the debate. Again, I don't 
want to engage in that----
    Ms. Sanchez. Mr. Chairman, may I just say something?
    Mr. Shuster. Yes.
    Ms. Sanchez. At the southern tip of my district, again, in 
Orange County--and I have supported every transportation bill, 
I have--you know, I understand the construction of highways, 
believe me, from my prior work--at the southern tip of my 
district, at the ``Y''--at the El Toro ``Y,'' as we call it in 
Orange County--the freeway is 23 lanes wide. You can see it 
from the moon. There is not a lot wider we can go in a lot of 
areas. So we do need an alternative.
    Mr. Shuster. That is why I say spend the money in the 
southern California area, instead of----
    Ms. Sanchez. I would be willing to build it from Anaheim 
through Los Angeles to begin with.
    Ms. Brown. Mr. Chairman?
    Ms. Sanchez. I am all for that. Thank you.
    Mr. Shuster. Mr. Cardoza?
    Mr. Cardoza. Thank you, Mr. Chairman.
    Ms. Brown. Mr. Chairman, I did raise my hand.
    Mr. Shuster. I am going to let them go through, give them 
all an opportunity to say something else.
    Mr. Cardoza. If I could just say very briefly--I think both 
sides have made some relevant points today, and you have to 
acknowledge both sides' points.
    But I would like to correct one thing that I think is 
misleading the committee, and that is that this segment, as it 
currently exists, sir, is the fifth busiest train segment in 
the country. And it serves over 6 million people a year. And, 
frankly, it doesn't do it very efficiently, because it does it 
with a short train segment from south Stockton to Bakersfield. 
Then you have to take a bus north to Sacramento or you have to 
take a bus south to Los Angeles.
    If you had the kind of situation that we're talking about 
and we would like to have in the State of California, I would 
tell you you are going to get exponential numbers of riders, 
because there are no alternatives to get our people to where 
they want to go in the major metropolitan areas.
    We have populations much greater than the size of many 
States in this country, and that do not have access, ready 
access, to alternative transportation venues. And so you have 
to drive a long way to get to where you need to go.
    Mr. Shuster. Mr. Nunes, I think, is----
    Mr. Nunes. Mr. Chairman?
    Mr. Shuster [continuing]. Eager to answer, or respond.
    Mr. Nunes. Well, I am not going to--I think you are headed 
in the right direction, as to focus the dollars where they can 
do the most good.
    However, I would encourage this committee to look at two 
projects that are rail, but not passenger rail. One is what Mr. 
Rohrabacher referred to, which is some way to get freight from 
the ports out to the larger rail lines to move products that 
come into this country east. That would be the first thing.
    The second thing, if you want to help out the San Joaquin 
Valley, would be to look at expanding the freight rail system 
along existing right-of-ways. So one of the major problems that 
we have in the San Joaquin Valley is at the southern tip--we 
are congested. You have to go out of the Valley, you have to go 
up the Tehachapis that are in Mr. McCarthy's district.
    It has been looked at. Although it is a very expensive 
project--I think into the hundreds of millions of dollars to 
add another line along existing corridors to help alleviate 
that traffic--that would help the entire San Joaquin Valley. 
That would help all of California. There have been studies out 
here on this. But in order to get to that point, this committee 
would have to allow California to use that money for rail, but 
perhaps not high-speed rail. Yield back.
    Ms. Brown. Mr. Chairman?
    Mr. Shuster. One second. And most likely it would help the 
Nation if you improve the movement of goods and produce and 
what you--the foodstuffs you----
    Mr. Nunes. Absolutely. It would help out for commerce, it 
would help out for air quality. It would get trucks off the 
road, all the things that I think would improve the economy.
    Mr. Shuster. Yes. Yes, Ms. Brown?
    Ms. Brown. Let me be clear.
    Mr. Shuster. Well, hold on a second. You have a question? I 
am going to----
    Ms. Brown. I do have a question.
    Mr. Shuster. OK. Well then, I will recognize you at the 
appropriate time. I am going to give Mr. Rohrabacher one last 
shot, if he cares to say anything else. Each panelist----
    Ms. Brown. A question----
    Mr. Shuster. I will recognize you in due time.
    Mr. Rohrabacher. I would yield to the gentlelady, that is 
fine.
    Ms. Brown. Thank you. First of all, let me just say this is 
the transportation and infrastructure committee.
    Now, freight rail is number one in the world. So we--when 
you travel around the world, they ask us about our freight 
rail. So the freights can afford to fund--if they thought it 
was a viable project, they would fund it. We have a problem 
with passenger rail in this country.
    Now, for every billion dollars we spend, it generates 
44,000 permanent jobs. Now I know we don't need to confuse 
anybody with facts, but I have been on this committee for 19 
years. I have been involved with transportation for over 30 
years. Transportation is the engine that puts people to work. 
So don't come to this committee telling us, ``Well, you know, 
we have this problem in this country.'' We didn't create this 
problem in Transportation. This committee is the committee that 
puts people to work.
    Now, not one of you voted against the Bush tax cut that got 
us in this mess. Reverse Robin Hood, robbing from the poor and 
working class to give tax breaks to the rich. That is how we 
got here. Transportation is the engine that will regenerate 
this country.
    Now, let me tell you something surprising. I agree with 
you, that we need to look at this project. It is not acceptable 
to double the cost of the project. We need to look at it. We 
need to have a different plan. You all need to come up with a 
different plan.
    And don't tell me anything about if you put it on the 
ballot or you ask the question. Listen. I know that you are 
going to answer the question based on how you asked the 
question. So if you change the way you ask the question, you 
can get a different answer to the question. I am a social 
scientist, I know that.
    So the question is--I have been to Anaheim--we need to look 
at whether or not we need to, you know, make sure what happened 
to California is not the same thing that happened to Ohio and 
Florida, where we sent billions of dollars back that would have 
generated 60,000 jobs in Florida. Yes, we need to look at it.
    One of the things we need to do is we need a one-stop 
permitting process. If not, in California 20 years from now we 
going to be talking about high-speed rail----
    Mr. Shuster. Mr. Rohrabacher's time is about ready to 
expire.
    Ms. Brown. So there are many things we need to do to work 
together to----
    Mr. Rohrabacher. I would----
    Ms. Brown [continuing]. Move people and keep freight and 
passenger rail separated.
    Mr. Rohrabacher. I think my time has been consumed, but I 
yield it back. Thank you.
    [Laughter.]
    Mr. Shuster. I thank the gentleman. With that, let me go to 
Mr. Rahall, if he has a--and what I am going to do----
    Mr. Rahall. Just----
    Mr. Shuster. One second. I am going to reduce the amount of 
time for questions to this panel to 2 minutes, so----
    Mr. Rahall. Just a couple of softball questions, if that is 
possible.
    To Mr. Nunes, we have all heard the figures--this panel has 
testified to them and they are common knowledge--about the 
expected 20 million people increase in California's population 
over the next 30 or 40 years. My question is, what would your 
alternative to high-speed rail be, and how would you pay for 
it?
    Now, I know you mentioned freight rail a minute ago. But as 
far as I have been able to discern, the freight rails aren't 
too--they aren't jumping up and down to accept passenger 
traffic over their lines. So I don't think we can put it all on 
the freight lines.
    Mr. Nunes. Thank you, Mr. Rahall. Going back to the point I 
was making about freight rail, one of the problems we have with 
congestion on the freeways is that there are too many trucks. 
They go a different speed than the cars. They create a lot of 
the congestion problems that we have. I am not against trucks.
    The problem is when we have freight rail that gets to the 
southern tip of the Valley. Because you have to climb up to an 
elevation, I think, of around 3,000 or 4,000 feet, those trains 
are only going 15, 20 miles an hour up the hill. And that is 
the problem. It creates a congestion that then requires us to 
put more trucks on the road that then creates congestion on the 
freeways. If we could alleviate--if we could just double the 
number of freight trains that we could get on that line, I 
think it would make a big difference.
    Now, with that said, I didn't come here to talk about 
taxes, but I know that the gentlelady did discuss taxes. That 
is the committee that I am on. We refer to the Bush tax cuts in 
our committee as the Bush-Obama tax cuts. Because I just want 
to state clearly for the record that President Obama has 
supported to extend the Bush-era tax cut.
    Mr. Rahall. Well, in answer to my question, it appears your 
sole solution, then, is to reduce congestion by putting more 
freight on the tracks.
    Mr. Nunes. Yes, because the tracks can handle----
    Mr. Rahall. Thank you.
    Mr. Nunes [continuing]. The extra freight.
    Mr. Rahall. I yield back.
    Mr. Shuster. Thank the gentleman. With that I will 
recognize again for 2 minutes Mr. Denham.
    Mr. Denham. Thank you, Mr. Chairman. Often times when the 
facts don't go your way, words like ``courage'' and ``guts'' 
get thrown out there.
    Look, I just want to see this project on time, on budget, 
and off of ag land. If it is a $33 billion project that can do 
those things, absolutely. But, Mr. Costa, when you talk about a 
bait and switch, sure, switching the money to $3.6 billion--or 
the $3.3 billion that is left--switching that to Highway 99, 
absolutely it would be a switch. But sending $3.6 billion of 
stimulus dollars for shovel-ready projects and then letting it 
sit for 3 years is not stimulus. And I would consider that a 
bait and switch.
    I would also consider it bait and switch when you send 
something out to the California voters and say, ``This is a $33 
billion project, you are on the hook for $9.95 billion of it,'' 
and then it goes to a $98.5 billion project. That is also a 
bait and switch.
    So, if we can get this project back under control and get 
it on time, on budget, and off of ag land, I would love to 
support it. I would like to see a balanced transportation 
proposal.
    And I just want to correct one thing for the record. We 
need to have big ideas. We need to have bold solutions. We need 
to look at the future and create jobs. But when you are 
throwing out projects like the Hoover Dam, that cost us $50 
million in 1931, which by today's numbers would be a $700 
million project, or the Boulder Canyon project, which included 
the Hoover Dam, the Imperial Dam, the American Canal cost $165 
million in 1936, which is roughly $2.5 billion today, that you 
have to have the facts and the numbers on your side to be able 
to promote those.
    So, we have exempted CEQA on projects like LA Earthquake. 
Governor Davis exempted CEQA for the jobs in the Bay Area for 
the Pac Bell Park. You know, it has been done by Republicans 
and Democrats. If you want to get this project back under 
control, then look at the environmental side of things. NEPA, 
the same way. The President has waived NEPA for important 
projects. If this project is that important, then get it back 
under control.
    Mr. Shuster. I thank the gentleman. Mrs. Napolitano is 
recognized for 2 minutes.
    Mrs. Napolitano. I won't take that long, Mr. Chair. And I 
am for mass transit, mass transit of the working class, of the 
people. We have New York, you have it in Washington, DC, you 
have it in other major cities, but not in California. That is a 
priority for me.
    In Spain and China and France, the Government owns the land 
that those transit systems are on. They control it. They 
determine who gets on it and who runs the systems.
    There has been very little mention about the railroad being 
able to allow transit on their freight lines. I understand that 
they are now willing to do that. Great. Maybe more of that can 
be found.
    And, Mr. Rahall, you brought up the trucks on the road. In 
Long Beach, the Alameda Corridor was supposed to take trucks 
off the road, and they are still on the highway, polluting and 
being able to not get on the Alameda Corridor itself, because 
it is cheaper to get it on the truck. And until that changes, 
it is going to continue.
    Thank you, Mr. Chair.
    Mr. Shuster. Thank you. And with that, I will recognize Mr. 
Miller for 2 minutes.
    Mr. Miller of California. Thank you. Some interesting 
things have been said, one about how you present the question, 
and I think that is how they got the first bond passed in 
California. But when the people of California looked at the 
facts, they want to vote it down today.
    But the comment has been made the Republicans don't really 
care about high-speed rail. But if you had asked Chairman Young 
and then Ranking Member Oberstar, I put $75 million into the 
2005 transportation bill for Maglev, and politics has played 
games with that money, and it is still sitting there unused. 
So--and the money has tended to go from Anaheim out to the 
Ontario Airport.
    And we talk about lack of capacity? If we stop playing 
games in Los Angeles and utilized Ontario, Burbank, and 
Palmdale Airport, you could really carry a tremendous amount of 
people. What has happened in Ontario specifically is you have 
an airport that was half developed, and then we sucked all the 
gate traffic out of it and moved it to LA. And the airport is 
ready to go double capacity from what they used to have, so 
there is absolute capacity in the region.
    The other problem is we talked about freight rail. The 
problem you have in Orange County and LA County is there is no 
right-of-way for the high-speed rail, unless you take the 
right-of-way away from freight. So you are going to offset one 
with the other, and neither one of those are to our benefit. 
And I don't know of any of the rail companies that are willing 
to give their freight capacity on rails--which we should 
double--to passenger. And that is going to be another huge 
problem.
    Money. We talked about--and my good friend, Loretta, you 
talked about the wide freeway on the I-5. And that is a 
beautiful area. But north and south of there we stop. And we 
tried to go to the 241, which was totally funded by private 
sector dollars, and the Coastal Commission shut it down. So we 
had a project that was totally privately funded, and California 
Coastal Commission shuts it down, thereby putting more traffic 
back on the I-5 Freeway.
    If you just go downtown Los Angeles, where the 5, the 10, 
and the 101 intersect, that interchange is over 60 years old. 
It goes to two lanes. And we don't have the money to fix that.
    So, are there things we should be doing in California? Yes. 
Are we prioritizing our dollars for the benefit of commuters? I 
think not.
    But at that, I yield back the balance of my time.
    Mr. Shuster. I thank the gentleman. Ms. Brown, are you 
requesting 2 minutes?
    Ms. Brown. Yes. I have a question for Ms. Sanchez.
    Ms. Sanchez, we are looking at how the State--and I know 
the next group will talk about it--how they came up with the 
doubling of the money, and how they determined where the 
different areas would go and why the decision was not made to 
go with LA, or that area where the population is, and northern 
California. Do you--can you give me some insight as to why that 
decision was made?
    And basically, I do want to say something about Maglev. 
When I do projects or transportation, I let the area decide on 
what is the most feasible. I don't say that you have to spend 
$75 million for Maglev, because that cost may be more than 
using other systems. You just put it out there and let people 
bid on it, and see what the bid come back with as opposed to 
saying it needs to be this, that, or the other.
    Ms. Sanchez. Well, Ms. Brown, let me just say that that 
would be a long conversation, and I would certainly love to sit 
down with you and sort of walk you through the history of this. 
I am very well familiar with it. As I said, I was an 
infrastructure investment banker before, and my job was to, 
before, sell bonds on behalf of a municipality or a State or a 
county to make sure that the project was actually viable.
    And there were plenty of projects that I shut down. In 
fact, one--there was a particular project where my life was 
threatened because I shut it down. It was such a big project, 
and I said it wasn't financially viable.
    So more than anything else, to my good friend from 
California, I would love to sit down and--I mean I would love 
to head that agency and get this project done, because I know 
how to get it done. But that is not my job. My job is to 
entrust it to the panels that will come and talk to you, and 
hopefully they can, you know, get the reports together and we 
can feel more confident that our monies are being spent 
correctly.
    One of the reasons that the cost of the project has gone up 
is----
    Ms. Brown. Double.
    Ms. Sanchez [continuing]. Is because there is no right-of-
way that is owned by the Federal Government. So you have to pay 
for right-of-way. You have to get right-of-way. When you go 
through places, you have to buy that up. Land is expensive in 
California. People have ``not in my backyard'' mentalities, 
too.
    And so, when you say I need to sit down with the 
jurisdiction and discuss with them what they want, that is a 
long process. The cost has been going up because everybody has 
a different idea. Some cities don't want it going through 
there, others are dying to have it go through their area.
    This is a give-and-take as you go through the process, and 
it is a long process. Some of it is environmental. There are a 
lot of issues behind it. But first and foremost is that you 
have to have buy-in from the agencies, the cities and the 
counties, where you go through for this line. And it is a long 
process, and an expensive process.
    Ms. Brown. Thank you.
    Mr. Shuster. Well, thank you, Ms. Sanchez. And thank all of 
our colleagues for being here today. This is certainly an issue 
that we will continue, I am sure, to debate not only here in 
this committee, but maybe even on the House floor.
    You know, we do have serious transportation problems in 
this country. Funding is a huge issue. And we need to continue 
to explore how we are going to do it in a reasonable and 
responsible way, and make those investments that really make 
sense, and will have a big impact on not only California, but 
the entire Nation.
    So again, thank all of you for being here. I appreciate you 
spending your time. And we will let you guys leave, and our 
next panel will assemble.
    Mr. Nunes. Thank you, Mr. Chairman.
    Mr. Costa. Thank you, Mr. Chairman. And clearly, all is 
possible if we can only work together, which often times is in 
short supply around here. That is how we built things in the 
past.
    Mr. Shuster. And I have read the book. It is a good read. I 
recommend it to anybody.
    Mr. Denham. Mr. Chairman?
    Mr. Shuster. Yes?
    Mr. Denham. While the panel is coming up, I would like to 
submit for the record Senator Doug LaMalfa from California has 
a statement to add.
    Mr. Shuster. Without objection, so ordered.
    [The information follows:]

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    Mr. Shuster. I want to welcome our second panel here. Thank 
all of you for coming today. Some of you have testified before 
in front of us. Mr. Szabo is a regular participant in these 
things. So--but again, all of you, appreciate you making the 
trip, many a long distance, to be here today.
    Unfortunately, I am going to have to step out after I 
introduce the panel, and Mr. Denham is going to chair the 
hearing. And with that, I want to introduce all of our 
panelists.
    First, as mentioned, the Honorable Joseph Szabo, who is the 
administrator of the Federal Railroad Administration. Next, Mr. 
Roelof van Ark, CEO of the California High-Speed Rail 
Authority. Next, the Honorable Jerry Amante, who is the mayor 
of Tustin, California, and a member of the Orange County 
Transportation Authority Board of Directors.
    If I am not mistaken, you are the chairman now, is it? Vice 
chairman. Thank you.
    Mr. Greg Gatzka--I guess I got you switched up here, I am 
sorry--the Honorable Ashley Swearengin--thank you--the mayor of 
Fresno. And Mr. Gatzka is from the Kings County Community 
Development Agency. Next we have Ms. Elizabeth Alexis, co-
founder of Californians Advocating Responsible Rail Design. And 
finally, Mr. Kole Upton, vice president of Preserve Our 
Heritage.
    Again, I welcome all of you here today. And with that, I am 
going to go and pause until Mr. Denham--is he out there? He is 
still debating with his colleagues in the anteroom, a lot of 
work gets done in the hallways and the waiting areas of 
Congress.
    But with that, while he is coming, we will go ahead and get 
started. Mr. Szabo, you can proceed.

 TESTIMONY OF JOSEPH C. SZABO, ADMINISTRATOR, FEDERAL RAILROAD 
   ADMINISTRATION; ROELOF VAN ARK, CHIEF EXECUTIVE OFFICER, 
CALIFORNIA HIGH-SPEED RAIL AUTHORITY; HON. JERRY AMANTE, MAYOR 
 OF TUSTIN, CALIFORNIA, AND MEMBER, BOARD OF DIRECTORS, ORANGE 
COUNTY TRANSPORTATION AUTHORITY; HON. ASHLEY SWEARENGIN, MAYOR 
   OF FRESNO, CALIFORNIA; GREGORY R. GATZKA, DIRECTOR, KINGS 
   COUNTY COMMUNITY DEVELOPMENT AGENCY; ELIZABETH GOLDSTEIN 
 ALEXIS, CO-FOUNDER, CALIFORNIANS ADVOCATING RESPONSIBLE RAIL 
 DESIGN; AND KOLE UPTON, VICE PRESIDENT, PRESERVE OUR HERITAGE

    Mr. Szabo. Well, thank you, Chairman Shuster and Ranking 
Member Brown, and to members of the committee. It is an honor 
to be here today to discuss the California high-speed rail 
project.
    The State of California, if taken on its own, would be the 
world's ninth largest economy. And it is known across the globe 
for its entrepreneurial spirit, top tier educational 
institutions, and thriving communities. And California achieved 
this status because past generations recognized the importance 
of infrastructure, and invested accordingly in ports, in 
highways, water systems, railways, airports, and more.
    Today, California's highways are amongst the most congested 
in the Nation, costing residents and businesses in Los Angeles 
and San Francisco alone nearly $13.5 billion last year. Delayed 
flights at six of California's major airports had an economic 
cost of more than $1 billion last year. Los Angeles to San 
Francisco is the most delay-prone short-haul market in the 
United States, with approximately one out of every four flights 
delayed more than an hour.
    The stress on the State's infrastructure will become even 
more overwhelmed during the next 40 years. California's 
population will grow by 20 million more people, ultimately 
reaching 60 million by 2050. And that growth alone is larger 
than every State in the Nation, with the exception of Texas. 
But if you think highways and runways are crowded now, imagine 
what they are going to look like if they are 60 percent more 
crowded.
    Today, highways in the State can have as many as 14 or 21 
or, as we heard earlier, 23 lanes of traffic across. So how can 
we possibly make them any wider? It is imperative that these 
problems are addressed, and not just for the sake of 
California, but for the sake of our Nation.
    The airports in San Francisco and Los Angeles are among the 
most important international gateways in the Nation, and the 
effects of delays at these airports span far across 
California's borders. American businesses rely on these 
airports to sell goods and services to customers all over the 
world, especially across the Pacific. If businesses can't reach 
these markets from America, they will look to locate their 
operations elsewhere.
    Many regional trips can be made more efficiently through 
high-speed rail, shifting valuable landing slots from short-
haul flights to more efficient and more profitable longer 
journeys that connect the Nation to international markets.
    Now, don't just take it from me. When asked about whether 
he sees high-speed rail as a threat or a complement to the 
airlines, JetBlue's CEO, Dave Barger, said, ``It is a 
complement. I don't think we need hundreds of departures every 
day from the Bay Area to Los Angeles.'' And Robert Crandall, 
the CEO--former CEO--of American Airlines said, ``If I could do 
whatever I wanted to, I would upgrade the rail system. Tracks, 
equipment, and power. By doing so we would free airplanes, air 
space, and airport facilities for flights to places that cannot 
be conveniently reached by rail.''
    This summer this committee proposed a re-authorization bill 
that called on Government to better leverage its private 
investment. The California high-speed rail project is exactly 
that type of project. The system will generate net positive 
cash flow from its operations, incentivizing private investment 
in capital construction. And if you want to build it faster, if 
you want to build it cheaper, you can make it happen. The 
largest cause for delay on the project and escalation of cost 
is attributed to congressional gridlock.
    California's approach is based on lessons learned from the 
international experience that existing assets can be used in 
the urban areas. The Central Valley will more than double in 
population over the next 40 years. Acquiring the right of way 
now, building through the Central Valley, is the best 
opportunity to save money during the course of this project.
    Without this high-speed rail investment the State would 
need to invest an additional $171 billion to acquire the 
equivalent level of mobility: 2,300 miles of new highways, 115 
new airport gates, and 4 new airport runways. California has a 
choice. High-speed rail will provide substantial fast, 
frequent, and reliable travel capacity more effectively, at 
lower cost, and with fewer overall impacts to California's 
natural resources than the alternatives.
    And I will be happy to answer any questions the committee 
has.
    Mr. Denham. [presiding.] Thank you.
    Mr. van Ark.
    Mr. van Ark. Mr. Chairman, Ranking Member, members of the 
committee, my name is Roelof van Ark, and I am the chief 
executive officer of the California High-Speed Rail Authority 
since 18 months. I come from the private sector, with 35 years 
of rail experience, including high-speed rail, and have built 
and been involved in such systems and PPP projects around the 
world. I am truly appreciative of having the opportunity to 
come before you today to talk about the progress of the 
Nation's first real high-speed rail project.
    I would like to also recognize that my chairman, Tom 
Umberg, and a board member, Dan Richards, is with me here 
today--they are with me here today.
    Mr. Chairman, we in California are at a crossroad. We can 
either continue to increase existing capacity on our highways 
and aviation systems to meet the population growth, or we can 
move into the 21st-century economy by doing what 24 other 
countries in the world have done or are doing: namely, 
implementing an efficient and effective high-speed rail system.
    California stands ready to choose the latter, as witnessed 
in the passage of Proposition 1A in 2008. Currently there are 
38 million people, 12 percent of the national population, in 
the State. Even relatively conservative estimates would have 
this population growing to 50 to 60 million by 2015. Explosive 
growth will bring with it increasing transportation 
infrastructure demands that will need to be accommodated.
    It is estimated that in order to accommodate such growth--
you have heard these figures before--2,300 lane miles of 
freeway, 4 additional runways, and 115 airport gates are 
needed. While many even question the feasibility of such 
expansion in the State, the additional environmental damage 
that that would result, due to automotive congestion, this will 
all be totally unacceptable. And the damage to quality of life 
that results from time lost sitting in traffic congestion, 
whether from personal perspective or from an economic 
productivity perspective, simply does not make sense.
    So we stand at a precipice, poised to move high-speed rail 
from the planning phase to the implementation phase, and we are 
ready to start in 2012, less than a year from now, with shovels 
in the ground.
    This high-speed rail system will alleviate 3 million tons 
of green gas emission spewing from tail pipes of cars which 
clog our congested roads annually.
    And if that were not compelling enough, the cost and 
conservation in realistic terms of the California high-speed 
rail system pales in comparison with the cost of the ``business 
as usual'' approach. We will build a high-speed rail system 
that will provide a one-seat ride from Los Angeles to San 
Francisco by 2030, utilizing already existing local and 
regional rail services in the cities for $78 billion, which 
includes inflation. This does not take into account the 
contributions from the private sector which we have calculated 
to be in the magnitude of $11 billion to $20 billion. 
Alternatively, to accommodate growing use of the ``business as 
usual'' approach, the alternative cost to build the 
alternatives would be $171 billion.
    California represents the best case for bringing high-speed 
rail to the United States. Connecting northern California with 
southern California--in the north approximately 10 million 
people, in the south 25 million people--is exactly right for a 
high-speed rail system.
    Starting construction in the Central Valley is correct. It 
is the backbone of the system. It is a wise and prudent 
decision. The Central Valley offers us the ability to start 
construction at a place where we can purchase more miles of 
track per dollar than elsewhere in the State. It allows us to 
test the first real high-speed rail system--in excess of 220 
miles an hour--in the United States, and will ensure the 
connection between north and south.
    I would like to just make some comments on the business 
plan, because I was behind the business plan. I did the 
business plan. The 2012 business plan represents a just plan. 
It is predicated on realistic--some may say rather 
conservative, but robust--economic assumptions and the 
projections that provide for a transparent and brutally honest 
assessment of the costs and a realistic approach required to 
construct the largest public-private partnership effort in the 
USA.
    I can confirm that the costs, the ridership and revenue 
predictions, peer reviewed by high-caliber international 
experts, the phased implementation approach, the blended system 
approach, as well as the participation of the private sector, 
are all based on solid and realistic assumptions, and are based 
on real-time experiences of high-speed rail systems developed 
around the world.
    Mr. Chairman, our infrastructure needs a rail, and the 
demand of continually growing population will force us in 
California to meet these demands in one of two ways. We can 
build smartly, by employing lessons learned from countries 
around the world, or we can continue to stagnate while building 
systems that are less efficient, more environmentally damaging, 
and cost more.
    I thank you for this opportunity to testify, and I am ready 
to answer questions. Thank you.
    Mr. Denham. Thank you, Mr. van Ark. And just to clear one 
issue for the record, the legislative analyst's office in 
California just issued out their new report less than 2 weeks 
ago. And in that it says alternative cost estimate overstated 
the draft business plan--compares to the estimated $118 billion 
cost of constructing high-speed rail, with an estimated $170 
billion cost of adding equivalent capacity to airports and 
highways. It then goes on to say this comparison is very 
problematic because $170 billion is not what the State would 
otherwise spend to address the growth in intercity 
transportation demand.
    Further, it says capacity to carry 116 million passengers 
per year, but their highest forecasted ridership is 
significantly less than that amount, 44 million riders per 
year. That came from the leg analyst's office.
    Ms. Brown. Mr. Chairman?
    Mr. Denham. Ms. Brown.
    Ms. Brown. Usually we let them finish, and then we ask them 
questions so they can respond. So he may want to respond to 
what you said. But I think the proper protocol would be to let 
all of them make their presentations, and then we can ask 
questions, and he will get a chance to finish his statement and 
respond.
    Mr. Denham. Thank you, Ms. Brown----
    Ms. Brown. If you don't mind, sir.
    Mr. Denham. I understand how to run a committee very well, 
but I will correct the record when I see something that is 
mistaken.
    We will now go to the mayor, Mayor Amante from Tustin. 
Welcome to the committee today.
    Mr. Amante. Thank you, Chairman Denham. Chairman Denham, 
Congresswoman Brown, honorable members of the committee, my 
name is Jerry Amante. I am here representing the elected board 
of directors of the Orange County Transportation Authority. I 
also sit on the LOSSAN Corridor Joint Powers Authority, which 
oversees service from San Luis Obispo through Los Angeles and 
Orange Counties into San Diego. And I am the former mayor of 
the city of Tustin, a major city along that LOSSAN corridor.
    The Orange County Transportation Authority is a unique 
multimodal agency. It represents 3 million Orange Countians and 
Californians, and provides service to them through all strata 
of transportation except aviation. And it is from that 
multimodal point of view that we address our comments to 
California high-speed rail project and its business plan.
    We believe that the high-speed rail should be reviewed in 
the context of investments in the LOSSAN corridor in general, 
and specifically with respect to that portion between Los 
Angeles and Anaheim, which would be part of the high-speed rail 
program. We own some 42 miles of right-of-way and jointly fund 
the operations of commuter rail through Metrolink in that 
corridor. Today that LOSSAN corridor, as Chairman Shuster 
alluded to, is one of the busiest in the Nation, second only to 
the Northeast Corridor. It carries 2.7 million Amtrak 
passengers every year, and a combined 4.5 million commuter rail 
riders on Metrolink and the Coaster.
    In 2007, our agency, OCTA, invested $7 million to advance 
the environmental documentation for high-speed rail, the only 
public agency to advance money for environmental clearance of a 
segment to bring high speed. We believe that high-speed and 
intercity rail passenger investment is key to California's 
transportation future, connecting the northern sections of 
California and the southern Los Angeles Basin, which are some 
of the busiest Amtrak and passenger corridors in the State, are 
important to a State which, as has already been recognized by 
so many members, is about to explode in population to some 50 
million or more by the year 2030.
    Members like Richardson, Costa, and Sanchez have already 
spoken to the intense amount of investment we would have to 
make in ribbons of highway. And I live about 5 miles from that 
El Toro ``Y,'' where those 23 lanes are, and the devastation to 
communities from further widening would be significant, and it 
needs to be acknowledged.
    We are, therefore, grateful to the Federal Government for 
the investment it has made, the matching investment by the 
State of California of $1.8 billion in the last 35 years, and 
what that has meant to rail improvements throughout the 
corridor. We believe a strong Federal, State, and local 
partnership, and private funding partnerships through public-
private partnerships to advance passenger rail are critical.
    The latest California high-speed rail plan is a marked 
improvement over the 2009 business plan. The plan now includes 
a blended approach of providing service in our Orange and Los 
Angeles Counties, as requested by my agency, OCTA, and by the 
Los Angeles Metropolitan Transit Authority. It will provide a 
key and critical link between population areas and those new 
areas of track to be built. And specifically, we would call out 
an important need to connect Bakersfield to Los Angeles, and 
not have those big gaps in what we are providing in terms of 
passenger service today.
    Notwithstanding that concern, we have grave areas of 
concern about the plan, itself. Many of them are detailed in my 
comments before the committee, and you have them before you. 
And some I am going to talk to other Members of this Congress 
have already spoken to you about.
    Most important to us is the phased delivery approach. We 
believe that the introduction of this phased approach into the 
business plan is important because it connects two major 
population regions, and makes investments where you can attract 
public-private partnerships, where you have ridership, and 
where on most days there is standing room only on Amtrak 
service between Los Angeles and Anaheim. There is ridership 
there, and you can take advantage of it when connecting those 
areas. We believe the blended approach is very important for 
that reason.
    We have already heard many people talk about project 
schedule, what it does to cost increases. We heard you, 
Chairman Denham, speak eloquently to the 1A issues of the State 
of California and to the funding of the financial plan. And we 
have been critical in our comments of the manner in which some 
of the Federal funding for high-speed rail can compete with 
CMAC, New Start, and other rail transit funding for programs 
that we and other transportation agencies have. We believe that 
that needs to be balanced.
    Certainly there are operational concerns and cost 
comparisons. Of all of them, though, the phasing is the most 
important. Yet we believe that these approaches need to be 
balanced.
    In conclusion, while our board has serious concerns about 
some of the specifics included in the business plan, we 
recognize the importance of investing. We believe that should 
include the bookends approach that we have recommended for the 
San Francisco Bay and Los Angeles areas.
    We are highly cognizant of the challenges this committee 
faces as you try to do work to improve the transportation 
system for all Americans. We stand ready to work with you. I 
would be prepared to answer any questions.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you, Mayor.
    At this time I would like to recognize the mayor of Fresno, 
Ashley Swearengin.
    Mayor Swearengin. Good morning, Mr. Chair, and members of 
the committee. My name is Ashley Swearengin, and I am the mayor 
of Fresno, California. I want to thank you for the opportunity 
to address you this morning. And I am pleased to offer my 
comments today in support of high-speed rail as a cost-
effective transportation mode that makes a profit and 
drastically reduces travel times between regional destinations.
    In reviewing the record of Congress, including this 
committee, I am pleased to see that there has been bipartisan 
support for high-speed rail dating back to the early 1990s, 
through Republican and Democrat administrations and Congresses 
alike. And as a Republican mayor and former economic 
development professional, I applaud that position and I share 
that view for three reasons.
    First and foremost is high-speed rail's profitable business 
model. No other transportation mode in the world makes a profit 
and requires no public subsidies for operations. Yes, public 
dollars are required for the upfront capital costs, just as 
they are to construct highways or low-speed rail systems or 
airports. But once those capital costs are provided for high-
speed rail, the operational costs are paid for by the fare box. 
And you cannot say that about any other mode of transportation.
    The second reason why I support high-speed rail is the vast 
reduction in travel times it offers. Today, when Fresnans need 
to travel to Los Angeles they have four choices. They can go by 
car, they can go by plane, they can go by bus, or low-speed 
passenger rail, which is pretty much just taking a bus. Of 
those choices, the fastest option is to drive. And that is 
going to take 4 hours if you do not run into traffic in the LA 
Basin.
    Well, what are the chances of not hitting traffic in Los 
Angeles? Well, they are pretty good, if you are willing to 
travel between 11:00 at night and 5:00 in the morning. With 
high-speed rail, travel times to the LA Basin are reduced by 
over 60 percent to about an hour and 20 minutes, and the same 
is true when connecting to the Bay Area.
    I was asked recently when the last time is that I chose to 
take Amtrak. And my answer? I almost never take Amtrak, because 
it takes so much longer to arrive at my destination than if I 
just drove in my own car. I choose the fastest transportation 
option that I can afford, which is what most consumers do. 
Saying that Californians won't choose high-speed rail over 
their cars because they are not currently riding Amtrak is like 
saying, ``I didn't like my dial-up Internet service, so I am 
not going to like a fiber connection to my home.'' It is the 
wrong measuring stick. And these two are completely different 
services.
    The last major reason I believe we need to pursue the 
development of high-speed rail in California is because of the 
affordability of the ticket price. The business plan indicates 
the fare on high-speed rail will be priced at 80 percent of 
what an airline ticket costs between LA and San Francisco, 
which is a tremendous cost savings for us, in the middle part 
of the State. You see, a round-trip ticket from San Francisco 
to LA is between $120 and $180. But if you are in Fresno trying 
to fly to either LA or San Francisco, you have to be prepared 
to pay at least $250, and that is if you buy your ticket a 
month in advance. As much as $1,400 to $1,500 if you try to 
book a flight just a few days in advance.
    So, again, we are talking about a transportation mode that 
makes a profit, requires no public subsidy for its operations, 
and can be fully commercialized and operated by the private 
sector. Reduces travel times by over 60 percent for regional 
travel, and offers an affordable ticket price, especially for 
Fresnans, who are paying in some cases 10 times as much for 
regional air service as other cities in our State. This is 
something worth pursuing.
    No city will benefit more from high-speed rail than Fresno, 
which is a city of 500,000 people--and yes, some cows and 
vegetables--situated in one of the fastest-growing regions in 
the country that already houses 4 million people. 
Unfortunately, Fresno's distance from other major urban areas 
has limited our economic opportunity. Unemployment rates today 
range from 14 to 40 percent in Fresno County. Our region 
struggles to gain access to the economic networks of the LA 
Basin and the San Francisco Bay area. High-speed rail changes 
that dynamic for a city like Fresno, which is why our local 
business organizations endorse this project.
    And with permission, I would like to submit today for the 
record letters of support from the Greater Fresno Area Chamber 
of Commerce, the Central California Hispanic Chamber of 
Commerce, the Fresno Area Hispanic Chamber of Commerce, the 
Fresno Metro Black Chamber of Commerce, and the Economic 
Development Corporation serving Fresno County. The membership 
of these organizations is comprised of literally tens of 
thousands of businesses from throughout Fresno and the central 
California region.
    Also with permission I would like to submit letters of 
support from the Fresno County Council of Government, the Kern 
Council of Governments and the city of Visalia, also in support 
of high-speed rail.
    And finally, with permission, I would like to submit today 
for the record a June 7, 2011, op-ed written by the mayors of 
Los Angeles, San Francisco, San Jose, Sacramento, and Fresno. 
Together, we lead cities with a combined population of 6.5 
million people. And while there are differences between these 
mayors when it comes to partisan politics, we recognize what a 
smart solution high-speed rail can mean for one of the biggest 
challenges our State faces: transportation and mobility.
    And without solutions for California's transportation 
challenges, our economy is hamstrung. And California's economy 
being hamstrung does not bode well for the rest of the United 
States.
    And I would like to close now by just telling you a story 
about a business called Commercial Manufacturing that is known 
worldwide for the manufacturing of food processing equipment. 
If you have ever popped one of those meal-in-the-bags kind of 
bags into the microwave and eaten a meal, you know you have 
eaten something from Commercial Manufacturing. It is a small 
business that employs 41 people. They export their products all 
over the world.
    Well, their world headquarters are at 2432 Railroad Avenue, 
which is in Fresno, California, right on the path of the high-
speed rail alignment. So, of all the people you would expect to 
be upset about this proposed train, it would be Larry Hagopian, 
the owner of this business that has been in his family for a 
number of years. But his reaction to the project? He says this. 
``I see this as an opportunity to upgrade our facility, which 
will allow us to improve our manufacturing techniques, increase 
our sales, and increase the number of employees that we employ.
    ``Also, as a lifetime resident of Fresno, I see this 
project as a chance for Fresno to clean up its south and west 
sides, and bring more people back to the core of downtown, not 
to mention the positive economic impact on the community from 
the jobs associated with high-speed rail.''
    And I think his statement captures a sentiment that I wish 
to convey to the committee today. I recognize it is not without 
its challenges. Mr. Chair, you have made some very good points 
today and things I also recommend that we take a look at. But I 
urge this committee to support high-speed rail, and I urge your 
help in clearing the way for high-speed rail in our Nation. 
Thank you.
    Mr. Denham. Thank you.
    Mr. Gatzka?
    Mr. Gatzka. Thank you and good afternoon, Chairman Denham 
and members of the committee. I am here before you today to 
share some of our experiences and/or observations on how 
California high-speed rail is failing in California, in terms 
of their planning.
    I represent Kings County, which is a small, rural, 
agricultural county located in the rich agricultural growing 
region of central California.
    Mr. Denham. Mr. Gatzka, can I ask you to pull your 
microphone a little closer?
    Mr. Gatzka. Absolutely. There we go. Is that better? OK.
    I represent Kings County, which is a small, rural, 
agricultural county in central California, also known as a 
region of the San Joaquin Valley. And in that region and in 
that county we are highly patriotic, as the county and our four 
cities are also home to the western strategic defense base 
called Naval Air Station Lemoore, one of the reasons we protect 
agriculture.
    High-speed rail plans to propose 28 miles to run through 
our agricultural county, and we face the greatest agricultural 
impacts along the first construction segment. As a result, that 
project will potentially devastate our local communities. But 
in trying to work with the California High-Speed Rail, we have 
been treated with disregard and silence. And this is in 
particular to Mr. van Ark and also Mr. Szabo. When it comes to 
our legitimate concerns, our property owners are treated with 
right-of-way consultant agents that come out and intimidate, 
with the threat of taking away their land through eminent 
domain.
    In terms of specific impacts that have not been addressed 
even to this day, some of those include 7,000 acres of farmland 
in our county that will potentially be disrupted; 11 dairies 
that will require repermitting and relocation; a critical cow 
rendering facility that we have that serves 800 dairies 
throughout the Valley; our very own Kings County Fire Station 
number four, that also has our emergency medical helipad 
SkyLife helicopter; also our fire search and rescue helicopter 
that serves CAL FIRE; and also our sheriff's patrol helicopter. 
In addition, that is also our regional firefighter training 
grounds that is going to be impacted by this, and has not been 
addressed.
    Also, unanalyzed switch of Amtrak San Joaquin service has 
not been addressed by the High-Speed Rail Authority, but yet 
they allude to it in their business plan, which will also 
devastate our local businesses.
    Why aren't these issues and impacts being addressed by the 
California High-Speed Rail? It is because of their faulty 15 
percent design approach that does not give us the answers for 
what they are proposing to come through our county. And how 
that is going to be integrated with our existing infrastructure 
and our communities.
    In addition, the expedited public processes that they have 
employed rushes to approve their project simply to spend 
Federal funds at the expense and sacrifice of our local 
communities. Their attitude is, ``We only need to listen to the 
Federal Railroad Administration and we don't have to deal with 
local impacted communities.''
    In fact, their project EIR and EIS released for only a 
minimum 45-day public review comment period--then extended for 
a token 15 days--included 30,000 pages that we were forced to 
have to review to find those answers. What we found was 
deferred impacts, in terms of their analysis and mitigation for 
impacts related to high-speed rail in relation to our 
communities. After project approval, they will figure out those 
answers. They rely on contracted right-of-way agents to take 
care of business after the project approval process. Full 
public disclosure has not occurred, and the impacts are not 
addressed in any accountable manner.
    Our county is not against enhancing transportation where it 
makes sense. But we cannot accept the manner in which the 
California High-Speed Rail Authority continues to carry out 
business. And we are not alone. Communities along the proposed 
route are also up in arms. Just to inform you, just even last 
night, the Bakersfield City Council voted six to one to oppose 
any high-speed rail coming through their community because of 
the same issues that we are dealing with which are unaddressed 
impacts.
    So, in closing, I want to thank you for the opportunity to 
speak, share what we are experiencing in Kings County in 
relation to California high-speed rail, and I also wish all of 
you the best in your endeavors to make sure that you bring 
accountability to not only this project, but also the use of 
taxpayer funds. Thank you.
    Mr. Denham. Thank you.
    Ms. Alexis?
    Ms. Alexis. Mr. Chairman, thank you for the opportunity to 
appear before you. My name is Elizabeth Alexis, and I am the 
co-founder of Californians Advocating Responsible Rail Design, 
also known as CARRD. I have spent 3 years analyzing the 
business plans and ridership forecasts.
    We believe in rail. But this project is on the wrong track. 
It costs too much, it takes too long, and it delivers far, far 
too little. If you liked the Big Dig, you will love California 
high-speed rail. This is a project of the consultants, by the 
consultants, and for the consultants.
    For most of its existence, the California High-Speed Rail 
Authority had been off on its own, operating as a small, poorly 
funded organization disconnected from the regional 
transportation authorities. Impacts had been downplayed to 
secure support. Critical decisions about the route were made 
without feedback on their feasibility or consequences.
    The route was divided up into 10 different segments of 
about 80 miles each. A different firm was hired to plan each 
section. Each of these firms hired their own team of 
consultants. Another firm was hired to oversee these 
consultants. And their work was to be reviewed by yet another 
engineering firm. No consultant was to be left behind. Four 
layers of consultants overseen by seven staff members. You can 
imagine the communication difficulties, the coordination 
issues, and the limited flexibility.
    Planning work, top-down, heavy-handed, one-size-fits-all. 
Reminiscent of the worst aspects of highway-building, resulting 
in designs that are both expensive and bad.
    Things got worse when the project won stimulus funds. These 
had deadlines that drove decisionmaking in California, and put 
everything into high gear. The ridership model has flaws that 
render it not just useless, but dangerous. Plans to redo it? No 
time. Plans to reform the highly politicized governing board? 
No time. Despite voter concerns with the cost, and legislators' 
fears that the project will be a money pit, there are pressures 
to continue moving forward without fixing the problems. Job 
claims have been hyped, and legislators have been told they 
need to act now, or there will never be high-speed rail in 
California.
    If the project moves forward as is, there is a good chance 
that the State will be forced to spend more money trying to 
salvage something useful from the initial construction. And in 
California, this means there will be little money for other 
infrastructure projects like water. Congressman Cardoza 
mentioned devastating cuts to higher education. Well, there 
will be more of the same.
    The current route is so destructive to cities and 
agriculture that there may not be any net jobs to show for it. 
Respectfully, Mayor Swearengin, in cities like Fresno you could 
not run over more businesses if you tried, and many will not 
survive the move.
    The $3 billion of Federal funds is the tail wagging the $98 
billion dog. The project is now at a crossroads: 2 years ago, 
costs were $43 billion, and today $98 billion. There will be no 
private investment. And California will be looking to you for 
another $73 billion to complete the project. Public subsidies 
will be almost more than $100 for every passenger in the first 
30 years of operation, which is higher than the ticket price. 
The $171 billion figure thrown around ignores cheaper ways of 
addressing congestion, like the congestion pricing in Los 
Angeles, and the airport's plan to be more efficient.
    The stimulus money, along with California's money, will buy 
unelectrified tracks in the Central Valley that won't run high-
speed rail trains until an additional $25 billion is found to 
extend the line to either the Bay Area or somewhere near LA. 
These cost increases are blamed on design changes. But most of 
these should have been anticipated, or had actually been made 
prior to the low-ball December 2009 estimate. There have only 
been excuses, not investigations. The cost per mile is two to 
five times what it would cost to build this in Europe. And the 
route is needlessly long, an extra 100 miles from San Francisco 
to Los Angeles.
    You have to ask yourselves, ``We may have only $6 billion 
to spend, and this is what we choose to spend it on?'' There is 
no more funding on the horizon, and there may not be any more, 
given the challenges the Authority has had in executing. There 
are so many other urgent transportation needs, like we have 
heard about in Los Angeles, that could also help advance high-
speed rail.
    The project needs flexibility from the Federal Government 
so it can take a time-out. It needs to get an independent 
ridership study. The current one predicts ridership from San 
Jose to Bakersfield will be as high as the entire Northeast 
Corridor. It is broken. The current relationship between the 
Authority and its consultants is unhealthy. If the private 
sector is driving planning, it needs to have skin in the game.
    Mr. Chairman, supporters like to compare this project to 
the Golden Gate Bridge. But this is fool's gold. Do we need 
high-speed rail in our State? Absolutely. But the train we are 
on is in the wrong place, it costs too much, and it delivers 
too little. Thank you.
    Mr. Denham. At this time the chair recognizes Mr. Kole 
Upton, vice president of the Preserve Our Heritage, as well as 
a local Valley farmer.
    Mr. Upton. Thank you, Mr. Chairman, committee members. I do 
represent Preserve Our Heritage. It is a group of citizens, 
farmers, about 200 to 300 of us in Merced and Madeira Counties 
that have concerns about this project.
    We first received word that our land was impacted in 
November 2009, with a letter from the Authority. What we did, 
we went to the next Authority board meeting and expressed our 
concerns that the route was not following the guidelines of 
minimizing the impact of ag land and using existing corridors. 
The chairman at that time was Mr. Pringle. He urged us to roll 
up our sleeves and participate in the process. We thought that 
was a good idea, so we have done that for 2 years.
    In March of 2010 the route that we were complaining about, 
A3, was taken off the table. I then got on some technical 
committees as an elected official, two water districts. Prior 
to that it was just city and county officials, but we got some 
rural members on there.
    In June of 2010 I made the question, ``Do you support any 
`Y' north of the Chowchilla''--that is the ``Y'' section. 
Unanimous opposition by every public agency. Yet, in July of 
2010, the High-Speed Authority comes out with a route called 
``The West Chowchilla Design Option.'' Yes, you guessed it: 
north of Chowchilla. So I asked the question, ``Why would you 
choose something that was unanimously opposed by everybody, if 
this input process has integrity?''
    ``Well, the city of Chowchilla wanted it.'' Well, the city 
of Chowchilla immediately said, ``No, it wasn't us. We don't 
want it,'' and they are still actively opposed today.
    So then they said FRA wanted it. So we did a Freedom of 
Information request to the FRA December 3, 2010. Despite the 
best efforts of Mr. Denham and Mr. Cardoza, we have received 
nothing from the FRA. So, unless Mr. Szabo brought it with him 
today, we still don't have any answer as to why FRA would 
demand this particular route, which is the most abominable one 
possible. It does not follow an existing corridor. Not even the 
local wildlife use it as a corridor.
    The impact to farmland. The problem is when it goes through 
it impacts facilities that we have had in place for decades. 
And Mrs. Napolitano is aware of this, because she has helped us 
with the water district facilities that kind of thing. It takes 
out an entire canal in my district, the pumps, the deep wells, 
the transfer facilities. And it has taken decades for this to 
develop. We are some of the most water-efficient farmers in the 
world, but this is going to hurt us.
    If you are going to do this project, it ought to be 
integrated in with the infrastructure that exists now. And in 
order to do that, we have to work together.
    Now, these construction workers, there is a lot of them at 
the meetings we go to. When we talk to them, they don't tell 
you, ``We want a job, but it only can be high-speed rail.'' 
They just want a job. And there is plenty that can be done in 
the Central Valley.
    One, we can build Temperance Flat. Cost them about $3 
billion, which would give us a much better water supply and 
ensure that we could supply food and fiber for the people of 
the United States. We are one of the only five Mediterranean 
growing regions in the world.
    Now, one place that it did create jobs was in the EIRs. 
When the draft EIRs--as Mr. Gatzka pointed out--came out, we 
had to hire EIR specialists and lawyers in order to get through 
it. I personally went through the one through my area as we 
divided it up with Preserve Our Heritage. The problem, one, the 
roads were misidentified, the counties were misidentified, and 
the rivers were wrong. In order to comment on it, I had to 
rewrite it.
    So we are going to challenge that EIR. And in so doing, we 
want to make it clear that we support Kings County, because 
Kings County is first up on this thing. And we know if they get 
thrown under the train, we are next. So, it is important that 
they start treating ag right, and they start going by the 
guidelines that are in place.
    We want to support our legacy and our heritage. My father 
started my farm when he got back from World War II. He started 
with 100 acres. He had spent 3 years in Europe. And I live on 
my farm, my son lives on my farm, and my brother lives on my 
farm. It is not something that we are going to give up easily. 
So--I think Kings County is in the same position.
    I assume you brought me here for my opinion. If the opinion 
is of a taxpayer where to spend the money, you ought to do it 
like Willie Sutton said. He robbed banks, because that is where 
the money was. For goodness' sake, put this high-speed rail 
where the people are. If it is the northeastern corridor, if it 
is Anaheim to San Diego, if you insist on doing it in the San 
Joaquin Valley, like the FRA apparently wants, then do it on 
the west side. They don't have any water over there anyway, 
there is not a lot of impacts, and it would be a straight shot 
from San Francisco to LA.
    But if you insist on doing it in the central part, on the 
east side of the San Joaquin Valley, I am reminded of a story 
back in the last century of an old farmer that took his mule to 
town every day. And a salesman approached him and said he could 
really improve on that situation, and convinced the farmer to 
buy some roller skates for the mule. OK. The mule, yes, he 
could get to town a lot faster, but it wrecked havoc all along 
the way. That is like this high-speed rail. OK? If they don't 
do it right, they are going to wreck havoc all along the way.
    So, we are looking for you folks to help us with that, to 
do it--if it is done right, let's do it and do not impact the 
farmland. Thank you.
    Mr. Denham. Thank you, Mr. Upton. I would just inform the 
committee that Mr. Szabo, the administrator for the Federal 
Rail Administration, does have an engagement at 1:00. And so 
you may want to direct your first round of questioning with 
that in mind. And that is exactly what I plan on doing first.
    So, first of all, we had a hearing last week with Secretary 
LaHood testifying regarding the California high-speed rail 
project, that--``We won't be dissuaded by the naysayers and the 
critics,'' was his quote. The critics here, however, are not 
simply just individual citizens, but also the non-partisan 
legislative analyst's office in California, the same as GAO, 
which has said, ``It is increasingly likely that the ICS may be 
all that is ever built,'' and also the peer review group, who 
has also said, ``The Central Valley portion would yield an 
asset of very little value.''
    So, the question is, if that is the likely outcome, why 
wouldn't the department of transportation re-evaluate whether 
the project is worth more than $3 billion in Federal funding?
    Mr. Szabo. Well, we continue to support the California 
High-Speed Rail Authority in the efforts of Governor Brown. We 
continue to believe that the need for the project is 
indisputable. And we also believe----
    Mr. Denham. Do you disagree with the findings----
    Mr. Szabo. And we also believe that the work that has been 
done with this most recent business study, which has gone 
through a very, very thorough international peer review, is a 
very, very conservative document that begins to address many of 
the legitimate concerns that folks have had. But we continue to 
believe that it is--from all analysis, continues to be a very 
strong and very doable project.
    Mr. Denham. Thank you. Mr. Szabo, you said, ``from all 
analysis.'' I would just remind you that California has a--
almost a super-majority of Democrats in the Assembly, almost a 
super-majority of Democrats in the Senate, and has a Democrat 
Governor. You would not say that the non-partisan legislative 
analyst's office is a conservative estimate by any means, would 
you?
    Mr. Szabo. What I would say is we find it interesting that 
they have had no dialogue with us--none, not one conversation. 
And, frankly, we believe that we can provide a lot of 
professional technical analysis and assistance that is based on 
our experience from looking at projects around the world from 
decades of experience and, quite frankly, could probably 
clarify a lot, an awful lot of the misconceptions that they 
have.
    Mr. Denham. So State and Federal Government are just not 
communicating?
    Mr. Szabo. The State government and our office is 
communicating very effectively. California High-Speed Rail, we 
are communicating very effectively. My point is that for some 
reason the LAO has not chosen to engage us at all in any 
discussion, not one, to better understand some of the issues 
and some of the concerns that they raise.
    Mr. Denham. Have you reached out to them?
    Mr. Szabo. I can find that out for you. I don't know. I 
have not, personally.
    But again, if they are doing research and want to be 
unbiased and accurate, isn't it incumbent on them, as they do 
their research, to make sure they talk to everybody that is 
appropriate?
    Mr. Denham. I----
    Mr. Szabo. I mean you don't limit your research to just 
those sources that you want to hear from.
    Mr. Denham. No, I would absolutely agree. But the 
California taxpayers are on the hook for $9.95 billion. And in 
that bond it was written in that the legislature could call 
that back at any time with a majority vote.
    So, before the Federal Government comes to this committee 
and says, ``We need $50 billion for high-speed rail, all of 
that going to California,'' I would assume that California's 
commitment of $9.95 billion, at the minimum, would--there would 
be a conversation there. I mean that would only seem likely. 
And if California is not communicating with you, well, I don't 
know why you would obligate the rest of the taxpayers across 
the Nation on anything further. So my recommendation would be 
to--I will recommend to them as well--but obviously, we need to 
start some better communication.
    Second question I have is you note in your testimony that 
Amtrak's San Joaquin's service could be routed over the IC's 
infrastructure. What is the likelihood that service would 
ultimately be routed over the ICS, assuming that it stops right 
there, which is what is covered under the current legislation. 
If it stops there, what is the likelihood that Amtrak would 
actually use----
    Mr. Szabo. A couple of points. A couple of important 
points. I mean first off, should there be a delay in 
constructing the first operable segment, we very easily could 
use this completed segment for operation in the San Joaquin's.
    And it is important to note that that is the fifth 
largest--fifth most utilized, most heavily used route on the 
Amtrak system. That region is home to almost 6 million people. 
The Central Valley, you know, people are calling it nowhere. If 
taken alone, it would be larger than two-thirds of the States 
in our Nation. So this isn't nowhere. It is an area that has 
significant population. And that segment most assuredly would 
be used.
    Mr. Denham. And just to be clear, the construction segment 
is the $5.2 billion segment, which is covered under the $3.6 
billion from the stimulus dollars, with additional funds coming 
from the State.
    Mr. Szabo. Right.
    Mr. Denham. The operating segment--so the construction 
segment that we are talking about Amtrak using would be from 
just north of Fresno to just south of Fresno. So----
    Mr. Szabo. Yes. Again, assuming----
    Mr. Denham [continuing]. That would actually----
    Mr. Szabo. Assuming that there were some delay in 
completing the first operable segment, the construction segment 
could be put into use very, very quickly, very, very easily. 
And that would provide immediate utility for that segment.
    Mr. Denham. It is my understanding--and, Mr. van Ark, you 
can clarify me, if you would--but the construction segment, the 
$5.2 billion, does not connect with Amtrak. But the operational 
segment which goes from Fresno to Bakersfield does connect, the 
difference being about $25 billion, one is $30 billion, the 
other is $5.2 billion. So we are going to have to come up with 
not only the State obligation, but another $30 billion on top 
of that.
    Mr. van Ark. Mr. Chairman, the initial construction section 
starts close to the ``Y.'' That means north of Fresno. It is 
approximately 130 miles, and it stops just south of 
Bakersfield. So it is a 130-mile section.
    The initial operating section goes either to San Jose in 
the north, or alternatively--that would mean from Bakersfield 
all the way to San Jose, or from Merced all the way down to the 
San Fernando Valley. That would be the first initial operating 
section.
    Mr. Denham. So the construction segment of--the $5.2 
billion definitely would----
    Mr. Szabo. Can easily----
    Mr. Denham [continuing]. Would be usable for Amtrak.
    Mr. Szabo. Can easily be usable.
    Mr. van Ark. Correct, correct.
    Mr. Szabo. Yes, yes.
    Mr. Denham. Thank you. And what happens to Federal funds if 
voters of California rescind the State bond, either through 
going back to the ballot, or if the State legislature, on a 
majority vote, decides to pull back the funds? What happens to 
the Federal funds, Mr. Szabo?
    Mr. Szabo. Well, I don't think I want to speculate on what 
California voters may or may not do. We have made a commitment 
to the California High-Speed Rail Authority and to the people 
of California on this project. We are going to deal with the 
facts that are at hand.
    And, you know, we are committed to completing the first 
construction segment. We believe that if the first operating 
segment is completed, it will in fact turn a profit day one and 
be the catalyst that we need to bring in the private 
investment.
    I think that is the most important thing to remember here. 
We are truly talking about a public-private partnership. And 
the worst thing that we can do is show uncertainty. Because if 
you are showing uncertainty you are actually generating risk 
for the private sector that is going to minimize their 
willingness to come forward. And right now there is very, very 
strong interest from the private sector in this project.
    And so, we need to be taking all the steps that we can to 
ensure the project's viability, and to present that foundation 
for the private sector investment.
    Mr. Denham. My question is, the same way that if I were 
going to invest in something as a private investor, I would 
make sure that there was certainty, as well. I would make sure 
that if funds were not available, if the other side did not do 
what they said they were going to do, that I would have an 
ability to pull out of my obligation.
    Now, I know that there is no obligated private investor out 
there. But, from a Federal perspective, you are obligating 
Federal taxpayer dollars. So there must be some type of 
contingency to say if California does not come up with their 
fair share, the Federal Government is able to rescind theirs.
    Mr. Szabo. We are committed to the project. We have made 
the obligation, and we stand behind our commitment.
    Mr. Denham. So if there is no private investor and there 
is--just want to be clear--no private investor, California 
doesn't come up with their money, which they have not done to 
date--which the attorney general or the Governor has not come 
up with the money, neither has the State legislature--if that 
money does not exist, you are still willing to put more Federal 
dollars out there than what we currently have? That is the 
Administration's----
    Mr. Szabo. We are not talking about more Federal dollars at 
this point. I am talking about the commitment that we have made 
in this initial obligation. We have made it, we are committed 
to the first construction segment, and we are not going to 
flinch on that support.
    Mr. Denham. OK, but there is no----
    Mr. van Ark. And, Mr. Chairman----
    Mr. Denham. Mr. Szabo, there is an important aspect here. 
The initial segment is $5.2 billion. You can correct my math if 
it is off anywhere. I believe it is $5.2 billion. Of that we 
have $3.3 billion left in stimulus dollars.
    So, are you saying we are going to go ahead and obligate 
the $3.3 billion to this first part of the project, regardless 
of whether or not the State ever comes up with their matching 
dollars?
    Mr. Szabo. That obligation has already been made. We have 
legally obligated those dollars already, and we are prepared to 
move into construction in spring.
    Mr. Denham. You have obligated them with the $2 billion of 
State dollars.
    Mr. Szabo. They are obligated based on all of the 
appropriate contingencies, of course, you know, to make sure 
that California High-Speed Rail meets all their obligations. 
So, you know, of course there is a list of contingencies that 
ensure that that first construction segment goes forward in 
accordance with the cooperative agreement That we have signed 
with them.
    But provided that all of those contingencies are met, you 
know, we stand behind--the worst thing we could do is make 
obligations to folks, and then start to renege on our word.
    Mr. Denham. OK. Let me ask the question a different way.
    We start obligating dollars, the money starts getting 
spent. Shovels start getting put into the ground. If the State 
government reneges, if the State government does not put their 
money out there, do you continue to spend the $3.3 billion?
    Mr. Szabo. Well, here. Again----
    Mr. Denham. If there is a contingency in place, there has 
to at some point be----
    Mr. Szabo. Yes.
    Mr. Denham. The money is not there today.
    Mr. Szabo. I am not going to speculate on what the State 
may or may not do. But certainly all conditions of the 
cooperative agreement have to be met before we expend dollars.
    Mr. Denham. Sir, I am not asking you to speculate. I am 
just making sure that you have a safeguard to taxpayer dollars.
    Mr. Szabo. Of course, through the cooperative agreement. So 
all of the conditions--we sign an agreement. We sign a 
cooperative agreement with the California High-Speed Rail. It 
outlines all of the requirements for that agreement to be 
satisfied, and allow for the expenditure of the dollars.
    So, you bet there are significant safeguards built into 
each and every one of these agreements we sign with the State.
    Mr. Denham. Thank you. This committee would request a copy 
of those documents.
    And, by the way, we are still waiting for the documents 
that Secretary LaHood had promised that we would have before 
this committee started. So just as an FYI.
    I am way over my time. I will certainly be very lenient 
with the time of other Members. And at this time I would like 
to recognize Member Napolitano.
    Mrs. Napolitano. Thank you, Chairman Denham. It is 
interesting. As you know, most of you have already had 
conversations with me at one point or another about how I feel, 
and how I have questions. Not only have people stated that they 
have to appease me--it is not me, it is the cities that I 
represent who have concerns about the issues on the high-speed 
rail moving forward.
    Mr. Szabo, there is a couple questions. Well, first of all, 
let me say to Mr. Denham that I am--and I did mention it to 
him--that I am disappointed that nobody from the LA County--
only about 13 million people--are represented here. It is a 
major community that is supposed to be a player, and it is not. 
And again I go back to the fact that we have not had a 
continuing dialogue with the High-Speed Rail Authority for 
almost two--a year-and-a-half. And that is the last time that I 
know that we have been asked to sit at the table to talk about 
what is happening. And I hope that changes. Otherwise, you will 
be hearing from me again.
    There are assertions about the ridership of--that is going 
to pay for itself, that is going to be a boost to the Central 
Valley, the hardest hit on unemployment, that it is going to 
create all these--and those facts, those figures, are coming 
from somewhere. But we don't know whether they are viable or 
not. Who is making those figures up?
    And I agree with the gentleman from the Valley on the water 
issue, because that is one of the biggest things that we try to 
protect, is the delivery of the water for the farms to continue 
to produce--the breadbasket of the United States and for the 
rest of the world in many areas. Is that growth viable?
    And then the other question that comes up--and this is to 
anybody--who owns the major country high-speed rail abroad? Who 
owns it? Who controls it, so that you don't have to pay for the 
land, which--it is part of the biggest cost of this high-speed 
rail issue.
    And you talked, Ms. Swearengin, about public rail paying 
for itself. Not even Amtrak pays for itself. So it is always 
subsidized. This will continue to be subsidized.
    Mr. van Ark. No.
    Mr. Szabo. No.
    Mrs. Napolitano. Well, that is only assumptions. Again, you 
are saying don't use assumptions, but we are allowing you to 
make assumptions. So unless you can really corner them and 
State where those assumptions are made from, it is not usable.
    Then there was an issue not too long ago of where analysts 
were saying that the cost to build--the guesstimate cost to 
build the high-speed rail would have been less than what is now 
projected. Number one, because there was high unemployment, and 
people were hungry to get to work. There was a lack of being 
able to get materials, et cetera, but that became a non-issue. 
Yet I have heard from others that this is--would have been 
less, but the figures that are being used are blown up, they 
are more than they should be. So, I mean, it brings a lot to 
the--to--back into this fray.
    And to Mr. Szabo, the monitoring and oversight, does that 
also include the ability for High-Speed Rail Authority to work 
with the communities, and ensure that they have not only the 
right-of-way, the past resolutions--as you heard, many cities 
have already passed resolutions banning it going from city--
because I was told by High-Speed Rail Authority in a meeting 
with my three COGs--77 percent of the cities in LA County--that 
there was no option for them, that it was going to, whether 
they liked it or not. And I raised my hand and I said, ``Yes, 
you do. You go to court.''
    Mr. Szabo. Congresswoman, you have had so many questions in 
there, it is hard to----
    Mrs. Napolitano. And I can keep going, too, Mr. Szabo.
    Mr. Szabo [continuing]. Work through them all. And I think 
there are good answers to every one of them.
    First off, let's talk about working through the 
communities. And, you know, it comes back to something that 
Congressman Denham said earlier, you know, Congressman, your 
frustration with the NEPA and the CEQA process. But 
unfortunately, that is the process that ensures that the 
communities get a voice, a very, very necessary voice.
    Mrs. Napolitano. Just for a second, Mr. Szabo----
    Mr. Szabo. And that is why we have to work through that 
process.
    Mrs. Napolitano. Yes. But----
    Mr. Szabo. If I can----
    Mrs. Napolitano [continuing]. Let me clarify NEPA/CEQA. We 
are trying to clarify that for California here in this 
committee, trying to make sure that it is acceptable to use 
NEPA and CEQA----
    Mr. Szabo. Yes, yes.
    Mrs. Napolitano [continuing]. Without having to go 
through----
    Mr. Szabo. But I would like to come back, you know, to the 
frustrations and the concerns of the--that Kings County raised. 
You know, it is one of the reasons why, you know, in October we 
announced that we were going to do a supplemental environmental 
study for them, you know, re-open the record. And it was a 
matter of listening to the concerns that they have, and trying 
to find a way through the process, to make sure that the 
community has an opportunity to engage.
    So, absolutely. You know, we monitor and work with the 
California High-Speed Rail Authority through that environmental 
process. It is a requirement of law and, you know, is an 
important tool to make sure that a lot of these important 
issues and frustrations, concerns that communities have, have a 
process to get flushed through, and to make sure that there is 
a good record from which the final determination is based.
    Mrs. Napolitano. Have you been in contact with my COGs, my 
councils of government in LA County?
    Mr. Szabo. Certainly they have been a part of the 
environmental process, yes.
    Mrs. Napolitano. When? I am sorry, but I have not heard 
from them, so I can't say that truthfully. I am sorry, go 
ahead.
    Mr. Szabo. No, but certainly I can allow, in a minute, 
Roelof to comment on what their outreach efforts have been 
through the environmental process. But I would really like to 
come back to the ridership, because I think there is a couple 
of very important points to be made there.
    First off, if you take a look at the ridership analysis 
that California High-Speed Rail did in their business plan--and 
I will let Roelof drill down a little deeper on this in a 
minute--but it is actually very conservative.
    When it went through the international peer review--again, 
by those that have built and operated high-speed rail around 
the world for decades--it was found to be very, very 
conservative and used as a ratio that is actually less than 
one-to-one, population versus projected ridership. And if you 
take a look at most of the systems around the world, it is 
substantially higher, usually a three-to-one ratio, or--you can 
correct the record if I am wrong--in France is it almost a 
four-to-one ratio.
    The comparison to the Northeast Corridor is a very, very 
false comparison. It is not even apples to oranges. It is an 
apples to bananas comparison, for a couple of reasons.
    Mrs. Napolitano. OK, Mr. Szabo, we are running out of time. 
Would you mind wrapping it up?
    Mr. Szabo. OK. The biggest reason you can't compare the two 
is, first off, the Northeast Corridor is capacity constrained 
today. Ridership is stunted because virtually every train is 
selling out. So we are not even measuring what the ridership 
potential is there if there was sufficient capital to make 
additional investments there.
    Secondly, the type of service that California High-Speed 
Rail is talking about is much different and far superior to the 
existing Acela service that exists today. Acela would be 
considered more what we call regional service under the new 
high-speed rail vision.
    Mrs. Napolitano. OK, thank you. And I have been to--with 
Ms. Brown. She invited me to a CODEL to all these foreign 
countries. I rode on them. We talked to the boards. We asked 
questions. So I am aware of how they operate and where they 
operate.
    So--and you talk about apples to oranges. They travel at 
almost--what, 225 miles per hour, Corrine?
    What is the highest speed we are going to be able to 
achieve here? Because the stretches are so small, in terms of 
some of the--not the inner cities, but some of those areas. I 
know my topography, too, a little bit. Not that well, but----
    Mr. Szabo. No, the vision for the California project is 220 
miles per hour.
    Mrs. Napolitano. In some areas. But in my area----
    Mr. Szabo. Substantial----
    Mrs. Napolitano [continuing]. When they were looking at 
going from LA to San Diego, they were going to destroy a built 
transportation center because it had a curve in it, and build a 
new one. And I think, ``Well, wait a minute. What--how sense 
does this make--how much sense does this make?'' And to build a 
curve over into Santa Ana area, to the Orange County instead of 
all the way down to San Diego, doesn't make quite sense by 
curving it or coming back and making two rail heads.
    There is a lot of explanations that have not been 
clarified. And we need to be able to say--if this is a second 
phase and we are in it, then we want to be sure that the 
Authority is working on the same----
    Mr. Szabo. Right, right.
    Mrs. Napolitano [continuing]. From the same plan that we 
need, not that the Authority wants, but that the people who 
represent those areas are able to determine that this is the 
best for them, and that the ridership is there, and that they 
can afford to be on it.
    Am I correct? Anybody? Please answer real quickly, because 
I got to get off.
    Mr. Amante. Congresswoman, I will just venture out and say 
you are right. We will take my area in Orange County, where we 
own the right-of-way, and that would be part of the track that 
would be shared track for high speed in those segments. It is 
certainly not going to travel 220 miles an hour there. It won't 
through most urban areas. But it is an area dense with riders, 
it is an area that can provide ridership.
    It is an area where it will attract private-public 
partnerships, because the private sector has an opportunity for 
the two things they need. One is the opportunity for 
profitability so they would invest, and the second is the 
certainty of ridership and the certainty of investment from 
both the public and the private sector.
    Where those areas exist, yes, you can have a profitable 
system that operates and operates well. It won't operate in the 
same way you have it in foreign countries. It won't be on 
strictly straight tracks. And it won't move at speeds of 225 
miles throughout the system. It can't. It may get you where you 
want to go. Maybe not in 2 hours and 40 minutes. But when you 
have connected all the segments over time, it will get you to 
the places you want to go. In urban areas it will move at 
greater speeds.
    What is most important to the rider is that they have an 
opportunity to have another option other than the car. In our 
area in Orange County, people who ride public transit, buses, 
rubber tire applications, generally are the working poor and 
students, $25,000 a year and under.
    Mr. Denham. Mr. Amante, thank you.
    Mr. Amante. People who ride the trains choose to do it----
    Mr. Denham. I have got to interrupt you. I know Mr. Szabo 
is very close to leaving----
    Mr. Szabo. Mr. Chairman, I have got my deputy here, and 
Karen Hedlund is prepared to slide in. So don't worry, we will 
continue to have representation here.
    Mr. Denham. Thank you. And we will come back to a second 
round of questioning.
    But at this time I would like to recognize Mr. Harris for 5 
minutes.
    Dr. Harris. Thank you very much, Mr. Chairman. Thank you. 
And I will direct my questions, earliest questions, to Mr. 
Szabo.
    But Mr. Upton, I just wanted to lead up to that. I read 
your testimony and it says that you have sent an FIOA--FOIA 
request to the Railroad Administration on December 2, 2010.
    Mr. Upton. Yes, sir.
    Dr. Harris. You still have not received a----
    Mr. Upton. We have not received. We asked for Mr. Denham's 
help and also Mr. Cardoza.
    Dr. Harris. Now, Mr. Szabo, that is your shop, isn't it?
    Mr. Szabo. You bet it is.
    Dr. Harris. OK. Now, the chairman--you know, you had 
suggested that, you know, when someone wants to do their due 
diligence they ought to come to you and ask for information. 
That was your testimony just 10 minutes ago, wasn't it?
    Mr. Szabo. It is.
    Dr. Harris. OK.
    Mr. Szabo. It absolutely is. And if I may say----
    Dr. Harris. Now, Mr. Upton's group came to you----
    Mr. Szabo. Sir, if I may say for the record----
    Dr. Harris. Sir, sir, it is my turn to ask the question. 
Your turn to answer.
    Mr. Szabo. OK, please ask it. I really want to----
    Dr. Harris. I haven't asked the question yet. Is it true 
that Mr. Upton's group sent a request 1 year and 12 days ago, 
and your Administration has been unresponsive to that request? 
That is a yes or no. You either responded----
    Mr. Szabo. The answer to that is----
    Dr. Harris [continuing]. Or you didn't.
    Mr. Szabo [continuing]. No, we immediately----
    Dr. Harris. Thank you. Now, let me keep on going.
    Mr. Szabo. We immediately made----
    Dr. Harris. Sir, sir, sir----
    Mr. Szabo. We immediately--and, in fact, the documents----
    Dr. Harris. Sir----
    Mr. Szabo [continuing]. Are publicly available on the Web 
site.
    Dr. Harris. Sir, I ask the questions, you answer. You 
answered no. That is very disturbing, because you are asking 
the people in the First Congressional District of Maryland to 
pay for this.
    Mr. Szabo. My answer no was that we made the records 
available.
    Dr. Harris. Sir, I am still asking the questions. That is 
disturbing to me, because the citizens in my district are being 
asked to pay--in fact, what is interesting is you or I are the 
only ones between this panel and all the Members here who 
actually don't come from California. But we are being asked to 
pay for it.
    Now, let me just ask a couple of things. A couple of pieces 
of your testimony. You said this was going to turn a profit day 
one. Sir, that is only in the way a person who works for the 
Government can say ``turn a profit.'' Because, you know, if 
this were a private enterprise, the capital expense would be 
included in whether or not you turn a profit.
    This is a yes or no question. When you say it turns it a 
profit, does that include paying back the interest to China for 
the stimulus money borrowing that is going to go to that--to 
the segments of that rail?
    Mr. Szabo. That is not an accurate question, sir.
    Dr. Harris. Which part is inaccurate? Sir, is that--the 
capital expense you are talking about----
    Mr. Szabo. This system----
    Dr. Harris [continuing]. Is stimulus funding capital 
expense.
    Mr. Szabo. This system will turn an operating profit from 
day one based on----
    Dr. Harris. Ah, but sir, I will go back----
    Mr. Szabo [continuing]. Based on the way that these types 
of systems are judged across the world, which is the above-rail 
cost. And, as comparable to everything in Europe and Asia, it 
will generate an operating profit.
    Dr. Harris. Thank you. But your testimony before was ``turn 
a profit.'' You didn't say turn an operating--I just want to 
make sure that the people--you see, because you are asking my 
citizens in my district to pay for that capital expense. So 
don't you think they ought to--you ought to be more specific 
and say it is the operating profit? Because the people in my 
district are going to have to pay part of the capital expense--
--
    Mr. Szabo. You talking about the value of the capital 
investment?
    Dr. Harris. Yes, sir, that is right.
    Mr. Szabo. But there is value to the people of the Nation. 
Again, take it back to the delays----
    Dr. Harris. Well, sir----
    Mr. Szabo. Take it back to the delays at the LA Airport and 
the San Francisco airport.
    Dr. Harris. Let me tell you something, sir.
    Mr. Szabo. And right now it's----
    Dr. Harris. The people in the First Congressional District 
in Maryland very rarely travel through the San Francisco 
Airport or the LA Airport.
    Mr. Szabo. But it affects the economy.
    Dr. Harris. They kind of stay near Salisbury and Baltimore, 
to be honest with you.
    Mr. Szabo. Congressman, it affects the----
    Dr. Harris. Now, let me keep on going.
    Mr. Szabo [continuing]. Economy of our Nation. It is very 
important.
    Dr. Harris. You said--to get to the chair's--you said you 
are not going to flinch on the support. Now, we have evidence 
that the California voters kind of indicating they might be 
flinching on the support. In fact, I have got a polling--and I 
know it is just a poll, it is not an election--that suggests by 
a two-to-one margin they actually might want to go back on that 
little $9 billion deal.
    If they flinch--let me just confirm this--if they flinch--
because this was your answer to the chairman--you said that 
that means that maybe we could retain some of that $3 billion 
that we have to borrow.
    Mr. Szabo. The $3 billion are fully obligated today. There 
is a cooperative agreement. And based on the terms of that 
cooperative agreement being met, we have a legal and binding 
obligation to continue to move forward.
    You know, the worst thing you can do is try and lead by 
polls. There is no denying what the need of this project is for 
the people of California and how it affects the economy of our 
Nation.
    Dr. Harris. Well, sir, I am going to suggest----
    Mr. Szabo. And capacity constraints----
    Dr. Harris. I only have a few seconds left. I am going to 
suggest that, again, I only--you know, I am sent here to speak 
for the people of the First Congressional District in Maryland. 
The cost of this project ultimately could be $70 billion 
transferred to the people of the United States. That is $300 
for every man, woman, and child in my district. I bet if I take 
a poll--even though you don't believe polls--the average person 
in my district says, ``Over my dead body do I want to pay $300 
in Federal taxes and borrow that money to build a railroad to 
nowhere,'' because that is the testimony.
    This first segment is truly--I mean this is almost--this is 
stunning. Only the Federal Government could plan to build this 
railroad, and start it in the least populated area of the 
State. Furthermore, going back and saying, ``You know what? We 
are not only going to build it where we have existing 
infrastructure, we are going to build it somewhere else, where 
apparently the local community doesn't want it.'' And the FRA, 
a branch of this Government, doesn't even want to give the 
information to that local jurisdiction.
    Mr. Szabo. First off, sir, we made it available----
    Dr. Harris. Sir, it is----
    Mr. Szabo [continuing]. It is publicly posted on the 
Internet.
    Dr. Harris. There is no question, no question standing.
    Mr. Denham. All time has expired.
    Dr. Harris. Thank you, Mr. Chairman.
    Mr. Szabo. It is publicly available----
    Mr. Denham. Mr. Szabo, all time has----
    Mr. Szabo [continuing]. Information posted on the Internet.
    Mr. Denham. Mr. Szabo, all time has expired. The chair now 
recognizes Ms. Richardson.
    Ms. Richardson. Ms. Brown, if that is OK?
    Ms. Brown. Yes. I would like it if the administrator could 
answer--maybe another 10 minutes so she can ask her questions 
and I can ask mine. And we won't be rude.
    Mr. Szabo. I have got to meet with the Iraqi transportation 
minister, but I will--until about 1:05 and then I will leave.
    Ms. Richardson. Well----
    Mr. Szabo. Karen Hedlund here----
    Ms. Brown. Yes, sir.
    Mr. Szabo [continuing]. Who is very, very capable of 
handling----
    Ms. Richardson. Well, Mr. Szabo, though----
    Ms. Brown. No, I need you, though----
    Ms. Richardson [continuing]. With all due respect, we have 
sat here since 10:00 this morning----
    Mr. Szabo. Yes, ma'am.
    Ms. Richardson [continuing]. Waiting for an opportunity to 
ask you these questions.
    Mr. Szabo. Yes, sure.
    Ms. Richardson. And I think our domestic policy far exceeds 
anyone in Iraq.
    So, we are asking for 10 minutes to ask you questions, 
please.
    Mr. Denham. Ms. Richardson, proceed.
    Ms. Richardson. Thank you.
    Mr. Szabo. Please.
    Ms. Richardson. Mr. Szabo, can you tell me what is the 
projected funding for the Northeast Corridor needed for their 
project?
    Mr. Szabo. The estimates that came from Amtrak right now 
are $117 million in order to bring it to, you know, world-
class, 220-miles-per-hour speeds, which we think is a worthy 
project.
    Ms. Richardson. OK. And is that project fully funded at 
this time?
    Mr. Szabo. It is not.
    Ms. Richardson. OK. So I think, for the record, we just--
you know, I understand the passion of everyone. But in all 
fairness, the Northeast Corridor, you just heard for the 
record, is not fully funded at this point, either, and 
taxpayers may be on the hook for assisting in that process.
    Number three, has the cost projections of the NEC included 
inflation, et cetera, as the California plan before us?
    Mr. Szabo. No. That is a key difference between the NEC 
proposal at this time and in California. The California project 
has already calculated in 3-percent inflation each and every 
year. And so these are inflated dollars, where the NEC project 
is in today's dollars.
    Ms. Richardson. OK. So would you supply to this committee--
so, since everyone wants to compare apples to apples, let's 
compare the inflation, all of the costs that we have included 
in the California plan, if you could, supply to this committee 
the same for the Northeast Corridor, so we can compare apples 
to apples. OK?
    Mr. Szabo. Absolutely.
    Ms. Richardson. Last question, sir, and so I am going to 
far exceed my time, and I think we can get you out, but we 
need----
    Mr. Szabo. OK.
    Ms. Richardson. We need your help and you on the record for 
these issues.
    I asked Secretary LaHood last week when he was here if for 
some reason there was a need or a request for a change other 
than starting in the Central Valley, was that possible on the 
Federal end. Because I was told that no changes could be made. 
Is----
    Mr. Szabo. And, Congresswoman, it is not. And this comes 
back to the congressional mandates under PRIIA and ARRA. It is 
not a matter of where we have been granted flexibility. There 
is very, very clear criteria that this committee and Congress 
set up by law that has to guide where the grants go, what are 
required in order to be eligible. And the ability to shift the 
dollars is--it is not there. It is not there.
    Ms. Richardson. In ARRA was it noted funding generally for 
high-speed rail, or was it specifically for the Central Valley 
corridor?
    Mr. Szabo. No, it was the requirements for high-speed rail.
    And see, you know, it is important that the committee 
understand that FRA doesn't just get to pick wherever we want 
to invest the dollars. We have to sort through the applications 
that the State makes.
    Ms. Richardson. Sir, reclaiming----
    Mr. Szabo. And only then can we make our decision.
    Ms. Richardson. Reclaiming my time, because I am trying to 
help you, and I hope you see that----
    Mr. Szabo. OK, sure.
    Ms. Richardson [continuing]. Through the questions that I 
am asking.
    My question is, it is my understanding, with what we voted 
through with ARRA, I voted for funding for high-speed rail. I 
didn't specifically say $700 million can go to the Central 
Valley. So I am going to come back to my question. You said 
that it is congressional authority that would have to allow a 
change of a particular line.
    See, to me, if I didn't originally vote for the line, I 
don't see how that is congressional authority.
    Mr. Szabo. Yes, it is the----
    Ms. Richardson. I see that as being yours.
    Mr. Szabo. It is the criteria that was established relative 
to project readiness and, again, the process that we had to 
follow in order to select the recipients of the grants, the 
criteria that had to be met for the grant to be eligible, you 
know, and there are several things.
    And it is important to note that a key part of it was, in 
fact--since this was part of recovery--unemployment was a key 
part of it. You know, and the fact that the unemployment rate 
in the Central Valley exceeds that in the other areas of 
California was just one of those criterias.
    But it also came back to project readiness, you know, how 
advanced the engineering was, where they were at in the 
environmental process----
    Ms. Richardson. OK, sir. So if--and I am supporting the 
project as it is, but I am trying to get at some of these 
questions that have been out there--if it is found, for 
example, given the more recent investment that was done in San 
Francisco, for example, I believe a quarter of a----
    Mr. Szabo. Yes.
    Ms. Richardson [continuing]. A billion dollars, if it were 
found that starting from the north would be appropriate, and 
that was urged from this Congress, would that be considered? Or 
if it was from the south?
    Mr. Szabo. Well, here. Those projects that were ready we 
did, in fact, make investments under ARRA in both the north and 
south----
    Ms. Richardson. No, I am speaking specifically regarding 
high-speed rail. If it was determined that the initial segment 
would be in a different place in California----
    Mr. Szabo. Yes. We don't have the ability to shift these 
dollars now and meet the requirements of the law. It just 
simply is impossible.
    Ms. Richardson. OK----
    Mr. Szabo. What is helpful is the fact that they are going 
with the blended approach now, and that California High-Speed 
Rail is, in fact, prepared to start making some investments in 
the LA and San Francisco regions.
    But this initial $3.5 billion that we have invested, there 
is no ability to shift it.
    Ms. Richardson. OK, sir, so I would just----
    Mr. Denham. Mr. Szabo, thank you. The chair now recognizes 
Mr. Miller.
    Ms. Richardson. Mr. Chair, I think----
    Mr. Denham. Time has expired.
    Mr. Miller of California. Thank you very much.
    Mr. Denham. We are happy to come back around for a second 
round, but Ms. Brown still wants to get some time in, too.
    Ms. Richardson. Could I ask for information for the record?
    Mr. Denham. For the record.
    Ms. Richardson. Thank you, sir. Mr. Szabo, if you could 
please submit for the record to this committee, since it has 
been of much discussion, whether it can, whether it cannot, and 
under what conditions it could.
    Mr. Szabo. Very good.
    Ms. Richardson. Thank you, Mr. Chairman.
    Mr. Szabo. Thank you, Congresswoman.
    Mr. Denham. Thank you. Mr. Miller.
    Mr. Miller of California. Yes, thank you. I appreciate that 
we look at the applications we have received from the State for 
funding levels. But the facts of California keep getting in the 
way of what we are talking about today, whether we like it or 
not.
    Mr. Amante, I think a good question for you--it is not my 
numbers, but the California Transportation Commission. A recent 
report said there is a $340 billion shortfall in highway 
maintenance over the next 10 years, just in that alone. And 
given the cost of project backlogs, how can we justify even a 
discussion of this type of project, based on the reality of 
California's bonding limits is at a questionable level. I mean 
for them to sell more bonds, they are going to be junk rated, 
because they are just far beyond the legal capacity they should 
have.
    How do we justify the discussion, based on the acknowledged 
shortfall by CTC?
    Mr. Amante. Congressman, I can't answer that any better 
than you can. We come from the same State. We both recognize 
where we are, in terms of the economy in California and, 
frankly, nationally. So, you are right. We have an enormous 
amount of deferred maintenance. And I will tell you that that 
is true across the country, not just in its most populous 
State.
    There are issues in transportation about the color of 
money. If the Federal Government is going to invest in high-
speed rail, I suggest that its investment ought to be in 
corridors where you have got perhaps demonstrated ridership and 
the ability to----
    Mr. Miller of California. OK, let me expand on that. 
Because Mr. Harris brought up a very good comment. And I happen 
to agree with where we are starting the project makes no sense.
    And the--my good colleagues and friends on the other side 
of the aisle had said we don't support high-speed rail. And 
based on the record, that is not true. In 2005 I put an earmark 
in for Maglev, which basically started in the Anaheim 
Convention Center to the most under-served airport in 
California: Ontario. And the goal was north Orange County 
absolutely needed an airport, there had been much debate, and 
people had been thrown out of office because we didn't have 
that. And at least the first phase of that would have paid for 
itself in ridership, because it was a huge benefit in doing 
that.
    Mr. Amante. And, Congressman, that was visionary, and still 
is. Ontario Airport has lots of room for expansion and gates, 
they just don't want the ground transportation and the impacts 
of their communities, nor do the communities along that 
corridor. We all know what that means, when we----
    Mr. Miller of California. But Ontario welcomes it.
    Mr. Amante. They would welcome it if they had a rail 
connection that brought passengers there----
    Mr. Miller of California. And that is what they want.
    Mr. Amante [continuing]. The plan that you had----
    Mr. Miller of California. They are totally behind that 
project.
    But, Mr. van Ark, I guess the question I have--and it is on 
the funding mechanism, because I think I was the only 
Republican to chair the budget committee in California in the 
last 70 years--I am an oxymoron to begin with--but you talk 
about TRIP bonds. And I think that is probably the Federal 
qualified tax credit bonds discussed in the Senate on S. 1436. 
And you were relying on about $12.6 billion on a bill that is a 
bill, not a law, I guess, is my first concern.
    And you know, both last year's and the present Federal 
fiscal year, we have zeroed out high-speed rail, so there is 
nothing there to fall back on. So--and even if you could say 
1436 was a reality, if--it is for $30 billion, not $50 billion, 
but let's use the $50 billion level. You can only use 2 percent 
of that per State. So, based on 2 percent, that is $1 billion. 
And even the California State treasurer testified a week ago 
that $1 billion can be leveraged into $1.5 billion. I am trying 
to figure out how to leverage my dollar into 1.50. But let's 
say it can happen. What do you do with the other $11.9 billion 
you are short, based on your estimate given on that specific 
fact alone?
    Mr. van Ark. [No response.]
    Mr. Miller of California. I mean it is a hypothetical 
funding source----
    Mr. van Ark. Congressman, it is a calculation that has been 
done, that has been put into the business plan----
    Mr. Miller of California. No, I understand----
    Mr. van Ark [continuing]. As an example.
    Mr. Miller of California. No, I understand it is a 
calculation. But the reality is it is not a law, it is a bill. 
If it were a law based on the bill, you couldn't count on more 
than $1 billion of it by the bill's language in and of itself.
    So, if you take the language within the bill, and it gives 
you $1 billion, not $12.9 billion, you are--and I am not trying 
to argue with you, I am just saying I am having trouble making 
these numbers add up, based on the reality of what the bill 
says.
    Mr. van Ark. Again, the example in there is an example of 
how the mechanism could work, rather than that being the 
funding----
    Mr. Miller of California. I didn't understand that. I am 
trying hard.
    Mr. van Ark. The calculation in the business plan is an 
example of how that could work.
    Mr. Miller of California. It is an example of how it could 
work----
    Mr. van Ark. An example.
    Mr. Miller of California [continuing]. If the bill were 
law, and if the bill did allow that, correct?
    Mr. van Ark. Correct, yes.
    Mr. Miller of California. But it is not law, and it doesn't 
allow it. So why would you use something that is not law, that 
is not allowed under the proposed law, as an example of how you 
are going to fund it is my biggest concern.
    There is $11.9 billion--the reason the people of California 
have turned against this project--and when it passed 
originally, I thought, ``How can you continue to bond 
California at the level we are?'' And I know from the Federal 
perspective on the rail side, that is none of our business. But 
I live in California, so it is not a hit on the Federal 
Government, but we are creating a disaster in California, and 
we have done it for the last 10 years. We have a bonding 
disaster.
    But you are using funds in here that are not even a pipe 
dream, because there is no way in the world. But--can I 
conclude with one last question on here?
    I guess it is the per-passenger mile cost that you have 
come up with. You have $.20 per passenger mile, based on 520 
miles from LA to San Francisco. But in 2007 we had another 
hearing on high-speed rails, and we brought the best in: 
France, Germany, Spain, and Japan. And we have patterned a lot 
of our Maglev and other things after that whole concept. But at 
their best, they found out that Government had to fund it, 
which--it is not allowed under the California High-Speed Train 
Act that was authorized. To begin with, we can't do that, but 
we are doing it.
    But at that, they are paying $.45 a mile for a very 
efficient program. How in the world, in these countries who 
really utilized high-speed rail, can we say we are going to do 
it for $.20, when everybody else in the world--that is like how 
can you cook grits for 3 minutes when everybody else in the 
world takes 15? How do you do it for $.20 when everybody else 
spends 45?
    Mr. Denham. And, Mr. van Ark, I would ask you to hold your 
response and I would gladly give you my time as it comes back 
around to me to respond. But right now I want to make sure I am 
respectful to Mr. Szabo's time. And I would just remind the 
committee that if you have on-the-record questions that you 
would like to submit for Mr. Szabo, we will compile those and 
submit those after the hearing.
    At this time the chair recognizes Ms. Brown for 5 minutes.
    Ms. Brown. Thank you, Mr. Szabo. A couple of quick 
questions. I think you cleared up part of my question. Does 
the--do you, the Federal Government, put in the application, or 
does the State put in the application? Because some of my 
colleagues seem to be confused. They think that we actually go 
to them, fill out the applications, do the studies, and then we 
make the decision. Is this a partnership, or what?
    Mr. Szabo. No. You are correct, Chairwoman. It is the 
States that apply, and then we review those applications. And 
then, based on the criteria that is established both in law and 
in our guidance, we make decisions on what should be----
    Ms. Brown. OK. There was a question. San Diego to Los 
Angeles. Did the State apply or--they did not?
    Mr. Szabo. No, there was never an application for that. You 
know, and obviously it is something that may have some merit. 
And if the State would, in fact, apply for it, it would be 
something that, of course, we could consider.
    Ms. Brown. There was also plenty of discussion--you know, 
as I said often we are number one with freight in the world. I 
don't care where you go, whether you go into Russia, China. 
Everybody asks us about our freight rail. But we are the 
caboose when it comes to passenger rail, and they don't even 
use cabooses any more.
    So, can you explain to us about if the project that the 
Members want, freight rail, they are perfectly--they can--I 
mean do they need anything from us? They have the money, they 
have the employees. They are doing well. I mean I am--you know, 
the rail is rolling in this country.
    Mr. Szabo. Well, I think two things. I think, first off, it 
is important to note that under our TIGER grant program, 
freight rail has done exceptionally well. This Administration 
has done more to support and advance freight rail as any 
Administration in recent history.
    But to your specific question on whether these dollars 
could be used for a freight purpose, no. Again, under the 
Federal law, the statute, and the criteria, the grant 
criteria----
    Ms. Brown. It says high-speed and intercity, is that 
correct?
    Mr. Szabo. Yes, it is. That is right.
    Ms. Brown. OK, right. But can the freights do these 
projects that we have been talking about, if they want to, if 
they see it is a financial----
    Mr. Szabo. Yes. Again, if you take a look at our vision, 
you know, the program that has been put forward, shared with 
this committee, it is three-tiered, you know, that you have the 
core express high-speed rail, which is those speeds up to 220 
miles an hour, like they are doing in California, like the 
Northeast Corridor is doing. And then there is that regional 
express service, which is similar to what the Acela is today, 
that runs from speeds, you know, from 90 to 125 miles per hour. 
That is what is going forward in the Midwest. And then you have 
your feeder services, which----
    Ms. Brown. Right. But when I travel around the world, in 
the cities it doesn't go 200-some miles or 300 miles. In no 
city. It slows down as it goes into the cities, and it is 
intermodal. Can you just give us a quick----
    Mr. Szabo. Yes. I think it is really important to note that 
the blended approach the California High-Speed Rail is talking 
about is very, very similar to what the TGV, you know, utilizes 
in France, to where out in the countryside, you know, you can 
go open throttle. They are doing 186 miles an hour there. But 
they choose to use--for a lot of reasons, they choose to use 
shared right-of-way in the urban corridors. It gets them to the 
center of downtown, which is important. It saves tremendous 
cost. And it saves an awful lot of these environmental concerns 
that communities have.
    Ms. Brown. And we can use existing tracks, and all of that.
    But there has been some discussion about Maglev. And, you 
know, I am looking in the audience at some of my people who 
have supported Maglev in the past. One of the problems with 
Maglev is--can you just tell us about the cost in comparison 
with some of the other systems?
    Mr. Szabo. Well, I would say this. Our program is actually 
technologically neutral.
    Ms. Brown. Right.
    Mr. Szabo. And Maglev certainly is eligible. But one of the 
challenges for those types of projects is, in fact, the 
significant upfront capital cost.
    Ms. Brown. All right. Is there anything else you want to 
say in my 48 seconds?
    Mr. Szabo. Just that, relative to the Freedom of 
Information request, we did immediately make virtually all 
those documents publicly available. They are available on the 
Web site today. It is my understanding that there were one or 
two pieces of paper that we need some clearance from both the 
Army Corps of Engineers and the EPA, you know, so we have to 
work through the sister agencies to get those, you know, from 
them and make them available and go through their clearance 
process.
    But 99 percent of what was requested back in 2010 or the 
date that was quoted was immediately made available, is public 
record available on the Internet today.
    Ms. Brown. I want to thank you for your service. And I have 
to tell you, working with this Administration and with the 
Secretary is a bright spot. Thank you.
    Mr. Szabo. Thank you so much, Ranking Member.
    Mr. Denham. Mr. Szabo, I would like to thank you for your 
indulgence this morning. If you will have Ms. Hedlund continue 
to stay and----
    Mr. Szabo. And she is highly capable of handling just as 
tough of questions as I am.
    Mr. Denham. Thank you.
    Mr. Szabo. Thank you.
    Mr. Denham. And again, for the record, we will be 
submitting you a list of questions. One of those questions, as 
well, we will be resubmitting--Mr. Upton had a question that 
has still not been--or the Heritage have not received an answer 
from a year ago. This--we will be submitting that, as well. 
Thank you.
    At this time I would like to utilize some of my time to 
allow Mr. van Ark the opportunity to respond to Mr. Miller. And 
I thank you for your indulge, as well.
    Mr. van Ark. Mr. Chairman, Members, the costs that we have 
got in our business plan have been crossed-checked and are 
based on international costs. All the infrastructure costs, 
including the operationals, are--operations and maintenance 
costs, including the ticket pricing, obviously based on the 
different economic levels of the different countries, but 
cross-referencing and cross-checking to all the systems in the 
world has been done, including the Acela system on the 
Northeast Corridor that the administrator has already referred 
to.
    Mr. Denham. Thank you. And I did want to clarify one other 
issue. Mr. Gatzka, the issue came up about the first segment of 
the ICS about San Joaquin's service, and how that would affect, 
actually, Kings County. I understand you have two stations 
within Kings County, Hanford and Corcoran. If the ICS was 
connected back into Amtrak, if the--you know, going back on the 
assumption that only one phase of this gets done, what does 
that do to the two stations that would be within your county?
    Mr. Gatzka. Well, the high-speed rail alignment if Amtrak 
was switched over and shifted outside of those two stations, 
which is the city of Corcoran and the city of Hanford, those 
stations basically go away. One of our local groups, actually, 
is the Hanford Business Association, which now has realized 
that that may potentially be a major impact to them. They are 
saying that is about an $11 million annual hit to their economy 
by losing Amtrak service coming into their downtown Hanford 
area. That is--those are probably the two key ones.
    In the city of Corcoran, we also have one of the State's 
major prisons there. Amtrak service going to that smaller city 
and smaller community is a means of affordable transportation 
to get families, residents, and other people back and forth, 
and also to serve that prison facility, as well.
    Mr. Denham. Thank you. And, Mr. Swearengin, I know you have 
another comment. But with that I wanted to ask you, the initial 
construction segment, if it is all built, what are the benefits 
that that provides to the city of Fresno? And is it worth the 
$6 billion that is currently projected?
    Mayor Swearengin. You bet. And I appreciate the opportunity 
to respond and then make a final comment.
    Just want to relay a story of another business person that 
just a few weeks ago--again, this is a property owner whose 
property is impacted by the alignment, he is a major food 
producer in the Fresno area. And I asked him, ``Are you 
concerned what's happening with your property? What's going 
on?''
    And he said, ``I cannot believe that we will potentially 
shoot ourselves in the foot and try to stop this train. I am 
sending jobs to LA right now, because I can't get people to and 
from Fresno in an affordable, fast manner. We have got to have 
this train.'' He says, ``I am the one who is driving to LA 
every week and San Francisco every week.'' And this is a very 
conservative business operator in Fresno. If I said his name, 
you would know him well.
    So, I think that is just an example of--you know, 
obviously, the construction jobs are a terrific impact for 
Fresno and the entire San Joaquin Valley. But, frankly, I look 
at this as the long-term connectivity of our subregion in 
Fresno and the San Joaquin Valley to the mega-regions of 
California. The economy operates when people and ideas and 
goods connect. And right now, we are significantly hampered in 
our ability to connect to the other mega-regions. It means our 
businesses, our graphic designers, our lawyers, our creative 
people are not eligible, and they are not seen as viable 
business partners from the LA area or the San Francisco area, 
because there is just not the proximity and the ability to 
connect. So I think there is tremendous benefit.
    And I want to just say, in the defense of the Valley, 
because I think it is fair to say, we would not be here right 
now if the dollars had gone somewhere else in California. All 
of this started, based on what we have heard from the Members 
today and some of the panelists, all of this started when the 
dollars went to the Central Valley. Why the Valley? Why the 
Valley?
    So, let me just put a fine point on this. I believe, as I 
think you have very eloquently put, as did Mr. McCarthy, we 
have got to invest where we get the fastest path to private 
investment. We could put $31 billion in southern California 
and, yes, there is ridership and there is a vast need for 
mobility. I understand that. But you would not attract private 
investment with $31 billion going into the congested LA Basin. 
The only point at which you attract private investment is when 
you can connect two different regions.
    So, while it is difficult for some in other parts of the 
State to believe that there is value in putting dollars into 
the backbone, it is the fastest path to private investment. I 
support you continuing to focus on that point.
    Really, the focus here is how do we get to $31 billion. We 
have got $12 billion right now. So the gap is much smaller, and 
then we trigger private investment.
    Mr. Denham. Thank you, Mayor. And I would agree with your 
points. Again, my concern continues to be if we have gone from 
$33 billion to $100 billion, where does that money come from. I 
want to make sure that we don't just start building something 
without having the Federal obligation that is there, as well.
    With that I recognize Ms. Brown for 5 minutes.
    Ms. Brown. Thank you. I guess you answered part of my 
question, because--and I want to ask this for also Mr. van Ark. 
How did we decide not to start in southern California or 
northern California, where the ridership is there? In all of 
the hearings I have heard in the past, if you have the 
ridership, then if the people in the area can see the benefits, 
then they will--you know, it would encourage people that want 
to use the system. They need to see some success.
    And I was in California when we announced that we almost 
doubled the amount. And it was really upsetting to a lot of 
people. And basically, they talked about the study. But I do 
know that, you know, it is how you frame the question.
    So, Mr. van Ark, can you first answer? Then I--yes.
    Mr. van Ark. Member Brown, yes, I can. And that is I 
mentioned in my introduction I built these systems around the 
world. This is my background.
    Ms. Brown. What systems were you involved in building?
    Mr. van Ark. For instance, the Hamburg to Frankfurt high-
speed rail system, the Holland high-speed rail, the high-speed 
rail system--so I have been involved in high-speed rail and 
rail systems, including public-private partnerships around the 
world.
    The thing about high-speed rail is it is about the 
interconnectivity of people, of metropolitan areas, over long 
distances. I know that people live in those extremities, they 
live at the ends. But the high-speed rail system has lesser 
value in those ends. It is expensive to build in the bookends. 
But that is not where you really operate a high-speed rail 
system. A high-speed rail system is that part, that backbone, 
that is going to connect those cities with each other.
    It is important that we, as Californians, understand that 
we want to connect northern California--the 10 million-plus 
people there--with southern California, through the Central 
Valley, with their 4 million-plus growing population. That is 
what high-speed rail is about. It is--so that is why it is so 
important to build that backbone in the Central Valley, because 
that is really how--you can--I can give you many references in 
the world, whether it be Paris--they built the central portion 
first--in Japan, they built the central portions first. The 
portions in the cities, which we call this blended system, you 
use the existing infrastructure, and you share the existing 
infrastructure. But without the backbone you will never get a 
high-speed rail system going.
    So, if we want high-speed rail, which I have heard often 
today, if we want high-speed rail in California, we are going 
to have to build the backbone, because that is what high-speed 
rail is about.
    Ms. Brown. Yes, sir. You know, we are complaining about $8 
billion, all of which did not go into high-speed rail, but the 
Chinese are putting $350 billion. They understand the 
importance of moving their people, goods, and services. And the 
fact is you can live there and work anywhere. And you know, 
downtown Brussels to downtown Paris, 200 miles, 1 hour and 15 
minutes. I mean that is the future of this country. It is how 
we get through it.
    And Ms. Swearengin, can you tell us how many jobs do you 
think the project will create?
    Mayor Swearengin. Well, the estimate for the construction 
phase is 20,000 jobs a year for 5 years. And, as I mentioned, I 
believe the benefit is well beyond just the construction. I 
think the value is that the permanent connectivity between a 
major region of this country--by California's standards, you 
know, the Valley is still very small, but when you compare the 
Valley to virtually every other part of the country, it is a 
big region--but connecting us to the LA Basin and to the San 
Francisco Bay area, that is where the real value and benefits 
comes.
    And, you know, this is a 100-year asset. This changes the 
way our local economy and our local dynamics operate 
forevermore, in my opinion. So, we are certainly looking 
forward to the immediate injection of jobs from the design 
professionals, the construction jobs. But I am looking beyond 
that, and I am seeing that our manufacturers, our producers, 
our creative people, now we are eligible to compete for work in 
other parts of the State, because they can finally get access 
to us, and we can get access to them.
    Ms. Brown. What about the problem that we are experiencing, 
as far as the farmers are concerned? I mean do they not use 
freight rail? Because----
    Mayor Swearengin. No, they do. In fact, we will--I 
personally will be meeting in just a couple hours with members 
of the FRA, and talking to them about another rail project, 
upgrading our short-haul rail in the Valley, which would have a 
tremendous impact for the growers in our area.
    So, you know, I think this is an all-of-the-above kind of 
analysis that has to be done. There are freight rail challenges 
in the Valley. The reality is our region has significantly been 
left behind, in terms of infrastructure investment.
    Mr. Denham. Thank you. Mr. Harris?
    Dr. Harris. Thank you very, very much. And I am just going 
to--I am sorry, I had to--from the FRA, I am sorry--oh, yes, 
and Ms.--OK, they switched your name tag, OK.
    I will give the FRA a little help on this, because I am 
reading the initial FOIA request. And maybe it wasn't specific 
enough. I mean what I am going to ask--and I will ask the 
committee to submit it, you know, as a question that you can 
answer later, because you may not have the answer--you won't 
have the answer--is the documents that would describe whether 
or not this decision was a decision made by the FRA to use that 
route, the--and I am going to use the exact term here, the one 
that goes north, the WCBO, or the--now called the West 
Chowchilla Design Option, or the hybrid route, because there is 
some confusion about whether the FRA insisted on that routing. 
And that is--I think that goes specifically to the point of the 
FOIA requests. So that is why my question will be. It should be 
a very simple yes or no answer. I mean, and if it is an answer 
that kind of evades that, we will go in a little further, then.
    Now, let me just--and again, look. My concern is--because, 
again, I am still the only person here on this side of that 
table who is from outside of California. And the thing is I am 
reading here, ``America is going to be asked''----
    Mr. Denham. Mr. Harris, just for the record, Ms. Brown is 
from Florida.
    Dr. Harris. I am sorry, Ms. Brown. Sorry----
    Ms. Brown. Not only am I from Florida, I am from the 
disadvantaged Florida. Eighteen other States received 3 billion 
of our dollars.
    Dr. Harris. Ma'am, this time of year we think Florida has 
advantages.
    [Laughter.]
    Ms. Brown. I am here supporting high-speed rail in the 
country.
    Dr. Harris. OK, thank you.
    Ms. Brown. But I am not a participant.
    Dr. Harris. Thank you very much. I am concerned because the 
cost is going to be over $50 billion that is going to be asked 
of the--and that is by the new draft report, is $50 billion. So 
we already have a cost escalation. We are already asking our 
citizens to pay well over--if that is all, the amount is over 
$150 for every man, woman, and child in the United States.
    But I have got to ask a couple things. First of all, Mayor 
Swearengin, you know, we had some skepticism. And I wasn't here 
when the stimulus bill was passed, but I was kind of out in the 
real world. And there was some skepticism that this, you know, 
$787 billion really was just kind of this little pot of money 
that was going to be sprinkled around before the 2010 election, 
perhaps maybe to influence the outcome.
    And because of an article in, I guess the Sacramento Bee, 
it has been brought to my attention there is some speculation 
that this--the $700 million--was sprinkled around to effect an 
election.
    Is it true that the timing of that announcement was just 
before the 2010 election of that award?
    Mayor Swearengin. That is true.
    Dr. Harris. OK.
    Mayor Swearengin. And if I could----
    Dr. Harris. People can draw their own conclusions.
    Mayor Swearengin. Precisely. And----
    Dr. Harris. They can draw their own conclusions from that. 
But that is exactly why people in my district are so worried 
about projects like this. Because that is more than 
coincidental. You know, that has the Solyndra ring about it. It 
is a use of hundreds of millions of dollars of taxpayer money 
for what appears to be raw politics.
    Now, the two mayors here. You run governments. Do you 
really believe that this is going to make a profit? Do you 
really--because I tell you, I just rode the train to New York. 
It is true. The Acela ticket is $350, and it gets you there 15 
minutes faster, $350 round trip from Baltimore--I am sorry, 
from Washington to New York, it is about the same from 
Baltimore. The regular train is $162.
    We also in Maryland claim that, you know, all we have--if 
we just supply the capital, don't worry, all the mass transit 
is going to be paid out of the fare box. So we actually put a 
50 percent rule in law that was lowered to 40 percent, to 35 
percent, and now $.30 on every dollar is paid for out of the 
fare box because, I have got to tell you, my impression, that 
is just the way Governments work with public transportation. 
And this is public transportation by any other name, because 
the public has funded the capital.
    Do you really believe it is--in your heart of hearts --I am 
not talking about the other benefits--this is going to really 
turn a profit, based on ticket sales?
    Mayor Swearengin. Yes, sir, I do, based on the operating 
model of every other high-speed rail system in the world.
    And again, you--high-speed rail is inter-regional 
connectivity, very different from commuter rail.
    Dr. Harris. So, Mayor, you believe that the ticket price is 
really going to be--that we are going to have that many riders 
and that is going to be the ticket price, and we are going to 
turn a profit, even though the Acela train----
    Mayor Swearengin. Right, which is a different----
    Dr. Harris [continuing]. In an established corridor, with 
lower priced capital expenses, lower priced equipment expenses, 
charges $350 round trip and loses money every day, as the 
Secretary testified, with full ridership?
    Mayor Swearengin. I couldn't pay $350 to ride it. So----
    Dr. Harris. You are darn right.
    Mayor Swearengin. So the--I think the difference----
    Dr. Harris. And a lot of people won't be able to----
    Mayor Swearengin. It is a fundamentally different service 
and a different operating model. And based on the data, yes 
sir, I do believe that.
    Dr. Harris. OK, thank you. My time has expired. I thank 
you, Mr. Chairman, for your indulgence.
    Mr. Denham. Ms. Brown for 5 minutes.
    Ms. Brown. Yes. You know, we keep talking about the 
Northeast Corridor. But the key problem is that we have tunnels 
that are 100 years old. We have bridges that need to be fixed. 
And once we do that, once we improve the infrastructure, then 
it will go.
    But I can tell you that the mayor of Jacksonville, we had a 
meeting in New York. He took the train and I took the plane, 
and he beat me there to the meeting, because there are many 
things involved in catching that plane, when you look at from 
LA to San Francisco, how long you have to--the congestion, 
the--you know, it is wasted time. So it is not apples to 
apples, it is apples to bananas, as the Secretary said.
    Would you further expand on--Mr. van Ark--how you all made 
the decision to go to the mid-Valley, as opposed to the areas 
that everybody feel you would have the ridership right away?
    Mr. van Ark. So when you build a high-speed rail system, 
you have to build the system where you are going to be 
interconnecting the cities. And that is exactly what the 
Central Valley is.
    Central Valley also will offer the United States the first 
place in the United States where we will be able to do an 
integrated high-speed rail 250 miles an hour--you have to 
overspeed--testing of the integrated system. This cannot be 
done anywhere else in the United States.
    So, unless you build that system first, and get that system 
up and running while you are completing the initial operating 
section, you will never get to a high-speed rail system in the 
United States.
    I think we have learned--and I was involved in the Acela 
system--I think we have learned from the Acela system. You must 
remember the Acela system has an average speed of around about 
70 miles an hour. Our trains have an average speed of about 170 
miles an hour. It is very different. The Acela service takes 
7\1/2\ hours to travel from Boston to DC. And I have used it. I 
have lived my last 5 years in New York. It takes 7\1/2\ hours.
    Ms. Brown. And there are many factors why it takes so long. 
I mean there is a lot we need to do to upgrade it. But it 
doesn't take that long from New York to Washington, DC. But 
that Boston area is what we need to invest in.
    Mr. van Ark. It is----
    Ms. Brown. I mean we understand we got to invest in the 
system.
    Mr. van Ark. Exactly. And investing in a system that is 
operating is very much more complicated----
    Ms. Brown. It is more complicated. The cities are already 
there----
    Mr. van Ark [continuing]. Than any system----
    Ms. Brown. I mean I understand all of the factors. You need 
to educate everybody else.
    But your system, tell me how it is going to make a 
difference.
    Mr. van Ark. Our system is based on a competitive market 
advantage. That is why it is so important that we have to be 
able to get from northern California to southern California in 
that 3-hour timeframe--2 hours, 40 minutes. Because, as you 
correctly stated, it is the time for you to get to an airport 
to check in to an airport, to check--all the flights that--
about a quarter of the flights in California between northern 
and southern California are delayed, apart from the problem 
that we cannot build more runways and gates.
    But it is the convenient time to transport people from one 
place to another. That is why it is so important that we cannot 
drop the speed. We have to stay at this high speed. We cannot 
compromise the system. Because, otherwise, we will not have a 
competitive system which will cost $82 a ticket, not $300 a 
ticket--$82 one direction--and it can make a profit, and the 
ridership will be a completely different level to the ridership 
in the Northeast Corridor, which is throttled because the 
system is compromised.
    And I don't want to blame the operator, it is not their 
problem----
    Ms. Brown. Right.
    Mr. van Ark. It is just that the infrastructure is----
    Ms. Brown. Absolutely. Let me just ask you one quick 
question. Is there any system in the world that pays for itself 
completely?
    Mr. van Ark. Madam, all the high-speed rail systems in the 
world, all of them, make an operating profit. Operating profit. 
All of them.
    Ms. Brown. But the infrastructure.
    Mr. van Ark. So the operating profit covers all operating 
costs, and it, in general terms, covers also the rolling stock 
amortization and the depots. So ``everything above rail'' they 
refer to sometimes, whereas there are also other PPPs that add 
further private participation into the infrastructure. The two 
lines in the world where they have done the calculation, that 
is the Paris Lyon and the Tokyo Osaka lines, that they have 
done the calculations that, incorporating the infrastructure, 
the whole system has paid for itself.
    But they do take environmental advantages as benefits to 
the calculation. Generally, State--generally, the State owns 
the infrastructure, and the operations are done by private 
sector.
    Mr. Denham. Thank you, Mr. van Ark. One area that we have 
failed to address significantly at all today, the biggest issue 
for the Central Valley, our agriculture industry, number one 
industry in California, the largest ag industry in the world. I 
would like to get a few questions in on that.
    Mr. Upton, your testimony raised some concerns with a 
proposed diagonal alignment through agriculture land. Why is 
diagonal alignment problematic?
    Mr. Upton. Well, one of the reasons is the impacts that it 
has on ag.
    For instance, so we have to use pesticides and herbicides 
very carefully, and--because they could affect other crops, 
they can affect people. HSR's own document says the indirect 
biological impact when going through an ag area is a quarter 
mile on each side of the track. When I showed that to the ag 
commissioner and said, ``OK, am I going to be able to spray my 
almonds or my corn,'' or whatever, he just laughed.
    He said, ``There is no way that I am going to allow 
spraying with this kind of document in front of me. It would be 
a lawyer's paradise if anything happened.'' So we have to look 
at that, and--when you are trying to farm.
    The other thing is it puts a cloud on your land, as far as 
your financing. The farm credit people said as long as these 
proposed routes show up on your land, they are not going to 
loan you the amount of money that they would, because they feel 
the land has been considerably devalued from what it was 
before.
    So, if you take a half-a-mile as a route, that is about 300 
acres a mile. That is a huge hit on a farmer's land. Also, when 
you are going through the land at an angle, and there is only a 
crossing maybe every 2 miles or 3 miles, as you know we have 
huge equipment that it takes to go, and you would have to go 
all the way around, clogging up the roads, increasing the 
number of hours that you are using those engines, causing air 
pollution.
    And lastly I will point out on dairies, dairies require a 
certain amount of acres to get rid of the effluent. That is how 
they are--get a permit to do that. When these trains go through 
there, some of these dairies are rendered inoperable. So you 
lose the whole operation.
    So there is a devastating impact on our culture, and it has 
not been adequately addressed.
    Mr. Denham. And the location for the Central Valley segment 
of it, the location for the Merced to Fresno's westward turn 
and the alignment to get from the Central Valley to San Jose 
has not been determined, because it is dependant on additional 
analysis of the San Jose to Merced section.
    Is there a consensus among the Preserve Our Heritage 
members about what would constitute the least disruptive route 
for that westward turn?
    Mr. Upton. Yes, there is. You make a good point. The Merced 
to Fresno route, as you know, was just approved by the 
Authority. But some of us in the 25-mile zone there are in the 
Twilight Zone, because it is not considered. It will be 
considered during the Merced to San Jose group.
    And what we have been doing--and we have had some 
cooperative meetings with the Authority, and I credit Mr. van 
Ark and his staff for that, that somewhere along the 152 and 99 
would be the preferred route, because that is an existing 
corridor, if we could do that.
    Our concern is the process. If, in fact, the FRA or EPA or 
the Army Corps is demanding that a particular route has to be 
done, then it really doesn't matter what I say, or what 
Preserve Our Heritage says, and so we need to know who is 
calling the shots, whether this input process is a sham, or if 
they are really listening to us.
    Mr. Denham. And has your organization provided 
documentation to the Authority on the negative impact, negative 
economic impacts of the project to the agriculture community in 
Madeira County?
    Mr. Upton. We have had more meetings than I care to 
remember, and submitted more documents, appeared at high-speed 
rail meetings. I am sure they are tired of seeing us, as we are 
in going there.
    Mr. Denham. Are you getting a response from the agency?
    Mr. Upton. In----
    Mr. Denham. Maybe the same thing we had with FRA earlier, 
apparently you submitted questions to them over a year ago, but 
it seems like you are, on many levels of Government, getting 
ignored.
    Mr. Upton. FRA, no response whatsoever. But with the local 
people with the high-speed rail, yes. They have been meeting 
with us. And with Mr. van Ark, yes, he has been meeting with 
us.
    Again, our concern is whether this will amount to anything. 
Because we are not convinced on who is calling the shots on 
this thing.
    Mr. Denham. Thank you. And I yield back, Ms. Brown.
    Ms. Brown. Thank you. Mr. van Ark, some witnesses and 
Members, my colleagues, have raised concerns regarding 
communications and working with the Authority. What are you all 
doing to address those concerns? And I guess it is the same 
concern that the gentleman just raised.
    Mr. van Ark. Congresswoman, we are doing more every day, 
but it is a mammoth task. It is a big State. It is an 800-mile 
section. And in many areas of the State, there is more than one 
alignment, because--the alternatives to meet the CEQA and NEPA 
process.
    So, of course, we have hundreds and hundreds--thousands and 
thousands--of stakeholders. We have an organization in place. 
We are just at the stage investigating how we can further 
improve the organization.
    I do believe certain improvements have happened. I think 
Mr. Upton just mentioned, you know, we have been having 
meetings with them. But not just there. We had a board meeting 
on Tuesday of this week in Merced. And I must say there were 
many, many organizations that came back and thanked us for the 
outreach and communications that we had been doing with them.
    So, there is still a way to go, I am not disagreeing with 
that. It is a big task when you interface with that many people 
in a big State like we have.
    Ms. Brown. There has been a lot of discussion about the 
funding source. How are you planning to get investors or 
investment in the bonds, or the additional costs? Is this a 
phased building? Can you explain that to me?
    Mr. van Ark. So I think what we--when you look at the 
business plan, you must consider that we should be targeting, 
and are targeting, at the first operable segment. It is the way 
that they built the systems in France or in Spain.
    For instance, the Madrid to Seville line was the first 
segment. It is their IOS. The line from Paris to Lyon was their 
IOS. So we need to concentrate on the first segment for 
funding----
    Ms. Brown. Yes, I drove that segment from Paris to Lyon.
    Mr. van Ark. Yes. I traveled it too, and I traveled it with 
Chairman Mica as well. And I know he was very proud, and used 
to say, ``This is what we need in the United States.'' Although 
that was in my previous function in the private sector.
    Ms. Brown. So we are going to be able, after we get the 
first segment, to get those private investors?
    Mr. van Ark. You see, when you cannot prove to a private 
investor, firstly, the stability of a project----
    Ms. Brown. The--that is right.
    Mr. van Ark. The second thing is that there is going to be 
a revenue stream that is going to come up. The private 
investors will not be willing to come. They talk to us, they 
have given us in writing they will participate. That happens.
    But do not forget, you know, they are still hesitant 
because we are hesitant. And we have to get over that. But 
private investors will participate in this project, as I have 
had private investors investing in projects around the world.
    Ms. Brown. Would anyone else like to respond to that? Yes, 
sir?
    Mr. Amante. Congresswoman, I want to address this whole 
issue of where we spend the dollars and how we attract the 
private partnership.
    It is clear; all of us know that--the chairman asked a 
question of the two mayors. He said, ``All of you govern.'' We 
know we have to make tough decisions, we know there are scarce 
Federal and State resources, and that there is an increasing 
demand in infrastructure in this country. But we are the most 
populous State. I happen to live in the most populous region of 
that most populous State. And as we go, goes the economy of 
this Nation. If we do not invest in the movement of goods and 
people in some fashion, we will choke in congestion. We will no 
longer be competitive.
    In my view--and I tell young people--there are only three 
legitimate purposes for Government: to provide for the public 
defense--at the national level the army, at the local level 
police, and everywhere in between whatever is required of that 
level of Government; the second is to invest in things that 
people can't do for themselves, roads, bridges, aqueducts, 
railroads, the kinds of things they can't build; and the third 
is to jealously guard their liberties. Everything else we do is 
whipped cream and sprinkles. That is the cake. And what we need 
to do is wisely invest, guard the liberties of our people, and 
spend their money wisely. That is why we have criticisms of the 
business plan.
    But we are not prepared to throw the baby out with the bath 
water. In my region, we would like to fill the bath tub from 
both ends, but we want to have the ability to move people and 
goods, and to bring economic integrity back to this country. 
And that is why the mayors fight for jobs, because they matter 
to the people we see in the grocery stores. Thank you, ma'am.
    Ms. Brown. Yes, ma'am.
    Mayor Swearengin. And I would just like to go back to the 
question from Mr. Harris, and just tell you that the dollars 
came out a few days before the election. But what I didn't have 
a chance to tell you is that 2 years leading up to that, 
coalitions of business leaders and local government leaders 
worked so hard to make the case to the High-Speed Rail 
Authority and to the Federal Government to draw attention to 
our region that it is the lowest cost place to build, and it is 
the fastest-paced path to private investment.
    We were getting bombarded by the interests of northern and 
southern California indicating we wouldn't see any of those 
dollars. Yet we fought hard, with local business in the lead, 
and ultimately made the case. So there is merit behind that 
decision. The political speculation I will leave to the 
editorial newspaper writers.
    Mr. Denham. Thank you. Mr. Harris?
    Dr. Harris. Thank you very much. And you are right, we will 
leave that to speculation. You make exactly my point. Here a 
process goes along 2 years, and just coincidentally, a few days 
before an election hundreds of millions of dollars.
    And I don't mind, you know, if California wants to build 
it. God bless them. I know you all are sixth largest economy in 
the world--what is it, I forget the statistic. But you know, 
California says, ``Oh, if we were a country, we would''--well, 
that is exactly the issue here. And, Mr. van Ark, that is 
exactly the issue.
    Because, you know, California's economy probably is bigger 
than France's, isn't it? It probably is bigger than all those 
countries you named, with the perhaps exception of Japan, all 
the countries you named. But California is coming to the rest 
of the United States and asking to fund a project that starts 
as a train to nowhere--and Mr. van Ark, I am going to ask you, 
because the business plan, to be successful, does really depend 
on an ultimate build-out, doesn't it?
    It does. The business plan depends on an ultimate build-out 
to be ultimately profitable, as a system. Is that right, or can 
we stop 3 years into it and everything we built up to then is 
profitable?
    Mr. van Ark. The business plan is built up in phases, and 
each one of the phases has got an added value and a benefit to 
the State and to the Nation.
    Dr. Harris. I am not sure that answered my question. Is it 
profitable if it is not built out?
    Mr. van Ark. The initial operating section would be 
profitable.
    Dr. Harris. Oh, OK. Once you get past the initial operating 
section, is it profitable--now there is a reason my--let me 
just skip to the--the total cost is now projected to be 90-
something. Let me see what it--$98.5 billion.
    I am a doctor, I am not a mathematician. But if you take 
the $9 billion in California bonds, and then you add the $52 
billion in Federal spending, that comes to $61 billion; $98 
billion from $61 billion is $37 billion. California just 
announced that they were cutting their budget, what, $900 
million because of a shortfall. I don't project California to 
have a whole lot of money flowing around for the next few 
years. Leaves a $31 billion gap. Call me skeptical--maybe that 
is why the private partnerships that you are looking for are a 
little skeptical--because the build-out is $98.5 billion, and 
on a good day you have accounted for $61 billion. And you are 
hoping that some private people are going to come out of the 
woodwork.
    And I have got to ask you, because you said--because I 
think all the testimony is the operating profit, there is an 
operating profit, but there is $30 billion of unaccounted-for 
capital. Is that right? Are we assuming that that capital is 
going to come at no cost to this build-out, ultimately? That it 
is either funded by taxpayers of the United States or taxpayers 
with California, with no realistic reason to believe that they 
get a return on that?
    Mr. van Ark. If I could just refer back to the initial 
operating section, we are talking about just over $30 billion. 
So, the $30 billion would be the----
    Dr. Harris. I am----
    Mr. van Ark [continuing]. Period where you would already 
attract the private investment.
    Dr. Harris. You hope you will attract the private 
investment.
    Mr. van Ark. You----
    Dr. Harris. Because there is no private investor out there 
who said they will do this.
    Mr. van Ark. There are private investors that have 
indicated their willingness to participate. But obviously, 
there is no project well enough developed to be able to attract 
and sign a contract on that basis.
    Dr. Harris. So they are willing to participate. Do you 
believe their understanding--will they be willing to provide 
$30 billion toward the ultimate build-out of capital expense?
    Mr. van Ark. The business plan indicates that the amount of 
private investment would be--depending on how far we go, the 
first phase would be $11 billion, and then we would go up to 
about--just over $20 billion, private----
    Dr. Harris. So $20 billion of private investment.
    Mr. van Ark. That----
    Dr. Harris. What happens if that private investment doesn't 
materialize? What happens to my--my citizens in the First 
Congressional District, what happens to their investment 2,400 
miles away?
    And look, believe me, I feel for your congestion at the 
airports in Los Angeles and San Francisco. Flew through there a 
few months ago. It is absolutely congested. But what happens to 
my citizens' investment in that project if you don't get that 
private investment?
    Mr. van Ark. As I mentioned, the project is built up in 
phases. And at every phase you can actually not continue beyond 
that phase. But when you get to the IOS you will have an 
operating section. So that means you will be able to operate 
the system, but you may not necessarily then decide to expand 
the system beyond that.
    Personally, coming from where I am, I believe it will be 
profitable. The market and the world says so. But----
    Dr. Harris. But----
    Mr. van Ark [continuing]. You can stop. That is why we have 
the phases, where you can actually only build one IOS and stop 
there.
    Dr. Harris. But----
    Mr. van Ark. And you are not expending----
    Dr. Harris. But you do understand the situation is 
different from European countries, where this exists in one 
section of the country that is far away from other sections.
    One could argue it is much more easy to derive a benefit of 
every citizen in France from the French high-speed rail, 
because everybody lives pretty close to that rail, by U.S. 
standards, pretty close.
    Again, I just have to go justify it to the people in my 
district, because we are coming to ask them to participate in a 
$52 billion buy-in. Thank you, Mr. Chairman.
    Mr. Denham. Mr. van Ark, I will allow a very brief 
response, if you have one.
    Mr. van Ark. I think that response becomes more political 
than my position, Mr. Chairman. I think you understand that.
    Mr. Denham. At this time I will remind Members that votes 
have been called. We have less than 10 minutes--actually, we 
have 9 minutes left--on the first vote.
    Before I close down the committee hearing, I would like to 
allow Ms. Alexis, who sat very patiently, 1 minute before we 
close.
    Ms. Alexis. Yes, I mean I think we do need to really look 
at the details of this plan. And we keep talking about initial 
operating segment, and that should be understood, that that is 
one of the--there is only two proposals. One is from San Jose 
to Bakersfield. There is no other system in the world which 
would have an initial starter line. You cannot say that Lyon to 
Paris is Bakersfield to San Jose, where there are exactly 
zero--zero--flights.
    If you cannot attract those business travelers, the people 
who like to pay for air flights, you are not going to have a 
successful high-speed rail system. And so, to compare this $30 
billion investment for Bakersfield to San Jose to the systems 
around the world is just very faulty logic. And we really need 
to step back and rethink this.
    I mean there are things that make sense. There is a price 
tag that would make sense for this project. There is a routing 
that would make sense for this project. But we are really far 
away from there. And we are getting ready to build. We are 
nowhere close to that stage. Thank you.
    Mr. Denham. And Ms. Brown?
    Ms. Brown. I just want to say that the argument goes both 
ways for Mr. Harris. The people of California have been asked 
to foot the bill for Amtrak service to upgrade Maryland, 
including tunnels and the Chesapeake Bay. And so, I mean, we 
could argue this back and forth. This is the United States of 
America. This committee is the infrastructure and 
transportation committee. This committee is the committee that 
actually put people to work. Jobs. We keep the goods separated 
from the people, and we make it safe.
    And so, what we need to do is to work with the people in 
California and the rest of the United States to move us 
forward. As I said all along, Florida--I mean you got our 
money, you got $3 billion, 18 States got it. And so, I mean, 
60,000 jobs. So the point is I want to make sure that we 
utilize that, and that we put people to work with our money. 
Because it is the United States. So, you know--of America.
    And so, therefore, I am not--we are not competing with 
Georgia and Alabama. And it is very important that we do what 
we can to help you, so you can be competitive. Then we all do 
well. Thank you very much.
    Mr. Denham. Well, that sounds like a perfect note to end 
on. We would like to thank the Floridians for their help in 
this project.
    [Laughter.]
    Mr. Denham. I would like to thank each of the witnesses 
here today that have been very gracious with their time.
    The hearing record will remain open for 2 weeks to receive 
materials for the record submitted by unanimous consent, and to 
submit questions for the record to the witnesses.
    The hearing of the House Transportation and Infrastructure 
Committee is now adjourned.
    [Whereupon, at 1:54 p.m., the committee was adjourned.]
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