[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
              THE FEDERAL ROLE IN AMERICA'S INFRASTRUCTURE

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

                                (113-1)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 13, 2013

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


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



                  U.S. GOVERNMENT PRINTING OFFICE
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of 
JOHN J. DUNCAN, Jr., Tennessee,          Columbia
  Vice Chair                         JERROLD NADLER, New York
JOHN L. MICA, Florida                CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri                 RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
ANDY HARRIS, Maryland                GRACE F. NAPOLITANO, California
ERIC A. ``RICK'' CRAWFORD, Arkansas  DANIEL LIPINSKI, Illinois
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
BLAKE FARENTHOLD, Texas              STEVE COHEN, Tennessee
LARRY BUCSHON, Indiana               ALBIO SIRES, New Jersey
BOB GIBBS, Ohio                      DONNA F. EDWARDS, Maryland
PATRICK MEEHAN, Pennsylvania         JOHN GARAMENDI, California
RICHARD L. HANNA, New York           ANDRE CARSON, Indiana
DANIEL WEBSTER, Florida              JANICE HAHN, California
STEVE SOUTHERLAND, II, Florida       RICHARD M. NOLAN, Minnesota
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
REID J. RIBBLE, Wisconsin            DINA TITUS, Nevada
THOMAS MASSIE, Kentucky              SEAN PATRICK MALONEY, New York
STEVE DAINES, Montana                ELIZABETH H. ESTY, Connecticut
TOM RICE, South Carolina             LOIS FRANKEL, Florida
MARKWAYNE MULLIN, Oklahoma           CHERI BUSTOS, Illinois
ROGER WILLIAMS, Texas
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Hon. Edward G. Rendell, Cochair, Building America's Future.......     5
Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce...     5
Terence M. O'Sullivan, General President, Laborers' International 
  Union of North America.........................................     5

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Timothy H. Bishop, of New York..............................    47
Hon. Eddie Bernice Johnson, of Texas.............................    49
Hon. Timothy J. Walz, of Minnesota...............................    50

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Edward G. Rendell...........................................    51
Thomas J. Donohue................................................    58
Terence M. O'Sullivan............................................    77

                       SUBMISSIONS FOR THE RECORD

Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, request to submit written testimony from the 
  Water Infrastructure Network...................................    18

                        ADDITIONS TO THE RECORD

American Association of Port Authorities, Kurt J. Nagle, 
  President and CEO, written testimony...........................    81
American Public Works Association, Elizabeth Treadway, PWLF, 
  President, written testimony...................................    85
American Society of Civil Engineers, written testimony...........    92
Building America's Future Educational Fund, Building America's 
  Future: Falling Apart and Falling Behind (2012)........... \\
The Leadership Conference on Civil and Human Rights, Wade 
  Henderson, President and CEO, written testimony................    96
Water Environment Federation, Jeffery A. Eger, Executive 
  Director, letter to Hon. Bill Shuster, a Representative in 
  Congress from the State of Pennsylvania, and Hon. Nick J. 
  Rahall, II, a Representative in Congress from the State of West 
  Virginia, February 13, 2013....................................    99

----------
\\ ``Building America's Future: Falling Apart and Falling 
  Behind'' can be found online at the Government Printing 
  Office's Federal Digital System (FDsys) at http://www.gpo.gov/
  fdsys/pkg/CPRT-113HPRT79795/pdf/CPRT-113HPRT 79795.pdf.

  [GRAPHIC] [TIFF OMITTED] T8920.001
  
  [GRAPHIC] [TIFF OMITTED] T8920.002
  
  [GRAPHIC] [TIFF OMITTED] T8920.003
  


              THE FEDERAL ROLE IN AMERICA'S INFRASTRUCTURE

                              ----------                              


                      WEDNESDAY, FEBRUARY 13, 2013

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to call, at 11:00 a.m., in Room 
2167, Rayburn House Office Building, Hon. Bill Shuster 
(Chairman of the committee) presiding.
    Mr. Shuster. The committee will come to order. I first want 
to welcome everybody to today's first hearing of the committee 
in this Congress, and the subject matter is critical to the 
importance of the national economy. But I first need to start 
with something a little unpleasant but I need to make this 
statement before I go on. I want to make a short apology. Last 
night I was quoted in response to the President's State of the 
Union Address that I implied he was lying about CEOs that 
wanted to invest in a country that has high-speed rail. This 
type of incendiary rhetoric is not my style at all. I regret 
using those words, and while I continue to disagree with the 
President on this point, I do not think the President is a 
liar, and I think it is important I start that off as we move 
forward in a very positive way.
    Again I am pleased that everybody is here. It looks like we 
have a full house. I expect a lot of Members to come in on our 
side of the aisle. If you hear a gavel, seniority rules, but if 
a more senior Member comes we are going to go to the Members 
that were here at the beginning. So I figure you are here on 
time, you get to be rewarded.
    I am pleased to welcome our distinguished witnesses: the 
Honorable Ed Rendell, former Governor of the great Commonwealth 
of Pennsylvania. He is also the cochair of Building America's 
Future. Thank you, Governor, for being here today.
    Tom Donohue, the president and CEO of the U.S. Chamber of 
Commerce and a real advocate for transportation, I appreciate 
you and all your work you have been doing over the past couple 
of years.
    And Terry O'Sullivan, the general president of the 
Laborers' International Union of North America, thank you for 
taking the time to be here today. I can't wait to hear what you 
have to say.
    Transportation is important. It is about people and how 
they live their lives, how they get to work, how they get their 
children to school, how they buy food, clothes and other 
necessities, and how families visit one another around the 
country. It is also about business. Transportation is critical 
on how the supply chain functions, how raw materials get to 
factories, how goods get to the markets, how food gets from the 
farmers to our kitchens, and how energy products move from 
production areas to consuming areas. An efficient national 
transportation network allows business to lower transportation 
costs, which lowers production costs and enhances productivity 
and profits. It allows American business to be competitive in 
the global marketplace and for our economy to prosper and grow.
    One need only to look at our Interstate Highway System and 
see how that investment in our national transportation network 
has benefited our Nation and caused tremendous economic growth 
over the past two generations.
    The Federal Government has historically played a role in 
transportation. Remarkably, the event that unexpectedly led to 
the Constitutional Convention was a longstanding dispute 
between Virginia and Maryland regarding navigation rights on 
the Potomac River, regarding transportation improvements 
proposed by George Washington.
    George Washington was determined that the new Nation must 
have the capacity to be connected through effective trade and 
communications through transportation and infrastructure 
projects. However, Washington's efforts to extend navigation 
required a formal treaty between Maryland and Virginia and 
elaborate approvals from other States in the Continental 
Congress. To settle that dispute he convened a meeting at Mount 
Vernon, which was unsuccessful, and then he continued to work 
on it and then they called another convention in Annapolis in 
1786 to deal with the Articles of Confederation and how they 
would move forward on this issue of navigation rights, and that 
summit failed. And as the participants left they understood 
that if they were going to be a United States they had to 
improve the Articles of Confederation.
    This is a very real sense that the Constitutional 
Convention and the Constitution itself were in response to 
meeting the transportation and commerce needs of a young 
Nation, notably the Commerce Clause. It gives the Congress the 
power to regulate interstate commerce and create, in the words 
of the Preamble, a more perfect union. Article I, Section 8, 
clause 3 of the Constitution contains the Commerce Clause, 
which says, to regulate commerce with foreign nations among 
several States and the Indian tribes. And Article I, Section 8, 
clause 7, to establish post offices and post roads, and those 
post roads of the 1780s and 1790s are the highway system and 
the byway system that we use today. And we continued to invest 
over the centuries from the Transcontinental Railroad, to the 
Panama Canal, to the Interstate Highway System. And why, why do 
we do this? To ensure that the Nation was connected, support 
the needs of the U.S. economy and the American people.
    Our national transportation system binds us together, 
physically binds us together. As President Dwight Eisenhower 
observed, without the unifying force of commerce and 
transportation we would be a mere alliance of many separate 
parts. Congress must renew its commitment to providing a robust 
physical platform upon which the American people in business 
can compete and prosper.
    You know the consequences of inadequate transportation and 
infrastructure. A major event that compromise safety and 
efficiency of one mode can create a ripple effect throughout 
the entire system, impeding freight and passenger mobility.
    Last Congress we made solid progress towards addressing our 
infrastructure needs by passing surface transportation and 
aviation bills. And I give great credit to Chairman Mica for 
his leadership on both those efforts.
    But there is more work to be done and this committee takes 
the lead on promoting legislation that addresses our Nation's 
infrastructure needs. First up is WRDA, Water Resources Develop 
Act, which was last enacted in 2007 and ideally that bill 
should be reauthorized every 2 years. In September the 
Passenger Rail Bill expires and so we need to be working on 
that, dealing with safety and rail and also the passenger 
system in this country. And then the Surface Transportation 
Bill, which expires in September of 2014, which we are working 
on and we will use this hearing today as a kickoff and start 
working making progress towards that bill.
    We can be successful, we must be successful. It needs to be 
a bipartisan effort. We need to build consensus and work 
together. It will promote competitiveness and economic growth. 
We need to focus our resources where they are most needed, and 
I still believe we need to go further when it comes to reform 
programs. Spending taxpayer dollars wisely is needed. And those 
reforms moving forward to continue to do that to give the 
States the flexibility to speed up the time it takes to do the 
major transportation projects saves us time, saves us money.
    Investing in our transportation system is our shared 
responsibility if we want to ensure prosperity of the Nation 
for future generations. Every day I talk to my colleagues about 
the importance of our transportation system. The Nation's 
fiscal issues present many challenges and we are faced with 
difficult choices, but the consequences of inaction are dire. 
If we are successful, and I believe we will be, then we can 
facilitate economic growth and ensure Americans' quality of 
life for years to come.
    And with that I would like to recognize the ranking member 
of the full committee, Mr. Rahall, for an opening statement.
    Mr. Rahall. Thank you, Mr. Chairman. And I thank you for 
calling this kickoff hearing as your chairmanship begins, and 
it could not be on a more pertinent topic of our Federal role 
in transportation and infrastructure investment.
    I want to first welcome, although they may have just left, 
a delegation with whom I just met from the European Parliament 
Committee on Transportation and Tourism chaired by Chairman 
Brian Simpson. So I welcome them to our hearing today.
    Throughout our Nation's history the Federal Government has 
played a vital and inextricable role in the development of our 
infrastructure and the various transportation modes it 
supports. Our Founding Fathers enshrined a Federal role for 
transportation in our U.S. Constitution and the leaders that 
followed made the hard choices to build the Transcontinental 
Railroad and the Interstate Highway System. Together these 
investments connected our Nation from sea to shining sea and 
paved the way for a new age of American opportunity and 
prosperity.
    Today infrastructure investment remains an essential 
component of our economic competitiveness and ability to create 
desperately needed, good paying jobs. Despite the critical role 
that the Federal Government has played in the development of 
infrastructure for generations, it now faces an uncertain 
future. The hard choices of the past have given way to a 
political will that never sees beyond the next election. It is 
time to recognize that Congress must again make hard choices. 
We must again move beyond rhetoric in support of infrastructure 
and recognize that it is indeed about the money.
    Will we find the necessary resources to increase investment 
in infrastructure and ensure that we leave our Nation better 
off for the next generation? It begins with budget 
sequestration, which will hit the Federal budget in just 7 
legislative days. If Congress allows the sequester to go into 
effect this self-inflicted wound will cut infrastructure 
investment and eliminate thousands of good paying jobs. The 
sequester will cut about $1 billion from the U.S. Department of 
Transportation, $600 million from the Army Corps of Engineers, 
and $4 billion from transportation infrastructure programs in 
fiscal year 2013 alone.
    But the sequestration's impact on our transportation 
infrastructure would be minimal, it would be minimal compared 
to some of the budget proposals that we have recently seen put 
forward in this Congress. The chair of the Budget Committee, 
for example, has indicated that this year's budget resolution 
will require a balanced budget within 10 years. Now a balanced 
budget, certainly it is a laudable goal, but if the budgetary 
priorities chosen to balance the budget in 10 years closely 
mirror those that Chairman Ryan selected when he proposed to 
balance it over 30 years ago in the last Congress, the Federal 
Government will go from playing a leading role in 
infrastructure investment to just being one of the extras.
    Rather than cutting Federal investment, we need to be doing 
more, much more in my opinion to rebuild our crumbling 
infrastructure and put Americans back to work. One way we can 
do this is by making sure that our Federal investments in 
highways, bridges, public transit and passenger rail systems, 
airport projects and water infrastructure projects are crafted 
with American, American workmanship and support good paying 
American jobs.
    I will soon be introducing legislation, which I invite 
Members on both sides of the aisle to join me in cosponsoring, 
a bill that ensures our transportation infrastructure 
investments will be stamped Made in America. By closing the 
critical loopholes in our Buy America laws we can ensure that 
these investments, financed by the U.S. taxpayers, will be used 
to create and sustain good paying jobs in our local 
communities, not outsourced overseas.
    In conclusion, Mr. Chairman, I do welcome our witnesses 
today, three very good friends, Terry O'Sullivan from the 
Laborers' and Tom Donohue from Chamber of Commerce. We back a 
few years on this issue in his previous hat, as well as good 
friend the former Governor of Pennsylvania. I look forward to 
hearing their comments about financing and ensuring that our 
Nation's critical infrastructure investments continue to 
support jobs, economic growth and a strong middle class in this 
country.
    Thank you, Mr. Chairman.
    Mr. Shuster. I thank the gentleman. Again I would like to 
welcome our witnesses here, thank them for spending some time 
with us today. I ask unanimous consent that our witnesses' full 
statements be included in the record. Without objection, so 
ordered. Since your written testimony has been made part of the 
record we would like to keep you around 5 minutes, but I know 
you have an awful lot, the three of you, to say. So we will 
probably be a little bit liberal with that 5 minutes this 
morning.
    So with that, I recognize Governor Rendell for his 
statement.

TESTIMONY OF THE HONORABLE EDWARD G. RENDELL, COCHAIR, BUILDING 
 AMERICA'S FUTURE; THOMAS J. DONOHUE, PRESIDENT AND CEO, U.S. 
    CHAMBER OF COMMERCE; AND TERENCE M. O'SULLIVAN, GENERAL 
   PRESIDENT, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA

    Mr. Rendell. Good morning, it is a pleasure to be here, and 
let me say as a proud Pennsylvanian it is a pleasure to take 
part in your first hearing as chairman.
    Politicians, myself included, always talk about American 
exceptionalism. We talk about it, but I believe we have mostly 
recently given lip service to the term ``American 
exceptionalism.'' We can't be an exceptional country without a 
first-class infrastructure. And let the record show we don't 
have one anymore.
    In 2005, the World Economic Forum ranked the U.S. 
infrastructure number one in the world for economic 
competitiveness. Now 8 years later we rank 14th in the same 
study. Our air transport infrastructure ranks 30th in the world 
behind countries like Panama and Malaysia. Our port 
infrastructure ranks 19th in the world behind countries like 
Estonia and Iceland.
    It is no surprise as China has put $3.5 trillion into its 
ports in the last 10 years, Brazil has put $250 million into 
developing the Acu Port, which is bigger than the island of 
Manhattan. We don't even allow the Harbor Maintenance Trust 
Fund to fully fund port development and dredging. Only two 
ports on the east coast will be ready for Panamax. It is a 
disgrace. I don't want to hear anybody talk about American 
exceptionalism who is not ready to invest in our 
infrastructure.
    Building America's Future, the group that I founded along 
with Mayor Bloomberg of New York and Governor Schwarzenegger of 
California, issued a report 2 years ago and updated it last 
year called ``Building America's Future: Falling Apart and 
Falling Behind.'' And let the record show we are falling apart 
literally and we are falling behind our competitor nations.
    [The report is available at the Government Printing 
Office's Federal Digital System (FDsys) at http://www.gpo.gov/
fdsys/pkg/CPRT-113HPRT79795/pdf/CPRT-113HPRT79795.pdf.]
    Infrastructure is important for three reasons, it affects 
our public safety. We have seen that time and time again. It 
affects or quality of life, and most of all it affects our 
economic competitiveness. Metallurgical coal is highly prized. 
It is the food substance for the production of coke. China has 
a need for metallurgical coal despite the fact it is a big coal 
producing country. It is found in Australia and the U.S. Both 
countries are high labor cost countries, but Australia can 
produce and send metallurgical coal to China for one-fourth the 
cost the U.S. can because they can move their metallurgical 
coal from where it is mined to their port cities infinitely 
faster, more efficiently and more capably than we do. Goods 
movement is one of the keys to economic competitiveness, and we 
are getting our brains beaten in.
    Now the American taxpayers understand that. In the last 
four elections, taxpayers have approved transportation 
initiatives by 61 percent in the tough year of 2010 and 77, 76 
and 78 percent in the last three elections. It is Red State, 
Blue State, it doesn't matter. In Charleston the voters voted 
to raise their own sales tax to make the port of Charleston 
competitive because Charlestonians understand that their 
economy depends on a viable, effective efficient operating 
port. The American people get it, not uniformly, there are some 
examples of referendums that are being turned down, but for the 
most part they vote for tolling, taxes or borrowing to finance 
and fund infrastructure.
    The Federal Government can't do this alone, we understand 
that. State and local governments provide 75 percent of current 
infrastructure funding, but the Federal Government must be a 
player.
    Let me draw your attention to one part of the stimulus that 
I think we will all agree was enormously successful, and that 
was TIGER grants. TIGER grants were successful because for the 
first time we had a vehicle for multistate projects, where 
States could band together and come in and ask the Federal 
Government for help on a project that benefited many of them. 
Pennsylvania participated, as you know, Chairman Shuster, in 
two projects, the National Gateway and the Crescent Corridor. 
The National Gateway and Crescent Corridor each had multiple 
States involved, one was Norfolk Southern and the other was 
CSX. They were responsible for opening up freight in the 
eastern half of the country. I was able with the help of my 
fellow Governors to persuade a number of Governors, all six of 
us, to go in and put our own State money in. The companies put 
in about 40 percent of the money, but these projects would not 
have been underway producing good jobs were it not for the 
TIGER grant program. TIGER gave funds to both projects and they 
are both among the best things we have done for freight rail in 
this country in the last 50 years.
    Now Building America's Future has some specific 
recommendations, and I know I am running short on time but let 
me run through them quickly and then I am happy to answer 
questions.
    Mr. Shuster. Take your time.
    Mr. Rendell. First, we think there should be a short-term 
boost in infrastructure spending above and beyond MAP-21, and I 
think the Congress did a good job on MAP-21, a lot of key 
reforms, speeding up the process, cutting down the delays in 
environmental regulations, the increase in funding for TIFIA. 
MAP-21 was a very good step in the right direction, but we need 
a short-term influx I think along the lines that the President 
proposed. But if we do it, if you do it, we suggest you put a 
rider in called use it or lose it. When we met with the 
President 2 months after his election in Philadelphia in 2008, 
we recommended use it or lose it. By use it or lose it I mean 
if a State doesn't get its share of that money, out the door; 
if jobs aren't being created, if money isn't being put into 
roads or bridges then the State should lose the money. Under 
current Federal standards if the State obligates the money that 
is considered enough, but obligation doesn't mean work begins, 
it doesn't mean money is being spent, it doesn't mean jobs are 
created.
    You all know the impact of infrastructure spending. DOT and 
other experts estimate that for every billion dollars of 
infrastructure spending, 25,000 well-paying jobs are created 
and, Congressman Rahall, jobs that cannot be outsourced. And 
just think if we did $50 billion like the President 
recommended, that is 1 million, over 1 million well-paying jobs 
that can't be outsourced.
    But we think that we need much more than that. We think we 
need to be able to step back and look at the long-term 
infrastructure needs of the country, not just transportation. 
But how about our electric grid? Think of all the jobs we would 
create if we took a power line that is above ground and buried 
it. We would never have a Hurricane Sandy again, we would never 
have a winter storm Nemo again, we wouldn't have people in 
danger of freezing to death. Just think of the jobs we would 
create.
    Now, it is obviously an expensive proposition, but is it 
worth it? Well, you know the CBO in 2008 in a study estimated 
that we could spend $185 billion a year more on infrastructure 
and it could be justified by the economic and societal benefits 
that would be created. So we think--and we have written the 
President and asked for a commission appointed by the President 
and by legislative leaders to study and develop a 6-month 
study, a quick study, study and develop ways, one, identify 
what our needs are, our real needs, set priorities and figure 
out ways, and funding suggestions to give the Congress and the 
administration. Unfortunately we haven't gotten a reply from 
the President to the letter we sent him on November 1st, but we 
think that type of commission with experts, former elected 
officials, academicians, people who know the business is a 
great idea.
    Next we need an infrastructure bank. An infrastructure bank 
works. Ranking Member Rahall, you said you had the European 
folks in. The European Infrastructure Bank loans out hundreds 
of billions of dollars a year and they make money. They not 
only cover their administrative costs, but they actually make a 
profit. Even though the interest they charge is fairly low, 
they make a profit. You could fund $50 billion of loan capacity 
for $5 billion. Under Federal regulations you only have to do 
$1 for every $10 of loan capacity. Five billion dollars would 
produce fifty billion dollars. When you think of the success of 
the TIFIA program and think of the demand that exists for 
TIFIA, to create an infrastructure bank that could loan out $50 
billion, just think of the projects that would be undertaken by 
doing that. I know there are issues involved in the 
infrastructure bank, but I think it is important enough that we 
should resolve them.
    Tolling, you should lift the ban on States tolling Federal 
highways, highways that were built with Federal funding. Let me 
give you an example of a small State, Rhode Island. Rhode 
Island and Pennsylvania are two States that don't toll I-95. 
They grandfathered in all the States that tolled it at the time 
Congress passed the regulation barring State tolling. Rhode 
Island has enormous repair needs on I-95. Tolling would produce 
$39 million a year for Rhode Island. With that $39 million flow 
they could produce a half billion dollars to repair I-95 along 
the stretch that goes through Rhode Island. Without it they 
have no chance, and that stretch of I-95 will continue to 
deteriorate. The same thing is true in Pennsylvania. You know 
that I applied for one of the slots to toll I-80 and I was 
turned down by the United States DOT even though it is really 
the only way to continue to fund all of the needs in I-80 
because of its elevation and the weather that it endures. So 
unlock and free the States to toll their roads. I know there is 
a theory that you paid for it once, but yes, you pay for a car 
when you buy it, but you also pay to maintain it year after 
year after year.
    TIGER, we have to find a mechanism, maybe through the 
infrastructure bank, where we make money available for regional 
and multistate projects, for projects that States can't do 
alone, and you can't build. For those people who say let's get 
out of the business, Federal Government, well think about it, 
you can't have 50 separate highway systems, because if you go 
through Pennsylvania you have got to get through to Ohio. If 
you take a freight train through a State the freight train has 
got to have a compatible rail bed to go to the next State. You 
have to have a vehicle. And it is very important to create a 
vehicle to replace TIGER. TIGER produced the best in 
transportation projects, the most meaningful, well prioritized 
projects.
    Gas tax. I know it is a difficult time to consider taxes, 
but I think we have to fund our transportation system and I 
think the inescapable reality is for the short term that will 
require an increase in the gas tax. Over the long term we can 
have a form of vehicle miles traveled tax and there are 
unobtrusive ways of doing so, the technology is literally being 
developed that can do it in a nonintrusive way as we sit here 
and speak.
    And lastly BABs. BABs, Build America Bonds, was an 
enormously successful part of stimulus as well. The Federal 
Government helps States defray the cost of their own borrowing. 
The States still pay the majority of the cost of the borrowing 
but because the Federal Government participates it doesn't have 
to--if it is $100 billion the Federal Government doesn't pay 
$100 billion, the States pay the lion's share of it. But that 
extra help on paying off the debt service for BABs made BABs 
incredibly popular and incredibly useful for the States.
    So there are ways we can help, and let me conclude by 
saying two things. Number one, you are both right. There has to 
be a continuing Federal role for all the reasons I discussed 
and you are going to hear that as well from Mr. Donohue and Mr. 
O'Sullivan. There has to be a continued Federal role.
    Number two, American exceptionalism, if we believe in it, 
if it is not just words, if it is not just puffing, it is time 
to put our money where our mouth is.
    Mr. Shuster. Thank you, Governor.
    Mr. Donohue.
    Mr. Donohue. Well, I am tempted, Mr. Chairman, to say amen 
and let you go on. But first, Chairman Shuster and Mr. Rahall, 
it is very good to see you again, and Mr. Petri and all people 
I have dealt with while at the Chamber but more particularly 
when I was the ATA. And, Mr. Chairman, thank you for coming to 
our infrastructure conference today, which is going on right 
now. You did a great job and people were very pleased to have 
you there.
    Now, look, everyone here today agrees that infrastructure 
is important to our economy, to our country and to our 
fundamental way of life. We all agree that it is a topic worthy 
of a robust and honest discussion and debate. And we all agree 
that this debate is taking place against, as the Governor said, 
a few important realities.
    First, our infrastructure needs are highly significant. 
Second, the economy is weak and the Government treasuries are 
not full. Third, there has been a longstanding Federal role in 
infrastructure and that must continue.
    Fourth, whether justified or not, we are facing a 
credibility gap. Many of our fellow citizens still equate 
infrastructure with pork, with politics of waste, with 
inefficiency, and without a lack of serious priority setting. I 
would agree with you that most of that is not true, but we have 
got to deal with that reality. They are legitimate concerns of 
our fellow citizens that we need to go out and deal with. But 
none of this changes the fundamental fact that we have got to 
build and maintain a superior, globally competitive 
infrastructure and we have got to get the job done one way or 
another.
    There are many extraordinary things we have done in 
infrastructure. America's capacity to run its supply chain from 
a technological point of view, from a management point of view, 
from a competitive point of view is phenomenal, but it is 
risked every day when the infrastructure we run it on is 
deteriorating.
    The Chamber has its own ideas on how to do all of this, 
some of which you may like and some of which you may not. The 
one thing we can't do is neglect the problem. If we do, 
conditions and performance will get worse. I promise you it 
will not get better while we sit here and look at it. 
Materials, labor and land will get more expensive, we will miss 
opportunities for more dynamic growth, competitiveness and job 
creation, and we will also forego opportunities to save lives.
    So what does the Chamber think? We think we are going to 
have to raise more money. I thought the Governor raised a lot 
of issues. Would I agree on all of them? No, but I think they 
are all worth discussion. From a business standpoint, if you 
need something that is going to provide a good return, you have 
to go out and invest in it and buy it. That is why we are 
willing to pay more in gas and diesel taxes for something we 
know is going to make us more productive and efficient and 
lower our costs.
    The Chamber supports reasonable increases in gas taxes that 
are phased in and indexed to inflation. That should cover the 
Federal responsibility for several years until, as the Governor 
said, we can figure out a related revenue system.
    The private sector is also prepared to pump as much as a 
quarter of a trillion dollars into private-public partnerships, 
or P3s. Barriers to private investment, including regulations 
and administrative procedures that make project delivery take 
far too long, should be removed or reformed. Every State should 
have laws that not only allow but welcome P3s. Public-private 
partnerships introduce innovation in financing, project 
building and project delivery, they ease the strain on Federal 
and State budgets and they free up public money for projects 
that can't attract private investment. We ought to be doing 
more of them more often.
    The bottom line is that there is no path to a 21st-century 
infrastructure for a 21st-century economy without increasing 
both public and private investment.
    So let's talk about reforms. Though more funding is 
necessary, it will not be sufficient. We can't build the case 
for more public investment if taxpayers aren't convinced we are 
being good stewards with their money. Congress must end, and 
they are always working on this, waste, and target funding for 
the highest priorities. We have got to be careful about that. 
That means focusing on a sensible mix of solutions, not a 
single prescription, projects based on actual need and not on 
politics or ideology, and projects that get the biggest bang 
for the buck, jobs, economic growth, safety. That is why we 
appreciate MAP-21, as the Governor indicated, the freight 
provisions there. Done right, real freight plans should help us 
prioritize and figure out where to put the bucks.
    In addition, we can no longer allow cumbersome and 
expensive processes, environmental or otherwise, that delay or 
kill infrastructure projects.
    By the way, I will tell you on the energy side where, if 
you look at real spending across the board, a huge percentage 
of it has something to do with energy, it could be as much as 
60 or 70 percent. There are 351 projects that could have been 
done over the last few years and they are not there because of 
the ``not in my backyard, not in my neighborhood'' sentiment. 
And this is something we really have to look at. It takes too 
long to build anything in this country, and that discourages 
private investment, increases cost, and undermines public 
confidence.
    I was in--30 seconds--I was in China about 3 years ago. I 
remember this trip and I was in this 60-story hotel, beautiful, 
brand new in Shanghai. I looked out and there was a hole down 
there. They were building a hole, and there was a camp down 
there. I came back in 11 months and there was a hotel higher 
than the one I was in in that hole. Why? We don't want to do it 
this way, but they had a camp, they had people work 24 hours a 
day, 7 days a week, different people, and got that done. We 
don't have to go there, but we damn well have to compete. And 
that means that we have got to get busy and make some of this 
work.
    So this committee made a great start with MAP-21 and you 
had a lot of courage to do it, and we look forward to reforms 
in the water resources bill this year.
    So now let me conclude where I began. Neglect is not an 
option. Sitting on your seat and watching this thing is not 
going to work anymore. Our infrastructure system is a national 
asset. We built it up over generations, we have a 
responsibility to the people that invested in it before and the 
people that will use it in the future to go forward on this. It 
has fueled economic growth, enhanced our competitiveness, 
created a lot of good jobs, sustained our security. If well 
maintained, boy, that is the big question, it can continue to 
deliver outstanding benefits to all Americans.
    So I am pleased this committee has brought together a 
diverse group of stakeholders to share ideas and to create a 
dialogue on how we are going to do this. Closing the gap 
between needs and resources is going to require just plain old-
fashioned leadership. Everybody has got a bigger appetite than 
they have got the capacity to consume it, and we have got to 
make choices. Nobody likes choices, we have to make them and I 
am not going to like all of them, but we need to move forward. 
We need big solutions. So it is time to put the smallness of 
politics aside and come together as this committee has done 
over the years to make this work.
    Transportation is a great opportunity to prove that 
Democrats and Republicans can work together, that States and 
the Federal Government can each play an appropriate role, that 
businesses are stepping up to help meet a major national 
challenge, why the Chamber was founded, and that all parties 
can come together to actually get something done for the good 
of the Nation. We are ready to do our part. Just do it.
    Mr. Shuster. Thank you, Mr. Donohue.
    Mr. O'Sullivan, you are recognized.
    Mr. O'Sullivan. Thank you, Chairman Shuster, Ranking Member 
Rahall, and distinguished members of the committee. On behalf 
of the Laborers' International Union, the men and women who 
dedicate their lives to building America, I want to express our 
gratitude for the opportunity to speak to you today. Mr. 
Chairman, it is an honor to be at the first hearing under your 
leadership. We respect your willingness to take on what will be 
a tremendous challenge. We are confident that your commitment 
to our Nation and your family's legacy of safeguarding our 
fundamental infrastructure will serve you well. I am also 
honored to be here with two good friends, Tom Donohue of the 
U.S. Chamber of Commerce and Governor Ed Rendell of Building 
America's Future, both fine leaders of organizations with whom 
we share the goal of building a modern and lasting American 
infrastructure.
    LIUNA members helped build the critical infrastructure of 
our country, but we don't only build. Like all working people, 
we rely on the basic infrastructure of America every day. This 
foundation of our great Nation was created with a strong 
Federal role, and it must be maintained and strengthened with a 
strong and vibrant Federal role. There is no better example of 
the need for strong Federal leadership than the state of our 
Nation's infrastructure. The simple fact is you can't talk 
about solving a $2.2 trillion problem without a Federal role. 
We can't fix the 26 percent of our bridges that are deficient 
or obsolete without Federal leadership. Without a strong 
Federal role we can't address the fact that each day 7 billion 
gallons of clean drinking water is lost to leaking pipes or 
that each year 50 billion gallons of sewage overflows. Nearly 
50 percent of the locks on our inland waterways are 
functionally obsolete. By 2020 that will increase to 80 percent 
unless there is a strong Federal role.
    Mr. Chairman, we believe in an all of the above solutions, 
user fees, public-private partnerships, new sources of revenue 
and increased efficiencies. But at the end of the day it is 
clear that Federal Government must lead. We commend this 
committee for making that the topic of its first hearing.
    With all due respect, the challenge we are facing as a 
Nation is beyond the capacity of any one city, any one county 
or even any one State to address solely on its own. Without 
strong Federal action we will stay in the path we are on, 
investing 2 percent of our GDP in infrastructure while China 
invests 10 percent, free falling towards a Third World 
infrastructure. We need a new Marshall Plan to tackle this 
crisis, a new way to think about and invest in the basics of 
America. We need the same inspiration, dedication and visionary 
leadership that made us the first country to land on the Moon, 
allowed us to win the Cold War and to become a beacon of hope 
and promise around the globe. If we accept this challenge, we 
can build America and build our economy at the same time.
    The construction industry is in its worst downturn in 40 
years. There are 2 million fewer jobs in the industry today 
than there were in April of 2006. The construction unemployment 
rate is currently 16.1 percent. Mr. Chairman, members of the 
committee, there is real suffering within the construction 
workforce and the solution is staring us in the face. Needed 
infrastructure investment would create millions of jobs, and 
investing now protects taxpayers, because every year of 
inaction costs $150 billion due to further deterioration. There 
is no doubt we will need to put our collective efforts and 
heads together to tackle this issue, but it is a no-brainer 
that we must get started now. The decisions and actions of this 
committee will be life altering and as historic as the decision 
to build our Interstate Highway System. Our challenges are 
great, our hurdles are high and building the world to move 
forward won't be easy, but this committee can leave behind real 
assets that will benefit taxpayers and our entire Nation for 
generations to come. This isn't a Republican issue or a 
Democratic issue, every single American benefits from good 
roads, safe bridges, clean drinking water, efficient airports 
and waterways and good jobs.
    Mr. Chairman and members of this committee, thank you for 
the opportunity to offer this testimony. We at LIUNA are eager 
to work with you and know that together we can build America so 
America works.
    Mr. Shuster. Thank you much, Mr. O'Sullivan.
    I just want to remind those on my side of aisle we are 
going to recognize you in order of you being here before the 
gavel went down by seniority and anybody who came in after that 
we will go in that order. And I will brutally enforce the 5-
minute rule as we move forward because there are a lot of 
Members here today. So keep your eye on the clock, both sides 
of the aisle. I will brutally enforce the 5-minute rule. And I 
will start with myself and make sure I fall within the 5-minute 
rule, to lead by example.
    Governor Rendell, in your experience as a Governor I know 
you have dealt with the issue of trying to do something with 
user fees, you have dealt with a tolling issue, you tried the 
public-private partnership. With that experience just as a 
Governor, what do you believe the role of States should be 
working with the Federal Government--how should the States and 
the Federal Government divvy up or divide up their roles in 
funding infrastructure and moving these projects?
    Mr. Rendell. If I were king of the world, I would keep the 
basic system of how the Federal Government allocates money to 
each State. I think you have got to keep that for political 
reasons, et cetera. But then I would put money aside for large 
projects, the projects that are important to us 10, 15, years 
down the road, the freight system we have got to build and 
build from coast to coast. And I would put money somewhere and 
I would suggest the infrastructure bank would be the place to 
put it. But you can put it in DOT, you can create some sort of 
permanent TIGER program and make that competitive. The best 
thing about TIGER is that it was competitive and you won or 
lost based on the value or the benefit to the United States of 
America. I wouldn't put all of the money there because 
obviously each district has to get some money for its own 
individual needs, but create that second tranche of money where 
competitiveness is the rule, where prioritization is key, where 
cost-benefit analysis is the thing that drives it, and where it 
is part of a national plan. We haven't had a national plan 
since President Eisenhower built the Interstate Highway System. 
There is no national plan. If I were to ask--and there are 
Members who know a whole lot more about transportation than I 
do, if I were to ask one of you what is our plan for a freight 
system by 2014, could anybody give me an answer?
    Mr. Shuster. We don't have an answer. That is what we are 
going to develop though over the coming years.
    Mr. Donohue, I know the Chamber has an econometric analysis 
and it found that if the Nation placed higher priority on 
transportation we could add nearly a trillion dollars annually 
to the GDP. Can you talk about the best practices you saw the 
States using and apply that to the national level?
    Mr. Donohue. It is very interesting to go out and look what 
innovative States do. Every few months we have a number of 
Governors, Democrats, Republicans, in for a day to talk about 
innovative States, what are they doing to survive in a time of 
exploding regulation in their own State and federally, what are 
they doing to prosper with less money and a lot of the 
traditional sources and innovation has been great. I mean 
public-private partnerships are up, getting individual 
industries to make investments, working, as the Governor 
indicated, on some of those TIGER issues that came out, looking 
for ways to bring industry in who are going to also participate 
in this process. It is--by the way, I made a note here. I am 
going to send you all the stuff from today's conference that 
has all the numbers in it. But the bottom line is one of the 
great strengths in this country, as opposed to the EU, in other 
words we built this country State by State by State and then to 
a central Government. They are trying to invent something that 
is really quite interesting. And we have a way and the 
Governors have always been the innovators in this country, they 
have always been the people that were close enough to what was 
going on that they would find new ways to do something. And I 
am sure, Mr. Chairman, I am watching this love fest here with 
the former Governor and the new chairman, I am sure you are 
going to get all that stuff and you sort through it and we will 
help you. That is where the innovation is. Let's go get it.
    Mr. Shuster. Thank you, Mr. Donohue. My time has expired. 
With that I yield to Mr. Rahall.
    Mr. Rahall. Thank all, Mr. Chairman, and thank all three of 
you for your powerful testimony this morning. I know I heard 
all three of you correctly that there is a need for a Federal 
role in transportation. I think you, Mr. O'Sullivan, made that 
very loud and clear and I appreciate it. Just to ask each of 
you again and just a quick response to this and then I will 
move on in regard to a Federal role, but each of you support 
this Federal role in transportation investment as opposed to 
the so-called devolutionists who would turn it over to the 
State and have the State raise their own money and make their 
own transportation policy and decide which roads on their own 
will be built? You support a Federal role versus devolution? 
Yes, yes, yes?
    Mr. Rendell. Sure.
    Mr. Donohue. Absolutely.
    Mr. O'Sullivan. Absolutely.
    Mr. Rahall. Now let me move on. Of course the big issue is, 
as I said in my opening testimony and each of you have 
addressed it as well, is money. That is the big elephant in the 
room and how we pay for it. I believe I also heard each of the 
three of you say that all options should be on the table. Is 
that a yes, yes, yes?
    Mr. Rendell. Yes.
    Mr. Donohue. They should all be on the table. We prefer 
some to others.
    Mr. Rahall. I understand that, but all options should be on 
the table. Yes, yes, yes?
    Mr. O'Sullivan. All of the above unequivocally.
    Mr. Rahall. Both Chairman Shuster and I both have said that 
in the public arena and privately and elsewhere. Where we need 
some help though of course is coming up with the political 
will, if you will, the political courage, whatever you want to 
describe it, and I am not very optimistic that is going to come 
from this institution, all sides included when I refer to this 
institution.
    So I would ask you, is it not incumbent upon each of you to 
reach out across the Nation in a grassroots effort to members 
of your coalition, members of your organization to help bring 
that political will upon us here inside the beltway, to help 
build support out in America where I believe they see it a 
little more clearly than we do within the fog of the beltway 
about the need to come up with revenues to finance 
transportation? This is something they can see that benefits 
them and they way of better roads, more good paying jobs, all 
the issues that each you have referenced in your testimony. How 
do we build that type of support to come from the outside to 
the inside of the beltway?
    Mr. Rendell. Congressman, I don't know if there are any 
Virginians, I assume there are some, on the committee, but BAF 
had a forum down in Richmond, and the Tidewater mayors had 
delivered that morning a letter to Governor McDonnell and the 
General Assembly in which they said they needed more 
transportation funding. And they said, Governor, consider when 
we are dealing with our taxpayers, explain to our taxpayers 
what the cost of inaction is, the cost of doing nothing. To 
raise fees and gas taxes according to inflation in 
Pennsylvania, which I wanted to do my last year as Governor, 
would have cost the average driver about $120 a year in 
Pennsylvania, but statistics show that drivers in anything 
close to a metropolitan area will idle cars long enough that 
they waste over $200 of gasoline in a given year, $200 in 
gasoline. So if spending that $120 can do something to reduce 
congestion, it can save money. The cost of inaction is high.
    I mean consider--and I know you probably all heard this 
statistic, since 1980, 33, almost 33 years, since 1980 the 
number of cars on American roads and highways has increased by 
104 percent. How much do you think our lane miles have 
increased? Four percent, four percent, one hundred four to four 
percent. The cost of inaction, the actual dollar cost to 
inaction costs our citizens more than a reasonable increase in 
revenue.
    Mr. Rahall. Mr. Donohue? And what I am looking for is 
something more than the joint releases with AFL-CIO, which I 
commend you for, being for all of the above but move beyond 
that.
    Mr. Donohue. I think there are a couple of issues here. 
First of all, we have all been out talking about, A, the need. 
Everybody agrees to the need, and you can go out and get the 
citizens all to agree, yes, we need the fix this and we would 
like to have that and that is very important. It then comes 
down, as you very effectively said, to money. And you know I 
would from my point of view, and I know Terry and the Governor 
have been out talking about this, say that after 20 years, 20 
years, we might consider a small increase in the Federal fuel 
tax and to go beyond that to say in that period of time that 
miles per gallon in trucks and cars have significantly 
improved. So therefore, and you can argue about the math, we 
are not getting the money that we would have gotten if they 
were the same miles per gallon for the roads. Everybody agrees 
to that, and you go to the money, and we talk too much about 
the money and not enough about the benefits. But, and I am 
going to be very straight about this, when we do talk about the 
money then the press come up here, or goes over to the White 
House, or goes over to the Transportation Department, and 
everybody is falling all over the floor to say that you won't 
have anything to do with that. Well, the bottom line is we will 
go out and raise a lot of noise, we will go out, as you will, 
and we will get people all over the country to talk about it, 
but maybe you could improve by just saying nothing instead of 
saying, hell, no.
    Mr. Shuster. The gentleman's time has expired. And with 
that I recognize the subcommittee chairman of Highways and 
Transit, Mr. Petri.
    Mr. Petri. Thank you very much. I thank you all very much 
for your testimony. We have been getting report after report 
from different academic and industry and other groups, 
associated equipment distributors, you name it, who have all 
been saying basically we have got to address this problem for 
the good of the economy, for the good of our country, and for 
the future of our economy.
    But there is an old saying in Washington, don't tax me, 
don't tax thee, tax the fellow behind the tree. And I am 
sitting here in awe to see Tom Donohue representing the 
business sector of our economy saying we need to be 
responsible, tax us, because we think it is necessary--could 
you expand on this? And I think the Truckers Association after 
having resisted it for a while----
    Mr. Donohue. They are saying the same thing.
    Mr. Petri. Could you explain why this is?
    Mr. Donohue. Yes, I think there are a couple of things. 
First of all, there is all kinds of tax things going on all 
over the country right now. But the bottom line is this is a 
user fee, this is a fee that lets us get from place to place 
and move our goods from place to place, and as the Governor 
indicated, there are more and more tolls and there are other 
fees, but the bottom line is what shippers are looking for is a 
system that allows them to move their goods to their customers 
in a time dependable way, whether it is in rail, whether it is 
in trucks, whether it is in barges, which are huge, no matter 
how it is. And the bottom line is we are all smart enough to 
know if you are staying with the same amount of money you had 
20 years ago and you heard the Governor talk about the massive 
increase in the movement of people and goods, it is just insane 
not to say this is a cost of doing business. It is not a tax on 
your income, it is not a tax on your retirement, it is not a 
tax on your house. It is a fee to use the Nation's 
infrastructure for the public good.
    And I have been saying this, Mr. Chairman, for a long, long 
time, but finally the holes are getting big enough that people 
are starting to listen, and you can count on we are here, the 
truckers are here, all of the other folks will be here, the 
unions will be here, and we even have the Governor. So we are 
way ahead of the game.
    Mr. Petri. Just to follow up on that, too, and I think this 
is in a lot of people's minds, the interplay between new 
technology and the physical infrastructure is very important 
and we have seen a lot of improvements in efficiency as people 
manipulate data and then execute after doing all of that. But 
there is an opportunity for a lot more. We are going to see 
automated vehicles within our next generation on our highways 
and all the rest of it.
    Can we be doing a better job of laying out the future and 
why it is important to invest in that future than we have been 
doing? It seems to me there is a story to be told that people 
are hungry to hear.
    Mr. Donohue. Well, Mr. Petri, it is going to be a long time 
before we can beam it up, Scotty, but there is a lot we can do 
to sequence, to order the movement of people to improve 
vehicles, to reduce emissions, and all of that is underway. But 
until which fix the primary system in transportation and in the 
other infrastructure issues, you haven't got a firm ground to 
build on. And I believe that giving people the confidence that 
we are going to fix the things really in order, getting them to 
support us in that puts us in a position to do exactly what you 
talked about.
    But you can go chase all the technology you want, you still 
have to move hundreds of millions of people in cars and trucks 
and trains and airplanes. And if we cripple that system, you 
can forget the technology. It will help but it only works if 
you have something to apply it against.
    Now, Governor, you are up.
    Mr. Rendell. And interestingly it is a little like short-
term, long-term. To get that technology and to deploy it may 
have some upfront costs, but in the long run it will seriously 
reduce our costs. Perfect example, we know what the technology 
is to put American aviation back among leaders in the world, it 
is out there, it is satellite, it is GPS, it is on your car. We 
have a land based radar system. It is a joke around the world 
what our system is. It is not hard, it costs some dollars. 
Well, not many and who should pay for it? The little old lady 
who never flies or maybe flies once a year, she shouldn't pay 
for it. But someone like myself who flies 70, 80 or 90 times a 
year I should pay for it because you should increase the 
passenger facility charge. Good Lord, they are charging 25 
bucks for a bag, 25 bucks for a bag that doesn't do anything to 
improve our air transportation system. Raise the PFC, the 
Federal share of the PFC. Let's get going. What are we waiting 
for?
    Mr. Shuster. Thank you, Governor. With that I would like to 
recognize Mr. DeFazio for 5 minutes.
    Mr. DeFazio. Thank you, Mr. Chairman. Mr. Chairman, I have 
a statement from Mr. Bishop, he couldn't be here, and from the 
Water Infrastructure Network, I would like to enter into the 
record.
    Mr. Shuster. Without objection, so ordered.
    [The prepared statement follows:]

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    Mr. DeFazio. Mr. Chairman, we are going to try a 
technological experiment here. They have been working on the 
room, there it is, OK. Mr. Rahall referenced this issue. If you 
look at the screens you see at the top there is a brand 
spanking new highway and that would be of course the Kansas 
Turnpike, circa 1956. It kind of ends abruptly on a strange 
angle. That would be Amos Switzer's farm field Oklahoma, circa 
1956. Oklahoma and Kansas had a deal that the turnpike would be 
extended. However, Oklahoma got into financial difficulties, 
didn't extend it and for years people launched themselves off 
the end of this beautiful new road into the farmer's field and 
he towed them out for free. He probably could have made a lot 
of money, and he didn't plant at that end.
    So this is devolution. There is some now who think this is 
a new idea, that we should devolve the duty of Federal 
transportation back to the States despite the fact it is in the 
Constitution, despite the fact that George Washington did 
canals, Abraham Lincoln did railroads, Eisenhower did the 
interstate and Reagan did transit into the Highway Trust Fund. 
We tried it, it doesn't work. So I just wanted to make and kick 
off for the point about devolution.
    Now to our funding problems, Mr. Donohue, you mentioned 
indexation. I would like to throw an idea at you here because 
it involves both indexation and the idea that right now we have 
record low capital costs which we are not taking advantage of 
for the investments to make in this country. I would suggest if 
we could find a dedicated revenue source; i.e., indexation, 
that we might borrow a bunch of money upfront on pretty short-
term bonds that we could get for very, very low rates to really 
jump start the Trust Fund, and I have got numbers to back it 
up. If we indexed the gas tax to both the highway cost 
construction index and, you mentioned this and referenced it, 
to fleet fuel economy you would both not be losing value 
because of inflation and construction. And secondly, you 
wouldn't be losing revenue because we are becoming more 
efficient. It would pick up about a penny a year per gallon, 
which of course the last time I drove by Exxon Mobil it went up 
more before I got by--I don't mean to pick on anybody.
    Mr. Donohue. Or down. Up and down.
    Mr. DeFazio. Not on the west coast. We are just going up. 
We are headed to 5 bucks a gallon since Memorial Day.
    Mr. Donohue. You have got other problems on the west coast 
with the State.
    Mr. DeFazio. Yeah, but anyway, so what do you think about 
that idea? So if we did double indexation and we capitalized it 
and had a dedicated revenue source, paid it off over say 10 
years?
    Mr. Donohue. Three sentences. Number one, we would sit down 
and talk about that. You saw in our testimony we have--we 
believed that indexation, I am not exactly sure what you are 
saying, but I would be very willing to look at it with our 
friends. The second thing is indexing is a good idea because it 
makes life a little easier up here because you don't have to 
come back all the time, adding a little more help. And, third, 
however, while we are talking about these very low rates, 
remember, these very low rates are put there by the Fed to try 
and get us out of this mess we are in. They are artificial in 
their reality.
    And, by the way, at the rate--and this is not a political 
statement, we all look at the rate deficits are going up, you 
can count on one thing, the price of money will go up. Now, I 
can't tell you when. So one of your great arguments, if we 
could do this Thursday and get something on before that 
happens, that would be a good idea. But we will take a long 
look at that, and we have some folks that are looking at that 
subject with people in the industry. Let's--let's get serious, 
let's talk soon.
    Mr. DeFazio. I will provide you some specifics.
    Mr. Rendell. Governor.
    Mr. Rendell. Congressman, let me say it is a great idea. 
Number one, that was one of the reasons for the success of 
BABs. At a time when there was no money available, BABs allowed 
States to go in and borrow. It made a huge difference, number 
one. But, number two, look in the palace of truth and justice, 
the long-run answer to all of our problems in my judgment is 
there should be a Federal capital budget. You are the only 
governmental subdivision in the United States of America that 
does not have a capital budget. Actually, the Defense 
Department does. But other than that, you are the only 
political subdivision in the country that doesn't have a 
capital budget. And that is what it is about. It is borrowing 
as a way of investing at the present time to build things that 
have a return on investment. Every company does it, every State 
does it, every county does it, every city does it.
    Mr. O'Sullivan. Mr. Chairman, I couldn't agree more. I 
think that it is those kinds of things that come out of this 
committee that will, as we look at how our core funding of 
infrastructure in this country going forward, the expansion of 
that, and the other creative financing mechanisms that have 
been discussed in the past will be discussed in the future, are 
the way that--that we move forward.
    So I know on behalf of our organization, as Tom has 
mentioned, any and all options we think we should consider 
because the ends result, it is about more, more, more, and not 
less, less, less.
    Mr. DeFazio. Thank you, Mr. Chairman. Congratulations on 
kicking off the year with this hearing.
    Mr. Shuster. Thank you very much, Mr. DeFazio.
    Next I want to recognize the vice chair of the full 
committee. Don't start his clock yet because I have got to make 
a little pitch. The vice chairman, Mr. Duncan, is going to head 
up a special panel this year, kick it off later in the spring, 
dealing with intermodalism and movement of goods. And the goal 
of that committee, which will be stood up for 6 months, or 
panel, is to make recommendations, legislative language, to the 
committee as we move forward on the next surface transportation 
bill. So I look forward to seeing the vice chairman's work. It 
is going to be extremely important work. And I think most of 
you, if not all of you in the room, will be very interested in 
what he is going to produce for the committee. And with that I 
recognize the vice chairman.
    Mr. Duncan. Well, thank you. Thank you very much, Mr. 
Chairman.
    And I am pleased to realize that under your leadership this 
is, once again, going to be a very, very active committee. And 
I want to thank all of the witnesses for being here and their 
testimony. I have been in meetings with Governor Rendell and 
Mr. Donohue, and I have heard them several times. I know they 
believe strongly in all of this. And I have always said that, 
you know, I am a very conservative Republican, but people in 
California sometimes use the airports in Texas, and vice versa; 
people in New York use the water systems in Florida, and vice 
versa; people in Ohio sometimes drive on the roads in 
Tennessee, and vice versa. So there is a very important local 
role, there is a very important State role, but there is also a 
very important national role in all of these projects.
    I just came from another committee in which we had a 
hearing on the 100, roughly $100 billion we have spent on 
Afghan reconstruction. Which is just a small portion of what we 
have spent on the war over there. And the Inspector General 
said that we have many billions of projects that are now in the 
pipeline and just beginning to start and new contracts being 
issued. Most people seem to think that because we are pulling 
out troops that that means that we are stopping. But we are 
going to be spending many, many billions in Afghanistan for 
many years to come.
    And I, for one, think it is way past time that we start 
putting our own country and our own people first once again 
because there are many things that need to be done here. He 
talked about money, billions that have been spent on a road 
that is not there and hospitals and clinics that they are not 
even sure exist, and so forth. So it is unbelievable, the waste 
and corruption.
    One question I have, and that is about all I am going to 
have time for. I have chaired several subcommittees on this--in 
this committee. Three. And in all of those, we have heard about 
how it takes usually about three times as long to do any 
project here as it does in almost any other developed country.
    Mr. Donohue talked about a skyscraper hotel being built in 
11 months or some short amount of time. And I have never 
forgotten when I chaired the Aviation Subcommittee that the 
newest runway there, which is several years old now, took 14 
years from conception to completion but it took only 99 
construction days, which they were so relieved to get all the 
approvals, they did it in 33 24-hour days. And I have heard 
similar things on all these road projects and everything else. 
And almost always it is environmental laws and rules and 
regulations that cause these delays.
    I would like to know if any of you have any suggestions or 
ideas on how we can get the environmental groups to allow us to 
move faster on these projects or--we saw that everybody came 
together on the I-35 bridge project because they were--there 
was no other choice. And we did that very quickly.
    Do you have any thoughts or suggestions along those lines?
    Mr. O'Sullivan. Well, Congressman, I couldn't agree more 
that the regulations, the red tape, and the approval process is 
way too slow. I don't know that I have any recommendations. One 
would hope that the same sense of urgency and a very 
unfortunate situation with the I-35 bridge would be the same 
sense of urgency that we have with environmental groups, with 
labor groups, with the business community when it comes to 
rebuilding our infrastructure.
    But I think as part of any process, as we look at how we 
pay going forward to rebuild our crumbling infrastructure I 
think that is something that certainly needs to be looked at. 
Because I am not sure what we are going to accomplish in the 
long term. If we identify projects and the time between 
identifying a project from the time that the implementation and 
start of that project is 14 years, then we are headed down the 
wrong path and we are not going to accomplish the goals of this 
committee, the goals of rebuilding our infrastructure in this 
country. But I think it is a critically important issue.
    Without having solutions, I think if we don't get our hands 
around it, no matter what we do as a committee and as a 
country, we won't be as successful as we need to be.
    Mr. Rendell. Congressman, what I would suggest is, on all 
these things, environmental impact statements, environmental 
assessments, that the Congress, after some good research, put 
time limits in the legislation and allow a waiver to be granted 
to extend those time limits, but the waiver would have to be 
issued by the Secretary himself or herself. And the Secretary 
would have to report to Congress in writing why the waiver was 
granted.
    You know, it is amazing what bureaucrats can do when they 
are tested. When we got the stimulus money in Pennsylvania--
actually, before we got it. We got it March 1st--I brought all 
of my road builders and contractors together, and I brought all 
of my PennDOT bureaucracy together, and I said to everyone, we 
are going to spend this money fastest of any State in the 
country. And actually, we did, we were tied with five other 
States, I think Tennessee was one of them, in spending the 
money quickly. What I said is, normally, you have got 90 days 
to respond to an RFP. You have got 45 days.
    All of you contractors tell me you are desperate for work, 
you can respond in 45 days. PennDOT, you normally take 90 to 
120 days to review the RFPs and make a selection, you have got 
30 days. Guess what happened. It worked. It worked. Not one 
thing fell through the cracks. It is amazing when we push the 
system. Where is it written? It is almost like it is in the Ten 
Commandments that an environmental impact statement must take 2 
years. No. No.
    Mr. Shuster. I will say amen to that, Governor.
    Mr. Rendell. Thank you.
    Mr. Donohue. Just one sentence to add to that. If you would 
limit the environmental argument to one set of lawsuits and not 
repetitive, repetitive, repetitive lawsuits, you would cut the 
thing way back.
    Mr. Rendell. Excellent.
    Mr. Shuster. I now recognize the gentlelady from the 
District of Columbia, Ms. Holmes Norton, for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman. And I want to thank--I 
want to thank the witnesses because of how you laid the 
groundwork for what the committee could well do, could well 
accomplish this year. And I appreciate the way in which this 
committee has started.
    In the last Congress, we got the fewest bills passed since 
they have been counted in U.S. history. So it is noteworthy 
that one of those bills was an infrastructure bill. The fact 
that we were able, given the contention of that Congress, to 
pass an infrastructure bill says something about its priority 
for the American people, and the fact that arrayed here today 
is a Democratic Governor, a Republican, I presume, president of 
the Chamber of Commerce, and the president of one of the most 
important unions involved in infrastructure, is a way, it seems 
to me, to lay the groundwork for what we are going to do or 
hope to do.
    Let me get to what concerns me.
    As important as it was that we broke through and actually 
did get an infrastructure bill last Congress, it was for only 2 
years because it was based on the gas tax, and it runs out 
after 2 years.
    It amazes me, particularly since I chair a subcommittee 
that has to do with real estate and construction, it amazes me 
how little innovation there has been in the work we have done 
in financing infrastructure.
    So my question really has to do with keeping us from 
developing a 2-year pattern. And I need to ask you what happens 
in the States when you get funded only for 2 years.
    But, Mr.--Governor Rendell talks about TIGER grants where 
the private sector was involved I think you said 40 percent. 
Talks about taxes and borrowing, and mentions the European 
infrastructure bank making money.
    Mr. Donohue, who just tells it like it is, if you want 
something to be done, you have got to pay for it. Although in 
your testimony you called it a gas tax, in answering questions, 
you called it what it is, a user tax. Since when should we give 
people who use the roads a pass on paying for those roads? And 
I guess pass it on to--in some general way, to the extent we 
can to everybody else.
    So I would like you to help us avoid the expiration of the 
present bill and just going again for another 2-year bill.
    If you had your druthers and we come to the expiration of 
the surface transportation bill that we enacted last year, 
would you just enact another 2-year bill? How would you find a 
way to get, for example, public-private partnerships as a core 
part of the bill? And, for goodness sakes, an infrastructure 
bill as part of the bill? Should they be part of a surface 
transportation bill rather than things that the States are 
trying out here and there? How--save us from another 2-year 
infrastructure bill because we are relying on the same gas tax 
that we know it is going to run out in 2 years.
    Governor Rendell, would you like to start?
    Mr. Rendell. Well, it is a very good point. It is very 
difficult for States to plan. We try to plan. And we do have 5-
, 6-year plans ourselves. It is very difficult to plan when 
there is not a Federal bill that is significant in number of 
years. It makes it impossible because we have no idea what 
money is coming in and what terms the money is going to be 
given to us.
    Ms. Norton. Does that affect which project you start?
    Mr. Rendell. No question, no question. With a 2-year bill, 
the tendency is to spend the money on ``Fix it First.'' By the 
way, ``Fix it First'' is not necessarily a bad idea. We should 
be doing a lot of ``Fix it Firsts,'' but there is in every 
State a project that is really important to unlock economic 
growth and development. There is not a Governor or any of you 
who couldn't point out a project in your State that is 
necessary that doesn't exist now, but that is necessary to 
unlock all sorts of growth and development. No question about 
it. Even if it is just a 6-mile spur to the turnpike from a 
newly developed business park that doesn't have one. So, yeah, 
it makes it very difficult. When the Congress does temporary 
fixes, it makes it very difficult. But it also makes it very 
difficult to have any long-range planning. And I actually 
believe we should have a long-term infrastructure plan for the 
country. And it should be transportation as well as all of the 
other things that go into our infrastructure.
    When a Hurricane Sandy happens, it destroys transportation 
infrastructure, but it also destroys water infrastructure and 
other types of infrastructure as well. So I would like to see 
us do it the way a business would do it, sit down and figure 
out where we want to be 10, maybe 15, maybe 20 years down the 
road and plan for it.
    Mr. Shuster. Gentlelady's time has expired. With that, I 
recognize the gentleman from Florida, Mr. Webster.
    Mr. Webster. Pays to show up early. Thank you, Mr. 
Chairman.
    Mr. Shuster. Yes, sir.
    Mr. Webster. I have a question. There are all kinds of 
means of transportation, one of which has not been, except just 
in passing, mentioned today, and that is transportation through 
pipelines. Has each of your organizations endorsed the XL 
pipeline? Publicly?
    Mr. Donohue. Yes.
    Mr. O'Sullivan. Resoundingly, yes, sir.
    Mr. Rendell. Building America's Future hasn't taken a 
position on it, but I personally, as a Democrat, have said we 
should make the Keystone Pipeline part of an overall energy 
bill.
    Mr. Webster. OK. Thank you for those answers.
    I have one question of you, Governor. You have mentioned 
several times about an infrastructure bank, which sounds like a 
great idea. I think it is a great idea. And that somehow, some 
way, that money would be distributed to the States.
    My question would be, as a former executive of a State, 
which, in some cases, tend to make you--you have your kingdom, 
and you mentioned that, that, you know, you don't want 
everybody telling you what to do, you want your own thing. 
Would you be--would you think that we could identify corridors 
that would not necessarily be just instate corridors to use 
that money on, in that they would be multistate corridors that 
we would identify not only for roads, but also rail and other 
things connecting ports to ports or seaports, airports, all of 
that, do you think that that is a Federal role?
    Mr. Rendell. Not only do I think it is a Federal role, but 
if I was drafting and crafting the infrastructure bank 
legislation, that would be the number one priority of the bank. 
The number one priority of the bank would be for projects 
beyond State borders, for multistate projects, for projects 
that do connect port to port. I mean, Congressman Shuster can 
tell you about both the Crescent Corridor and the National 
Gateway projects because they were both freight rail projects 
that went through multiple States, both of them went through 
Pennsylvania. And they created not--not the construction jobs 
that were raising the heights of bridges and things like that, 
but permanent jobs. They created tens of thousands of jobs all 
along the route as those corridors went through Pennsylvania.
    It was amazing, the intermodal facilities that were built 
in places like Chambersburg, not far from you. So, yeah, I 
think that would be the number one task of the infrastructure 
bank. We don't need an infrastructure bank to decide whether 
Kansas is going to build an addition to Route 64. Kansas should 
make that decision. But we do need an infrastructure bank if 
Kansas, Oklahoma, and Colorado come to us and say we need a--we 
need a freight rail link between these five cities.
    So, yeah, I think that should be the primary goal of the 
infrastructure bank, primary priority of the infrastructure 
bank.
    Mr. Webster. One other question about that.
    Would somebody else like to respond to that? Mr. Donohue? 
Mr. O'Sullivan.
    One other question to you, just because you were a 
Governor, I think it is important to understand where the 
States would be.
    A lot of times--in most cases, the Federal Government has 
no land-planning or use-planning authority; that is usually 
given to the local communities.
    And so many times the local communities will make decisions 
that greatly impact the Federal road system and highway system, 
and yet we have nothing to say about what is done there. And my 
question is, do you think there is any way we could balance 
that to say that, look, you have these feeder roads coming 
into, quote, U.S. highways that we are funding and--either 
partially or fully, and yet we have no control over the amount 
of traffic and the level of service that goes down as soon as 
those feeder roads are expanded. Do you think there is any 
opportunity for us to input in any way in that?
    Mr. Rendell. Sure. I think you could build in as--to your 
own distribution criteria.
    Just like, I think Mr. Donohue said, give priority to the 
States who, in certain Federal funding, give priority to States 
who make the maximum effort on their own in funding. You could 
key the distribution of your money to things like that. I think 
you could make them depend, and they could be one of the 
criteria that funding decisions are judged on.
    Mr. Webster. Anyone else want to respond to that?
    I yield back.
    Mr. Shuster. Thank you, Mr. Webster.
    With that, recognize the gentleman from Everett, 
Washington, Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman. Bill likes to note 
that he thinks I am from the second-best Everett in the 
country, Everett, Washington, whereas he is from Everett, 
Pennsylvania. We differ on that. On that point. But we don't 
differ on the point we are having, hearing today.
    And that is--you know, essentially what I heard you all say 
is that our success in this country when it comes to 
infrastructure doesn't happen by accident, it happens on 
purpose. It has happened on purpose for the last 200 years by 
us purposefully using the Federal role to both kick-start 
enhance, complement, State and local government funding in 
transportation infrastructure.
    And I think we have lost the sight of that over the last 
several years, not just--not just 2 years, 4 years, 6 years, 8 
years, but over the last--over the last several years, that our 
success happens on purpose, and by purposefully investing in 
infrastructure, we can be more successful than we have been.
    And there is a lot of examples of that. Just, one, quickly 
from my district. There is a county that I represent that has 
$50 million in bridge repair that needs to be done. As a proxy 
for its income in this county, about half the kids in the 
largest city in this county are on free and reduced lunch. 
There is an indication here the population of that county is in 
no way able to tax itself at a level that it can repair $50 
million worth of bridges by itself. The State help is 
necessary, there is Federal help that is necessary.
    So there is a--there is definitely a role here.
    One issue we haven't touched on, and I am not sure it is 
most appropriate. Maybe Mr. Donohue is most appropriate for 
this is--has to do with NextGen and the air traffic control 
system and the investment that we need to make in that. Which 
is largely technology-based, as it turns out.
    But if the Chamber has a specific idea about how to 
structure financing for that in a way that is, you know, most 
fair, have you all come to a conclusion on that?
    Mr. Donohue. Congressman, I am thinking about that. I am 
not ducking it. There are a lot of creative financial 
approaches that we can take here. And there are great 
experiences that have been had in the States, and there are 
fundamental realities, as you say, that some things can't be 
done at home alone. And I think we can come to some of those 
resolutions and as soon as we make one fundamental decision, 
and that is we are going to increase the revenues. Because 
right now to talk about this idea or that idea gets very, very 
difficult unless, A, we are willing to increase the revenue 
and, therefore, we have a means to do creative financing or 
effective financing--I like that better--on top of it. But you 
are not going to get anywhere until you do the fundamental 
issue of giving this committee and the larger piece of change 
to figure out how to exercise its responsibility.
    I am a big, big fan of States off doing what they ought to 
do. I live in Maryland. And in Maryland and Virginia, we have 
spent 25 years arguing about what we are going to do about the 
beltway. And I--and that needed everybody to work together on 
it. And a big Federal role. But every year we wait, it gets 
worse and worse and worse because of different congestions, 
different building projects.
    So let's fix the fundamental deal and then let's get a lot 
of smart people like yourself together to figure out what we 
ought to do to build on top of that to take care of the 
projects the Governor was talking about, to take care of the 
projects you are talking about. And we are not ducking that at 
all. I represent people that do creative financing all the 
time. But the fundamental issue is you have to be in business 
to do it. And what we are doing is putting us in a difficult 
position.
    Mr. Larsen. Governor.
    Mr. Rendell. I think you know my answer. I would raise the 
PFC and bond off it. If you raise the PFC, you could get all 
the money you need to have NextGen started immediately and 
finished fairly quickly.
    Mr. Donohue. And you could note for yourself that while the 
Governor gave his answer, I wasn't shaking my head ``no.''
    Mr. Larsen. Let the record show. And if there is a group of 
start people that want to get together, talk about that, I will 
join them if they will allow someone who is not so smart to be 
there.
    Mr. Shuster. I thank the gentleman from Washington. With 
that, the gentleman from Texas, Mr. Williams, is recognized for 
5 minutes.
    Mr. Williams. Mr. Chairman, thank you. And in full 
disclosure, I am from Texas. And I have been in the automobile 
business for 41 years. So--and I also agree that the Federal 
Government has a major role in maintaining our infrastructure. 
I agree with all of you on that.
    Question I would have, though, what do you all see--what 
would the 18.4 cents look like, what would it rise to? What do 
you see it rising to if we raise the tax necessary to do the 
things we are talking about, things we need? Do you have an 
idea what that would----
    Mr. Rendell. Unless I am wrong, and someone correct me if I 
am wrong, penny on the Federal tax brings in $9 billion? Is 
that right? Anybody? $1.7 billion, per penny. $1.7 billion per 
penny. So you would have to raise it fairly significantly to 
make a difference. But you would phase it in. You wouldn't have 
to do it all in 1 year. And I know people keep saying with the 
economy what it is, this is not a great time to raise any tax, 
particularly a tax that impacts on individuals. But you could 
phase it in over a period of time.
    And, again, if you wanted to do some things upfront, if you 
had a phased-in schedule, you could bond off it, you could do 
something very creative. I mean, we do it all the time. We do 
it all the time. We raised our tolls and we bonded off--the 
toll increase was locked in for 25 years, and we bonded off the 
toll increase.
    Mr. Williams. Also would help--I am sorry, Tom.
    Mr. Rendell. No. Go ahead, Congressman.
    Mr. Williams. I said, also would help, too, if all the 
money went in it account it was supposed to go into.
    Mr. Rendell. No question.
    Mr. Williams. You know, I would like to see a figure on 
that. We may check that out, if all the money was supposed to 
be where it is, how much we would have in that account today.
    Mr. Donohue. You know, the point is, if you do this over a 
number of years, if you get up to 12, let's say you go 15 
cents. This is only part of the equation. It is the Federal 
money, it is the State money, it is the local money. If you--if 
you got 15 cents over a relatively quick period of time, maybe 
3 years, something like that, all of a sudden at least you are 
getting back to where you were. And a little bit ahead.
    Mr. Williams. And I would just say this, too, something 
that you have touched on is a lot of people are not thinking 
about but the CAFE standards with what they are. I personally 
don't think the CAFE standards do our transportation 
infrastructure that much good. But the fact of the matter is, 
when they have to reach a goal of 53 miles per gallon, I think 
it is 2020 or something like that, we are going to have to come 
up with a way to offset that and possibly have more people 
paying in the system that are not paying in the system. Do you 
agree?
    Mr. Donohue. I agree that the people that use the system, 
and eventually if we keep changing all of these issues, some of 
the people that benefit from the system directly are going to 
have to put up the money. And we want to be a part of that 
discussion and that decision. But the bottom line, we are not 
talking about personal income tax, State income, real--we are 
talking about the tax to use the facilities, to move the goods 
and people of this country, and to protect our safety and our 
national security. And we need to get on with it.
    Mr. O'Sullivan. Congressman, I--I am not sure what the 
number is, Tom talks about 15 cents. I mean, that is a good 
number.
    I mean, we haven't raised a gas tax since, what, 1993, 
indexed, for argument's sake, they talk about anywhere from 30 
to 32, 34 cents. Anything would be an improvement of expanding 
how we--the core base of how we fund infrastructure. And I 
think we certainly need to look at that. I am encouraged by 
what is going on with the number of States across the country. 
Of looking at their own gas tax, of increasing the gas tax. 
Those are encouraging steps. This committee and this meeting 
today is certainly encouraging in commitment of looking 
seriously at how we fund our infrastructure needs going 
forward.
    But I think it is critically important because we--we 
support user fees, we support the gas tax, we have to get real 
about it. I look at it this way--I think our union does, I 
think we all do, is that we have a $2.2 trillion problem. And 
we all know that. So I am not sure what the number is, but we 
need to get closer to satisfying what the infrastructure needs 
of this country are now, over a period of time. But it needs to 
be a relatively short period of time, or I think that no matter 
what we do, we are going to be extremely disappointed at the 
end of the day, 5 years or 10 years or 15 years from now, about 
what our infrastructure looks like. And support what the 
Governor talked about of having a national plan of what we want 
our infrastructure to look like 10, 15, and 20 years out.
    Mr. Rendell. And, Congressman and Mr. Chairman, I think one 
of the most important things this committee can do is start 
looking at some form of vehicle miles traveled tax. There are, 
as I said, technologies that I know of that are extremely less 
intrusive than the original VMT that could truly resolve this 
problem in a fundamental way and get away from the fact that 
whatever we do with the gas tax, it is going to have a 
declining yield. There is no question about it. But it doesn't 
mean that people are using the roads less, they are using the 
roads more. So we have got to find a fairer way to do it. I 
would envision 5, 10 years down the road that we wouldn't have 
a gas tax, we would have some other form of user fee.
    Mr. Shuster. Mr. Donohue is champing at the bit. I will 
give you 10 seconds.
    Mr. Donohue. Yes. I think what the Governor is doing with 
his time and energy is very important for this country and for 
our infrastructure. I would just like to say he is the most 
creative conservative taxer that I have seen. That is his 15th 
idea on a way to raise the revenue. We are ready to go on a 
user fee and other related creative issues. I am not sure we 
want to go as far as he does yet, and I don't want the people 
that are covering this to be out saying that I have jumped off 
the bridge.
    Mr. Shuster. Thank you, Mr. Donohue.
    With that, Mr. Capuano.
    Mr. Capuano. Thank you, Mr. Chairman. Mr. Chairman, before 
I make a few comments, I would like to suck up to you for 1 
minute. Mr. Chairman, you should know that I represent the 
original Everett, Everett, Massachusetts. And more importantly, 
my mother had the great foresight to name me Michael Everett 
Capuano. So when the earmarks come back, just remember that.
    Mr. Shuster. I will yield to you. I will give you the first 
place in Everett standing in the country.
    Mr. Capuano. Mr. Chairman, thank you. I didn't really come 
prepared to ask a whole lot of questions simply because it 
sounds like we are all on the same page, pretty much, or at 
least the same chapter, which is nice for a change. But I do 
want to make a few points. First of all, I think it is 
important for people to know that are listening to this that 
virtually every single penny that is spent on infrastructure in 
this country supports private enterprise. Federal employees, 
State employees, city employees do not build or repair bridges. 
We hire private entities to do that, almost exclusively. And I 
think that that is an important fact a lot of people forget.
    I also think it is important for people to realize, look, 
whatever we do here, everybody agrees we need more revenue. We 
should do whatever is right. Because the truth of it is--we are 
going to talk politics, which I know we are not supposed to--we 
are going to get as much grief for a nickel as we get for a 
dime as we get for 15 cents. We should figure out what is 
right, what we need, what is good for the future of this 
country and do it and accept the political consequences. 
Because, in theory, I thought that is what we ran for office to 
do, what is right.
    I guess I want to defend my environmentalist friends. I am 
an environmentalist by any measure of the term. Yet I also know 
that there are some things that get in the way. And I think the 
problem up until now has always been those people who say, oh, 
the environmental regulations are too tough. I actually agree 
with you. But the result, the reaction to that shouldn't be 
then to just throw them all out. The reaction should be, which 
ones are the problems? Let's get to work, let's figure it out. 
I am not looking--I cannot support, I will not support a 
destruction of our environment. I am not looking to go back to 
the 1950s. I am looking to somehow find a balance to actually 
make progress on infrastructure in a way that is 
environmentally sensitive. And I believe it can be done.
    So for those of us who are concerned about it, instead of 
just saying, oh, the environmentalists are all the problem, 
let's throw them out, if you do that, fine, you are going to 
lose again and we will lose, those are of us who actually want 
to build something, will lose as well. We should together and 
figure out exactly what the problems are and exactly how to 
figure it out.
    I guess the last point I want to make before I make a 
comment, one last comment, is on infrastructure bank. I just 
want people to be warned about infrastructure banks. The 
concept is fine for a rare occasion. But the concept is 
problematic if you simply say let's borrow today and pay for it 
with money tomorrow. It appears and it does--it is necessary on 
occasion. I had to do it for a mortgage, otherwise, I couldn't 
get my house. The Commonwealth of Massachusetts basically did 
it to pay for the Big Dig. We also did it a few years ago to do 
something called the Accelerated Bridge Program out of the 
stimulus. Which means today, the Commonwealth of Massachusetts, 
approximately 30 percent of every Federal dollar coming into 
Massachusetts has already been spent.
    Now, OK. Those are two emergencies, we had to deal with 
them. It happens. But if you do it all the time, you are going 
to find yourself, those of you who spend more than a few years 
here, you will find yourself in a situation where every Federal 
dollar that comes into your State has been spent by your 
predecessors. So be careful about how far we go down the road 
on infrastructure banks.
    And, lastly, I guess I want to say, Mr. O'Sullivan, my 
guess is that I probably have 100 percent voting record with 
your organization. That is a guess, but if not 100, pretty damn 
close.
    Mr. Donohue, I am not so sure that my numbers are that good 
with you. But I have got to tell you, I am getting a little 
nervous. We agree on taxes on roads. We agree on comprehensive 
immigration reform. Is there any chance maybe we agree in 
investment on research?
    Mr. Donohue. I think the research tax credit is an 
intelligent thing to do.
    Mr. Capuano. Mr. Donohue, are you going to take any of 
these things into consideration on my score this year? Because 
I would like to get up above single digits.
    Mr. Donohue. Wait a minute, now, Congressman. Don't get 
carried away. I will start at the other end of the curve and 
come forward. But I would like to congratulate you for the 
position you have just taken on those three issues, and I will 
certainly keep it in mind.
    Mr. Capuano. Thank you very much.
    Mr. Chairman, I am going to quit while I am ahead.
    Mr. O'Sullivan. Mr. Congressman, if I could just say thank 
you on behalf of the members of my organization. Thank you for 
your vote.
    Mr. Rendell. Can I just respond, Mr. Chairman, to one thing 
about the infrastructure bank? The infrastructure bank as was 
in the Kerry-Hutchison bill, did not have any grant authority. 
It was all loan authority. And so the Federal Government would 
not--again, if the European infrastructure bank is a barometer, 
the Federal Government wouldn't lose a dime. We wouldn't be 
encumbering anybody with debt, we would actually be making a 
small profit. We would cover the administrative costs of the 
bank itself and make a small profit.
    The European infrastructure bank is a key part of how 
Europe does its infrastructure and it doesn't wind up costing 
anybody anything. And you can control that by just making sure 
that the infrastructure bank only had loan authority. Now, I--I 
would do it as a mix of loans and grants. But you can deal with 
that by just giving it loan authority. And $5 billion of loan 
authority would allow you to loan out $50 billion to projects 
that would be funded by the--in great part, by the private 
sector. This money would be the money that puts the project 
together that lets money in, and it could create an awful lot 
of development. And if we are not going to do something in 
terms of writing big Federal checks, and my guess is we are 
probably not, we should look at something like that. I mean, it 
is the theory behind TIFIA. I assume, Congressman, you voted 
for the significant increase in TIFIA, which was a great idea. 
Because TIFIA winds up leveraging just a whole boatload of 
money----
    Mr. Shuster. Thank you, Governor.
    Mr. Rendell. That and other things.
    Mr. Shuster. Appreciate it.
    With that, Mr. Coble for 5 minutes.
    Mr. Coble. Thank you, Mr. Chairman. I thank the gentleman 
from Ohio for yielding. I appreciate that.
    Gentlemen, good to have you all with us.
    Mr. Donohue, in what ways would streamlining the regulatory 
and licensing processes help us to strengthen our 
infrastructure?
    Mr. Donohue. Well, Congressman, if we--if we short--shorten 
the amount of time it takes to get permits, the amount of time 
it takes to deal with land issues, the amount of time it takes 
to deal with environmental issues, from that first perspective, 
we would spend a lot less money doing it, we would get going 
much sooner, and the end-to-end costs would be less. Second, 
there are lots of other regulatory issues, many of which we 
have worked our way through. Some of the wage rates, some 
issues on safety and environmental issues, and we are making a 
lot of progress, particularly on in--Terry and I deal with this 
stuff all the time. The bottom line is, when regulation is 
bigger than the rest of the project, I think you have got a 
clue it is not working well.
    Mr. Coble. Thank you, sir.
    Governor Rendell, not every Member of Congress, as you 
know, has a district that includes ports or waterways. Explain 
to us why these Members, without those facilities, should also 
have concern about having a modern inland waterway and port 
system in our country?
    Mr. Rendell. Because without that, Congressman, there are 
businesses, manufacturers in your district that export. And the 
key to successful and competitive exporting is to be able to 
get the product from your State to a port, to have that port 
run effectively and efficiently, and get those goods on their 
way at the lowest cost in the fastest time available.
    Mr. Coble. Thank you, sir.
    Mr. Donohue--and I will also hear from Mr. O'Sullivan on 
this one. The Chamber in the econometric analysis found that 
the Nation--if the Nation placed a higher priority on 
transportation, we could add nearly $1 trillion annually to our 
GDP.
    With that in mind, what policies or best practices that 
States are using can and should be applied at the national 
level by the Congress?
    Mr. Donohue. Well, we have talked to a lot of the States. 
We have done a lot of analysis on this. Our view is--and we 
just talked this minute--anything that we can do to shorten the 
timeframe between idea and conclusion, anything we can do to 
assure that financing and money is available in an intelligent 
way, anything we can do to work carefully with our employees 
and our private sector to do some joint issues, which is 
happening more and more in the States, all of that shortens the 
timeframe, reduces the cost, and gives--this is very important, 
probably not in my testimony--when people see a result, when 
people--I can go drive on that road, I can go on that bridge, I 
can get quicker to go to work--all of a sudden, they get much 
more agreeable on the next deal.
    Mr. Coble. Well, in other words, just generously lacing 
with some common sense might be a good way to say it.
    Mr. Donohue. You want to get everybody upset, but I think 
common sense would be a great addition.
    Mr. Coble. Mr. O'Sullivan, do you want to add that?
    Mr. O'Sullivan. I don't know that I could add much, 
Congressman. I agree with common sense and what Tom--Tom laid 
out we have to figure this out, we have got to shorten these 
periods.
    Congressman Capuano makes a good point. I mean, we have to 
be environmentally sensitive. But at the same time, we have got 
to be able to move product to market, move people from point A 
to point B, and we have got to shorten the time that it takes 
to do--to repair and rebuild our infrastructure.
    I also think that Tom just touched upon--we need the value-
added proposition of what people are getting when you talk 
about possible increases in gas taxes and those things.
    And I would just add that between American transportation 
mobility, which Tom heads up that our unit is part of, Building 
America's Future, which the Governor has spearheaded for years, 
I think it is incumbent upon our organizations and other 
transportation organizations to work hand in hand with this 
committee to accentuate the reasons why we need to put more 
money, not less money, towards our infrastructure; why we need 
to shorten the timeframe of identification of a project to 
completion of a project. Because, in the end, our economy 
depends upon it, sorely depends upon it. And so does our 
ability to create much-needed jobs in the construction industry 
moving forward.
    Mr. Coble. Thank you, gentlemen, for being with us. I yield 
back.
    Mr. Shuster. Thank the gentleman. I just want to alert 
folks that at 1:15, we expect a vote. I know there is some time 
constraints on some of the panel members.
    So if you would--we are going to recognize everybody till 
1:15. But we are going to adjourn when we go to vote. So if 
anybody wants to be considerate of other Members here that want 
to ask a question you shorten it up, quicken it up. And our 
panelists, if you can give snappy answers, we certainly would 
appreciate that.
    With that, I recognize Mr. Nolan for 5 minutes.
    Mr. Nolan. Thank you, Mr. Chairman. With that in mind, I 
will withhold my questions. But I feel I would be remiss if I 
didn't thank the panel. We have three extraordinary leaders 
here: From labor, from business, from combination of business 
and governance. And they have outlined a vision based on the 
needs for progress and development here in this country. And we 
would all do well to heed their good advice and find a way to 
enact and to implement that vision.
    And I would remind everybody that being from Minnesota, and 
the talk about the need to fix our infrastructure and our 
bridges could not be more apparent where the bridges have 
literally fallen down, in the case of I-35, costing us the 
tragic death of many people and the great costs associated with 
that.
    And as you have all pointed out, this is America. We are 
and we can be exceptional, as the Governor pointed out. And 
let's take the challenge that they have issued us here today. 
And let's bring forth a good, strong bipartisan bill that 
implements the recommendations that we have heard here today.
    Thank you all very much, gentlemen.
    Mr. Shuster. Thank you, Mr. Nolan. And that will be duly 
noted that you yield back about 4 minutes. Write that down 
somewhere. With that, I recognize Mr. Gibbs.
    Mr. Gibbs. Thank you, Mr. Chairman.
    And thank you, panel, for being here.
    I want to maybe talk a little bit about water sites, since 
the water is, at least on a tonnage basis, about 90 percent of 
the freight goes through our water system. And, Governor 
Rendell, I want to thank you for your commitment on the RAMP 
Act, especially what is going on in Panama, what it does to our 
competitiveness if we don't get our ports in order, as you 
know.
    We talked about it a little bit with Congressman Duncan 
about the costs of these studies and time. And I noticed in 
your testimony, at least two of you talk about the private-
public partnerships, getting capital. And, you know, seems to 
me we have better chance of doing that if we restore some 
confidence in the private sector, that we are not going to run 
up a bunch of costs on the studies and the time.
    Does anybody have a--maybe a kind of a ballpark figure, 
percentagewise, what some of the costs of the studies are 
compared to the total project?
    Mr. Rendell. That is a good question.
    Mr. Donohue. Forget the costs of the dollars that goes into 
the study. And it employs some people. Look at the costs of 
time. And the costs of time is much more expensive. You are 
paying interest, you got construction financing, you have got 
all the frustrations, the delays. You know, you can look at the 
studies. You were talking about poco. But serious deal, time is 
money.
    Mr. Gibbs. Because I have seen a couple examples, 15 years, 
$75 million before the backhoe started. You know. And it just 
really frustrating. So I know in your--previously here in the 
committee talked about waivers and time limits and lawsuits. 
And, hopefully, that is something we can incorporate. Because I 
also want to also thank the chairman for his commitment to do a 
water bill, which I think is important.
    And along with that, on the--when we start looking at 
projects, you know, I think it might be a different water bill, 
I may be going on a little limb here, since I am chairman of 
the subcommittee. I know in the past--I wasn't, of course, 
here--there was the earmark issue. You know, I think we should 
make sure we have a very transparent and accountable process. 
But things of regional or national significance, you might want 
to care to comment about how we should maybe try to move that 
way in a new version or a type of water bill.
    Mr. Rendell. Well, again, there was some debate on the 
infrastructure bank bill about whether it was transportation 
only.
    Again, if it was up to me, I wouldn't make it 
transportation only, I would make it available to other things. 
But in this case, you are talking about water transportation. 
So it would be available for that. And that would be where you 
would go to get that type of sort of overview. And broad--in 
other words, there would be earmarks, but they would be 
competitive earmarks based on a cost-benefit analysis. That is 
what TIGER was. When you think about it, TIGER was earmarks. 
TIGER--money was given to a specific proposal.
    But it came after a competitive process which subjected 
each and every one of the applications to cost-benefit 
analysis. And you are right. There has to be a vehicle for 
specific projects. But that vehicle, to go back to I think the 
point Mr. Donohue made, the public, rightly or wrongly--and a 
lot of earmarks were very good and did a lot of things for 
Pennsylvania transportation. But the public never heard about 
those. And the whole earmark process poisoned the well for 
transportation funding.
    So in this case, you would have earmarks being given out, 
but given out by a group that is doing it on a cost-benefit 
analysis on national goals and priorities and things like that. 
By the way, the Congress could write in the criteria that the 
board members of the bank would use to decide which projects 
would be funded.
    Mr. Gibbs. Mr. Donohue, would you like to expound a little 
bit more how to create these public-private partnerships and 
getting that private capital?
    Mr. Donohue. There are a lot of examples how this has 
happened. I was up in New York the other day with people that 
have a billion dollars they want to invest in this. What we 
need are projects that can be organized and financed in the 
short basis that are going to have a decent return. Some people 
think it is a gift, you know. But it is there. And we just--in 
the issues we just spoke about, in terms of how do we take all 
that delay out, you shorten the time and put the asset to work 
so that it is bringing in a return, you can get a lot of it.
    Mr. Gibbs. If I can conclude here, I just wanted to say, 
and you referenced the Olmstead Project. I have been there. I 
am very frustrated what is happening there. The cost overruns, 
about 90 percent of the capital budget is going to that one 
project. And we need to fix that. And in the future, need 
discussion on that. I have talked to the Army Corps of 
Engineers, but we are still a few years away. My time is up. 
Thank you for being here.
    Mr. Shuster. Time is up. I thank the chairman of the Water 
Subcommittee and look forward to working with you as we work on 
a water bill.
    With that, I yield to Mr. Maloney from New York.
    Mr. Maloney. Thank you, Mr. Chairman. While I cannot exceed 
my colleague from Minnesota in many respects, I am going to 
beat the Rick Nolan rule or standard on 4 minutes yielding 
back.
    I just want to thank the panel for your testimony. I am a 
huge fan, Governor. Thank you for your leadership on 
infrastructure over many years. I created the Public-Private 
Partnership Commission when I was in the Governor's Office in 
New York, and we were a big fan of the work you were doing. I 
think it is very important that Democrats, especially, on my 
side of the aisle come to the table on these issues that have 
been brought up this morning, particularly the combination of 
sources, leveraging private capital, getting that capital off 
the sidelines and into projects.
    What the people of Hudson Valley need is hammers-on jobs. I 
look forward--I appreciate the role that labor plays in this. 
It is very important to get your guys off the couch and on 
these projects. The Tappan Zee Bridge is critically important 
to my region. You can't look for any better example where we 
need that TIFIA Program to support that project. The Governor 
has been a great leader on this in getting design-build into 
the mix as well. Thank the Chamber for its flexibility on this. 
And I yield back my time. I thank the chairman for his 
leadership, and I look forward to working with all my 
colleagues on the committee.
    Mr. Shuster. Thank you, Mr. Nolan. Again, somebody write 
that down. Four minutes to spare--Maloney.
    Mr. Maloney. Don't give it to Nolan.
    Mr. Shuster. Sorry. I was so impressed with him that I----
    Mr. Farenthold.
    Mr. Farenthold. Thank you, Mr. Chairman. I did want to talk 
a little bit--the chairman, Mr. Gibbs, we have all been talking 
about projects of national significance and in what the Federal 
role is in determining how our highway dollars are spent. You 
know, I am from Texas. The Texas Department of Transportation 
published their transportation goals, ranging from a low of $10 
million to widen a roadway in Jefferson in Chambers County, to 
over $16 billion to complete Interstate 69. And near and dear 
to the--my constituents in Corpus Christi, $600 million to 
replace our aging Harbor Bridge.
    You hear some people say, let's just turn the money over to 
the States and block grant it and let them choose the 
priorities. How do you balance that with choosing what projects 
are of national significance? I don't think we would have 
gotten the Interstate Highway System built through some of the 
less populated States. Where is the balance there?
    Mr. Rendell. Again, it goes back to what I said. I don't 
know, Congressman, if you were here earlier. I said I would 
leave the basic funding formula in place that distributes money 
to every State. But then I would create a second pool of money, 
akin to the TIGER grant program, maybe even a little larger, 
for projects of national significance.
    Mr. Farenthold. So we had the President's State of the 
Union. He had a lot of ideas, many of which I really liked. But 
are we falling into the trap that I think the President fell 
into with a laundry list of great ideas, but no how do we do 
them? You know, how do we fund them? What--what is the--you 
know, what is the impact, with a limited pile of money, how do 
we get there?
    Mr. Rendell. Well, again, I think all three--and I don't 
mean to speak especially for Mr. Donohue, I would get him in 
trouble. But I think we all agree that there should be some 
increased revenue flow, either temporary increase in the gas 
tax, changeover to a vehicle miles traveled type tax----
    Mr. Farenthold. So the big concern with the miles-driven 
tax, which I think may end up being where we come, as we see 
more vehicles move to natural gas, electric, how do you ensure 
privacy as to where people are going with that and how do you 
pay it on a short-term basis rather than getting a bill from 
the Government every year for how many--when you don't have the 
cash to pay it?
    Mr. Rendell. It is a very good question. And it is why I 
suggest to the chairman that this committee look into that. 
There is a technology now that can do a VMT at the pump. Again, 
I am not sure I can explain it that well.
    Mr. Farenthold. It is an RFIT-type deal. Probably be how it 
would work. The pump would read how far you have driven.
    Mr. Rendell. Exactly right. Without being intrusive in 
finding out where you drove and----
    Mr. Farenthold. So you create an incentive, say, all right, 
you chip your car, you get the miles-driven tax, otherwise, we 
have jacked the gas tax up. So there is an economic incentive 
to move to that? Or you just move forward with vehicles 
manufactured after a certain----
    Mr. Rendell. I don't think we can get vehicles 
manufactured--I mean, vehicle miles traveled quickly enough. I 
think you would have to raise the gas tax for a short period of 
time before there is a transition. But I think this committee, 
it could be the most valuable thing you do. I don't know how 
you do your assignments, Mr. Chairman, but to really up-tempo a 
study of that. When--I don't know if all of you remember 
Secretary LaHood came out in favor of looking at and 
transitioning to a VMT. And then the White House----
    Mr. Farenthold. The problem with any increase here is that 
gasoline--it is almost like an overall tax. There are very few 
ways an individual can lower their consumption of fuel 
economically. You can cut out unnecessary trips. But most 
people don't take many unnecessary trips. You go to work, you 
go to school, you go to the doctor's office. How do you know, 
you know, without major capital investment in a new car, avoid 
that? Are we just--are we just asking the American people to 
pony up more when that is really all they are hearing now?
    Mr. Rendell. Well, there are ways. I mean you would be 
surprised. Keeping your tires at the appropriate pressure, you 
would be surprised how much that cuts your gas bill.
    Mr. Farenthold. Maybe we will read the tire pressure and 
there will be an alternative tax for not maintaining your tire.
    I will give a little time back. Thank you.
    Mr. Shuster. Thank you, Mr. Farenthold. And with that, Mr. 
Rice is recognized.
    Mr. Donohue. Excuse me, Mr. Chairman, I think you know 
where I have to go next.
    Mr. Shuster. Yes.
    Mr. Donohue. And I have to leave now or I can't get there 
on time. And I want to show you the extraordinary relationship 
between labor and business. I yield my proxy to Mr. O'Sullivan.
    Mr. Shuster. Well, fortunately for some or unfortunate, you 
don't get to vote today. But I know you have an important 
meeting and so by all means go and make sure you carry the good 
word to the individuals that you are speaking to in a few 
minutes. Thank you for being here, Mr. Donohue.
    Mr. Donohue. Thank you.
    Mr. O'Sullivan. Thank you for your proxy.
    Mr. Shuster. Mr. Rice, you are recognized.
    Mr. Rice. Thank you, Mr. Chairman. I want to start by 
thanking the chairman and the ranking member. I look forward to 
working with this committee over the next year. I consider it 
is a big privilege and honor to sit on the committee and look 
forward to learning and helping America grow. My priority since 
my first political office was only 2 years ago, I was the 
chairman of the county council in Horry County, South Carolina, 
where Myrtle Beach is. And my priority has always been jobs. 
And my name plate on my desk says jobs, jobs, jobs.
    I am very concerned about American competitiveness, about 
our infrastructure keeping pace with the rest of the world. It 
is not enough that we simply maintain our infrastructure, we 
have got to keep moving forward or we will be left behind. I 
have maintained throughout my campaign that spending money on 
meritorious infrastructure is not really an expense but an 
investment that pays returns.
    I want to tell you a little bit about my frustration and I 
am really going to repeat a lot of what has been said here 
today. We have got two major infrastructure projects in my 
district. And you have to keep in mind I have eight counties in 
South Carolina. National unemployment rate 7.8 percent, 
statewide unemployment rate in South Carolina about 9. Not one, 
not one of my counties is even at the State rate. I have Marion 
County in South Carolina, which is the highest unemployment in 
the State of South Carolina, 18.5 percent. I have got Marlboro, 
which is number two at about 16 percent, and I have Dillon, 
which is number eight at around the 14-percent range.
    One of these projects that I am talking about is I-73, 
which would impact every one of those counties in a big way. 
Studies have been done--29,000 jobs, 21 percent annual return 
on investment to construct that road. We have been trying to 
get the permit now for 5 years, 5 years. And we are still 
dealing with the Army Corps of Engineers. And while I wonder 
about that--well, let me go to the next project. The second 
project is totally within Horry County, no Federal dollars 
involved at all. One, we couldn't get any help from State or 
Federal Government. Voters stepped up and voted a local option 
sales tax to construct a series of road projects. One of the 
top ones was extension of road called Highway 31 and four-
laning a road called 707. We had permits to do both of those 
projects independently, we had to move the intersection of the 
two roads a little way. Southern Environmental Law Center 
stepped up, said we need to relook at this because we are 
moving it, you have to get a new permit. The Army Corps said 
you need to join those two roads. Not only that, we need that 
resurveyed, but we want you to look it the last portion of 
Highway 31 you built 9 years ago in case you damage more 
wetlands than you told us you did. And we will see you in 2 
years, and that was 2 years ago. Thousands of potential jobs, 
no Federal dollars involved. It is not just that the Federal 
Government is not participating in helping us to progress, it 
is that the Federal Government is actually an anchor around our 
necks, and that even when there are no Federal dollars involved 
they are a burden, a wall holding up progress, holding up 
American competitiveness and sacrificing American jobs.
    I would just like your comments on that.
    Mr. Rendell. Well, again I don't think either of us would 
argue with you. You are dead right, particularly the second 
example is a great example. When we were trying to get 
dredging, Mr. Chairman, done in the Delaware River to make our 
port competitive, we had EISs and we had EAs and they had been 
done, and a group came in and said, no, you need to do another 
one. And we fought hard and actually won that battle and won 
that argument, but they seem to be endless. There was no 
material change at all. In fact, I actually talk about this a 
little bit in the book that I wrote. The reason they ask for a 
new environmental impact statement was because there was a 
school of sturgeon that had taken up residence in the Delaware 
River and they wanted to see the impact on the sturgeon. I said 
how long has the sturgeon been living there, they said 3 years. 
I said do you realize that we dredge every year just to 
maintain our current level and that means we blast. And how are 
the sturgeon doing? The person from OSHA said, well, they have 
grown, the school has gotten bigger. I said, well, there you 
are, they like it, they really like dredging, you know. Why do 
we need to do a new study? The sturgeon aren't dying, the 
school is growing.
    I mean one of the Congressmen who is not here anymore used 
the term ``common sense''; we need common sense, simple as 
that. And we can't be afraid to say that. And there is no 
reason that you need another EIS to go back to something that 
was done over the last 9 years. There are frustrating stories 
like that all over.
    And if Mr. Capuano was still here I would say we don't want 
to get rid of any environmental regulations, we just want them 
to be conducted in a commonsense way, in a swift way, in a way 
that is fair and it doesn't necessarily hamper growth and 
development.
    Mr. Rice. I may disagree with you there, there are a few I 
might like to get rid of.
    Mr. Shuster. The gentleman's time has expired. We have to 
figure out how to legislate common sense. I don't know if we 
can do that or not.
    With that, Mr. Radel from Florida is recognized.
    Mr. Radel. Thank you, Mr. Chair. I dovetail right off that, 
I have had the honor of representing and serving Florida. I am 
a firm believer that a healthy environment means a healthy 
economy. But we are hearing it time and time again. You have 
DEP at our State level, EPA, Army Corps.
    Mr. Rendell. OSHA.
    Mr. Radel. OSHA, everything overlapping. And so what do we 
have, we need to look at both sides of the ledger here. We are 
being asked, we need to invest, we need to spend, spend, spend, 
but at the same time we are getting our credibility cut because 
of delays, which mean even more spending.
    With that said, I would like to go back to a word that was 
used in theory of devolution, devolutionists. It sounds like a 
rock band, by the way. I think, Governor, you are well suited 
to answer this. Is there something we can do to push this down 
to the States? Instead of having the EPA in Washington clearing 
these projects, can we leave the jurisdiction up to the States?
    Mr. Rendell. Actually I know Terry is going to want to jump 
in on that, too. That is another one of the problems, is that 
you have joint jurisdiction often. You have to deal with the 
Federal regulations and you have to deal with the State 
regulations. It doesn't make a whole lot of sense. And there 
are ways to streamline this. By the way, I think you made some 
strides in MAP-21, you made some definitive strides, and I 
think all of us were pleased with that. We can do more, we can 
do more and you are right, State, Federal, those investigations 
if they are going to be carried out, let them be carried out 
contemporaneously. Why do we have a State investigation and 
then two-thirds of the way through the State investigation EPA 
starts to investigate. I mean again it does go back to common 
sense and it does go back to the people who are in charge of 
the regulators enforcing common sense.
    When I was Governor I never, ever overruled any of my 
regional DEP people on their environmental conclusion, but I 
sure as heck told them to get off the dime and get me an answer 
one way or the other in 30 days or 45 days. It can be done. And 
you did do, I don't know--were you here for MAP-21?
    Mr. Radel. No, sir.
    Mr. Rendell. I think the Congress made some progress in 
MAP-21.
    Mr. Shuster. We did some of that.
    Mr. Rendell. They could do more.
    Mr. O'Sullivan. I don't know what I can add, but I said it 
before, and that is that as we have gone through this hearing 
today and talked about alternative methods of funding 
infrastructure going forward we hear time and time again the 
same complaint, Congressman, that you have the same problems 
that you have. I think as the Governor has laid out, if we 
don't deal with the State and Federal role in how we reduce the 
amount of red tape, if we can figure out the funding we are 
still not going to be happy with the end result because of the 
examples that you brought up and other committee members 
brought to the table.
    So I think while funding is critically important so are the 
issues that you are bringing forth when it comes to taking a 
project from identification, to implementation, to finish. And 
if we don't reduce that time, we are not going to be where we 
need to be 5, 10, 15 years from now.
    Mr. Radel. Noted. I yield my time. Thank you, Mr. Chair.
    Mr. Shuster. Thank you, Mr. Radel. And with that I 
recognize the gentleman who represents the Brent Spence Bridge 
in Kentucky and Ohio.
    Mr. Massie. Of course you are going to hear about that 
bridge in my question, but thank you, Mr. Chairman. As the 
chairman knows, I am a hard nosed fiscal conservative, but I 
believe that we need to spend more on infrastructure and that 
is why I am glad to be on this committee. Not just because I 
realize the need and the benefit of spending money on 
infrastructure, but because of the constitutional nexus that we 
have. And so it warmed my heart today to see Members on the 
other side of the aisle talking about the importance of the 
Constitution. I hope they feel the same way in other areas of 
the Government.
    My question is for the Governor today, and it comes from my 
experience as a county executive, struggling with a 
transportation budget myself and also from discussions with my 
own Democratic Governor Beshear in Kentucky, and that is when I 
first took office as county executive, the first thing I did 
was look at the transportation budget in the county because I 
felt that was of utmost importance to my constituents. We had a 
6-year road plan. I found a 36-foot bridge on the plan that 
went to five houses on a dead end road, and I assure you there 
is no national significance to this bridge, and it was going to 
cost $400,000. So I asked the State engineer why the bridge was 
going to cost $400,000. He said because we are getting Federal 
money to build this bridge. And with the Federal money comes a 
need for an archeological study, a hydrological study and an 
environmental study. And talk about common sense, you don't 
need a hydrological study, you go ask the farmer whose family 
has lived there for over 100 years, has the water ever been 
over this bridge, and he says no. So you build one just like 
it. I also think once you go over a certain level you had to 
start paying prevailing wage for this bridge. So an $80,000 
bridge became a $400,000 bridge because it took Federal money. 
So I talked to the Governor about this because we are always 
looking for ways to pay for the Brent Spence Bridge. This is 
where the confluence of I-71 and I-75 come together near 
Cincinnati and cross the same bridge; 4 percent of our commerce 
goes across this bridge. And I thought what if we gave the 
Governors more power? For instance, as I understand it, we 
can't earmark programs but we sort of tie the Governors' hands, 
we give the money in silos. And if I understand this correctly, 
some of the money has to be spent on small bridges in rural 
areas, some of it on beautification, some of it on recreational 
trails. And so--I don't find a constitutional nexus or national 
importance for all of these things.
    So my question for the Governor is, would you like to see 
more flexibility on these funds, and if you were still Governor 
would you like to have been able to have more flexibility to 
take money maybe from the recreational trails or the 
beautification projects and spend it on infrastructure that was 
sorely needed?
    Mr. Rendell. The answer is I think every Governor would 
want more flexibility and there is no question about it. But by 
and large, you are right. There are tranches like bicycle 
trails, et cetera, that become part of the Federal bill. But 
remember how the money, transportation money is distributed. 
You had an MPO that included your county, right? Or an RPO, 
rural planning organization, and the State let that 
organization vote on its priorities for the 6-year plan, am I 
right? So basically except for the tranches that come with 
Federal requirements, basically the States do have fairly free 
rein, and the Governors can influence the MPOs or RPOs by 
having the Penn DOT secretary. The Penn DOT Secretary says 
well, we would really like to do this or we would really like 
to do that. But basically in the end the MPOs raise their hands 
and they set the 6-year plan in motion.
    So there is a lot of flexibility right now with the Federal 
money that comes in, there is no question. Are there tranches 
in there, generally small tranches that I would like to see 
left up to the individual State policy? Absolutely. But 
remember, the vast majority, the highest percentage of the 
money, 85, 90 percent, is distributed--those plans are set by 
the RPOs or the MPOs. And it always used to--when I was mayor 
it ticked me off that Philadelphia, which had 40 percent of the 
population of my MPO, got 1 out of 17 votes, because there were 
other like 17 counties in the MPO. But that always bothered me. 
But again I think there is a lot of flexibility with the 
Federal dollars. What I would have suggested were I Governor of 
Kentucky is you do that project without Federal money, fund 
that yourself, $400,000, you don't really need Federal money to 
get that done. And so you avoid all of the Federal 
requirements.
    Mr. Massie. The story has a happy ending. I gave the money 
back and got some State money and did it for $80,000 instead of 
half a million dollars.
    Mr. Rendell. There you go, you did the right thing.
    Mr. Massie. But as I understand it from the Governor, he 
does get money from silos and can't move it from one silo to 
the other. There is money we would like to spend on the Brent 
Spence Bridge that we can't.
    Mr. Shuster. I thank the gentleman from Kentucky. We have a 
vote going on, we have 11 minutes left so we can probably get 
you two--you and Mr. Davis in if you shorten it up a little 
bit. Thank you.
    Mr. Mullin from Oklahoma.
    Mr. Mullin. Thank you, Mr. Chairman. I appreciate the 
opportunity to sit on this board. I sat here just for one 
reason. I own a company, which is construction companies. We 
spend over 40 cents on every dollar to comply with regulations 
that come in. One thing we can definitely hear among everybody 
here is that regulations, the red tape, the common sense has 
been taken completely out of these agencies and they are 
becoming more of a hindrance than they are to help preserve 
anything because our infrastructure around us in Oklahoma is 
definitely failing. And I can identify the agencies that cause 
us the biggest headache to complete projects or even to be able 
to start projects. And what I look forward to is the 
opportunity to work with everybody here to identify those 
agencies that have reached too far and bring them in and make 
them answer for what it is they are requiring us to do, because 
what we are doing is we are funding projects and we are sending 
it to the Government to just be able to do the project.
    And I yield back my time, but I do say, Mr. Chairman, thank 
you for allowing me to serve and thank you for taking the time 
to be here.
    Mr. Shuster. Well, we appreciate you, Mr. Mullin, being 
here. Someone with your experience, real world experience is 
going to be very, very helpful as we move through all these 
different bills, WRDA to the next highway bill. We look forward 
to the expertise that you bring.
    And with that, final questions, Mr. Davis from Illinois.
    Mr. Davis. Final questions, I am the last guy. Thank you, 
Mr. Chairman. I will make it quick. How many minutes do we have 
left?
    Mr. Shuster. You are going to get 5, but we have 9 to vote.
    Mr. Davis. Hey, I just want to say I hail from the great 
State of Illinois. Mr. O'Sullivan, please give my best to John 
Penn in the Midwest region, a friend of mine, somebody that I 
know we can work with on a regular basis to pass some major 
legislation that is going to help us rebuild our crumbling 
infrastructure. I see the need for that. It is a bipartisan 
issue that we all know. I want to thank both of you for coming 
in today and sitting here and answering the questions.
    To be honest, all my questions have been answered so I am 
not going to ask you anymore. I just want to reiterate locally 
how important it is to address some of the major issues in the 
regulatory environment to reduce the overall project costs. I 
am going to give you one example, a two-lane highway that is 
about to be finished into a four-lane highway from my hometown 
of Taylorville, Illinois, to Rochester. It was 18 miles back in 
1988, first ever Federal funding in SAFTEA-LU I believe, and we 
had--it was estimated to cost $18 million to build that four-
lane section, it is going to be finished this next year, yes, 
next year. And we are exponentially higher than $18 million. 
And a lot of it has do with the questions my colleagues have 
asked, the questions that the chairman has brought up. I would 
just urge us all to continue to work together, Democrats, 
Republicans, labor, business because we can make something 
happen. Under the leadership of Chairman Shuster whom I know 
wants to see a long-term transportation bill I think we can all 
work together to make it happen.
    Thank you again for coming today. I yield back.
    Mr. Shuster. Thank you, Mr. Davis, and I want thank our 
witnesses today, appreciate your spending time with us. The 
discussion was broad and informative. We appreciate it and look 
forward to talking to you as you move into the future. Again 
thanks and safe travel.
    Mr. Rendell. I can't ask Mr. Davis why I spent 13 hours in 
O'Hare Airport on Monday?
    Mr. Shuster. I don't think he represents O'Hare Airport so 
he is not going to take the blame for that.
    Mr. Davis. Aviation Subcommittee.
    Mr. Shuster. I ask unanimous consent that the record of 
today's hearing remain open until such time that our witnesses 
have provided answers to any questions that may be submitted to 
them in writing and ask unanimous consent the record remain 
open for 15 days for additional comments and information 
submitted by Members or witnesses to be included in today's 
record.
    Without objection, so ordered. And with that the hearing is 
adjourned.
    [Whereupon, at 1:20 p.m., the committee was adjourned.]
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