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



 
                      AN UPDATE ON THE HIGH-SPEED 
                   INTERCITY PASSENGER RAIL PROGRAM: 
                   MISTAKES MADE AND LESSONS LEARNED 

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

                               (112-114)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                            DECEMBER 6, 2012

                               __________

                       Printed for the use of the
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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                 EDDIE BERNICE JOHNSON, Texas
BILL SHUSTER, Pennsylvania           ELIJAH E. CUMMINGS, Maryland
SHELLEY MOORE CAPITO, West Virginia  LEONARD L. BOSWELL, Iowa
JEAN SCHMIDT, Ohio                   TIM HOLDEN, Pennsylvania
CANDICE S. MILLER, Michigan          RICK LARSEN, Washington
DUNCAN HUNTER, California            MICHAEL E. CAPUANO, Massachusetts
ANDY HARRIS, Maryland                TIMOTHY H. BISHOP, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL H. MICHAUD, Maine
JAIME HERRERA BEUTLER, Washington    RUSS CARNAHAN, Missouri
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        VACANCY
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
    Tennessee
VACANCY



                                CONTENTS

                                                                   Page

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

                               TESTIMONY
                                Panel 1

Hon. Kevin McCarthy, a Representative in Congress from the State 
  of California..................................................    10
Hon. Janice Hahn, a Representative in Congress from the State of 
  California.....................................................    10

                                Panel 2

Hon. Ray LaHood, United States Secretary of Transportation.......    14

                                Panel 3

Mitchell Behm, Assistant Inspector General for Rail, Maritime and 
  Economic Analysis, United States Department of Transportation..    43
Susan A. Fleming, Director, Physical Infrastructure Issues, 
  Government Accountability Office...............................    43
Hon. Paula J. Hammond, P.E., Secretary of Transportation, 
  Washington State; Chair, American Association of State Highway 
  and Transportation Officials High-Speed and Intercity Passenger 
  Rail Leadership Group; and Chair, States for Passenger Rail 
  Coalition......................................................    43
Hon. Ann L. Schneider, Secretary, Illinois Department of 
  Transportation.................................................    43
Edward R. Hamberger, President and Chief Executive Officer, 
  Association of American Railroads..............................    43

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Kevin McCarthy......................................... \\
Hon. Janice Hahn.................................................    62
Hon. Ray LaHood..................................................    68
Mitchell Behm....................................................    98
Susan A. Fleming.................................................   108
Hon. Paula J. Hammond, P.E.......................................   135
Hon. Ann L. Schneider............................................   145
Edward R. Hamberger..............................................   159

                       SUBMISSIONS FOR THE RECORD

Hon. Ray LaHood, United States Secretary of Transportation:

    Request to submit letter and attached S. 1029 Connectivity 
      and Bookend Investments list from Dan Richard, Chair, 
      California High-Speed Rail Authority Board, to Hon. John L. 
      Mica, Chairman, and Hon. Nick J. Rahall II, Ranking Member, 
      Committee on Transportation and Infrastructure, December 4, 
      2012.......................................................    17
    Request to submit Current High-Speed and Intercity Passenger 
      Rail Program Investments maps..............................    27
    Responses to questions for the record from Republican members 
      of the Committee on Transportation and Infrastructure......    81
    Responses to questions for the record from Hon. Corrine 
      Brown, a Representative in Congress from the State of 
      Florida....................................................    90
Mitchell Behm, Assistant Inspector General for Rail, Maritime and 
  Economic Analysis, United States Department of Transportation, 
  responses to questions for the record from Republican members 
  of the Committee on Transportation and Infrastructure..........   106
Susan A. Fleming, Director, Physical Infrastructure Issues, 
  Government Accountability Office:

    Responses to questions for the record from Republican members 
      of the Committee on Transportation and Infrastructure......   130
    Responses to questions for the record from Hon. Corrine 
      Brown, a Representative in Congress from the State of 
      Florida....................................................   133
Hon. Ann L. Schneider, Secretary, Illinois Department of 
  Transportation, responses to questions for the record from 
  Republican members of the Committee on Transportation and 
  Infrastructure.................................................   156

----------
\\ Hon. Kevin McCarthy did not submit a written 
  statement.

  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      AN UPDATE ON THE HIGH-SPEED
                   INTERCITY PASSENGER RAIL PROGRAM:
                   MISTAKES MADE AND LESSONS LEARNED

                              ----------                              


                       THURSDAY, DECEMBER 6, 2012

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to call, at 9:35 a.m., in Room 
2167, Rayburn House Office Building, Hon. John L. 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. Today is another one of our hearings focused on 
passenger rail in the United States, and this is an oversight 
hearing which we conduct at the full committee level. I am 
pleased to welcome everyone to this hearing and this 
opportunity to review the progress of high-speed rail in 
particular today, and the title of the hearing is, ``An Update 
on the High-Speed Rail Intercity Passenger Rail Program: 
Mistakes Made and Lessons Learned.''
    The order of business is we are going to hear Members' 
opening statements from the committee. Then our first panel 
will actually be two Members who we will welcome and hear their 
commentary. Both of them are from California, leaders in the 
Congress we are pleased to welcome, and then we will have the 
Secretary, and I believe, and one panel, and another panel to 
follow. So that is the order of business.
    And again, welcome, and I will start with my opening 
statement, and we will yield and continue.
    Well, again, as I said in introductory comments that we 
have been trying to conduct some oversight of passenger rail 
service. We focused in the past hearing on Amtrak and its 
organization and reorganization attempts I think dating back to 
2005 and most recently.
    The purpose of these hearings is not to micromanage. 
Sometimes people say I get a little bit into the weeds, but to, 
in fact, hopefully influence policy which we are responsible 
for, legislation that accounts for an important responsibility 
under our transportation portfolio, and that is making certain 
that the United States is in the business, regarding rail and 
conducting that activity for passengers and freight in a 
responsible manner.
    At this committee's level, we have responsibility over 
Amtrak, our significant and really only passenger enfranchised 
operator in the United States, and so we focus quite a bit on 
that agency, and as you know, for 40 years or more, we have 
subsidized that operation for more than a billion dollars a 
year, and we are also faced with subsidizing high-speed rail, 
and that has been a $10 billion investment that has been made 
by this administration and also by the Congress, I think eight, 
was it American recovery stimulus dollars, $8 billion and then 
several billion added by Congress. That is no insignificant 
figure.
    Again, when we are dealing with multitrillion-dollar 
deficits, we do have a responsibility as a Congress and a 
committee to see that that money is wisely spent, and even if 
it is stimulus money, that that money is spent. One of the 
questions that I will pose today to the Secretary and to others 
that are before us is, to date, only I believe 7 percent of the 
$10 billion has actually been expended to date. Now stop and 
think about that. We are supposed to be adding jobs, the 
stimulus was supposed to be creating economic opportunity, but 
7 percent of the stimulus dollars and the total $10 billion has 
been spent to date.
    I might also preface my remarks by saying that I consider 
myself one of the strongest advocates, in fact, I have been 
quoted as saying the biggest cheerleader for transportation and 
for passenger rail and for high-speed rail in the country, and 
I still hope to cling to that title. My effort as chair is 
actually to move a positive program forward. I started working 
with Mr. Oberstar when we did the PRIIA act, it was the first 
rail passenger reauthorization in 11 years, and worked with the 
other side of the aisle in moving that, that important 
legislation that deals with passenger rail, forward, it sets 
the framework that we are now operating under. And we will be 
looking at a reauthorization in the next Congress, so it is 
very important.
    Let me just say that, whether we are building a high-speed 
rail, intercity passenger rail, transit services, any kind of 
infrastructure, highways, you wouldn't want to build a four-
lane highway, where there are no passengers or vehicles to 
access it. You wouldn't want to build a city transit system 
where you don't have adequate capacity or people, passengers to 
use that facility. The same thing holds true with high-speed 
rail and intercity passenger service.
    I am greatly concerned about the direction of this whole 
effort. I was excited when I heard President Obama and his 
administration at the beginning wanted to promote high-speed 
rail. Unfortunately, most of the money, the $10 billion, does 
not go for high-speed rail. They chose instead to support 
almost 150 projects, and the number is growing, and a lot of 
that money has been left behind. In fact, most of the money 
that has been rededicated to high-speed rail has been sent back 
by States, including my State, the State of Florida, where we 
had a bait-and-switch proposal for high-speed rail, the actual 
speed was 84 miles per hour, 84 miles that took 1 hour to 
transit the distance of the proposed link in central Florida, 
and that is not high speed. High speed is at least, and by our 
definition, 110 miles per hour average. That doesn't mean the 
train gets up to 110, 150, 160 miles for some stretch, we are 
talking about the average speed.
    There was also a bait and switch in Ohio. We were looking 
at 39 miles to 58 miles per hour. That money was wisely turned 
back. There was a similar proposal in Wisconsin. That money was 
turned back. And unfortunately, the beginning of the whole 
high-speed effort in the United States has been somewhat of a 
setback for high-speed rail.
    The only route that has a possibility of being high speed 
is California; we have two California Members we are going to 
hear from. We will go into details about California's progress, 
but having visited out there, it does only service what, about 
a 100-mile stretch and mostly in a rural area without the 
transportation interconnections that we need and intermodal 
systems. We are serving the major population centers. We will 
talk about plans, and I am concerned about some of the 
direction of what is going on in California, about plans to 
connect to, I always say LAX, Los Angeles and SFO, the San 
Francisco Bay Area, which are also troubling reports that we 
have on that.
    So our intention today is really to try to work in a 
positive fashion to make certain that true high-speed rail 
occurs in the United States. I make no secret, I tell people in 
Florida, in my district, and around the country, that our 
number one goal should be and as you may know, Amtrak owns and 
the Government people own have an interest in the 600 miles of 
track between Washington, DC, our Nation's Capital, 
Philadelphia, New York City, Boston, the most congested 
corridor in the United States of America, and that is the only 
600 miles that we really own. We own some other small 
stretches, all the rest commuter, I am sorry all the rest of 
Amtrak service is run over more than 20,000 miles of private 
freight rail. And I see some of the freight rail people in the 
audience, and they have concerns, too, about using some of 
their corridors and not having dedicated high-speed corridors, 
and we need to address that issue as we move forward.
    My final point is the Northeast Corridor is where I think 
we should be putting the focus, some dollars; give the 
administration credit for at least taking the money that has 
been turned back dedicating some of it to the Northeast 
Corridor, but we are doing that in a piecemeal, half-baked 
fashion. The Northeast Corridor, every State, every major area 
can benefit by bringing high-speed rail to the Northeast 
Corridor. Seventy percent of our air traffic delays emanate 
from the Northeast Corridor, even when we have next-generation 
air traffic control and move planes a little bit faster and 
closer together, with the doubling of the air traffic, with all 
of the other restrictions that we have in that corridor, you 
must have high-speed rail to serve that area, and it has the 
connections to also service one of the most congested corridors 
in the United States of America.
    Next week, our hearing, our final hearing, will be a 
hearing that we will hold on the Northeast Corridor. Our very 
first hearing on a snowy day in January when I became chairman 
was at Grand Central Station in New York City, and we will 
conclude our final hearing of this session dealing with 
progress or lack of progress in the Northeast Corridor next 
week in our hearing that will focus specifically on the 
Northeast Corridor.
    So, with those comments, again, as a strong supporter 
because of energy, environment, because of congestion, I still 
remain dedicated to moving positive intercity passenger rail 
and particularly high-speed service because the United States 
is falling further behind and must lead the pack instead of be 
behind the pack.
    With those quick comments, let me yield to the patient 
ranking member, who was so nice to me yesterday, I have to be 
very nice.
    Mr. DeFazio. Thank you, Mr. Chairman, I am disappointed 
that your portrait isn't hanging behind us.
    Mr. Mica. It is never going to hang there.
    Mr. DeFazio. Nothing can move Don Young from the center.
    Mr. Mica. Nothing. Look at the size of that.
    Mr. DeFazio. It takes five people to move it.
    So thank you, Mr. Chairman.
    Mr. Chairman, I have been involved in the issue of high- 
and higher speed rail since early on in my career in Congress. 
In the early 1990s, Al Swift on the Appropriations Committee 
designated the first proposed five high-speed rail routes in 
America, and one of them was from Eugene, Oregon, to Vancouver, 
British Columbia. And we will hear a little bit later from 
Paula Hammond, who is the secretary of transportation from 
Washington State, who will describe our progress or lack 
thereof, small amount of progress in achieving those goals.
    But we are plugging away at it. This is not an easy thing. 
Right-of-way issues are very problematic. The conflicts between 
freight and passenger rail, we need to invest time and effort 
in helping to work those things through. But I do believe that 
the American people do want higher and high-speed rail. 
California is trying something unique in terms of new right-of-
way. They are seeing the difficulties with that, but that does 
have the promise of true high-speed rail that can pretty much 
only come with new and dedicated right-of-way, which is very 
problematic and very expensive. But I still believe that there 
is a tremendous market for this, and if done right, it will be 
something that future generations of Americans will look back 
on and say, they can't believe there was a day when we were 
limping around with what we are limping around with now in 
underfunded Amtrak, undercapitalized Amtrak, and we are not 
putting in the investments we need to help people move 
efficiently from point to point by higher speed rail.
    I just point to the Spanish example. It is probably most 
analogous to ours. Twenty years ago, they had a system that was 
crappier than what we have here, and they built their first 
segment from Madrid to the coast. And after a while, pretty 
much everyone in Spain had had a chance to ride on it, and they 
all said, hey, we want that, too. And now they have a system 
that moves people very long distances very quickly, has changed 
real estate markets and businesses. It has been a tremendous 
boost. They have got problems with their economy but has made 
major changes for them that have been beneficial. And 
similarly, you can find that in places like California, with 
extraordinarily high-priced real estate in the urban centers, 
but with high-speed rail, people could live even further out 
than they do now and get there economically and environmentally 
responsibly.
    So I look forward to discussing the problems we have had, 
and the improvements we can make, and what the future is going 
to look like. I regret that I have to go to a meeting because I 
am on policy and steering, because I am looking forward to a 
lively exchange between the two Californians, which I know will 
be lively, and I always love to hear from Secretary LaHood. But 
I will have to step out. But I know they are, now I am ably 
followed by others who will take my place.
    Thank you, Mr. Chairman.
    Mr. Mica. Well, thank you, Mr. DeFazio.
    And he has been a great partner. I appreciate all of his 
work. I will probably see you next week for my last hearing as 
chair, but I want to thank you.
    We took the United States through 9/11 and some very 
difficult times together.
    Mr. DeFazio. The TSA has been a work in progress.
    Mr. Mica. Don't mention TSA, please. I always refer to that 
as my bastard child, but you helped it in the conception.
    Mr. DeFazio. Well, I didn't even want to go there.
    Mr. Mica. I think we are going to have a lively one today, 
because we have got Mr. Denham from California, and I think Ms. 
Richardson won't miss this opportunity.
    But, Mr. Denham, you are recognized.
    Mr. Denham. Thank you, Mr. Chairman.
    I will take the short opportunity to make a quick 
statement. I always look forward to talking about high-speed 
rail in California, because it always changes; there is always 
something new to talk about. This was something that I 
supported when I was in the State Senate, when it was a $33 
billion project going to the ballot initiative to borrow $9.95 
billion when we actually had a decent credit rating. Since 
then, our credit rating has been downgraded; our debt has gone 
through the roof to the point of near bankruptcy. And this plan 
that we once had has no plan. It went from $33 billion to $98.5 
billion, with no private investors to pay for it, with no 
funding coming from the Federal Government to pay for it and 
unable to float the $9.95 billion dollar bond that the voters 
passed. Now the voters are saying, no, thank you. Let's put it 
back on the ballot, so that we can end the project once and for 
all.
    I think there are a lot of things that we would like in 
California, and certainly a new shiny train would be one of 
them. It would be fun to have, but the question you have to ask 
yourself is, can we afford to have something fun? Can we afford 
to have a luxury right now? And can we afford it do it do it 
with no plan?
    So my questions will continue to center around where does 
the $98.5 billion come from, and if that has now been reduced 
down to $68 billion, where are these new ridership numbers 
coming from that have no justification?
    And lastly, I want to see something that shows that we 
actually have a budget, that it is actually going to be done on 
time, not over several decades.
    And thirdly, one of the things that was promised, not only 
to me as a Member of the Central Valley but to the entire 
State, was that this was going to be done on a preplanned 
corridor that was going to stay off of our ag land, not only 
our valley's number one industry but our State's number one 
industry, and if we continue to disrupt our ag industry, we 
will continue to lose our number one industry.
    With that, I yield back.
    Mr. Mica. I thank the gentleman.
    Now, the gentlelady, Ms. Richardson from California, you 
are recognized.
    Ms. Richardson. Yes. Thank you, Mr. Mica.
    I can't compare to the bastard child that you referred to 
with Mr. DeFazio, but maybe I will be a good cousin for you 
today.
    Thank you, Chairman and Ranking Member DeFazio, who was 
here earlier, and I would also like to acknowledge Mr. Denham. 
I traveled with Mr. Denham and Mr. Mica to the Central Valley 
to look at this very issue, and although we may not agree on 
the ultimate thoughts of your perspective of this project, I 
think you have been very conscientious and want to do what is 
best for the Central Valley, and we hope to work to provide you 
with that plan; that is why the part of the Secretary being 
here and others, so that we can get this ball rolling and get 
it done.
    Today we are here to discuss the high-speed and intercity 
passenger rail opportunities. And I also want to acknowledge 
Secretary Ray LaHood. I think probably more than any Secretary 
that I have seen here in Congress, you consistently come very 
patiently to answer our questions and want to make sure that we 
are well informed so that we can do our work, and we thank you 
for that, sir.
    As a member of the Railroad Subcommittee and cochair of the 
California High-Speed Rail Caucus and vice chair of the 
Bicameral High-Speed Rail Caucus, the development and 
implementation of a national high-speed rail system is one of 
my highest priorities. Right now, China is operating 13 high-
speed railways and has more than 20 under construction. By 
2020, this network will cover nearly 10,000 miles.
    When I looked at the title of this initial hearing about 
what mistakes have been made, it seems to me one of the number 
one mistakes has been is our lack of continued commitment to 
high-speed rail and providing adequate dollars to be able to 
have a true system here in the United States.
    Not only are we not investing in alternatives to highway 
systems, but we are spending it on Band-Aids for 
infrastructure, rather than investing in a top-tiered system. 
Our President has certainly taken bold steps, and the Secretary 
has carried that flag with us, but we must provide them the 
support to provide the additional dollars that are certainly 
going to be needed, as Mr. Denham referenced, to be able to get 
this project going.
    When you consider the amount of money that is spent on 
gasoline, aging infrastructure and all of the changes, 
certainly high-speed rail must be at the forefront. And when 
you consider that the Federal Reserve Bank of San Francisco 
referenced that infrastructure investment gets a good bang for 
the buck in the sense that fiscal multipliers, the dollars 
increased by the output of each dollar that we are spending, 
are significant and should be done. When you consider that 
California, as Mr. Denham mentioned is the ninth highest GDP in 
the world, the first in the United States and represents about 
12 percent of the country's population, certainly when others 
before us, generations before, considered trains going west, we 
shouldn't be hesitating and insisting upon an only one way when 
we know the opportunities are there in California. Some 
portions of California offers a landscape that makes it a true 
high-speed rail possibility, similar to France and China, and 
our chairman here alluded to that.
    The recent GAO's preliminary assessment of California's 
cost estimates show that California's High-Speed Rail Authority 
has to secured $11.5 billion from Federal and State sources and 
still needs a shortfall of $57 billion to move forward.
    To put this investment into perspective, in the 1950s, 
Congress took bold action to invest in its infrastructure and 
to create an Interstate System. The initial system took 35 
years to build, and after several editions, the highway system 
is a total length of 47,182 miles. The cost of construction has 
been estimated at over $425 billion in today's dollars if we 
were making that same decision. So certainly we should move 
forward at this time.
    An urban mobility report by Texas Transportation Institute 
found that the cost these slow speeds of what we currently have 
and long delays and endless congestion continues to cost the 
United States over $100 billion annually. Now is the time to 
make that investment for alternatives to congested highways and 
to simultaneously create jobs.
    The intercity passenger rail service is one of those 
alternatives that at any speed trumps long delays and crawling 
speeds that faces our Nation's major interstate today. The 
Northeast Corridor and the California high-speed rail system 
should be treated as the first step to developing the Nation's 
high-speed rail network, not an ending point.
    I want to thank all of our witnesses before us today, and I 
look forward to your testimony about this important issue.
    And I yield back.
    Mr. Mica. Thank you so much.
    Ms. Norton.
    Ms. Norton. Well, Mr. Chairman, I don't know if this is 
your swan song.
    Mr. Mica. No, that is next week.
    Ms. Norton. All right. Because if so, I would not be 
surprised that it was on high-speed rail.
    Mr. Mica. It will be, and it will be on the Northeast 
Corridor. And then I might save a little time for the FTC.
    Ms. Norton. I knew it. That is your real swan song, and 
that will never go away.
    Mr. Chairman, it has been a pleasure to work with you on 
that matter. I don't know about California and other places 
where high-speed rail may be controversial, but I do know where 
we are furthest along, and all I want to do is to see us get 
started so that we have a pilot to show that we can do this.
    Those who created the American railroad system with 
considerable help from the United States Government during the 
Civil War, private and public alike, our public officials, the 
magnates who took the Government money and ran with it, they 
would be turning over in their graves to see how far behind we 
are developed and developing country on high-speed rail. The 
fact that we cannot say that there is a single example of real 
high-speed rail in the United States should be, and for me is, 
a matter of personal embarrassment as an American citizen.
    And in the District, where we have the hub of Amtrak, 
Amtrak has already created a master plan for redesigning the 
station in order to accommodate high-speed rail. It is already 
dealing with the infrastructure, and, of course, in the 
Northeast Corridor is where we have already the fastest trains.
    I will not, I want to engage in a competition with the rest 
of the country and I see and I understand why the stimulus 
package trying to catch up with countries around the world 
funded the high-speed rail at various parts of the country, but 
I notice, I note that the IG says there needs to be milestones. 
You are not going to hook up this entire country on high-speed 
rail by just saying, on your mark, here we go. I don't think we 
will be able to avoid prioritizing where the money goes, 
piloting it because we have not done it, and I Am not convinced 
we know how to do it, because we haven't done it, and to avoid 
making mistakes throughout the country of having no model to 
study, I hope we will at least start where we already have 
started on the Northeast Corridor and somebody else in the 
Southeast or California or anywhere in the United States think 
they can do it faster and their model is ready, I will concede 
to them. Just let's get started.
    Thank you, Mr. Chairman.
    Mr. Mica. I thank the gentlelady.
    And I also thank her; for 15 years, we talked about having 
Union Station as a true intermodal center. We used to have our 
people come to the Greyhound station, two, three blocks, drag 
their luggage to Union Station; we used to have to go around 
town to take a bus from some satellite location. And Ms. Norton 
was with me. In 15 months, we got that done and dedicated, came 
up for that, even during a very heated election. But I thank 
you for your leadership.
    Also, not this Secretary, but Porcari the Deputy Secretary, 
was instrumental in making the Nation's Capital have a true 
intermodal center. But I thank both of you.
    Ms. Edwards.
    Ms. Edwards. Thank you, Mr. Chairman.
    I want to thank all of our witnesses today, and I want to 
particularly thank Secretary LaHood. I understand it is your 
birthday. I don't think I would have chosen to spend my 
birthday with you, but I am glad you have chosen to spend your 
birthday with us.
    And particularly to the chairman, for holding this hearing 
and discussion today about high-speed rail, we had a chance to 
just about a week and a half ago, of course, to go up to New 
York, and bless Amtrak, but it just took forever, even on the 
Acela. And so I do share your view and that of Ms. Norton that 
we have a really densely populated corridor in the Northeast 
that requires robust development of high-speed rail, but I 
don't think that has to be, nor should it be, at the exclusion 
of development of high-speed rail in other corridors of the 
country.
    When I think about a trip that I took many years ago with 
my son, from Paris to the Dordogne region in France, and it was 
going from a densely populated urban area to a rural and 
mountainous region, and high-speed rail wasn't excluded from 
there. And so I think the same can be true of areas along the, 
around the central coast; I think that that is true in other 
areas of the country. And for us to be competitive, I think it 
is absolutely necessary.
    And we know, of course, and we don't have to sing the 
phrase here, but we know that the investment in high-speed rail 
and that kind of infrastructure will pay off in terms of 
thousands and thousands of jobs, and it will pay off in terms 
of making us more competitive. I mean, if a worker going from 
Boston to Washington, DC, can have so many more options for 
work for employment, our employers can have so many more 
options if their employees could make it a day commute. And so 
we need to get started, and there has been so much discussion 
on this committee with the stimulus package.
    And I really have to question why it is that Members of 
Congress are so headstrong against high-speed rail in some 
corridors when it was their Governors and their State 
legislatures that wanted the high-speed rail dollars. And yet 
they have rejected that.
    I have to say, in Maryland, we were particularly 
beneficiaries when Florida went through its own rejection 
phase. I am grateful for that. I don't think it was 
particularly smart. And so I look forward to a discussion today 
about how we can get off the dime. Sometimes there is great 
resistance to change, and that requires somebody to punch 
through with vision. And I am sure, and I know that this is 
true, that over a period of time when the Interstate Highway 
System was being developed, there were areas that said, no, we 
don't want the highway. Well, who doesn't want a highway now?
    There have been other occasions, even with our own 
Metrorail here in this region, I can think of communities that 
I represent now who said, I don't want metro coming to our 
district. It will keep people out. And guess what? They are 
begging for Metro now. I was begging for Metro this morning 
when I spent an hour and a half commuting 8.6 miles.
    And so all across this country we have a need to get from 
one place to another to do our business to conduct our work. 
And I share the view of many in our freight rail industry. We 
could be so much more efficient if we weren't sharing tracks 
and sharing infrastructure with our passenger rail system.
    So let's get this right, Mr. Chairman. Let's spend the 
money that we need to spend and let's consider that an 
investment and a payoff maybe not for us but for a couple of 
generations in the future. And with that, I yield.
    Mr. Mica. I thank the gentlelady.
    The gentleman from Indiana, Mr. Bucshon.
    Dr. Bucshon. Thank you, Mr. Chairman.
    I am going to make a few comments. I am from Indiana, and 
we are probably not ever going to get high-speed rail.
    But in my observations recently with the ongoing interstate 
project through my district, trying to get a highway built from 
Evansville to Indianapolis, I see some of the same stepping 
stones that high-speed rail has. And I think some of the 
discussion needs to revolve around, what are the impediments, 
other than money, that are stopping these type of projects? And 
the reality is that there are environmental issues, ongoing 
lawsuits for years, sometimes decades. There are right-of-way 
issues, again, ongoing lawsuits, sometimes for decades, that 
cost people so much money that the question I have is, should 
the Federal Government continue to funnel money to projects 
that are going to take two decades, three decades, if we are 
not going to really address some of the drivers of the ongoing 
cost?
    Interstate 69, which is a little different from building a 
high-speed rail, but it is through new terrain; it is not an 
existing right-of-way, started--we started thinking about this 
project in the late 1960s, and I would argue, had the 
Interstate Highway System, if we tried to build that today, we 
couldn't build it. And so I think, with my 2 years on this 
committee and being into a number of hearings about high-speed 
rail, I am in favor of it. I think in a lot of areas it makes 
sense. But I think we do need to address some of these issues.
    Thank you. I yield back.
    Mr. Mica. Any other Members seek recognition?
    If not, I thank our two first witnesses, Member panel, for 
their perseverance. And they get first choice of speaking. I 
would also ask unanimous consent that members not on the 
committee, including Mr. McCarthy and Ms. Hahn and others if 
they choose to be permitted, to sit with the committee at 
today's hearing, offer testimony and ask questions.
    Without objection, so ordered.
    So you are welcome to join us afterwards if--you will be at 
the end of the pecking order on questions, but you have endured 
very well so far.
    With that, we want to welcome our two colleagues from 
California, Mr. McCarthy, Ms. Hahn, and thank you for joining 
us.
    We will recognize Mr. McCarthy, first.
    Welcome, and you are recognized.

  TESTIMONY OF THE HONORABLE KEVIN MCCARTHY AND THE HONORABLE 
  JANICE HAHN, REPRESENTATIVES IN CONGRESS FROM THE STATE OF 
                           CALIFORNIA

    Mr. McCarthy. Well, thank you, Mr. Chairman.
    And before I begin, I do want to thank you for your 
commitment to America's infrastructure and your tenure as 
chairman. You have done a very good job and we appreciate that 
commitment.
    To Mr. Secretary, happy birthday. You happen to share that 
with someone very special to me, my wife, so I will see her 
later today.
    And to Ms. Hahn, thank you for joining with us.
    I listened to all the comments today, and I can't disagree 
with your comments, but the one thing that we all have to look 
to, especially in a time of why we are here; none of you have 
planned to be here during this time of year. We are here 
debating a fiscal cliff. We are here debating the direction of 
America, where are we going to go financially? We have a very 
responsible ability as Members of Congress: We are the stewards 
of public funding. And it is rightful that we have this hearing 
again, and I appreciate it.
    In December, when I came, I raised a couple issues. We want 
to invest in infrastructure. We want America to move quickly 
our freight and our people in the best ways possible.
    What you want, you also need to plan for, a plan that 
works, a plan that is tested, a plan that is audited and a plan 
that has a review. I happen to come from California. I happen 
to sit in the area that many of you talk about it is going to 
be part of where it begins. And I have real doubt of viability, 
the cost, and if and when this will ever be built.
    That is why I joined with the chairman, Mr. Denham, Mr. 
Hunter, Mr. Miller, when we sent the letter to the GAO, asking 
for an audit and review of the business plan in California. And 
I will look forward to hearing their testimony later and 
looking and reading the report when it is completed.
    To date, the project in California has been the biggest 
recipient of Federal money, billions of dollars. There are 
concerns about the business plan itself and equally concerning 
to me; just because we have invested money doesn't mean we have 
to invest more. The current plan, to be finished at the 
smallest level of number, asks for another $38 billion from the 
Federal Government.
    Please put that in perspective. The debate we are rassling 
over for the rest of the month on our fiscal cliff, if you 
raised all the dollars and raised all the taxes as proposed, 
you only get $31 billion in a year. And they are requesting 
more than what we would even get from that.
    So we need to be good stewards. Yes, we want movement. Yes, 
we want to work it right. But before we make an investment 
again, shouldn't we review the business plan?
    Secondly, it is an issue that Mr. Denham raised. This was 
put before the California voters; yes, it looks different 
today. As a California voter, I personally think you would have 
to go back to the Californians because this is not what was 
proposed. It said there would be private funding. There is no 
proposed private funding as of today.
    There is no money in, and I question whether there will be 
in the future.
    So, is the Federal Government now on the hook for the rest 
of the plan, which the voters were asked for and said would 
come? If we are the biggest funders of this, why would we not 
wait to what they said they would do? That is a question we all 
have to ask.
    Thirdly, when you read the business plan, and you live in 
my area, the numbers just don't add up. The millions of people 
that they project will ride the train from my area are nowhere 
near the population that will do it. There is roughly 750,000 
within the Central Valley that currently take a train or an 
airplane to the region in which they are going to serve.
    So is your investment going take pay off? Or are you making 
an investment where you are going to have to continue to invest 
and subsidize the riders to be on the train themselves?
    California first brought this issue up when we had a 
surplus. Many people realize in a Government when you have a 
lot of surplus, you start big picking up big dreams; you want 
to do a lot of different things. That is not the same 
perspective of where California is today, and it is definitely 
not where the Federal Government is today.
    So our stewardship has to analyze the business plan, 
analyze the numbers, and also put on the table, maybe it is the 
time we cut our losses. Maybe we say, no, we are not going to 
fund anymore, and the savings should go to pay down our 
deficit.
    Look, I know Hollywood happens to be in California, but 
this is not a Kevin Costner movie. If we build it, I don't know 
if they will come. And that is not how we play with taxpayers' 
money.
    It is right to have this hearing, but it is right to 
scrutinize, and before we move forward on anything, the 
legislative analyst's office and the peer review have the same 
questions to the business plan. We should even ask more because 
it wasn't their money; it is the taxpayers' money that we are 
responsible for investing. And that is the review we need. I 
yield back.
    Mr. Mica. I thank the gentleman.
    I am pleased to recognize Ms. Hahn, the gentlelady from 
California.
    Ms. Hahn. Thank you and good morning.
    Thank you, Mr. Chairman, members of the committee, thank 
you for allowing me to participate in this hearing today.
    I have only been in Congress about a year and a half, but 
my whole life I have been deeply involved in transportation 
issues, particularly in my capacity on the Los Angeles City 
Council for 10 years, and so my dad who was a L.A. County 
supervisor for 40 years in L.A. County took my brother and me 
to the World's Fair in 1960, which was held in Seattle. Many of 
you probably weren't born then. And so there was this modern 
monorail project that ferried people around the World's Fair. 
And the investors of that project at the time offered to build 
that monorail system as a pilot program in Los Angeles, 
traversing the Harbor Freeway. Dad thought it was a good idea 
but couldn't again get any of the other city fathers or county 
fathers to agree that this was a good investment. Nobody at 
that time thought we could ever get people out of their beloved 
cars.
    So that monorail now circles Disneyland's Magic Kingdom in 
Anaheim constantly. But that is a reminder to me that the 
biggest mistake I think we have made so far is not building 
major transportation projects that the public can use, will use 
and will get them out of their cars.
    You know, in California, I believe and I think the voters 
have proved that time and again, that high-speed rail will 
reduce congestion; it will create jobs; and it will modernize 
the entire State's rail system. It will reduce congestion, 
which is a key issue for Californians. Transportation 
congestion is strangling the business potential of our State 
and weighing down the economic activity that isn't just 
critical to the success of California but to the Nation as a 
whole. If any of you have ever driven on the freeway between 
Los Angeles and San Diego, it could take anywhere from 2 to 4 
hours in traffic.
    Turning to aviation, there are delays there as well. Flying 
between Los Angeles and San Francisco in theory takes only an 
hour, but one out of every four flights between Los Angeles and 
San Francisco, the busiest short-haul market in the United 
States, are late by close to an hour or more. And that doesn't 
even include the time now it takes with air travel and going 
through security.
    Our transportation network is already overburdened, and 
that is long before you start factoring in the projected 
increase in travelers in California. But in many cases, there 
is no physical space to expand a freeway or build a new runway 
to take into account all of the projected growth in travelers.
    In many cases, the communities do not want to expand their 
airports. The community surrounding LAX is already mobilizing 
against any expansion. As the population grows, we need to 
construct new transportation options to reduce congestion, 
options that won't just continue to patch our existing system 
but break open a new transportation future. I think high-speed 
rail is that option.
    Second, there is no doubt that high-speed rail is a job 
creator. At a minimum, the construction project will create 
20,000 jobs each year for 5 years. This is great for the State 
of California, which was certainly hit hard by the recession, 
and that 20,000 is before you factor in the jobs that this new 
system will ultimately generate.
    Third, the plan will modernize the State's rail system. 
They have created a blended system that will begin construction 
on high-speed rail while improving other rail systems 
throughout the State. This will allow for the high-speed rail 
system to connect the intercity and regional rail systems, 
called the bookends, and there are connectivity funds for rail 
projects throughout California, including Caltran's Positive 
Train Control and Los Angeles Metrolink upgrade in my part of 
the State. This railroad will get needed upgrades and swap out 
diesel engines for an electrified system that is cleaner and 
faster.
    High-speed rail would not happen without Federal Government 
support, including legislation passed by Congress to authorize 
this program.
    If the United States is going to maintain our position of 
economic leadership, we have to invest in the best 
infrastructure in the world. That will not be true if we do not 
invest in high-speed rail. We cannot wait until our highways 
are completely congested, our airports cannot expand any more, 
to start thinking of other longstanding transportation options. 
We need to catch up to Germany, France, and Japan. I just heard 
this morning that Japan is celebrating their 50th anniversary 
of their bullet train. We cannot allow China to surpass us in 
our next generation of infrastructure. Tourists from across the 
world will visit our high-speed rail to marvel at our civic 
engineering and technological prowess. This is not just about 
transportation but about changing the revitalization along the 
cities along the route.
    In conclusion, it is clear that I support the high-speed 
rail in California; the Federal program will help make it 
possible. What we need now is vision. What we need now is 
leadership. And what we need now is a belief that the people of 
California and this country want us to invest in this type of 
transportation option.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Mica. Thank you. I thank both of the Members for 
joining us, and you are welcome now to join us if you would 
like and stay for questions. We will excuse you at this time.
    As we bring Secretary LaHood up, who is our next witness, 
Ms. Hahn when you see the mayor of Los Angeles, tell him what 
we need now is light rail to the airport and that is my 
continuing message to the city of Los Angeles. Just an aside. 
We will get that done.
    Well, our second panel consists of the Secretary of 
Transportation, former member of this panel, distinguished 
Secretary of Transportation, who we have had a chance to work 
with. I appreciate his cooperation and efforts, and I am also 
delighted to have him here on the anniversary of his birth.
    Welcome, Secretary LaHood, and you are recognized.

TESTIMONY OF THE HONORABLE RAY LAHOOD, UNITED STATES SECRETARY 
                       OF TRANSPORTATION

    Secretary LaHood. Mr. Chairman, let me again begin by 
congratulating you on a job well done as chair of this 
committee.
    I served when I came here with Bud Shuster, who was the 
chair, and I heard every, all of Jim Oberstar's lectures, as 
you have, over a long period of time, and what you have been 
able to accomplish in a very short period of time as chair of 
the committee I think is extraordinary, a transportation bill, 
probably not as long as either one of us wanted, but it is a 
good bill; an FAA bill, it is a good bill. And we couldn't do 
the work that we do at the Department of Transportation without 
the leadership of this committee and your chairmanship over the 
last time that we have been together. So you have done a lot, 
and you have a lot to be proud of.
    And we haven't agreed on everything, but we have agreed on 
most things because we agree how important transportation is 
for America. And I just I want to offer my words of 
congratulations to you.
    And I also want to say a word as a former staffer of 17 
years around here, Jim Coon and his team really did a good job 
on both bills and on a lot of other things. And I know Jim is 
moving on to bigger and better things, but to all of the staff 
that work on this committee, you are the ones that do the work, 
and we appreciate all of you also.
    So to the chairman and the ranking member, I am delighted 
to be here. President Obama's High-Speed Intercity Passenger 
Rail Program is bringing more transportation options to 
millions of Americans. As we invest in our rails, we are 
creating jobs and supporting economic growth across the 
country. High-speed rail and higher performing passenger rail 
are critical for America's future.
    By 2050, our country will be home to 100 million more 
people. Right now, our highways and runways are already 
congested. I don't have to tell any of you that from any of the 
communities that you come from.
    This congestion will only grow with time. We can act today, 
or we can face a transportation crisis later.
    Investing in rail is a priority for President Obama and 
this administration. And most importantly, it is a priority for 
the American people. Since 2009, we have received 500 
applications.
    In your statement, Mr. Chairman, you acknowledged two or 
three Governors who turned down the money. Since, during this 
period of time, we have received 500 applications. For the 
money that was turned back from Florida, $2.3 billion, we had 
$10 billion worth of requests for that money. The idea that 
people don't want passenger rail, they do. We have the 
statistics. But we have the people that tell us this.
    So let's look at the progress we have made.
    As a result of this administration's investment, the 
Nation's first true high-speed rail system is set to break 
ground this year. The 220-mile-per-hour train system will carry 
travelers from Los Angeles and San Francisco in less than 3 
hours, more than twice as fast by interstate. California will 
have high-speed, true high-speed trains.
    We have introduced and are now expanding 110 miles-per-hour 
service. And as you indicated, Mr. Chairman, that is--the law 
says that is high-speed trains. In October, I rode on a train 
for a very short stretch as a result of investments we made in 
Illinois, Chicago, St. Louis corridor, and I saw the progress 
myself. I also recently visited a plant in Rochelle, Illinois, 
that is building 130 rail cars, and creating about 250 jobs in 
the process. These are cars that are being ordered from 
California and other places, these are American jobs, American 
workers building America's train sets, that is what this is 
about.
    This Rochelle plant did not exist before President Obama 
initiated a high-speed rail program. And when I was there that 
day, I not only spoke to 250 employees, they are talking about 
building another facility there as a result of the vision that 
this administration has for passenger rail. This is about jobs. 
Not just the--these are jobs that exist today as a result of 
our investments, more that 40 stations are being upgraded 
across the country, strengthening the connections between 
regions and revitalizing local economies.
    And we are leading a comprehensive planning effort to 
determine the Northeast Corridor's next generation of service. 
In a short amount of time, we have developed a sophisticated 
grant management process for one of the largest, discretionary 
infrastructure programs in the country. Rather than a one-size-
fits-all approach, we are targeting service improvements to the 
specific needs of every market.
    For those of you who think we haven't moved fast enough, 4 
years ago there was no high-speed rail vision. Four years ago 
we had not invested $10 billion, and if we would have moved too 
fast and the money hadn't been spent or allocated properly, I 
would be sitting here answering your questions about that. We 
had to reach agreements with freight rail companies in America. 
I hope you are going to hear from Ed Hamberger, the head of the 
freight rail system that we worked cooperatively with every 
freight rail. We worked with them and we hammered out 
agreements, we didn't get everything we wanted.
    So the idea that this is taking too long, we are talking 4 
years, 4 years. And agreements with every freight rail company 
in America, to use their freight system--to use their 
infrastructure, because we don't have enough money to build all 
the tracks. We need our friends in freight rail. So the idea 
that it is taking too long, it took 50 years to build the 
Interstate System, and in the beginning, not every Governor 
wanted a road running through their State. What do we have 
today? Because of the vision of Eisenhower, because of the 
vision of a Congress that said every year we are going to 
invest in highways, we have a state-of-the-art Interstate 
System.
    So we have obligated 100 percent of our Recovery Act money, 
99 percent of our total program funding. And as a result, 152 
projects are now moving forward in 32 States in 4 years, not 
fast enough for some, but done the right way, by the book. We 
have $1.7 billion in construction projects are now underway or 
completed in 17 States, in 4 years. Not fast enough for some, 
but pretty darn good, and done the right way by the book. And 
we have another $1.5 billion in job creating projects that will 
break ground in the next 6 months.
    We have already seeing projects come in on time and on 
budget. We recently completed a project in Vermont that 
upgraded 190 miles of track, speeding up both passenger and 
freight rail; in Maine, we have restored passenger rail service 
to two towns for the first time since 1959, and in the process, 
sparked millions of dollars in private sector investment.
    In the Northeast, we invested more than $3 billion in 
projects. For those of you who think we haven't invested enough 
in the Northeast, we have invested $3 billion, that is almost 
as much we invested in California. And more than we have 
invested in anyplace else in the country except California. And 
what we have done, we have upgraded infrastructure, eliminated 
bottlenecks and are laying the foundation to expand high-speed 
rail. For instance, our investments will ensure that by 2016, 
the segment between New Haven and Hartford will be completely 
double-tracked providing commuters more frequent and reliable 
train service and shorter trips. And in Pennsylvania, we made 
improvements on the Philadelphia, Harrisburg Keystone Corridor 
that will allow for trains to travel at higher speeds, but as 
much as we have accomplished, the reality is we have only 
started to meet States' enormous pent-up demand for passenger 
rail. Over the last 8 years, Americans, particularly younger 
Americans, have been driving less all while choosing passenger 
rail and public transit. We are doing for the next generation 
what previous generations did for us, we have an obligation to 
do what other generations did.
    The other generations built the Interstate System. What are 
we going to do? I have nine grandchildren, what are we going to 
do for the next generation? The next generation of 
transportation is high-speed rail, and we are on track to 
accomplish it. We are not going to stop, we are not going to be 
dissuaded by our detractors. We are going to have high-speed 
rail in America, we are on our way.
    The President has a vision. Many of you have a vision, it 
is going to happen. Thank you, Mr. Chairman. I am happy to 
answer questions.
    Mr. Mica. Thank you.
    I will get right into questions.
    Secretary LaHood. Mr. Chairman, could I just also insert as 
a part----
    Mr. Mica. Without objection your entire statement will be.
    Secretary LaHood. And there is a letter from Mr. Richard.
    Mr. Mica. And the letter that you have indicated.
    Secretary LaHood. Thank you.
    [The letter follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Mica. That will be made a part of the record, without 
objection, so ordered.
    A couple of the concerns that we have, first of all, I 
mentioned before that out of $10 billion, I think $8 billion 
was stimulus and there was another several billion dollars 
appropriated by Congress for rail, only 7 percent had actually 
been spent. You have indicated a great deal almost all of it is 
obligated. Can you provide the committee with a timeframe of 
the payout? You have asked for additional investment, I heard 
Ms. Richardson talking about putting more money in, we have 
difficulty getting money out. It can be obligated, but 7 
percent is about $700 million of $10 billion.
    I think Congress even took back some of the money that had 
been appropriated. So shovel-ready as the President found out 
has been somewhat of a national joke because everything takes 
so long. And we are trying to get expediting of the process we 
did some of that in the MAP-21 bill and certainly we need to 
have FRA and other agencies that are responsible for getting 
that money out. Could you provide us with expenditure sort of 
graphic description?
    Secretary LaHood. I will do that for the record if that is 
OK.
    Mr. Mica. That would be great. I don't mind investing the 
money if we know how it is being spent, but to come and ask for 
more and we haven't been able to spend it, any recommendations, 
too, for speeding up the process? I think some of the things 
that we do with FRA are totally mindless. You can run freight 
trains and all kinds of traffic, and Amtrak can run all the 
service they want, and then we spend years doing these studies 
to see if we can run additional passenger service, to me, it 
just----
    Secretary LaHood. Look, Mr. Chairman, I think you all did 
some good work on MAP-21 on speeding things up.
    Mr. Mica. And we are looking to--some of that was 
compromised to get it through, but particularly in rail to get 
people out of that cars, for energy and for the environment. We 
have to be able to spend the money, 7 percent, as you know, 
2\1/2\ years after stimulus, we only had $60-some billion in 
infrastructure money that 35 percent of that money was still 
sitting in Washington. And I know you were working to get that 
out, but we have to change the law and some of the policy that 
we are in charge of in order to make things truly shovel-ready.
    There were some concerns expressed in the Government 
Accountability Office report on the selection of some of these 
projects, the process--the GAO released this report March of 
2011. Specifically, the report said that there were concerns 
about transparency and other issues with an FRA selection 
process. They couldn't verify, again, some of the criteria by 
which some of these projects were selected. Can you cite any 
improvements in that process? Again, you were citing a number 
of projects, but also criticized by GAO for the process.
    Secretary LaHood. Look, we pay attention to what the GAO 
said, and we have tried to improve our decisionmaking process. 
We have tried to use the Governors as our partners on these 
projects, and in receiving proposals from them and from the 
States, from their DOTs and working with them, we have paid 
attention to what the GAO said and tried to improve our process 
for selecting projects.
    Mr. Mica. Well, the other most recent report by the 
inspector general and that was released just weeks ago 
September 11th, 2012. It said, they raised concern about FRA 
grants management framework and stakeholder agreement process. 
Would you like to comment regarding their criticisms?
    Secretary LaHood. The comment I would make is that when 
this program started, it was part of the stimulus program as 
you indicated, $8 billion, and we have never had a high-speed 
rail program before at FRA or at DOT and we had to staff up. 
Were we short of staff? Yes. Have we staffed up? Yes. Have we 
found the people with the expertise? Yes, we made improvements. 
We take seriously what the IG and the GAO tell us and we have 
tried to make those improvements. But frankly on the day that 
this program started, there was no high-speed rail program or 
staff and we had to staff up for that.
    Mr. Mica. We do only have really one high-speed rail 
project underway in the United States, the Northeast Corridor, 
we have a long-term plan, 30 years and $130 billion was the 
last plan I saw, and next week we are going to focus on the 
Northeast Corridor. I think it can be done in a third of the 
time and probably a third of the money if we included private 
sector partnerships and people who have actually built these 
systems in congested corridors, but that is the subject of next 
week.
    Right now and most of the commentary was on the one project 
that we have that can achieve high speed chosen between, again, 
two fairly rural destinations planned to connect into the major 
metropolitan areas, San Francisco to the north, Los Angeles to 
the south.
    Now it may be true that in 3 years or so we can finish that 
leg. The total cost of that leg is about $6 billion I, maybe $8 
billion when we get through, part of it Federal, part of it 
State, et cetera. But the report we have from California is 
that the total project is going to be $68 million with a 
completion date of 2028. And the latest plan also--that raises 
questions if it is $6 billion or $8 billion and that leaves $60 
billion. It would take a pretty substantial Federal commitment 
in the future. Of course, we have the next 4 years and we have 
money, 39 percent of the stimulus money is obligated to the 
California project. But a longer term commitment to connected 
into those two major areas consumes a huge amount of money, you 
heard opposition from some of the Members from California.
    The other criticism I heard the plan they are looking at 
actually could save some money, even though that is an 
expensive figure, but they are going to use current right-of-
way to San Francisco and Los Angeles, which is not a dedicated 
high-speed alignment. The future Federal support for this is 
estimated at $42 billion. How do you see that playing out?
    Secretary LaHood. Well, first of all, we have a very strong 
commitment from the Governor, who has appointed new people to 
his Rail Authority; Governor Brown is as committed a Governor 
as we have in the country to this project, which obviously is 
very important, but we also have a very committed assembly in 
California that had to take a vote to sell the bonds, and both 
the House and Senate in California voted for this project.
    You all know they represent the people in California in the 
assembly in Sacramento. So at the very top leadership in 
California, we have the people supporting this that we need to 
support it. And we also have several companies talking with the 
Governor and his staff, and the High-Speed Rail Authority about 
investing in California. We know that this project can not or 
will not be built with total Federal dollars. We don't have 
enough money here to do that. We need private investment.
    Mr. Mica. Let's--what I am trying to lean towards is it 
appears that there is a commitment, well there is a commitment, 
you have already committed 39 percent of the $10 billion which 
should be sufficient from a Federal standpoint for this first 
leg. The first leg is sort of the easy part of it, because 
again, it doesn't serve the metropolitan areas. The expensive 
part and the more difficult part is down the road, and that 
will take a commitment from future Congresses and future State 
legislatures and Governors, but it is not going to be a fully 
completed high-speed rail system in California until, again, 
their estimate is 2028 and we are missing $42 billion in 
Federal money and $60-some billion for the total project.
    So if there is some plan that the administration has for 
partnering in the future, we would also like to see that. And 
also, what about the issues raised now about the nondedicated 
alignment, nondedicated high-speed alignment using current 
right of ways, north and south?
    Secretary LaHood. Well, to your question of financing, I 
will just repeat what I said. There are lots of private 
investors working with the State of California, the Governor's 
Office and others about their ability to privately invest in 
this project. And we know full well that this project will not 
be fully funded by the Federal Government, California knows 
that.
    With respect to the others, I will have to submit something 
for the record on those alignments.
    Mr. Mica. So it sounds like you are open to having the 
private sector in that corridor and other corridors fully 
participate, both from financing, construction and operational 
standpoint?
    Secretary LaHood. Absolutely.
    Mr. Mica. Very good, I am pleased to hear that. I met 
recently with some of the high-speed various countries to have 
their operations, and we are falling further behind, as I may 
have told you. Even the Russians had someone at the table, they 
now have got high-speed rail between St. Petersburg and Moscow. 
But I was interested to find the European Union is now opening, 
in a couple of years, all of the public transportation 
operations for high-speed and other rail service to the private 
sector, which is, I think, something we should look at.
    And actually, Italy has moved forward in an expedited 
fashion opening to private contractor Ferrari, which is now 
providing--it is not planned, they are now providing--competing 
service to the public sector in Italy. So we can look at some 
things that may or may not be successful in other countries and 
try to pick the very best options, but have you on the record 
today as supporting both the financing, the construction and 
the operation----
    Secretary LaHood. Totally.
    Mr. Mica. I am pleased to hear that. Let me yield now if I 
may to Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman. I can only take my 
colleague, Mr. Denham, at his word, when we went to the Central 
Valley and he echoed the same today that one of the roadblocks 
that has been for him has been the lack of kind of knowing the 
details as a colleague. And so the conversation you just went 
through with Mr. LaHood, how soon could we expect to get an 
update on who these private companies are that are able to 
invest? How much are they willing to invest and how soon is 
this going to come together? Because he--I have heard him, Mr. 
Denham, say the same concern for over a year now.
    So when do you anticipate that the Governor would be 
prepared to work with you to present a package of how we might 
be able to get the private investment piece in with us?
    Secretary LaHood. Look, I am not going to speak for the 
Governor, but what I am going to say we will be happy to 
provide you the names of the companies that are in California 
and in other States wanting to make investments. How much they 
are going to invest, obviously that hasn't been determined. 
That has to be determined through negotiations, but we can 
certainly give you a report on companies that want to invest in 
California.
    Ms. Richardson. Would you also express to the Governor on 
behalf of this committee, and I don't think the chairman would 
object to that, that he would put together some sort of report 
to give this committee an update whether he wants to do it 
through closed session because it might be pending 
negotiations, but give this committee some sort of better sense 
of what we can anticipate of the real commitment of private 
investment.
    Secretary LaHood. Sure.
    Ms. Richardson. Thank you, sir.
    My next question building you said the President has a 
vision, I think the best example of the vision is that he has 
actually put money upfront on the table to begin this process 
of high-speed rail. But Mr. Denham, again, says that there is 
it no plan. Could you help us to better understand what the 
specific plan is of the President's vision for high-speed rail, 
in particular, for California?
    Secretary LaHood. The President's vision for the country is 
to connect 80 percent of the country over the next 25 years. We 
believe that the cost of that is about $500 billion. And I have 
submitted maps for the record, I can do it again. I have some 
maps here that I would be happy to submit for the record, which 
show what that is.
    [The maps follow:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Richardson. OK.
    Secretary LaHood. Look, we can't do this without Governors, 
we need partners, and we have plenty of partners, both 
Republican and Democratic partners, and that is the way this is 
going to work.
    Ms. Richardson. And one of the other objections has been 
that--and I realize it was not of your doing, it was actually 
in California of determining that Central Valley would be the 
first kind of leg here. And you mentioned in your testimony the 
adjustments that have been made through San Francisco. How 
quickly could you see us potentially, given completing the 
Central Valley leg, being able to connect to San Francisco? I 
believe that that is much further than the considerations being 
done going south.
    Secretary LaHood. I believe now there is a commitment on 
the part of the Governor and Dan Richard, who is the head of 
the Railroad Authority. Jeff Morales who is the executive 
director of the Railroad Authority to complete the California 
high-speed rail corridor within the next 10 years.
    Ms. Richardson. Wow. OK, sir, with that, I would like to 
join my colleagues in wishing you a happy birthday.
    Secretary LaHood. Thank you.
    Ms. Richardson. And also I think even more than your 
birthday, we hope that you will continue to stay and serve in 
this capacity.
    Secretary LaHood. Thank you.
    Ms. Richardson. Thank you, sir.
    Mr. Mica. Thank you. The gentleman from Wisconsin, Mr. 
Ribble.
    Mr. Ribble. Good morning, Mr. Secretary.
    Secretary LaHood. Good morning.
    Mr. Ribble. Thank you for coming in today on your birthday, 
we are glad to have you here. One quick comment, and maybe you 
can help me understand, I am from northern Wisconsin where we 
don't have high-speed rail and probably never will, it is a lot 
of woods and farmland and not a lot of people. But I do 
recognize that there are corridors in our country that high-
speed rail would work and probably would work pretty 
effectively. And so I don't come at this from a position of 
being negative on high-speed rail. I want to make it clear. 
Although I do think there is a level of naivety, kind of a 
wonderful naivety for Americans who often compare what is going 
on in China to what is going on in the United States.
    Having spent some time in the construction industry and 
having spent some time in China involving construction, there 
is a certain nimbleness to communism. There is a freedom of 
just taking over land because the country owns it all and they 
can say to citizens, you know, we would like this land and you 
leave, and without compensation. And so there is a speed and 
cost savings there that doesn't allow us to compare what is 
going on in China today to what is going on in the U.S. The 
economies are much different, and certainly our systems of 
Government are different. It would probably be helpful for the 
overall conversation to set aside those comparisons.
    But I would like to kind of focus in on what is going on in 
California since the earlier panel was here. Can you give us an 
idea of what the real timeline is that you expect it to be? 
When is this going to be up and running and how much more money 
is it going to cost the taxpayers in northeast Wisconsin to 
subsidize California's high-speed rail?
    Secretary LaHood. Well, the investments that are being made 
in high-speed rail across America amount to a little over $10 
billion so far, that is Federal share right now. And obviously, 
States are putting in their own money, California certainly is 
doing that. There is, as I said, their assembly voted to sell 
the bonds, and it was not without a lot of debate out there. 
These things are controversial, but what I said to Ms. 
Richardson I think is true, the goal is to complete a high-
speed rail corridor in California over the next 10 years.
    Mr. Ribble. And do you----
    Secretary LaHood. And the cost is currently $69 billion.
    Mr. Ribble. Yeah. And do you think that cost will be able 
to hold given your experience in transportation projects? You 
have been around, even though you are a young man on your 
birthday here, you have been around here a while. You have seen 
how this inflationary trend can go. Do you have any guess what 
the real number is?
    Secretary LaHood. I don't, I don't
    Mr. Ribble. It is likely to go up, though, wouldn't you 
agree with that?
    Secretary LaHood. Well, I will let that be your----
    Mr. Ribble. Having watched how much time often transpires 
from the beginning to the end of these, I think it is a 
reasonable expectation.
    I want to go to a broader question now because I do believe 
that there is friction that is put in our economy as a result 
of lack of investment in transportation here in the U.S. I 
think that is clear. And if we want to be a global competitor, 
it is really important that our airports, our ports, our 
highways, our rails are functioning. Like I said, I come from 
Green Bay, Wisconsin, which is a large manufacturing State. We 
have big obstacle in the way with Lake Michigan to get product 
moved to the east coast, so I recognize that there is need for 
investment.
    I often hear from my constituents a concern of the 
Government, of the Federal Government picking regions of the 
country to win and lose in the economic battles that take place 
between States. In other words, if we invest a lot of money in 
the Northeast Corridor as Federal taxpayer or we invest a lot 
of money in California, the taxpayer in Wisconsin is wondering 
are we just making those States more competitive to compete 
against Wisconsin manufacturing. Can you talk a little bit 
about how the whole thing plays together and what the answers 
should be?
    Secretary LaHood. First of all, I know you know this, but 
you all were in the ball game.
    Mr. Ribble. Oh, yeah, I am not making a statement on----
    Secretary LaHood. I know you are not. I am saying if you 
feel that your State is disadvantaged, it is not because of us. 
We wanted to make investments we were ready to make 
investments.
    Mr. Ribble. Let's take it from Montana, let's just take a 
different region, so the broader question is really, the point 
I am trying to make is that there are mega regions in the 
United States, large population areas. Is it fair to taxpayers 
that are living in rural areas to subsidize the large, already 
somewhat quite wealthy suburban areas?
    Secretary LaHood. I will put it to you this way: You name 
me any form of transportation in some way, shape, or form that 
is subsidized by the taxpayers. Transit is, I don't know if 
Green Bay is advantaged by transit, I don't know, but I know 
you are advantaged by roads. My son went to school at St. 
Norbert's. You have got some pretty good roads up there.
    Mr. Ribble. It is a pretty good school too.
    Secretary LaHood. It is a very good school. That was paid 
for by all the taxpayers to advantage taxpayers in Wisconsin 
and transit money.
    Mr. Ribble. And used by Wisconsin taxpayers.
    Secretary LaHood. That is correct, that is correct.
    Mr. Ribble. It is not likely high-speed rail will be used a 
lot.
    Secretary LaHood. But you do have a corridor between 
Milwaukee and Chicago that is subsidized by the Federal 
Government, it is an Amtrak line. And people on that line that 
use it a lot are advantaged by all other taxpayers.
    Mr. Ribble. Very good. Well, thank you for being here today 
and I yield back.
    Secretary LaHood. Thank you.
    Mr. Mica. Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. Mr. Secretary, you 
have earned many happy birthdays, not only for your service in 
this administration but for your long service to the United 
States in many capacities.
    Secretary LaHood. Thank you.
    Ms. Norton. First, I want to commend you and this 
administration, when I say let's get started, you got us 
started, you moved us off the dime. You got 151 projects, they 
are all obligated. Yes, you have some States divided. And when 
they are divided I think you are doing the right thing, take 
back the money. And look what you get, you get a bonanza of 
other jurisdictions, if Florida and California are still 
debating whether or not they want to become second-class 
States, be my guest. There will be many other States that move 
forward. And this is a country of jurisdictions. Some will come 
later, all will come, and those who come early will be ahead.
    Now I indicated when we began that my concern is the best 
way to produce something so that it shows that we can, in fact, 
move forward quickly with high-speed rail. Now this name that 
has been penned on this project about a train to nowhere is 
unfortunate. Let me indicate one way that I think we could get 
over that. I think that has a lot to do with the fact that here 
again we are a federation of States, and we need high-speed 
rail throughout the United States so the administration starts 
in strategic places. You know, it is in parts of California, 
parts of northeast, the Northeast Corridor, the central part of 
the country, the Chicago fulcrum.
    And yet, if one were to defend against the notion of a 
train to nowhere, I am not sure there is a good defense. For 
example, the GAO says in its report that they had warned in 
June that States would be--that States would be the primary 
recipients of the Recovery Act funds for high-speed rail, but 
says the GAO, many States did not have rail plans that would, 
among other things, establish strategies and priorities of rail 
investments in a particular State. Well my concern is whether 
the United States of America really has priorities of where to 
begin and where we would end.
    What we have seen in the past couple of years ever since 
the initial important investment is no funding from the Federal 
Government. So we really, in some kind of dream of our own, to 
keep the notion going that somehow these States from west to 
east will continue to move forward because even under the best 
of circumstances, as we approach a cliff which I still believe 
we will not go over, but in not going over it, there will be 
very significant reductions in every kind of program made.
    If that is the case, I need to hear the case for why we 
wouldn't prioritize one--at least one of the places you have 
funded that looks like it is ready to go and go with it. If you 
do not do that, you must have some view that some miracle is 
going to happen in the economy so that at least the public 
sector will continue funding. I can't see that, if it is not 
the case that we can expect public funding for all parts of the 
country in the next, let's say, next 5 years. So let's take the 
near term, how do you think--what do you think is the best way 
to proceed with what scarce funds you may receive, having 
received none now as far as I can tell, since the initial 
funding?
    We know this, that if you start, and I know this from the 
Department of Homeland Security. We are trying to look for 
public/private ways to finish that, because every year that we 
fail to complete a project that has already begun, we are 
adding literally, and I use my words advisedly, hundreds of 
millions of dollars to the original cost of the project.
    If that is the case, please help me to understand how one 
proceeds with a national network such as you have already 
embedded, knowing full well that there is no near-term prospect 
of funding it nationally, how will you have something to show 
to the American people within the next 5 years?
    Secretary LaHood. Well, first of all, every budget that the 
President has submitted for the last 4 years for transportation 
has included money for high-speed rail.
    Ms. Norton. And Congress has, in turn, not funded. Did you 
really think we are going to fund high-speed rail for the 2014 
budget, for example? The President will submit after he is 
saving us from going off the cliff, but is the administration 
thinking through the present funding crisis? We decided the 
fiscal cliff, the funding crisis we are building ourselves into 
precisely by solving the fiscal cliff problem.
    Secretary LaHood. Well, as you know, Ms. Norton, I sat in 
those chairs where you all are for 14 years, and I know this: 
If you keep after things, keep working on things legislatively, 
particularly if they are good things, particularly if they are 
good for the America, particularly if the American people want 
them, eventually they will happen. Look, we are not giving up 
on high-speed rail. The President will include money in his 
budget, in the transportation budget, for high-speed rail. 
Eventually I hope there is enough visionary people around here 
that see high-speed rail as the next generation of 
transportation for the next generation that--but in the absence 
of that, we are trying to get some private dollars, we are 
encouraging--I traveled to 15 countries over the last 4 years. 
Everywhere I went I told these companies that built the rails 
in Europe and Asia, come to America, invest in America. And 
many of them are here now.
    So in the absence of Congress not providing the money, but 
with the leadership of the President providing the money, I 
think we will get there with public money, but until we do, we 
are going to use private dollars.
    Ms. Norton. Mr. Secretary, with all respect, there is not 
15 minutes worth of vision in this Congress. The chairman likes 
to exclude himself, but after all, he is from Florida.
    Mr. Chairman, I very much respect, and I believe it is the 
way to proceed not to give up on high-speed rail, I beg you not 
to give up. My question really goes to priorities. If you 
continue to flake this money out because it will be so little, 
it will be a bunch of snowflakes, at the end, there will be 
huge criticism of the administration for having nothing to show 
for its funds. So my question very directly is, is it possible 
for you and the administration to think through a system of 
priorities based on a real-time, realistic vision of what lies 
ahead for us in the next 5 years so that we might prioritize 
among these projects? The projects which, for example, that 
have State go-aheads, the projects where you see an opportunity 
for private sector funding, on some rational basis to say, we 
are going to get to everybody. But to avoid the notion of 
having to simply disburse virtually no money everywhere, we are 
forced to use this set of criteria for prioritizing where the 
money goes first. We will reassess as the economy changes, but 
this is our priority now, it is Florida, it is California, it 
is the Northeast Corridor, it is Chicago, but we are not afraid 
to see what it is.
    Secretary LaHood. Yeah, no, of course we will, we will.
    Ms. Norton. I will take that answer right there. And ask 
that the Northeast Corridor be considered. Thank you very much, 
Mr. Chairman.
    Mr. Mica. Thank you. Let me yield down to Mr. Bucshon, 
gentleman from Indiana.
    Dr. Bucshon. Thank you, Mr. Secretary, for being here 
today. I will quickly draw your attention to a matter unrelated 
to high-speed rail, and I will submit the questions for the 
record.
    Secretary LaHood. OK, fine.
    Dr. Bucshon. The State of Indiana recently received notice 
from the National Highway Traffic Safety Administration that 
Indiana was no longer in compliance with open container law and 
repeat offender law, and we disagree with that. NHTSA 
previously sent a letter to Indiana telling us that we were in 
compliance, and I will submit that letter for the record.
    It is my understanding we didn't make any changes in MAP-21 
regarding these laws. Because we are now considered 
noncompliant, Indiana is being withheld $40 million in funding. 
Indiana Department of Transportation sent several letters to 
Administrator Strickland seeking clarification. As of now, we 
haven't received a response, and Indiana State Representative 
Soliday, and Indiana State Senator Wyss, who are the respective 
heads of the Transportation Committees in the Indiana 
Legislature have submitted a letter to your office. So I want 
to bring that to your attention and thank you ahead of time for 
addressing.
    Secretary LaHood. Well, look, I will personally look into 
it and I will personally call you and tell you where we are at 
with that.
    Dr. Bucshon. I appreciate that and with that I will submit 
my questions for the record. And I ask unanimous consent to 
submit those questions as well as the previous mentioned 
letters to the record.
    Mr. Mica. Without objection. And with the concurrence of 
the minority we will leave the record open for 15 days. So 
ordered.
    Ms. Edwards.
    Dr. Bucshon. I will yield some of my time to Mr. Denham.
    Mr. Mica. Oh, I am sorry. I thought you were concluding.
    Dr. Bucshon. With that, Mr. Chairman, I yield the rest of 
my time to Mr. Denham.
    Mr. Mica. Mr. Denham, you are recognized, and then we will 
go to Ms. Edwards.
    Mr. Denham. Has the administration taken a position to 
waive NEPA on this project?
    Secretary LaHood. To waive NEPA? Not that I know of.
    Mr. Denham. Have you had a discussion about it?
    Secretary LaHood. I have had no discussion about that, the 
first I have heard it.
    Mr. Denham. Have you had any discussions with the Governor 
to waive CEQA?
    Secretary LaHood. No, sir.
    Mr. Denham. So when the Federal Government really wants to 
get something done on time, on budget, avoid some of the 
lawsuits, normally I have seen a number of times when we have 
waived NEPA, but certainly from a State perspective a Governor 
who has decided to waive NEPA or waive CEQA to get AT&T part 
done for the Bay area, or most recently, to build new football 
stadium, I would think that the two parties wanting to get 
high-speed rail is their number 1 priority, would look at, 
rather than having duplicative regulation and going through 
NEPA and going through CEQA, that we would try to streamline it 
at some point so this $98 billion fluctuating to $68 billion of 
numbers can actually get narrowed down to a specific. Do you 
have any thoughts or comments on waiving one of those two or at 
least working with the Governor to have that conversation?
    Secretary LaHood. I have never had any discussions with 
anybody about this, including my own staff. First I have heard 
of it.
    Mr. Denham. This is something that has come up in this 
committee many times, in fact, I think we have, in our 
bipartisan discussions, at least an interest to go with the 
highest level of environmental regulation rather than 
duplicating that, it would seem that this would be a very 
simple topic that should be at the top of both the State and 
Federal Government's interest point if we are going to get this 
project done. Surprising that--the Governor talks about it all 
the time when he wants to do it for a ball park in one of the 
different areas of the State. I would think that for the number 
1 project of the State that that would be a conversation as 
well if we are going to do this on time and on budget.
    I wanted to ask you about the timeline, you said this will 
take about a decade?
    Secretary LaHood. Yes, sir.
    Mr. Denham. The High-Speed Rail Authority plan has us doing 
Madera-to-Bakersfield corridor by 2017; Merced to San Fernando 
Valley by 2021; San Jose to San Fernando, 2026; and then the 
final San Francisco to L.A. by 2028. Does the administration 
have a different timeline than the Authority?
    Secretary LaHood. Well, I believe that the timeline I was 
given was about a decade, so I will go back and see if I am 
incorrect on that.
    Mr. Denham. I would just be curious to see if there is a 
way to expedite this project, and certainly having it done on 
time would be of great interest to me as we are looking to try 
to come to some type of agreement so that we can fight together 
rather than fighting to come up with a plan that we can all 
agree on.
    Finally, on shovel-ready projects stimulus dollars, we are 
4 years into this now. Any idea when we will actually have 
shovels on the ground?
    Secretary LaHood. You are talking about high-speed rail or 
stimulus generally?
    Mr. Denham. I do believe we have found some shovels for 
some of the stimulus money, but on high-speed rail we are still 
are using stimulus dollars and have no shovels in the ground.
    Secretary LaHood. Well, you know better than anyone the 
difficulties it is to start a new program. Even though 
California was well positioned with a good plan, obviously that 
plan changed, the dollars changed, the administration has 
changed. We went from one Governor to another Governor. And we 
have to, as I said, we have had spent a lot of time with our 
friends in the freight rail to get these agreements, which we 
are very happy we are able to get. I think Governor Brown 
wanted to put in own people in place and there has been a 
change with the Rail Authority.
    I would assume that you would want us to do this correctly 
rather than speedily. And doing it speedily--look, we can't 
have it both ways, we would like to do it as fast as we could. 
We want to get it right. Our partners in this are the State 
government. We had a change in State government, a change in 
personnel, a change in the plan, a change in the money. We are 
positioned today now. We know what the plan is, we know what it 
is going to cost. People are in positions now to implement the 
plan, and we are going to move forward.
    Mr. Denham. What is the change?
    Secretary LaHood. The change is going from Schwarzenegger 
to Brown, going from new members on the Railroad Authority, 
changing from $99 billion to $69 billion, which it changed the 
plan. A lot of things have changed. And all of those changes 
have taken time.
    Mr. Denham. I would actually look forward to seeing a plan 
to see exactly what those changes are, other than fluctuating 
ridership numbers which get made up all the time, there doesn't 
seem to be a whole lot of changes. You have two administrations 
that made it a top priority. I mean, I expect that Governor 
Brown wants this just as bad as Governor Schwarzenegger did, 
and both wanted to have a streamline fast process, but we have 
had anything but that so far, and we have nothing that you 
could sell to Congress and certainly couldn't sell them to a 
private company that would want to do this.
    I am just still looking 4 years into this and seeing a plan 
that actually makes sense that I can take back home and sell to 
the people of my district.
    One final question, we continue to hear Members talk about 
the train to nowhere, I think Mr. McCarthy would take offense 
to that, Bakersfield is not nowhere. But the question is if you 
get on Amtrak from my district, and want to go to southern 
California, when you get to Kevin McCarthy's district, you have 
to hop off a train and hop on to a bus to get to the Tehachapi 
Mountains. What is the plan to get high-speed rail over to the 
Tehachapis?
    Secretary LaHood. I will be happy to submit that for the 
record, and I will also be happy to have Dan Richard come to 
explain the high-speed rail plan to you.
    Mr. Denham. Thank you, I yield back.
    Mr. Mica. Mr. Denham, I caution some of the terminology, 
after I saw some of the proposal early on, I remember I phrased 
it slow speed trains to nowhere, and I got a number of 
delegation letters, people from Illinois telling me how they 
were somewhere, so I had to modify my verbiage. Ms. Edwards.
    Ms. Edwards. Thank you, Mr. Chairman. Secretary LaHood, 
thank you so much because every time you have appeared before 
this committee, not only are you forthright about everything, 
but your passion for high-speed rail is so evident, I want you 
to know that there are plenty of members on this committee who 
share that and not just for where we live, but for a network 
that would eventually run across this country and I know that 
that is part of the vision. And I think that you are right, you 
have to start with a vision and then begin to build on that. 
And punch through, as I said before, punch through the 
resistance.
    Some this committee and particularly on the other side of 
the aisle talk an awful lot about a bottom-up approach and 
renewed focus on what States want and what States define for 
their own needs versus the Federal Government. And yet, in the 
discussion about high-speed rail it seems to be quite the 
reverse quite frankly. And so when the applications came in 
from the States to the Department, did you all have to twist 
arms to get applications?
    Secretary LaHood. Absolutely not. As I indicated earlier, 
when Florida decided not to accept $2.3 billion, we put out a 
notice for that money, we had $10 billion worth of requests.
    Ms. Edwards. So you didn't force a State assembly or a 
Governor to submit an application, you didn't force them to 
take the money?
    Secretary LaHood. We didn't call anybody and ask them to 
take the money. We put a notice out and we were flooded with 
applications.
    Ms. Edwards. And so in California their assembly, their 
Governor, they are on board? They submitted the application, 
you reviewed the applications, just like you did for the 
Northeast Corridor, just like you did for my State of Maryland, 
and then made some decisions about--and those applications 
could have come from Montana to Chicago, or from anyplace else 
around the country.
    Secretary LaHood. That is right, that is right, it was a 
free and open, fair competition.
    Ms. Edwards. And I know we started out, you described that 
we started out with essentially--it is a startup, you didn't 
have staff expertise, you hadn't made the grants develop the 
application process or review the application process, it is 
like having a startup company.
    Secretary LaHood. That is right.
    Ms. Edwards. And now here we are 4 years later really ready 
to do something; is that right?
    Secretary LaHood. That is correct.
    Ms. Edwards. Let me just ask you about the freight rail. I 
discussed that earlier, I understand there are agreements with 
the freight rail industry. Are you looking at technology that 
will enable this kind of dual use of the freight and the 
passenger rail system so that we can achieve the highest speeds 
possible?
    Secretary LaHood. Absolutely. Our goal is to make sure that 
according to the legislation, high-speed rail is defined at 110 
miles per hour, now California will be higher.
    Ms. Edwards. Do you think 110 miles is a bad definition?
    Secretary LaHood. I think it is a pretty fast train. Look--
--
    Ms. Edwards. In some places when you get on high-speed 
rail----
    Secretary LaHood. I have been on trains in Spain and other 
countries, in China, that go 250, 300 miles; I would love to do 
that. You are never going to get a train going 250 miles an 
hour along the Northeast Corridor, nor would you want to. But 
in California, where we are building new infrastructure, do it 
at 200 miles an hour, which is what we are going to do. In 
Illinois, the best we can do is 110 miles per hour. Would we 
like to go 200? Of course we would, but it is not possible.
    Ms. Edwards. So it is a standard that we can live with----
    Secretary LaHood. That is right.
    Ms. Edwards [continuing]. As high-speed rail. And then 
there has been some criticism as well that it is money that 
hasn't been spent yet. Do you think it is actually even 
reasonable to have actually spent the amount of money without 
developing the plans and rigorously reviewing those and making 
obligations for the studies that are required for those, and 
isn't it actually OK simply to have obligated the money and 
still ask for more because we can obligate more?
    Secretary LaHood. What I am proudest of, over the last 4 
years, you haven't seen any bad stories about boondoggles, 
earmarks or sweetheart deals when it came to the $48 billion, 
of which $8 billion was high-speed rail, none. We did it the 
right way, by the book, because, that is the way we were 
supposed to do it. We did it the way Congress asked us to do 
it, and we put 65,000 people to work over the last 4 years with 
the $48 billion with 15,000 projects. Now, if people think we 
have been too slow, fine, I will take the criticism. But nobody 
is going to criticize us for any sweetheart deals, boondoggles 
or earmarks, none.
    Ms. Edwards. Mr. Secretary, thank you so much. We are, as 
others have said, 50 years behind Japan, another couple of 
years is not going to hurt us, thank you very much.
    Mr. Mica. Other Members seek recognition?
    OK, I think we finished all of our regular--I am sorry, 
Mr.--I thought you had already spoken.
    Mr. Denham.
    Mr. Denham. Thank you, Mr. Chairman. I just wanted to go 
back to this NEPA issue, because it seems like one of the 
biggest areas that, hopefully you can get bipartisan support 
on, it has come up whether it was the transportation bill that 
we had debated here, or a number of other amendments where you 
have got CEQA, the highest environmental quality regulation in 
the land, why would you go through it twice?
    My staff pulled up a number, I guess the Federal Government 
has 179,000 NEPA waivers, a lot of those most recently on a lot 
of the wind projects. So it would only make sense to me that 
you would at least investigate this, and that staff had done 
179,000 of them would at least maybe question this project on 
whether or not we needed----
    Secretary LaHood. Look, Mr. Denham, I take your point, I 
think it is a good point. I am going to go back and talk to 
California about this. We don't do wind projects in our 
department. OK?
    Mr. Denham. I understand that.
    Secretary LaHood. So if you have an example of a NEPA or 
something like that at Transportation, I would be glad to hear 
it. Your question was have I ever talked to the Governor about 
this? No, I haven't, have I ever talked to anybody in 
California about it? No, I haven't. Have I ever talked to 
anybody in my staff about it? No, I haven't. I take your point. 
I am going to start talking to them about it.
    Mr. Denham. Thank you. I look forward to seeing a 
resolution on that specific issue.
    I still want to come back to the budget numbers. I realize, 
and I would agree with you that I would rather go slow than to 
try to speed through this and not have a full plan. And I have 
yet to see a plan, I am still looking forward to seeing that. 
But last time we were talking last year it was a $98 billion 
project, I know there are some new ridership numbers, now we 
are talking a $68 billion project with a different timeline. I 
know that there have been some changes with the Rail Authority. 
But on the $68 billion, the numbers I have here as Proposition 
1A would be 12 percent of the project, the Federal funding 
which has already been obligated would be 4.8 percent of the 
project, the unfunded piece, $38.6 billion that was unsecured 
Federal funds, 56.4 percent of the project.
    Do you anticipate that that would be a request from 
Congress on stimulus dollars? Do you think it will be part of a 
budget? Any idea where that 56 percent or $38.6 billion will 
come from?
    Secretary LaHood. Well, I will just be honest with you, Mr. 
Denham, I would hope that we could find Members of Congress 
that wouldn't prohibit the Federal Government from funding 
high-speed rail projects, that is a good first start. We--look, 
as long as there is language in bills that prohibits us from 
funding, we are with going nowhere. So if you would be good 
enough to withdraw your language in that appropriations bill, 
or tell Mr. McCarthy to do that, that would be a good first 
start for us. We are not going to get $1 as long as there is 
language in the appropriation bills that says no Federal money 
can be spent on California high-speed rail. That doesn't help 
us, that doesn't help us get any more money to the project. So 
that is why I say we are looking for private investment.
    Mr. Denham. The amendments are not meant to help you, we 
agree on that. The amendments are meant to stop this project 
until we see a plan. You and I have been talking about this for 
2 years now.
    Secretary LaHood. And the last time we talked about it----
    Mr. Denham. I want to go back to my district and say here's 
the plan.
    Secretary LaHood. The last time we talked about it, I 
suggested you sit down with Mr. Richards, Dan Richards and go 
over the plan and review it. Now I will be happy to have Mr. 
Richard call on you and sit down with you and review in detail 
what the plan is. So if he does that, will you withdraw your 
language?
    Mr. Denham. When you can show me that this project is fully 
funded and we have a private investor----
    Secretary LaHood. We are not going to get it fully funded 
as long as there is language and bills that says we can't have 
any money. How do we fully fund it?
    Mr. Denham. Mr. LaHood, I have been hearing this story for 
many years now. When it first came up in front of the State 
Senate, it was if you will just support this, we will have a 
private investor before it goes to the ballot. We just need to 
be able to show that the legislature supports it.
    There was no private investor. They said wait a minute, if 
we just pass it, if the voters pass it, then we will have a 
private investor for sure because we will show that the State 
is obligating these funds and we will be ready to go, there is 
still no private investors. They said wait a minute, if we just 
get the stimulus dollars, we will definitely have a private 
investor come in because now we have got the State, we have got 
the Federal and we have got the voters on the hook for the $33 
billion. Then it became a $98 billion project that would take 
an extra decade. We said, OK, well, if we just have the true 
numbers, a private investor will come.
    So I keep hearing about these private investors, all these 
steps that if we just jump through one more step, we are going 
to have this private investor. So until we have a fully funded 
project, till we have a private investor that says look, OK, I 
understand you guys have some amendments, and I understand you 
guys have some disagreements, but here is what it is going to 
take, is it $36 billion? And the private investor is going to 
come up with 10, 12, or 15? Then let's see how that makes 
sense.
    Look, I am a businessman too, I run a company. I know I 
can't go out there and borrow money or expand my business or go 
sell a new product until I have got a business plan to sell to 
investors. You are trying to sell me on a plan so that I don't 
put any more amendments out there, I just want to see the 
numbers, my district wants to see the numbers. And I think the 
State that is obligated State dollars needs to see a plan as 
well.
    I am out of time, I yield back.
    Mr. Mica. The gentleman now yields to Ms. Hahn, thank you, 
and welcome to our panel. You are recognized.
    Ms. Hahn. Thank you, Mr. Chairman, and let me go on record 
to say I totally, 100 percent agree with the idea of extending 
the Green Line into L.A. International Airport; there is no 
other international airport in the world that doesn't have a 
good transportation system that goes directly into a terminal. 
The thought that people stop a mile short and try to get on a 
shuttle and get to the airport is the reason people aren't 
taking public transportation, so I agree with you.
    Mr. Mica. I no longer will be able to stop all the projects 
until he gets that done. I will just torpedo a few.
    Ms. Hahn. I am with you on that. And Mr. Denham, I hear 
your comments about the possibility of waiving NEPA and CEQA, 
and I do remember our legislature falling all over themselves 
to waive that when it came to building a football stadium in 
Los Angeles. So I think the conversation is certainly one we 
ought to have, if there was any way that would soften your 
stance or get your support of our California high-speed rail, I 
would be the first one to start that conversation. I think that 
is something we definitely ought to have.
    And Mr. Secretary, it is great for me to sit here and 
listen to your passion and really believe a vision in what a 
high-speed rail would mean, not just to California, really to 
this country. And I know, Mr. Denham, I know you have a lot of 
concerns about this, although I do know that I believe you were 
in the legislature in 2009 when you were on a letter that 
actually--you wrote to Secretary LaHood, you know, believing in 
the project then, agreeing with the project and asking for 
stimulus dollars to be given to California. So I know----
    Mr. Denham. I voted on it, I was fooled at one time, and 
now we are trying to fix that situation.
    Ms. Hahn. That is OK, but you had the hope and you had the 
vision at that time. I think we can get back to that. I think 
we should get back to that. I hope there comes a day when our 
whole California delegation will be in support of really being 
the model for this country and making sure that Federal 
Government invests in it. And, you know, it has been called the 
train to nowhere, but Mr. Secretary, you talked about this new 
project where we are going to be building the rail cars in 
Illinois.
    There are already jobs that are going to be created. There 
is already money that is going to be into our economy as a 
result of this, even if it is a somewhat unconstructed vision 
that we have of the high-speed rail in California. So I hope to 
be one of the champions here in Congress a long time to 
continue to urge us to finally build the high-speed rail in 
California. It would be a proud moment for this generation. As 
you said, what are we going to build that is great and 
significant and has incredible impacts for jobs, for the 
economy, and for the future of transportation, for tourism. In 
Los Angeles, tourism outpaced goods movement as the number one 
industry. So we want to tourist dollars in California. Those 
are the dollars that matter to us. But the only thing I'm going 
to ask is, there is always a bureaucracy that has to implement 
the plans, the progress, the process, and can you tell me, 
Secretary LaHood, how has the California High-Speed Rail 
Authority been in working with your department? Have they been 
open? Have they been responsive? Is this a good agency as we 
move forward to build this significant project?
    Secretary LaHood. First of all, Dan Richard is an 
extraordinarily gifted chairman, very knowledgeable about high-
speed rail and knowledgeable about how to get things done in 
California. I think Governor Brown's other appointees are very 
good, are very dedicated people. I have been very impressed 
with the board. Jeff Morales is also a very gifted individual 
and very committed to doing this the right way, doing it 
correctly, and working with all the stakeholders in California. 
I think the right people are really in place right now. And I 
wouldn't have said that a couple of years ago.
    I will tell both you and Mr. Denham this, on a trip that I 
made to California, I spent 3 days along the Corridor, 
primarily in Fresno but in the Central Valley, and I met with 
some farmers and as a former Member of Congress, I was stunned 
by the way they had been treated by the previous people that 
were in place, treated very shabbily, treated very arrogantly. 
And Dan was in that meeting, and Dan and I made a commitment to 
these farmers--and we met with some small business people in 
Fresno who had also been treated shabbily. And I don't blame 
them for being against this project. But we told them we would 
make it right for them. We listened to them, Dan has gone back 
and listened to them, and we are trying to work with these 
people who have spent their whole lives in agriculture, whose 
farms have been in their families for 100 years, and who have 
been treated very shabbily by people in Government.
    We made a commitment, and I think Dan has followed through 
on that. And so I experienced the hard feelings. I don't know 
if some of those are your constituents or not, Mr. Denham, but 
I know this, these people in California were not treated right 
and I don't blame them one bit for feeling the way they do 
about this project. We have got to get them back. And we are 
working on doing that. I don't know if we will or not, but we 
are going to work on it. We need to do a lot better when it 
comes to the people along this corridor.
    Mr. Denham. Will the gentlelady yield?
    Ms. Hahn. Yes, I yield to my friend from California.
    Mr. Denham. You are 100 percent correct. When this was sold 
to the voters of California back when it was a proposition, I 
would say they did a very, very good job of going out and doing 
a lot of outreach to farmers throughout the Central Valley and 
getting a lot of actual support for the project at the time. 
And then there were changes that happened within the Authority 
and they went out and lost, burnt a lot of those bridges, lost 
a lot of those relationships, and it is going to be a difficult 
road to get them back on and supportive. But it is something 
that I would look forward to engaging with your office on 
because I, quite frankly, you will have a hard time getting my 
support if we can't rectify things for those farmers that feel 
like they are going to lose their farms in this process.
    I yield back. Thank you.
    Ms. Hahn. Well thank you very much, Mr. Chairman, for 
letting me be part of this committee. I am an unabashed 
supporter of high-speed rail, and I look forward to working 
with my colleague in California, Mr. Denham. I think not only 
can we get over all the obstacles to build this high-speed 
rail, I think there is a possibility we are going to get Mr. 
Denham's support for this project.
    Mr. Mica. I thank the gentlelady for yielding back. And let 
me say in conclusion, well, let me clear up one thing for the 
record, because there is a lot of confusion about where I stood 
and others stood on the link in Florida which was 84 miles, and 
the administration came forward I think initially with a $1 
billion offer, and it was initially rejected. The Secretary was 
gracious, and came back with a $2 billion offer and that was 
rejected.
    Finally, to try to make an incredibly substantial 
commitment, the Secretary, I remember the discussion we had, 
came back with I think it was close to $2.4 billion out of a 
$2.7 billion. And I tried to work with all the parties. At 
first it would not work at $1.7 billion even at $1.2 billion, 
questionable, but the Secretary did go to every extent.
    The problem was, and I tried--again, it was not a high-
speed rail project, but it was an important intercity passenger 
lane and I tried to negotiate with the Governor and others and 
there were others other interests in the State that wanted to 
go all the way to Tampa. The Governor did review it. There were 
serious concerns about the link from the tourist area, Disney 
to Tampa, the Orlando to the tourist area it is a no-brainer. 
It should be built, it can be built, it can be self-sustaining, 
it can be a great project. But we couldn't get a compromise to 
build it in phases. Tampa had had problems and still has 
problems, one of the few cities without a fixed transit system 
in that size category. I think there are only two left in the 
United States now.
    But the Secretary and I did all we could in our power to 
make that happen, it just didn't happen and the money did come 
back, and I was pleased that a good portion of it did go into 
the Northeast Corridor but we can't do that piecemeal, we can't 
do it Band-Aid. We need to do it and get it done not in 30 
years, but in a fraction of that time, and we can make that it 
happen. One reason I came back and will be here a very active 
member of this committee, even though not maintaining the chair 
is to get that done. We will figure out a way.
    If we have got a multibillion-dollar project in California, 
it is not going to be a dog, we are going to, we want success, 
we need a plan, we will work with folks, we need to expedite it 
if we are going to do it, and then we need to see that it is 
connected into a place it would serve. So we will work 
together.
    I thank the Secretary for his cooperation and his 
commitment.
    Secretary LaHood. Thank you.
    Mr. Mica. Publicly, I just want to say how much I have 
enjoyed our working relationship from probably the very hour 
you got the call that you were going to be Transportation 
Secretary to today. So on your birthday, congratulations.
    Secretary LaHood. Thank you.
    Mr. Mica. And this livened it up. It will probably add to 
your longevity. They say that stimulation is good for the 
heart, so we wish you many more prosperous and healthy 
birthdays.
    Secretary LaHood. Thank you all very much.
    Mr. Mica. Thank you. We will excuse the Secretary and we 
will turn to our next panel.
    Our next panel consists of Mr. Mitchell Behm, assistant 
inspector general for rail, maritime and economic analysis, the 
U.S. Department of Transportation. Second witness is Ms. Susan 
Fleming, director of physical infrastructure, Government 
Accountability Office, GAO. Then we are also privileged to have 
as a witness the Honorable Paula J. Hammond, secretary of 
transportation for Washington State, chair of AASHTO High-Speed 
and Intercity Passenger Rail Leadership Group, and chair of the 
States for Passenger Rail Coalition. The Honorable Ann 
Schneider, secretary of transportation for the State of 
Illinois. And finally, the distinguished Mr. Ed Hamberger, 
president and CEO of Association of American Railroads.

  TESTIMONY OF MITCHELL BEHM, ASSISTANT INSPECTOR GENERAL FOR 
RAIL, MARITIME AND ECONOMIC ANALYSIS, UNITED STATES DEPARTMENT 
    OF TRANSPORTATION; SUSAN A. FLEMING, DIRECTOR, PHYSICAL 
 INFRASTRUCTURE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE; HON. 
PAULA J. HAMMOND, P.E., SECRETARY OF TRANSPORTATION, WASHINGTON 
    STATE; CHAIR, AMERICAN ASSOCIATION OF STATE HIGHWAY AND 
  TRANSPORTATION OFFICIALS HIGH-SPEED AND INTERCITY PASSENGER 
  RAIL LEADERSHIP GROUP; AND CHAIR, STATES FOR PASSENGER RAIL 
     COALITION; HON. ANN L. SCHNEIDER, SECRETARY, ILLINOIS 
    DEPARTMENT OF TRANSPORTATION; AND EDWARD R. HAMBERGER, 
PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN 
                           RAILROADS

    Mr. Mica. I would like to welcome all of you. I tell you 
that we appreciate your patience. As you can tell, we have had 
some lively discussion to date. There is a lot of interest in 
the passenger rail service, intercity and high-speed, we look 
forward to your contribution. If you have a lengthy statement 
that extends beyond 5 minutes, without objection, it will all 
be considered as part of the record and included in the record.
    We welcome you, and we will now begin and we will start 
with Mr. Mitchell Behm who is the assistant inspector general 
for rail, maritime and economic analysis of the Department of 
Transportation. Welcome, Mr. Behm, and you are recognized.
    Mr. Behm. Mr. Chairman, members of the committee, thank you 
for inviting me to testify on the FRA's implementation of the 
Nation's High-Speed Intercity Passenger Rail Program. Since we 
raised concerns in April 2010 about FRA's ability to meet this 
challenge, we have seen FRA make noteworthy progress in 
implementing its grants program.
    To date, FRA has awarded and obligated nearly all of the 
$10.1 billion in grant funds. However, it has only disbursed 
about 8 percent of these funds due in part to challenges in 
completing key components of its grants management framework 
and stakeholder agreements. My testimony today will focus on 
these two challenges.
    To establish a sound foundation for a grants management 
framework, FRA developed policies and procedures for grant 
solicitation, administration, oversight and closeout. However 
FRA has not developed sufficient guidance for FRA's staff and 
grantees on how to comply with these policies and procedures. 
Through our survey of FRA staff, we learned that grantees did 
not always meet the agency's grant obligation requirements for 
documenting project scope, schedule and budget. Nine of 12 
grantees we interviewed indicated that FRA could have provided 
more guidance to help them develop the required application 
documentation.
    Providing guidance on how to navigate the complex grant 
life-cycle process could help FRA prevent any inefficiencies, 
mismanagement and project delays. FRA has established work 
groups to develop this guidance, but has not established 
timelines for completion for all of these work groups.
    FRA's grant management framework also lacks clear strategic 
and performance goals for assessing the grant program's 
progress and grantees' performance. For example, the goal to 
improve reliability, speed and frequency of rail passenger 
service does not include measures that indicate progress such 
as anticipated trip time improvements, additional trains or 
ridership gains. A lack of specific performance measures as 
well as inconsistencies across documents containing strategic 
and performance goals make it difficult for grant managers, 
decisionmakers and other stakeholders to measure progress and 
identify risks.
    FRA also needs to develop a comprehensive training program, 
one that incorporates its program policies and procedures to 
ensure staff appropriately and consistently administer funds 
across all active grant programs.
    To help fill its training gap, FRA has required its program 
staff to attend agency-provided training on grant monitoring, 
applicant outreach and other relevant topics. However, FRA has 
not required staff to complete training for recognizing common 
fraud schemes such as conflicts of interest or false statements 
claims and certifications.
    Historically, large scale grant projects, such as those 
under the High-Speed Intercity Passenger Rail Program, have 
been particularly vulnerable to these types of fraud. FRA 
agreed with our recent recommendation to develop a 
comprehensive grant management training curriculum that 
includes a required fraud training component. FRA expects to 
complete the curriculum by the end of this calendar year.
    Finally, all stakeholder agreements need to be completed in 
order for FRA to disburse obligated funds to project grantees. 
Prior to obligation, FRA ensured that grantees for all long-
term projects completed service outcome agreements. These 
important agreements outline the benefits that will result from 
the infrastructure investments.
    While FRA obligated all of the funds within the ARRA-
mandated deadline, other required agreements related to 
maintenance and construction were not complete. The deadline 
for extending ARRA funds and completing construction is 
September 2017, a compressed timeline for complex projects, 
such as creating a new rail corridor or expanding or 
reconfiguring an existing one.
    For projects with maintenance and construction agreements 
that remain outstanding, the timeline for completion becomes 
even more compressed. Short-term projects, which were intended 
to stimulate economic recovery, have also been delayed. FRA 
originally planned on obligating funds for these projects by 
September 2010, but did not complete this effort until 
September 2011 as a result of the focus on completing the long-
term project service outcome agreements.
    According to FRA officials, stakeholder agreement 
requirements for short-term projects were completed on a case-
by-case basis instead of providing guidance for completing 
these agreements. Grantees of these projects reported that 
without this written guidance, they had difficulty 
understanding FRA's expectations regarding the terms of the 
stakeholder agreements. Stakeholders also noted that delays in 
obligating funds impacted their ability to plan and complete 
their short-term projects.
    We will continue to monitor FRA's progress in finalizing 
grant administration guidance, establishing clear program goals 
and measures, and completing a comprehensive training 
curriculum, all actions we have recommended, as well as other 
areas we identify as critical to ensuring FRA's successful 
implementation of the High-Speed Intercity Passenger Rail 
Program.
    Mr. Chairman, this concludes my prepared statement. I will 
be happy to answer any questions you may have at this time.
    Mr. Denham. [presiding.] Ms. Fleming, you are recognized 
for 5 minutes.
    Ms. Fleming. Mr. Chairman, members of the committee, thank 
you for the opportunity to discuss the Department of 
Transportation's High-Speed Intercity Passenger Rail Program. 
As you know, this program was established to provide grants to 
States and others to develop high-speed, intercity passenger 
rail corridors and projects. As of November, almost $10 billion 
has been obligated for about 150 projects. Projects range from 
multibillion-dollar high-speed rail systems, like that in 
California, to smaller projects designed to improve speed, 
frequency, reliability of conventional rail service.
    My testimony today will discuss our ongoing review of the 
California project. I am providing our preliminary observations 
on our work to date, mostly related to project costs. But I 
will also highlight some of the key challenges facing this 
project.
    First, based on our ongoing review, we have found that the 
California High-Speed Rail Authority's cost estimate exhibits 
strength and weaknesses. We have evaluated the cost estimate 
according to GAO's Cost Guide, which provides best practices 
for developing reliable cost estimates. We group these best 
practices into four broad characteristics, whether an estimate 
is comprehensive, accurate, well documented and credible.
    Based on our experience, adhering to these practices helps 
to reduce the risk of cost overruns, missed deadlines and unmet 
performance targets. Overall, we found that the Rail Authority 
produced generally comprehensive cost estimates including most 
project life-cycle costs. However, they are not based on a 
complete set of assumptions, such as how the Rail Authority 
expects to adapt existing high-speed rail technology to the 
project in California. The cost estimates are also accurate in 
that they are based on the most recent project scope including 
inflation adjustment and they contain few mathematical errors.
    In regards to documentation, while most assumptions and 
methodologies are well-documented, in some cases, we were not 
able to trace the final cost estimate back to the source 
documentation. We also could not verify how certain cost 
components, such as trains and stations, were calculated.
    Having complete documentation is important so that changes 
to the estimates can be tracked and updated and key decisions 
are documented and defensible.
    Finally, in regards to the cost estimates' credibility, the 
Rail Authority did conduct a sensitivity analysis and an 
independent cost estimate, but these were limited to the 
initial construction segments.
    In addition, it did not conduct risk and uncertainty 
analysis to determine the likelihood that the estimates would 
be met. Without these steps, decisionmakers cannot identify the 
risks that may affect the project's costs.
    Moving on to my second point. In addition to developing 
reliable cost estimates, the California high-speed rail project 
faces many challenges. Chief among these is obtaining project 
funding beyond the initial 130-mile construction segment. While 
the Rail Authority has secured $11.5 billion from Federal and 
State sources, it needs at least $57 billion in additional 
funding to complete the project. As with any large public 
infrastructure project, it is relying on public funding, in 
this case, about 81 percent for the total construction costs. 
The remaining financing is expected to come from unidentified 
private investment once the system is operational.
    As a result of this financing challenge, the Rail Authority 
is taking a phased approach, building segments as financing is 
available. However, given that the High-Speed Intercity 
Passenger Rail Grant Program has not received funding for the 
last 2 years and future funding proposals about Federal funding 
will likely be met with some concern, the largest block of 
expected funds for completing this project is tentative.
    The Rail Authority will also face the challenge of 
developing reliable ridership and revenue forecasts. These 
forecasts are important to assessing the financial viability of 
the project. Factors such as limited data and information, 
especially early in a project, make developing such forecasts 
difficult.
    In addition, risk of inaccurate and biased forecasts are a 
recurring challenge for sponsors of the project. Research on 
ridership and revenue forecast for rail projects worldwide have 
shown that ridership forecasts are often overestimated and 
actual ridership is likely to be significantly lower than 
forecast.
    Among the other challenges facing the project which may 
increase the risk of project delays are potential legal 
challenges associated with State and Federal environmental laws 
and acquiring necessary right-of-way acquisition.
    Mr. Chairman, this concludes my statement. I would be 
pleased to answer any questions you and other members of the 
committee might have.
    Mr. Denham. Thank you.
    Ms. Hammond, secretary of transportation for Washington, 5 
minutes.
    Ms. Hammond. Thank you. Mr. Chair, members of the 
committee, this is an important hearing to think about not only 
lessons learned through the development and implementation of 
the High-Speed Rail Program, but looking forward to pre-ARRA 
authorization. We States who are responsible for delivering and 
operating the rail systems in our States are committed and 
encouraging you to continue a rail program of this kind. 
Passenger rail in our States of Oregon and Washington has been 
in place since 1994 where we have partnered from the State 
level with Amtrak and in our State, Burlington Northern Santa 
Fe, in a collaborative approach to an incremental delivery of 
high- and higher speed rail programs and service.
    So as we have been investing over the years, we see the 
implementation and the creation of a national vision as a very 
important part of what we are trying to deliver.
    We have a 460-mile corridor between Eugene, Oregon and 
Vancouver, British Columbia. We have achieved in the last year 
up to 850,000 passengers, and our growth is increasing year 
over year in the 10-percent rate.
    We have, in our State, invested over $480 million in 
capital and operations in Amtrak Cascades, which is what we 
call our program. But it wasn't until the Recovery Act came 
that we were able to make significant capital infrastructure 
improvements on the rail itself. Sidings, double-tracking, 
positive train control, all of those amenities that will 
benefit high- and higher speed rail and more frequent service 
for passenger rail also has ancillary benefits to our freight 
rail and freight movement in our State.
    We in Oregon are very trade-dependent nations, and one of 
the things we are very careful about in not only updating our 
passenger rail program and plan for the future is to look at 
both freight and passenger rail movement and how we can coexist 
in the same corridor together because that is our plan.
    We have received $800 million of the high-speed rail 
program money. We have five projects currently under 
construction with another five coming into construction in the 
next year.
    The improvements, while they bring important investments in 
our ability to increase our service, also have created jobs. 
More than 2,300 jobs will be created in just the capital 
infrastructure and the indirect benefits from those jobs. But 
what we are looking for is the long-term stable travel choice 
for passenger rail in our corridor along the I-5 corridor on 
the west coast because our States are growing. We can't build 
enough lanes on the highway side nor do we want to to provide 
passenger service.
    We want trains, we want commuter rail, we want light rail, 
and we want an integrated transportation system for the 21st 
century that our citizens deserve and we need to ensure that 
their taxpayer dollars are well spent.
    We have had an overall positive experience with the high-
speed rail implementation. We recognize that the Federal 
Railroad Administration was starting from being a regulatory 
agency trying to move into the grant delivery agency and we 
have had some challenges as have they; but, they are dedicated 
people. If they are staffed and resourced at the level that is 
required to have oversight of a performance-managed system, I 
believe they will continue to do well and excel in this 
program.
    We do need the written guidance from the Federal Railroad 
Administration, it helps us State and us mainline rails know 
what is coming and know what is expected of us. That can 
streamline the delivery of the program as it moves forward.
    We also believe that with the benefits that have been made 
in the MAP-21 reauthorization as we look to PRIIA, the more we 
can streamline and coordinate things like NEPA, environmental 
permitting, so that all of the Federal U.S. DOT agencies can 
serve as a one DOT agency, and streamline and find that the 
processes and the environmental documents can be concurrently 
delivered and accepted from one agency to another, Federal 
Highway Administration has been in this grant business or 
delivery business for a very long time. They are good at it. We 
have found some efficiencies and streamlining there. I think we 
can expand that to Federal Railroad Administration and continue 
to have great success.
    The other issue we have had is needing consistent guidance 
from the Federal Railroad Administration on the Buy America 
program. We wholeheartedly agree with and encourage Buy 
America, manufacturing created in the United States, and to 
continue to grow our Nation's economy in that way. But we are 
in a transitional period, and we have had some challenges in 
trying to get waivers for as much as 5 months on a clip for a 
rail tie that probably shouldn't have taken that long as we are 
in this transitional period.
    So figuring out how to accommodate the goal of Buy America 
but finding a way to get there in a transition period I think 
would be good.
    I know I am out of time or getting close I would just 
suggest that as we move to PRIIA, we would love to see this 
program continued. We do know that there are prioritization-
based investments that should and could be made. Performance-
based investments are the way of the future. We are committed 
to it in Washington State. We support that and we think that 
the taxpayers should continue to see the benefits for the 
dollars invested. But we also believe that passenger rail is 
where it is at, it is where our future needs to go, and we 
appreciate the vision of the President and the administration. 
Thank you.
    Dr. Bucshon. [presiding.] Thank you for your testimony.
    Ms. Schneider, secretary of transportation for the State of 
Illinois, 5 minutes.
    Ms. Schneider. Thank you, Mr. Chairman and members of the 
committee. I appreciate the opportunity today to submit 
testimony to you on behalf of Illinois Governor Pat Quinn to 
give you an update on the High-Speed and Intercity Passenger 
Rail Program in Illinois. First, I want to thank the members of 
the committee, the entire Congress and the Obama administration 
for supporting a healthy intercity passenger rail system, for 
your leadership on freight rail infrastructure needs, and for 
supporting improved service with words and money.
    We are grateful for the investments from the American 
Recovery and Reinvestment Act, which have provided more than 
$1.4 billion for Illinois high-speed rail. And I can tell you 
that these current investments in the Illinois high-speed 
passenger rail system are already supporting thousands of jobs 
and providing economic benefits with much more on the way. And 
we could not do it without Federal help.
    We need continued Federal funding for high-speed rail so 
that we can finish the job that we have started and keep our 
promises to travelers and taxpayers.
    These investments will continue to pay dividend, and the 
American people deserve no less.
    We ask that Congress appropriate additional funds for 
States making these investments including Illinois and the 
Midwest. What would have been the destiny of Illinois and the 
entire Midwest had the Nation's rail system not been centered 
in Illinois in the mid-19th century. Very simply, neither 
Illinois nor the Midwest would be the transportation hub of the 
Nation that it is today and the State's diverse economic base 
would not exist as we know it.
    Fortunately, Illinois was made the center of national rail 
development, and today, Illinois hosts a 7,300-mile rail 
network that serves as a keystone in moving passengers and 
freight across the State, the region and the Nation.
    Passenger rail service is crucial to Illinois' multimodal 
transportation network and has never been more important than 
today. Illinois helps fund 28 Amtrak trains serving four high 
use corridors from Chicago to Milwaukee, Chicago to St. Louis 
and instate, from Chicago and Quincy to Carbondale and to the 
west and to the south. Those trains carried a record 2.2 
million passengers last year. Ridership growth in Illinois has 
been exceptional, up more than 74 percent since 2006, and on 
the Chicago to St. Louis high-speed rail corridor, our 
passengers have increased by 224 percent since 2006.
    And this increasing public demand is why we were proud to 
debut higher speed service in October on the Dwight to Pontiac 
segment of the St. Louis to Chicago high-speed rail corridor 
with Secretary LaHood and Governor Quinn on the train. And by 
Thanksgiving, we began delivering that same 110-mile-per-hour 
experience to regular Amtrak passengers every day.
    Intercity passenger rail is already stimulating development 
on the corridor in cities like Normal, Illinois, where new 
multimodal station has attracted $200 million in related 
private investment and in Joliet, where construction of a new 
multimodal station is underway.
    Plans also include new or improved stations for six other 
cities on that corridor. And we have, as the Secretary LaHood 
mentioned earlier, created 250 new jobs in Rochelle, Illinois, 
where railcars for California and the Midwest are being built. 
And last week, I was able to witness Caltrans giving that 
manufacturer the notice to proceed.
    Illinois and the Midwest collaboration on high-speed rail 
began in 1980, but gained traction in the 1990s when a 10-
State, Midwest rail initiative did joint studies and prepared a 
plan of staged development for high-speed rail to upgrade 
existing track, add passenger rail frequencies, and use new 
technologies to enable faster, safer passenger trains on all of 
our existing rail corridors.
    With years of solid planning in place, Illinois and its 
Midwest partners were ready to move quickly on April 16 in 2009 
when President Obama called for a national network of connected 
high-speed rail corridors.
    Secretary LaHood earlier properly compared the President's 
vision to the 1950s blueprint for building the U.S. Interstate 
Highway System. The Federal Railroad Administration awarded 
Illinois $1.2 billion in January of 2010 to upgrade to 110-
mile-per-hour passenger rail service between Dwight and the 
East St. Louis area.
    And Governor Quinn made Illinois a full partner in this 
vision with his commitment of $400 million in State funds for 
high-speed rail from his $31 billion capital program known as, 
``Illinois Jobs Now!''.
    Federal awards that year also provided funding to construct 
a key rail fly over in the Englewood neighborhood on Chicago's 
South Side to help improve mobility and help augment high-speed 
service for Chicago St. Louis and for the Chicago Detroit 
corridor which is the next expected high-speed route in the 
Midwest. In that route, Illinois has invested $200,000 in State 
funds on the tier one study for that corridor in cooperation 
with Michigan and Indiana. And work is progressing to provide 
needed positive train control by fall of 2015, which will 
enable high-speed service to commence on almost 75 percent of 
that 285 Chicago to St. Louis corridor reducing overall travel 
time by an hour.
    Clearly, Illinois is still moving quickly on its high-speed 
vision, a vision that Governor Quinn is passionate about and 
shares with President Obama as a key component of a world-class 
national rail system.
    Please let me reiterate at this point knowing that I'm out 
of time that continued Federal funding and support for this 
vision of a national high-speed rail service has never been 
more critical than it is right now. And thank you for the 
opportunity to testify today.
    Dr. Bucshon. And thank you for your testimony.
    Mr. Hamberger, it is good to see you and you have 5 
minutes.
    Mr. Hamberger. Thank you, Mr. Chairman, Congresswoman 
Edwards, Congressman Cummings, on behalf of the freight rail 
members of the Association of American Railroads, thank you for 
the opportunity to be here today. For the record, I would like 
to associate myself with the remarks of Secretary LaHood on the 
leadership that Chairman Mica has exhibited the past 2 years in 
this committee.
    As Secretary Schneider and Secretary Hammond can attest, 
our Nation's freight railroads are successful partners with 
passenger railroads all across the country. Approximately 97 
percent of Amtrak's 22,000-mile system consists of tracks owned 
and maintained by freight railroads, and the high-speed and 
intercity passenger rail projects under development nationwide 
will largely, but not exclusively, utilize freight-owned 
facilities.
    In addition, hundreds of millions of commuter trips each 
year occur on commuter rail systems that are at least partially 
owned by freight railroads. Privately owned and operated, 
America's freight railroads in recent years have been investing 
more than $20 billion of their own capital to expand and 
maintain a freight rail network second to none.
    In simple terms, we are carrying the load so that American 
taxpayers don't have to.
    At a time when there is growing concern about the state of 
this country's transportation infrastructure and who should be 
paying what to do the job and maintain it, freight railroads 
are making these record investments in the country's rail 
system to be ready to meet America's business needs and to help 
the economy grow in the years ahead. Our commitment to 
continued private investments supports millions of jobs across 
the country and spurs economic development in cities both large 
and small.
    Secretary LaHood and his team certainly understand that 
America's economic health and global competitiveness would 
suffer greatly if the integration of future passenger rail with 
freight rail operations is not handled smartly.
    I have often heard the Secretary say and confirmed with him 
this morning that it is still his view that yes, America needs 
a world-class passenger rail system, but not if it comes at the 
expense of what is already the world's best freight rail 
system.
    The AAR has long advocated that true high-speed rail must 
operate on dedicated track and in a sealed corridor.
    In the meantime, moving to higher speed rail on a mixed-use 
basis does present significant challenges. These challenges can 
be more easily met if five key principles are followed:
    One, safety has to come first when it comes to passenger 
trains sharing track or rights of way with freight trains. 
Differing speeds and operating characteristics must be 
accommodated with safety as the number one goal.
    Second, capacity issues, including the ability to grow both 
freight and passenger service in the future, must be properly 
addressed. On some corridors, current or expected freight 
traffic levels may mean there is no spare capacity for 
passenger service. In these cases, new capacity will be needed 
before passenger trains can operate.
    Third, if passenger trains use freight railroad assets and 
property, it is reasonable for the host freight railroad to 
expect full and fair compensation.
    Moreover, freight railroads should not be subject to any 
new local, State or Federal tax liability as a result of being 
a partner in a passenger rail project.
    Fourth, freight railroads must be adequately protected from 
liability associated with hosting passenger service.
    Finally, each project involving passenger rail service on 
freight-owned tracks in general and high-speed rail projects in 
particular has its own unique challenges and circumstances. To 
mix the two, agreements must be tailored to the specific needs 
and conditions of each project.
    Freight railroads support passenger rail and support 
Government efforts to grow passenger rail in ways that make 
economic sense and that complement freight rail growth. Freight 
railroads are, therefore, committed to working with Government 
officials, passenger rail stakeholders and others to ensure a 
winning result for all parties involved.
    Thank you for your attention.
    Dr. Bucshon. Thank you.
    And we will get into some questions here then.
    Mr. Behm, your testimony explains that the FRA staff said 
additional guidance is needed to help ensure compliance with 
policies and procedures.
    What efforts are underway to ensure this is occurring and 
what also are the risks if we don't have further guidance to 
the States?
    Mr. Behm. We have made recommendations to the FRA to 
enhance the guidance that they provide to the States to both 
their FRA staff as well as the State grantees. I think that it 
wasn't a matter that FRA was not willing to provide this 
guidance, but obviously considering the challenges that they 
were faced with in establishing this program from the ground 
up, ultimately one of the largest discretionary grant programs, 
really addressing things on kind of a critical-path basis, and 
first identifying and developing the policies and procedures 
and then going ahead and proceeding with developing this 
guidance was the way that they approached it.
    Basically they have agreed to develop work groups at our 
recommendation and additionally to get feedback from the State 
grantees as well as FRA staff in order to ultimately establish 
better guidance.
    Dr. Bucshon. Thank you. Ms. Fleming, you explained that the 
estimates will change as the project moves into construction. 
Does that mean that it is fair to say that costs will increase? 
Do you have a way to predict future cost growth in projects 
like this?
    Ms. Fleming. No. I don't have a crystal ball in that 
regard. But I think our bottom line is that the project is 
still in the early stages, and we would like to see some of the 
weaknesses that we have identified addressed, such as the need 
for the Authority to undergo a risk analysis that would help 
determine whether or not the estimate is too high, too low, and 
by how much. That would also identify what the key risks are so 
that policymakers and decisionmakers can try to mitigate those 
risks. So at this point, we don't know if--you know, the number 
will change obviously. The project scope will change, there 
will be refinements constantly to both the costs as well as the 
ridership forecasts. That is normal with this project. The 
Authority is trying to make those changes for each of the 
upcoming business plans. But the numbers will change. The tests 
will help try to determine the magnitude in terms of the risk 
and how to address that.
    Dr. Bucshon. Mr. Hamberger, in your view, what are some of 
the--and you explained some of this in your testimony, 
technological, legal and logistical hurdles that we are going 
to need to overcome if we are going to share existing freight 
rail right-of-way with passenger rail trains.
    Mr. Hamberger. One of the biggest concerns, frankly, is 
safety. If you have a disparate set of speeds you know from 
your highway experience that that increases exponentially the 
risk of accidents. It is true on railroads as well that a 
faster train will close the gap with a slower train faster than 
expected. Many grade crossings are set to react to a certain 
train speed. If you have a faster train and a slower train 
moving on the same corridor, how do you operate a system so 
that the gates go down in time?
    In addition, there are different classes of track. As 
passenger trains operate at higher speeds, the track has to be 
maintained to a much greater standard and frequency. Moreover, 
a heavier train, for example a grain train, would exhibit 
forces on the track that might make it unsuitable for the 
higher speed passenger train. So all of these things need to be 
taken into account.
    Dr. Bucshon. I think sometimes there is this impression we 
are using existing track and using existing right-of-way is 
easier and cheaper than just building new track. The same thing 
is true with highways, I think. And obviously, it sounds like 
with a lot of the logistical hurdles with train speeds just 
assessing that, and straightening all that out, as you pointed 
out, is going to be something that is very difficult and 
costly.
    Mr. Hamberger. Indeed and you also asked about the legal 
and contractual issues. Obviously, the freight railroads are in 
operation to serve America's communities, to serve America's 
farmers and manufacturers, and get their goods to market. And 
so, as I mentioned under the capacity principle, we have to 
make sure that there is adequate capacity to keep America's 
economy moving as well.
    Dr. Bucshon. Thank you. I yield to Ms. Edwards.
    Ms. Edwards. Thank you, Mr. Chairman, and thank you to our 
witnesses and also for your patience today. As you can tell, 
there is a lot of interest on this committee, even on an off 
day around high-speed rail. So thank you very much.
    Secretary Hammond, some on this committee have criticized 
the administration for providing Federal funding for higher 
speed rail. I wonder if you can tell us about some of the 
improvement riders would see as a result of investments that 
are investing in higher speed rail and not just high-speed 
rail, and why that would be important.
    Ms. Hammond. As I mentioned, in Washington State since 
1994, we have been working on an incremental approach to 
growing passenger rail service in our State. As we have 
additional round trips, additional speeds and additional 
reliability of service, we are finding our ridership growing 
year over year. And when you think about the unique 
characteristics of different States, for us in Oregon, the 
Pacific Northwest and the I-5 Corridor the West Coast Corridor 
for us is linking between some pretty rural areas but between 
Seattle; Vancouver, BC; Seattle and Portland, Oregon; and 
Eugene, Oregon; we have some major business markets and the 
opportunity for travelers who are tourists to enjoy our rail.
    For us, it wasn't going to work to start from scratch and 
immediately institute a high-speed rail line. We have too many 
communities linking throughout that West Coast Corridor that 
wanted to enjoy the benefits of rail and wanted us as a State 
who is contributing and putting our own State dollars into it, 
they wanted to see the benefits in that incremental fashion.
    So for us, I think that Washington State will always be a 
higher speed or at least in the next 20 to 30 years, be a 
higher speed passenger rail program, but it works for us and it 
works for our businesses and our major communities that it 
links.
    Also, I would like to say that as we work closely with 
Burlington Northern Santa Fe on this notion of sharing the 
corridor, it is a decision that we made, Burlington Northern 
Santa Fe has bought into it and the notion for us in the amount 
of increments and passenger trips that we intend to make, the 
investments we are making on that freight rail line will not 
only benefit passenger travel, but our freight movement in our 
State, as we are a most dependent trade State. And as the 
economy recovers and their business continues to grow, we think 
the investments are going to help us be very compatible and 
help continue service in both areas.
    Ms. Edwards. Let me turn first to Ms. Fleming on this 
question of sort of estimating ridership as a way to determine 
whether it makes sense to develop a line because I think as 
Secretary Hammond has pointed out, they started out with the 
vision, but then over time, because of the investments they 
have made, the ridership has increased which then begs for more 
investments at different speeds.
    How is that factored into your analysis about whether there 
is an efficiency investing and whether it is the California 
Corridor or another?
    Ms. Fleming. We are still assessing California's process, 
the California process for developing its ridership and revenue 
forecasts. But our sense is that they have largely followed 
best practices. And in fact, the inspector general has put a 
really nice guide out there. But ridership and revenue 
forecasting is inherently risky. You are forecasting the 
future, it is an extremely complex undertaking. But that being 
said, it is critical to determining the viability of a project. 
And I think the key to this is that you have to be continually 
refining the estimates as the project scope changes, as things 
change, you just update the model, as the economy changes, so 
you are just constantly updating and refining. So that is the 
process that I think California is undertaking as well.
    Ms. Edwards. Thank you. Let me just turn, before my time 
expires, to Mr. Hamberger because I have expressed a lot of 
concern about the sharing of freight rail. I understand why we 
need to do this sharing in various places, but I wonder if 
you--if the freight industry has done some assessment about 
what that means in terms of its own productivity, 
competitiveness and those things because I share the concerns 
that the Secretary expressed when he was hear that we have a 
great freight system, it is private, it has great investment, 
and we don't want to do anything to damage that; at the same 
time, we do want to develop a high-speed rail. And then can you 
talk to me about the technology developments that actually are 
going to allow us to better share those systems?
    Mr. Hamberger. Yes. I see we have 4 seconds left, so let me 
get into that.
    Ms. Edwards. But I am sure that the chairman will let you 
finish your answer.
    Mr. Hamberger. Thank you, Mr. Chairman.
    Those issues--what are the impacts of passenger rail 
traffic on freight needs--are actually examined through a very 
site-specific analysis. The report by the inspector general 
indicated that some of these negotiations dragged on. Well, 
indeed they did. And they did because there were four parties 
sitting around the desk--the State, Amtrak, the Federal 
Government and the freight rail right-of-way owner--each of 
whom was looking at this through its own prism. The freight 
railroads wanted to make sure that not only could they continue 
to serve their customers today, but that they would be able to 
continue to serve their customers for the foreseeable future. 
That meant having models to assess what would be the growth of 
traffic for freight and what would the impact be of having 
passenger rail service added knowing that maybe that passenger 
service, if it was commuter service, would be heavy at certain 
times of the day. So how do you model that and find agreement?
    So yes, those discussions did drag on for some time. But 
they did come to successful conclusions. And so I think that 
says a lot about the freight railroads' desire, not only to 
serve their customers, but also to be willing participants and 
to work toward getting to ``yes''; on doing the right thing to 
help enable passenger rail, but again, not at the expense of 
freight rail.
    With respect to the technologies, I know you know about 
positive train control, but there are so many other issues that 
I tried to reference in response to Chairman Bucshon's question 
about sharing track at higher speeds. There is a general view 
that there is no issue really up to 79 miles per hour. And 
there are some corridors, again, based on specifics--and were 
you on that train? I understand you were--where I understand 
the train went to 111 mph actually.
    Ms. Schneider. I was.
    Mr. Hamberger. So it can be done. But again, a lot of 
resources need to be focused on it and a lot of cooperation and 
planning. It depends on the topography and on the freight rail 
traffic and geometrics. At some point, and we believe certainly 
110 mph is it, that it becomes almost impossible to share 
passenger and freight traffic on the same track. And that is 
why for true high speed--and I inferred from your question to 
the Secretary that you don't consider 110 mph to be true high 
speed--there needs to be dedicated track, dedicated right-of-
way and a sealed corridor.
    Dr. Bucshon. I recognize Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman, and I want 
to thank all of you for your testimony.
    Mr. Hamberger, I want to talk a little bit about Amtrak we 
had a very lengthy hearing a few days ago concerning Amtrak.
    Mr. Hamberger. Yes, sir.
    Mr. Cummings. And some in Congress have proposed mandating 
that States auction off Amtrak's long-distance and State-
supported routes to the lowest private bidder. Although Amtrak 
could compete for the service, it is unlikely Amtrak would be 
the lowest bidder since it provides good wages and benefits to 
its workers.
    What is your position on that type of proposal?
    Mr. Hamberger. The Association has long held the position 
that there should be one operator of intercity passenger rail, 
and that that operator should be Amtrak. There are a number of 
reasons for that, and you won't be surprised that we start with 
safety. Amtrak has the same safety culture that the freight 
railroads have. The freight railroads operate, in many cases, 
to the same safety standards. They have had 40-plus years of 
operating experience with Amtrak, and they are convinced that 
Amtrak has the same dedication to safety.
    Second, really, is security. Amtrak and the freight 
railroads, again, have a very good working relationship not 
only between themselves, but also with local law enforcement, 
and just as importantly, with the FBI's National Joint 
Terrorism Task Force Centers around the country.
    Freight railroads also know that Amtrak understands the 
operating characteristics that are necessary to have freight 
and passenger service work together.
    Freight railroads have had, again, a 40-year partnership 
with Amtrak, and there is concern about how the current 
contracts, the current labor agreements, and the various crew 
change agreements that are out there, would all be handled if 
the Amtrak intercity network were parceled out to other 
operators.
    And finally, I'm inferring from your question that you 
believe that perhaps the other bidders would not be covered by 
railroad retirement.
    Mr. Cummings. Yes, I'm very concerned, you read my mind. 
That is very good.
    Mr. Hamberger. That would be, in our opinion, a major 
problem not only for our current employees, but for retirees. 
As you well know from when we passed railroad retirement reform 
10 years ago, the railroad retirement system is already upside 
down six to one--that is, six retirees for every one employee. 
And Amtrak is 10 percent of the current railroad workforce. If 
that workforce were not part of the railroad retirement system, 
the payments into the system would perhaps not be enough to 
maintain the necessary payments to retirees. Also, under the 
law passed 10 years ago, there is an automatic increase in 
taxes both on current employees, up to 4.9 percent of their 
paycheck, and on the railroads to make sure that there is 
enough money in there to pay retirees.
    So again, that would be, from our standpoint, a major 
problem. We believe that steel wheel on steel rail means you 
are a railroad and therefore you should be paying into railroad 
retirement.
    Mr. Cummings. Director Fleming, you mentioned in your 
testimony that California high rail speed project is, by far, 
the largest high-speed rail undertaken in the country. Tell us 
what steps can be taken to apply to the lessons learned in 
California to other projects of this nature?
    Ms. Fleming. The project is still in fairly early stages, 
but obviously has improved in terms of its management 
structure. I think we heard earlier that with the current 
management structure folks feel pretty comfortable and 
confident, but it doesn't mean there still aren't improvements 
needed. I think that the modeling that they have undertaken, 
they have been working very closely with different academics as 
well as peer review groups to constantly refine and fine-tune 
the models and processes they are using, and so people are 
feeling that they are very open to addressing those types of 
comments and criticisms.
    I think that they have been working pretty closely with FRA 
as well. FRA just hired and put a senior executive in 
Sacramento to work hand in hand and to help oversee the 
project. So I think these types of things are probably lessons 
that could be applied to other projects in the country.
    Mr. Cummings. Thank you very much. I see my time has 
expired.
    Dr. Bucshon. We are going to have another round of 
questioning here. I'm going to start with Ms. Schneider since I 
grew up in Illinois about 20 miles south of Springfield in a 
town called Kincaid, Illinois, and I lived in Chicago from 1984 
to 1988, that kind of dates me a little bit. I used to take the 
train from Chicago to Springfield; my parents would pick me up 
because I didn't have a car when I lived there, I was going to 
med school so I am going the address this question to you.
    When we are talking about high-speed rail, we are talking 
about maximum speed, at some point along the track we will get 
to 110 miles per hour. But the question I have is average speed 
and time savings going different distances, for example, going 
from Chicago to Springfield, I can't recall exactly, but we had 
a couple other stops in suburban Chicago, and I think Joliet 
and Normal and other places.
    So investments in, and Ms. Hammond, I will ask you about 
this too, investments in increasing our top speed to 110 miles 
per hour could cost us quite a bit of money, but when you start 
looking at average speed, and then you start excluding 
communities that will have access to train, because you are 
going to go from Chicago to St. Louis, and you are going to 
have a high-speed train, I get that. But to do that and do 
that, in my view, to be true high speed, you are going to have 
to exclude a bunch of these people in the middle and have a 
separate service for that. So is it worth, you think in certain 
areas, would it be worth the cost to get the average speed up, 
I mean, to get the top speed up to a certain level but really 
the average speed and the time it takes you to get from here to 
there doesn't really change much?
    Ms. Schneider. Actually by 2015, when we are complete with 
the high-speed rail corridor between Chicago and St. Louis that 
travel time is going to drop from 5\1/2\ hours to 4\1/2\ hours 
that is a significant change in travel times. And we are doing 
that without removing any of the station stops that are 
currently along that corridor. And in fact, many of the 
communities that have station stops currently are making 
significant investments in the areas around where those 
stations are, and where those stations will be located. For 
instance, in Alton, they are working on developing a transit-
oriented development around the station that will be built to 
accommodate the high-speed rail corridor there, they are going 
to move from their current location to this new station.
    So we are experiencing, through our investments, that type 
of improvement in travel time. And if we complete the buildout 
of that corridor as we currently have an EIS with FRA to 
double-track that entire corridor, if we are able to identify 
the financing to do that double-tracking, we are going to be 
looking at travel times from Chicago to St. Louis that are less 
than 4 hours, and currently they are at 5\1/2\. So I think that 
points to a very significant improvement.
    And I think that is also why we are seeing this increase in 
ridership of 224 percent over 6 years on that corridor because 
of those changes that people are anticipating.
    And I know personally for a fact that when I have tried to 
get on Amtrak coming back to Springfield from Chicago, when I 
am in Chicago, many times the train is full and you can't get 
on it, so there is excess demand that currently exists that 
can't be met.
    Dr. Bucshon. Ms. Hammond.
    Ms. Hammond. I think you have hit upon something that is an 
interesting tension as you develop passenger rail program. We 
also have a commuter rail program in Central Puget Sound that 
we have a regional transit agency that delivers that service. 
But as you increase and grow, service, reliability and speeds, 
every community along the way wants to have a stop. So, as we 
are being very careful and deliberative about how our higher 
speed rail will work as we move along and as we, in Oregon, 
have now just created a plan that will integrate our 
operations, so that departure times and arrival times all the 
way from Eugene up through to Vancouver, BC, are better and 
more concentrically delivered. It is more of a streamline 
service now. We used to have gaps in Seattle and gaps in 
Portland of time. So as we are trying to streamline the 
operations of that, we are looking carefully, for example, in 
the four and will soon have six roundtrips between Seattle and 
Portland, how many of those do stop at some of those 
intermittent communities? And how many are direct and high-
speed, truly higher speed, rail that is a streamlined or 
express service between Seattle and Portland, that works for 
business people, in the morning and evening kinds of routes and 
commutes.
    And we are trying to operate this much like the airlines 
do, as they think about service and times and where they have 
their directions of service. So it is turning into a much 
better integrated system, all the way from Eugene up to 
Vancouver, BC.
    Dr. Bucshon. Thank you.
    I yield to Ms. Edwards.
    Ms. Edwards. Thank you, Mr. Chairman, and thank you for 
this second round of questions.
    Secretary Schneider, I hated that the program that you 
oversee has been dubbed, ``Train to Nowhere,'' I think it is so 
incredibly disparaging. And so I actually want to ask you about 
the benefits when the recovery money was invested, because I 
understand that Governor Quinn announced the purchase of, a 
multistate purchase, of new passenger rail cars that are going 
to be manufactured in a new plant in Illinois. So those are new 
jobs, new train--new rail cars. And in fact, California is also 
purchasing some of those cars, and so we have created a piece 
of the industry that is really important to our manufacturing 
core. Can you talk about this and some of the other success 
stories in more detail so that we can name your program 
something else?
    Ms. Schneider. Thank you very much.
    I appreciate that, because I think the communities in 
Illinois feel very strongly that are being served by higher 
speed trains that they are someplace.
    In terms of the rail equipment, we have partnered with the 
California Department of Transportation; the State of Illinois 
represented the Midwest Consortium, so we represented the 
States of Michigan and Missouri in that procurement. And as a 
result of that procurement, a new manufacturer that has chosen 
to locate in the State of Illinois, because Governor Quinn 
actually aggressively went after that manufacturer before it 
was even known that they would be building any rail cars for 
this initiative Nippon Sharyo located in their facility in 
Rochelle, Illinois, and they have hired 250 people, and this is 
from nothing. We weren't competing with other States for those 
jobs; those jobs are new jobs to the United States, new jobs to 
Illinois. So that is clearly a success story there.
    That facility also is making some transit cars for Metro, 
which is the suburban Chicago fixed rail system for commuters, 
so that is a big success story.
    And I think I talked briefly about Normal, Illinois, in my 
comments. Normal, Illinois, is the home to Illinois State 
University, and that, in Illinois, is the station with the 
second highest ridership, second only to Chicago, and that is 
because they have built this wonderful station; they used TIGER 
funds to build this station. That is a station that connects 
the riders getting off of the train with transit so that they 
can get to their locations inside Bloomington-Normal. Off of 
the high-speed rail corridor, in some of the intercity 
passenger rail corridors, much of them serve our university 
towns, and Macomb, Illinois, which is a small town in western 
Illinois, is home to Western Illinois University. And they have 
seen a decrease in students that register vehicles on campus 
from 80 percent of their student body to 60 percent of student 
body, and that is because of the train service coming out of 
Chicago, it is 100 percent on-time performance, typically we 
track that from week to week, and that is one of the best 
performing routes in Illinois. And there is that transit-
oriented facility at the end of that run, where they can take 
transit to get where they need to be.
    So we think that this has been a successful program in 
Illinois. We are excited about the future of it. In fact, the 
State actually invested $1.25 million in a 220-miles-per-hour 
study that looked at 220 train service from Chicago to 
Champaign, Illinois, where the University of Illinois flagship 
campus is, and then with legs going to Indianapolis and to St. 
Louis from there.
    We are also excited because our partner States are also 
participating, Governor Snyder, not Schneider, in the State of 
Michigan, we are working on high-speed rail corridor between 
Chicago and Detroit. Right now, there is 80 miles of that 
corridor that is currently at 110 miles per hour between 
Porter, Indiana, and Kalamazoo, Michigan.
    There is a lot of work to be done in the Chicago area on 
the CREATE program to help facilitate faster speeds to all of 
our corridors. So I think we do have a record of success, and 
we are building on that record of success. We are doing this 
incrementally, and we are doing it in a way that we have 
planned and makes sense to make sure that when we do deliver 
this service, that it is something that people are going to 
appreciate and demand.
    Ms. Edwards. Thank you. And we will make sure to describe 
it not only as a train to somewhere, but that train happens to 
be the 21st century. So thank you very much.
    As I close here, I would urge, Ms. Fleming, I don't know 
whether this is true or not, but as I read through your 
testimony, it occurred to me, that just in terms of figuring 
out some of the modeling, I don't know how much you used models 
that that have been sort of well developed with some of our 
international allies and their development of rail, because I 
think that they have learned a lot and just in terms of 
assessing ridership and costing, and those are things that we 
could learn as we develop our programs.
    Thank you very much, Mr. Chairman.
    Dr. Bucshon. Mr. Cummings.
    Mr. Cummings. Mr. Behm, one of the chief concerns in 
managing high-speed rail grant program is that some of the 
money that was intended to stimulate the economy through these 
projects has not actually been delivered, due to failure to 
complete service outcome agreements. It is one thing to apply 
for and receive grants, but quite another to get the job done. 
And so I am simply concerned about the confusion over 
implementation of the these projects. The FRA says that they 
made great strides in this regards since the IG's audit was 
completed. So can you tell us if they have taken all 
appropriate action to assure that these projects finally get 
underway? What else would need to be done?
    Mr. Behm. Well, I think one thing we point out in our 
report that is very important, and we thought it was a great 
thing they did to require these service outcome agreements to 
be reached before the funds were obligated. Because it is those 
agreements that ultimately ensure that the Federal investment 
that is being made is actually going to achieve the results 
that were intended to be achieved.
    That being said, again, this being a brand new program and 
these funds that need to be ultimately disbursed by September 
2017, which may seem a long time from now, but these are very 
complex projects, and the fact that a lot of time was spent 
with the negotiating of agreements, we are almost 4 years 
beyond the time that ARRA was originally passed; it is just a 
concern surrounding the fact of getting these projects going 
and completed, and getting beyond the meeting--completing the 
agreements. It is important the agreements be met, as Mr. 
Hamberger stated. There are many stakeholders involved here. 
Obviously, you have the Federal Government--FRA, you have FRA. 
You have the freight railroads in a shared infrastructure 
circumstance, and you have the States that are grantees 
themselves as well as the operator of the train.
    So I think all we were trying to get across is that, while 
we still are close to 5 years from the time when the money 
needs to be disbursed, that time for these types of projects 
isn't all that much.
    Mr. Cummings. Well, I know this has been quoted before, but 
you wrote in your testimony that the FRA mechanism for 
assessing grantee performance lacking civic authority lacks an 
effective tool to help staff track and manage monitor grantee 
compliance with documentation requirements including FF, 
Federal financial reports and various Recovery Act requirements 
and so on and so on.
    Let me ask you this, is this a situation in which grantees 
are not in compliance, or just that FRA doesn't have a tool to 
track compliance?
    Mr. Behm. I think it was, in general, really a learning 
process. I think, again, this was a situation where FRA had to 
generate and develop these policies and procedures from 
scratch. This is an entity with limited resources that was 
primarily focused on safety that had to develop this major 
discretionary grant program. So I--we didn't identify any 
fraud, waste or abuse. I think that there potentially were some 
inefficiencies, but I think, again, that can be expected by 
virtue of the fact that this program was created from scratch. 
I think that, in general, I would laud the efforts that FRA has 
done under these tight timeframes that they have been presented 
with in developing this program.
    Mr. Cummings. And so, where are we right now? Do you feel 
comfortable with where we are? Or do you feel that we still 
have a ways to go, FRA that is?
    Mr. Behm. I feel comfortable where we are right now. I 
think the fact that there has been a lag in additional 
appropriations being made has benefitted the FRA. In other 
words, I think that, again, based on limited resources, they 
first had to focus those resources on evaluating and awarding 
the applicants and developing policies and procedures. Now they 
are shifting their focus into providing oversight over those 
funds. So I think that the time allowing them to see these $8 
billion or in excess of $10 billion through has given them the 
ability to develop a program from beginning to end that 
ultimately should be successful.
    Mr. Cummings. Is there any additional advice that you would 
have for them?
    Mr. Behm. No, I think it is important, one of the things we 
identified was for them to develop some strategic and 
programmatic goals that are a little bit more consistent, along 
with some performance measures that would allow stakeholders, 
such as yourself, to identify whether or not the program is 
meeting its intended purposes.
    Mr. Cummings. Thank all of you for your testimony.
    Dr. Bucshon. Thank you very much.
    Are there any further questions from members of the 
committee?
    Seeing none, I would like to thank each of the witnesses 
for their testimony today. Your contribution to the discussion 
has been very informative and will be helpful to Congress.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may have been submitted to them 
in writing and unanimous consent that the record remain open 
for 15 days for additional comments and information submitted 
by Members or witnesses to be included in the record of today's 
hearing.
    Without objection, so ordered.
    Again, I would like to thank the witness for their 
testimony, and with no other Members having anything to add at 
this point, the committee stands adjourned.
    [Whereupon, at 12:44 p.m., the committee was adjourned.]
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