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







                HOW THE FINANCIAL STATUS OF THE HIGHWAY
                           TRUST FUND IMPACTS
                    SURFACE TRANSPORTATION PROGRAMS

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

                                (113-31)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                          HIGHWAYS AND TRANSIT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 23, 2013

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure



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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
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York           JOHN GARAMENDI, California
DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina

                                  (ii)


                  Subcommittee on Highways and Transit

                  THOMAS E. PETRI, Wisconsin, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
JOHN J. DUNCAN, Jr., Tennessee       EDDIE BERNICE JOHNSON, Texas
JOHN L. MICA, Florida                MICHAEL E. CAPUANO, Massachusetts
FRANK A. LoBIONDO, New Jersey        MICHAEL H. MICHAUD, Maine
GARY G. MILLER, California           GRACE F. NAPOLITANO, California
SAM GRAVES, Missouri                 TIMOTHY J. WALZ, Minnesota
SHELLEY MOORE CAPITO, West Virginia  STEVE COHEN, Tennessee
DUNCAN HUNTER, California            ALBIO SIRES, New Jersey
ERIC A. ``RICK'' CRAWFORD, Arkansas  DONNA F. EDWARDS, Maryland
LOU BARLETTA, Pennsylvania           ANDRE CARSON, Indiana
BLAKE FARENTHOLD, Texas              JANICE HAHN, California
LARRY BUCSHON, Indiana               RICHARD M. NOLAN, Minnesota
BOB GIBBS, Ohio                      ANN KIRKPATRICK, Arizona
RICHARD L. HANNA, New York           DINA TITUS, Nevada
STEVE SOUTHERLAND, II, Florida       SEAN PATRICK MALONEY, New York
REID J. RIBBLE, Wisconsin, Vice      ELIZABETH H. ESTY, Connecticut
Chair                                LOIS FRANKEL, Florida
STEVE DAINES, Montana                CHERI BUSTOS, Illinois
TOM RICE, South Carolina             NICK J. RAHALL, II, West Virginia
MARKWAYNE MULLIN, Oklahoma             (Ex Officio)
ROGER WILLIAMS, Texas
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)




























                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Kim P. Cawley, Chief, Natural and Physical Resources Cost 
  Estimates Unit, Congressional Budget Office....................     4
Hon. Polly Trottenberg, Under Secretary for Policy, U.S. 
  Department of Transportation...................................     4

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Elizabeth H. Esty, of Connecticut...........................    34
Hon. Nick J. Rahall II, of West Virginia.........................    35

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Kim P. Cawley....................................................    38
Hon. Polly Trottenberg...........................................    45

                       SUBMISSIONS FOR THE RECORD

American Society of Civil Engineers, written statement...........    52
Commercial Vehicle Safety Alliance, written statement............    57
Gregory M. Scott, President and Chief Executive Officer, Portland 
  Cement Association, written statement..........................    61



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



 
                    HOW THE FINANCIAL STATUS OF THE
                       HIGHWAY TRUST FUND IMPACTS
                    SURFACE TRANSPORTATION PROGRAMS

                              ----------                              


                         TUESDAY, JULY 23, 2013

                  House of Representatives,
              Subcommittee on Highways and Transit,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Thomas E. Petri 
(Chairman of the subcommittee) presiding.
    Mr. Petri. The subcommittee will come to order. Today's 
hearing will focus on the financial status of the Highway Trust 
Fund and discuss the impact its pending insolvency will have on 
our surface transportation programs. Federal highway transit 
and highway safety programs are administered by the U.S. 
Department of Transportation in partnership with States, public 
transit agencies and with localities.
    While the U.S. Department of Transportation provides 
financial and technical assistance, the grantees are 
responsible for implementing the programs on a day-to-day 
basis. Federal share of the programs are funded almost entirely 
from user fees collected and deposited into the Highway Trust 
Fund. When the Highway Trust Fund was established in 1956, the 
excise tax rates for fuel were 3 cents per gallon. Since then, 
the tax rate and structure have been revised several times.
    Currently, the tax rate of 18.4 cents per gallon is levied 
on gasoline and 24.4 cents a gallon on diesel fuel. Fuel taxes 
represent approximately 90 percent of net revenue into the 
trust fund, but other sources include taxes on tires and heavy 
trucks.
    A separate mass transit account within the Highway Trust 
Fund was created in 1982, which receives a portion of the fuel 
taxes collected. In 2008, for the first time, the Highway Trust 
Fund had insufficient revenues and cash balances to meet its 
obligations. As a result, the Congress authorized an $8 billion 
cash infusion from the general fund of the Treasury into the 
Highway Trust Fund. By the end of 2014, a total of $54 billion 
will have been transferred from the general fund into the 
Highway Trust Fund to maintain its solvency. This includes an 
$18.8 billion transfer authorized by Congress last year in MAP-
21.
    As the purchasing power of the Federal fuel taxes continues 
to decline year to year and vehicles become more fuel 
efficient, current spending levels will continue to outpace the 
money collected from fuel taxes. Over time, the gap will only 
widen. MAP-21 is set to expire on September 30th, 2014, and 
current projections show that the trust fund will, once again, 
become insolvent and unable to meet its obligation starting in 
budget year 2015. Without changes in spending levels or 
additional revenue, the trust fund will continue to be unable 
to meet its obligations over the 10-year budget window.
    Today, the committee will receive testimony from the 
Congressional Budget Office outlining the financial status of 
the Highway Trust Fund and its pending insolvency. In addition, 
we will hear how the U.S. Department of Transportation and its 
partners would be impacted if and when the Highway Trust Fund 
can no longer meet its commitments. Many of our Members were 
not in Congress when previous funding shortfalls were 
addressed, and it is important that all of us understand the 
fiscal reality we face and the measures this department will 
need to take. So I look forward to hearing from our witnesses 
and call on the ranking member of the full committee, Mr. 
Rahall of West Virginia, for his statement.
    Mr. Rahall. Thank you, Mr. Chairman. I appreciate your 
calling today's hearing. The sobering testimony that our 
witnesses have already submitted should be a wakeup call for 
Congress and the administration to step up to address the 
looming crisis in highway and transit financing. MAP-21 
provided 2 years of relatively flat funding. While this gave 
State departments of transportation some assurances to move 
forward with projects, it simply did not allow the investments 
necessary to maintain our infrastructure, let alone build what 
we need to compete in the global economy. Yet even this 
insufficient amount of investment is significantly greater than 
what the Highway Trust Fund can sustain.
    This hearing makes clear that in fiscal year 2015, the 
Highway Trust Fund will go off a cliff. Stopping this crisis 
facing the Highway Trust Fund will require action and difficult 
choices to address this shortfall. While Washington has avoided 
the difficult choices, many States have not. States are 
increasingly coming up with their own plans for raising 
additional transportation revenues. Over the legislative years 
2010 through 2013, seven States enacted significant 
transportation revenue raising measures. This includes a 
diverse group of States taking steps to increase transportation 
and infrastructure investment by generating additional revenue 
from a variety of sources.
    For instance, in February this year, Wyoming raised its tax 
on gas and diesel fuels by a whopping 10 cents per gallon, from 
14 cents to 24 cents, and this is a fairly conservative State, 
as we all know.
    Maryland's $4.4 billion 6-year package enacted this past 
March includes indexing the gas tax to inflation and adding a 
3-percent sales tax paid at the pump. Prior to enactment, the 
State motor fuel gas was 23.5 cents per gallon for gasoline. It 
is estimated that under the package, that rate may rise to 43.7 
cents per gallon by fiscal year 2017. And Virginia's $3.5 
billion 5-year package enacted this past April completely 
eliminated the State cents per mile gas tax and adds a 
wholesale tax on gasoline and diesel fuel.
    Each of these States was confronted with different 
challenges, yet each stepped up to begin addressing their 
infrastructure investment deficits and made the hard choices on 
how best to do that.
    But the message we should take from this is not that the 
States can take care of their situation on their own. Yes, the 
States must and are stepping up, but as we on this committee 
know very well, there is a significant Federal role necessary 
in surface transportation. Unfortunately, over the past several 
years, we have neglected our responsibilities in this regard. 
That concludes my opening statement.
    I thank you for having this hearing again, Mr. Chairman.
    Mr. Petri. Thank you. I now recognize the chairman of the 
full committee, Mr. Shuster.
    Mr. Shuster. I thank the chairman, thank you for holding 
this hearing and thank the witnesses for being here today. The 
chairman and the ranking member certainly laid out the 
landscape that we have to--we have to face, and there is a 
problem. I think we all know that. We have got to find 
solutions to it. Money is not the only solution. It certainly 
is a big part of it, but also, we have to continue to make sure 
we are streamlining, getting these projects moving faster. 
Instead of a major project taking 15 years, we need to be able 
to work to cut that time in half. That significant savings and 
inflation savings alone, you would save on some of these 
massive projects millions and millions of dollars.
    So, again, we need to continue to streamline. I know that 
MAP-21 was passed last year. I don't believe they have 
implemented all the streamlining that we put into MAP-21. I 
think that is going to be of some assistance, but again, we 
have got to figure out how to fund it. We need to consider all 
the--all the sources we possibly can in the ways we have done 
it in the past and new ways. I know that several Members have 
come up with innovative ideas that we need to take a look at. I 
don't know that they solve the entire problem, but they 
certainly add a tool to the toolbox to help us with this 
significant challenge that we face.
    And as the ranking member pointed out, there are a number 
of States that are addressing this. I don't know if he 
mentioned Arkansas, but Arkansas, the citizens of Arkansas, 81 
percent, I was told, 81 percent of the citizens of Arkansas 
voted to increase their sales tax by half a percent dedicated 
to funding, so that the people of Arkansas, I think the people 
of States all across this country know that we have a problem. 
It is the--it is the veins that carry commerce, the blood life, 
the blood of commerce is on those highways and byways and 
bridges, and we need to make sure that we continue to make the 
improvements and increase the capacity where necessary so that 
we can continue to be competitive in the world and create jobs.
    This is about jobs. Not just the jobs, certainly if we 
build a significant road project, there are jobs, but I am 
talking about the jobs that come after that, the 10-, the 20-, 
the 30-year jobs that are created by the efficiencies and that 
come about by having a first-class, world-class transportation 
system. So I look forward to working with all my colleagues and 
all of you here today listening in. It is going to take a big 
effort, not just by us on the committee and Congress, but a 
grassroots effort across America, making sure the American 
people, like the folks in Arkansas, obviously, came to the 
conclusion that something has to be done. But I look forward to 
working with all of you and the stakeholders to make sure that 
message gets out, make sure the American people are pounding on 
our doors saying we have a problem, we have to face it, and we 
have to find a solution to solve it.
    So again, thank you, Mr. Chairman, for having this hearing 
and thank our witnesses again.
    Mr. Petri. Thank you. And I thank our panel for the written 
statements that were submitted and would invite you to 
summarize them in approximately 5 minutes. Our witnesses today 
are Mr. Kim P. Cawley, who is chief, natural and physical 
resources cost estimates unit of the Congressional Budget 
Office, and the Honorable Polly Trottenberg, Under Secretary 
for Policy of the U.S. Department of Transportation. Welcome to 
both of you, and Mr. Cawley, would you like to begin?

    TESTIMONY OF KIM P. CAWLEY, CHIEF, NATURAL AND PHYSICAL 
RESOURCES COST ESTIMATES UNIT, CONGRESSIONAL BUDGET OFFICE; AND 
   HON. POLLY TROTTENBERG, UNDER SECRETARY FOR POLICY, U.S. 
                  DEPARTMENT OF TRANSPORTATION

    Mr. Cawley. Thank you, Mr. Chairman, members of the 
subcommittee. I appreciate the invitation to testify on the 
Congressional Budget Office's projections for the Highway Trust 
Fund.
    Mr. Shuster. Will you bring your mic closer. Thank you.
    Mr. Cawley. The authority to obligate new funds from the 
trust fund expires at the end of fiscal 2014, and the authority 
to collect most of the taxes dedicated to the trust fund 
expires in 2016. But all of CBO's projections assume that laws 
are enacted to enable the current trends and trust fund 
spending in revenues to continue. Specifically, CBO's 
projections assume that spending authority continues after 2014 
at roughly $50 billion per year and grows at the rate of 
anticipated inflation and that revenues continue to be 
collected at current rates after 2016 yielding about $40 
billion a year.
    I think those two amounts, Fifty billion dollars in 
spending and forty billion dollars in receipts, illustrate why 
continuing on the current path of trust fund spending and 
revenues is unsustainable. CBO's projections indicate that in 
2015, the trust fund will have insufficient amounts to meet all 
of its obligations. That means that at some point in 2015, the 
Department of Transportation will be unable to reimburse States 
for all of the Federal highway and mass transit expenses that 
they have already incurred.
    How States will respond to that situation is really 
unknown. They might patiently wait to be reimbursed by the 
Federal Government, or they might slow down their construction 
and maintenance programs, or they could even accelerate their 
spending in an attempt to receive reimbursements earlier than 
other States. It is clear, however, that without some change in 
policy, there won't be enough money to go around.
    This is not a new situation. The Congress has faced this 
problem before. For over a decade, trust fund spending has 
outpaced revenues. In the past, to avoid any shortfalls in 
making reimbursements to the States, the Congress has 
authorized nearly $55 billion to be transferred from general 
fund for the Treasury to the Highway Trust Fund over the 2008 
to 2014 period.
    This morning I tried not to repeat every number in my 
written statement, but I would like to conclude by focusing on 
just three more figures that illustrate the size of the problem 
that Congress faces when MAP-21 expires if the trust fund is 
going to avoid the shortfall that we have been discussing.
    To avoid the projected shortfall we see in 2015, the 
Congress could eliminate all highway and mass transit spending 
in 2015 or raise the tax on motor fuels by about 10 cents per 
gallon, or transfer about $15 billion from the general fund to 
the Highway Trust Fund. Of course, those three measures to 
control trust fund balances could be used in any combination as 
well. The additional measures needed to maintain adequate 
balances in the trust fund beyond 2015 are outlined in my 
written statement, and I would like to stop here and would be 
happy to answer any questions about CBO's trust fund 
projections.
    Mr. Petri. Thank you.
    Ms. Trottenberg.
    Ms. Trottenberg. Thank you, Chairman Petri, Chairman 
Shuster, Ranking Member Rahall, members of the subcommittee, 
thank you for the opportunity to appear before you today on 
behalf of the Obama administration and Secretary Anthony Foxx 
to discuss the future of the Highway Trust Fund.
    As the chairman noted, for nearly five decades, we had a 
very successful model for funding transportation that served 
the Nation well, but in recent years, the number of trends have 
converged such that the authorized spending levels have greatly 
outpaced available funds. As the chairman mentioned, since 
2008, we have relied on periodic infusions of general funds to 
cover program needs, and at times, the trust fund has come 
perilously close to insolvency. I think we can all agree, in 
the transportation community across the country right now, 
there is an agreement that a more permanent solution is needed.
    There has been, as many of you know, a long tradition of 
bipartisan agreement when it comes to transportation and 
revenue issues. In 1982, Congress, working with then-President 
Reagan, raised the gas tax to 9 cents per gallon and dedicated 
a portion of those revenues to fund mass transit. In 1990 and 
1993, Congress, working respectively with President George H.W. 
Bush and President Bill Clinton, raised the gas tax to its 
current level of 18.4 cents, with much of the initial increase 
going for deficit reduction. After that, the gas tax has not 
been raised again for 20 years.
    In late fiscal year 2008, the Department, for the first 
time, announced that there is insufficient cash in the Highway 
Trust Fund to fully cover payments due to States. The Federal 
Highway Administration ceased the practice that it had at that 
time of paying twice daily bills to State DOTs and moved to 
paying them weekly. Then-Transportation Secretary Mary Peters 
asked Congress for additional funds to restore solvency of the 
trust fund, and Congress subsequently transferred $8 billion in 
general funds.
    While this resolved the immediate shortfall, it did not 
resolve the long-term structural deficit. And as we heard here 
by the year 2014, the Highway Trust Fund will be nearly 
depleted again and Congress will have transferred, over the 
course of the recent years, $54 billion in general funds to 
keep the program afloat.
    Two fundamental shifts have occurred that are projected to 
continue the shortfall for the foreseeable future. First, the 
Obama administration is proud of our accomplishments in raising 
CAFE standards, but those improvements in fuel efficiency, 10 
percent over the last 24 years for light-duty vehicles have 
reduced contributions to the trust fund. Second, per capita 
vehicle miles traveled, which increased by large percentages 
for decades in the United States, peaked in 2005 and have been 
falling ever since, particularly as the millennial generation 
and baby boomers are driving less.
    In addition, highway and transit construction, labor, and 
material costs have increased by around 70 percent from 1993 to 
2013. So as we mentioned here, by the end of fiscal year 2014, 
DOT estimates that the highway and mass transit account cash 
balances will be $4.6 billion and $300 million respectively, 
and we will once again be facing a shortfall.
    Although the exact response would be depending on the 
specific situation, in the case of a shortfall, the Federal 
Highway Administration would implement established cash 
management procedures, Federal Highways would only be able to 
cover some fraction of State DOT reimbursement requests, and 
that would clearly affect States' abilities to invest in 
infrastructure, including critical, safety, and state-of-good-
repair projects. Likewise, the Federal Transit Administration 
would have to implement cash management procedures that would 
slow down payments to grantees in order to stretch out the 
available cash on hand. Many of the Federal Transit 
Administration's 1,300 rural transit providers would be 
especially devastated by a shortfall in funding.
    The administration has consistently supported 
infrastructure investment, including the President's $50 
billion ``fix-it-first'' initiative to create jobs for economic 
investment and rebuild our transportation network. The 
administration is also leveraging hundreds of millions of 
dollars of private investment through our TIGER, TIFIA, RIFF, 
and private activity bond programs. But we are also focused on 
how we can bring more productivity and efficiency out of our 
existing system and continue to perform--improve its 
performance at current spending levels.
    We are working to streamline project delivery, as the 
chairman mentioned, program management, and make better use of 
collaboration, integration, technology, and operational 
improvements. Ultimately, we know that any resources provided 
to the Highway Trust Fund are paid for by the American people, 
and we owe them the best value we can deliver for those tax 
dollars.
    Over the past 5 years, a variety of solutions have been 
proposed to address the long-term use of our surface 
transportation programs, but clearly none have yet been 
universally embraced. The Obama administration looks forward to 
working with Congress and transportation stakeholders 
throughout the country to find a bipartisan solution to this 
urgent challenge. I thank the committee and am happy to answer 
any questions you have.
    Mr. Petri. Thank you.
    And we appreciate both of you helping us address this. It 
is not necessarily a pleasant task, but it is an important task 
because we ask for these jobs, so we are going to have to deal 
with it as responsibly as we can.
    In that connection, does the administration have any 
position on what we should be doing about the default as we 
move forward to fund our transportation needs?
    Ms. Trottenberg. We have proposed in our budget using the 
funds available from the drawdown of our commitments in 
Afghanistan and Iraq to help fund the program in the short 
term. It has been proposed in our budget for the last few 
years, and it would enable us to not only continue the program 
at current levels, but grow the program and fund a new rail 
title as well.
    Mr. Petri. So that would mean basically taking money that 
would otherwise go into the general fund and using it to fill 
in the shortfall in the Transportation Trust Fund for the next 
few years?
    Ms. Trottenberg. Yes.
    Mr. Petri. And would that drawdown be anticipated to be 
adequate to meet the----
    Ms. Trottenberg. Yes. In fact, the drawdown actually 
provides, my understanding, more revenue than would be needed 
to continue the program and grow it. The administration, as I 
mentioned in my testimony, is also looking at ways of getting 
more private sector investors into our transportation program 
and looking for ways we can run the program more efficiently, 
both run it more efficiently at DOT, but also work with our 
partners, State DOTs and transit agencies, so that we do 
squeeze as much value as we can out of every dollar that we are 
spending.
    Mr. Petri. Could you sort of expand on the thinking of is 
it because of historic low interest rates that it makes sense, 
in your view, to borrow money for the next few years to pay for 
the transportation investment necessary rather than doing this 
maybe as a State search, and fund it upfront?
    Ms. Trottenberg. At the moment, I think the thinking in our 
budgets is as we reduce our overseas military commitment, it 
makes sense to take a portion of those savings and invest them 
in infrastructure here at home. There is, I think, the general 
view right now that interest rates are low and it is a good 
time to invest in infrastructure, and clearly the country has 
some pretty profound infrastructure needs at the moment.
    Mr. Petri. So, if we didn't do that, the money would be 
used to reduce the deficit, but you feel it is a better 
priority to fund transportation at this time with the borrowing 
rather than the deficit reduction?
    Ms. Trottenberg. I would say, Mr. Chairman, if you look at 
the administration's overall budget proposal, a portion of 
those funds would go to transportation infrastructure 
investment. Overall, the budget proposal has a number of 
suggestions on ways to also reduce the deficit. We do also 
think that is a priority.
    Mr. Petri. OK. Thank you very much.
    Mr. Rahall.
    Mr. Rahall. Thank you, Mr. Chairman. Let me just follow up 
on the chairman's questions, Madam Secretary, in regard to the 
cash management procedures both at FHWA and DOT. Based on your 
current estimates, what is the timeline when you think that 
this scaling back of reimbursements through our States will 
take place?
    Ms. Trottenberg. I want to preface my answer by saying 
these estimates are a moving target. We revise them fairly 
frequently. It can----
    Mr. Rahall. Right.
    Ms. Trottenberg [continuing]. Be very determined by 
economic conditions, gas prices, et cetera, so you have to take 
that with a grain of salt.
    Mr. Rahall. Let me add also, how much notice would the 
States be given?
    Ms. Trottenberg. I think we learned in 2008 that we need 
to, as soon as we start to get concerned with the cash balances 
are going to run low, that we start to talk to States well in 
advance so that States can have a sense of what might be coming 
and they can plan as well, because obviously they need to think 
about what a slowdown in cash disbursements would mean for 
them.
    As I testified, it looks to us, the rule of thumb has been 
that you want to have in each account, in the highway account 
and the mass transit account about a month's worth of potential 
disbursements, which is, give or take, $4 billion in the 
highway account, $1 billion in the mass transit account. And as 
I testified, according to our estimates, which differ a bit 
from CBO's, we will be down to $4.6 billion at the end of 
fiscal year 2014 on the highway side, and for the transit 
account, down to only $300 million.
    As we start to get to the end of next fiscal year, we are 
clearly going to need to start thinking about what the trust 
fund looks like and talking to States about what might happen.
    Mr. Rahall. Do you think the fear of waiting to get 
reimbursed by the States will cause them to front load their 
spending?
    Ms. Trottenberg. It is a good question, and actually, it 
turns out----
    Mr. Rahall. Around the bank, so to speak?
    Ms. Trottenberg. It turns out, in 2008, that is actually 
not what happened. There was a concern that States would try 
and quickly get to DOT for disbursements, but I think at that 
time the States had confidence that Congress and the 
administration were going to come together and plug up this 
hole in the trust fund. Whether States would think so now, I 
don't know.
    Mr. Rahall. Good question. Let me ask you about the peace 
dividend. You know, that sounds good, and that has been the 
line from administration for quite some time, taking the 
drawdown from expenses of two wars and spending it here at 
home. It still requires congressional appropriating action, 
does it not?
    Ms. Trottenberg. Yes.
    Mr. Rahall. Which means you are going to reduce defense 
spending and then increase spending for the Department of 
Transportation, and so you are still going to have that battle 
here on Capitol Hill, are you not?
    Ms. Trottenberg. I would think you would, yes. I would say, 
Congressman Rahall, I think clearly, as you are hearing from 
our testimony today, we have a big challenge here with what we 
are going to do long term in the transportation program.
    Mr. Rahall. And the peace dividend is not a long-term 
solution. That is still a Band-Aid approach.
    Ms. Trottenberg. And, I think, again, that is one idea that 
we have put on the table. We know there are a lot of other 
ideas here in Congress, and clearly, it is going to take the 
work of a lot of the leaders here in Washington to come up with 
a solution. It is not going to be an easy problem to fix for 
sure.
    Mr. Rahall. Thank you. Thank you, Mr. Chairman.
    Mr. Petri. Mr. Shuster.
    Mr. Shuster. Thank you. Just to follow up on Ranking Member 
Rahall's question on the acceleration, the States. You don't 
see any of that occurring now? I would think that maybe States, 
based on when the shovel-ready projects, where other States are 
going to be looking at this with the anticipation that we are 
going to run out.
    Ms. Trottenberg. The only thing I have seen so far, Mr. 
Chairman, we have talked to a lot of State DOTs and transit 
operators, and obviously they are all keenly following what is 
happening here in Washington and wondering what the long-term 
situation is going to be. This is one thing that we have often 
talked about, States need to take a long time to plan these 
projects. Big ones can take many years, and I do know that some 
States are starting to look at what their long-term list of 
projects is and think about, if we start to have a funding 
shortfall, what might we postpone? I haven't heard yet that 
they are thinking of accelerating, but that doesn't mean that 
some of them aren't thinking of it.
    Mr. Shuster. Right. Right. Mr. Cawley, the accuracy of the 
projections over the past years on the Highway Trust Fund, is 
it--have they been accurate or they been off or they----
    Mr. Cawley. Well, CBO's projections, I think, have 
certainly been close. We are rarely spot-on with the actuals. I 
think, on the revenue side, there is some difficulty in 
accurately predicting the change points, if you will, in the 
economy. For example, the 2008 financial crisis is something we 
certainly couldn't foresee, and that caused quite a change in 
revenues, but our most recent estimates have been pretty 
accurate.
    Mr. Shuster. Is there any difference in the accuracy in the 
highway account versus the transit account? Are they all pretty 
close to what you project?
    Mr. Cawley. I don't think there is a significant 
difference. I know we have some technical differences with the 
Department about the exact pace of spending for transit 
activities in past obligations, but it is not too large.
    Mr. Shuster. And Secretary Trottenberg, if we--if it is 
significantly reduced, spending, radically cut during fiscal 
year 2015, can you talk about the impacts it will have on our 
ability to maintain and what the effects will be on the States?
    Ms. Trottenberg. I think it is quite clear that the effects 
would be dramatic. I think you will start to see, if we draw 
close to what appears to be a bit of a crisis point, that State 
DOTs and transit agencies will start to look at the list of 
projects they have and potentially start to postpone some of 
them.
    One thing I would note for the committee is, and the 
effects would be different for different States and different 
transit agencies. As I mentioned in my testimony, particularly 
for smaller States or districts or rural areas, they are 
actually much more dependent on fairly frequent infusions of 
Federal dollars, so if there is a slow down, a larger transit 
system like in New York perhaps could float along for awhile, 
but some of the smaller rural transit providers, they would run 
out of money pretty quickly, so the effects will not be even 
across the country.
    Mr. Shuster. And you mentioned in your testimony, as I 
mentioned in my statement about implementing the streamlining 
in MAP-21. I know--I think that the chairman has had some 
hearings on that, and can you sort of update us on where we 
are?
    Ms. Trottenberg. We are meeting the deadlines as we go 
along. We have implemented the first categorical exclusion, 
which was for projects, emergency projects, and existing right-
of-ways. I am happy to say we already got to exercise that 
authority with the temporary replacement for the Skagit River 
Bridge in Washington State, so I think that was a tremendous 
success. We have out for comment now the categorical exclusions 
for projects with minimal Federal dollars and projects within 
existing right-of-way.
    We are very excited about the provisions within MAP-21 and 
they dovetail well with some of the things the Department has 
already been pursuing through our Every Day Counts initiative 
where we have really been trying to look for ways to speed up 
the environmental process, make the reviews concurrent, and 
work with all our sister Federal agencies. We thank Congress 
for those provisions, and I can assure you Federal Highways and 
Federal Transit are implementing them aggressively.
    Mr. Shuster. And in Sandy, the money that went out to the 
Sandy, wasn't there some--some of MAP-21's streamline, were you 
able to utilize that to get money out much quicker?
    Ms. Trottenberg. I think the emergency provision in MAP-21 
is going to prove very useful all over the country whenever, 
unfortunately, disaster strikes.
    Mr. Shuster. Thank you. Yield back.
    Mr. Petri. Representative Edwards.
    Ms. Edwards. Thank you, Mr. Chairman, and thank to our 
witnesses today. I think this is the thing that we just 
struggle with. I mean, I happen to be from the great State of 
Maryland, which I think did something both spectacular and 
really politically difficult over this last session of our 
general assembly in terms of spending--that as a State, we have 
State transportation needs that are not being met and dwindling 
ability to expect that the Federal Government is going to be 
the partner that it needs to be, particularly for some of these 
large projects. And so, one of the ways that we wrestled with 
that, of course, was around the gas tax. Still, not without 
controversy. Although, as I go around my district and talk to 
people about this, you know, the--you know, some of the folks 
who are understandably angry because they seem to be paying 
more and more at the pump, but these are the same people who 
have great complaints about the--about our infrastructure and 
whether we are able to meet those needs adequately.
    And I think many of us have just come to the conclusion 
that in the same way that we had to absorb the fact that 20 
years ago we paid 50 cents for a candy bar, that same candy bar 
costs $1.25 now.
    And I look at, you know, the gas tax as, you know, a 
revenue source, although not one that we can count on for the 
future for reasons that you have described in your testimony. 
And I wonder if there is some hybrid solution--for example, 
implementing a CPI, which we seem to do on just about 
everything, and adjusting that CPI so that it is, in effect--I 
mean, as I think, Mr. Cawley, in your testimony, I think you 
pointed out that, had that consumer price index been in place 
at 18.4 cents, it would be about 29 cents today.
    And I am not saying doing that, but, you know, perhaps even 
implementing a CPI and, you know, from day one, from today 
going forward, and then some sort of temporary, one-time 
adjustment so that we could bring the fund up to some 
acceptable point. But at least we would have, then, that 
structure in place for the future rather than having to 
continue to revisit this question and spending dollars today 
that don't hold the same value as a dollar would, you know, a 
year or 10 years from now.
    And so I wonder if you could talk to us about just, you 
know, explore the alternatives. I know we are afraid to mention 
that sometimes on this committee, but it seems to me a 
realistic approach to try to deal with what is a truly 
structural problem that is impacting job creation and impacting 
our ability to meet our infrastructure needs.
    Ms. Trottenberg. I would just say, it is interesting, we 
actually had for many decades a de facto indexing, because fuel 
usage just increased fairly naturally for so many decades, 
after 1956.
    Clearly, this is something I know that has been much 
debated in Congress. I think it is--in my time, because I 
worked on Capitol Hill for many years, it is sort of a 
perennial debate with a lot of different programs about whether 
you maintain control by voting regularly to increase revenues 
or whether you decide to just put some kind of an index in and 
let it go on autopilot. I think it is a difficult decision.
    To some degree, we had de facto indexing for a long time. 
Part of why we are where we are now is because fuel usage has 
essentially flattened out. We no longer have that de facto 
indexing.
    Mr. Cawley. I think the option you outline, to start 
indexing to CPI perhaps in the near future, is certainly 
something we could work with your staff and try to analyze the 
numbers on. I can't do it here, but it is a possibility we 
could look into for you.
    Ms. Edwards. Thank you.
    I will just conclude. I think, Mr. Chairman--Chairman 
Shuster, Mr. Chairman, it is really incumbent on us to figure 
this out. I mean, we put an obligation--for example, when the 
base reorganizing was done, there are facilities all across 
this country, two of them in my district, where we also weren't 
able to make the kind of transportation structural changes that 
were needed to accommodate what were increased numbers of 
employees at those facilities. There is a greater burden on our 
bridges, greater burden on our roads, and we haven't been able 
to meet those needs. And I just hope that we can find a 
solution to this.
    And I would just say that, you know, finally, it makes 
sense to me that in this environment we have to create a 
process where we can come to the kind of bipartisan solution 
that Secretary Trottenberg pointed out over the history of the 
transportation fund. And when we do that, I think we will get 
to one that the American people can respect and enjoy.
    Thank you.
    Mr. Petri. Thank you.
    Mr. Coble?
    Mr. Coble. I thank the chairman. Good to have the panelists 
with us today.
    Mr. Cawley, your testimony states that the revenue from the 
gas tax is in decline while revenues from the taxes on diesel 
fuel and truck and truck sales are increasing. What trends do 
you expect to see as it relates to the remaining excise taxes?
    Mr. Cawley. Over the 10-year period, we project the 
combined revenues from all of the various excise taxes that go 
into the Highway Trust Fund will vary between about $38 billion 
to nearly $41 billion. So, over the 10 years, there is not a 
tremendous growth or variance in the receipts.
    Mr. Coble. Will these trends that you may have suggested, 
will these trends have any impact on the insolvency of the 
Highway Trust Fund?
    Mr. Cawley. Assuming that spending from the trust fund 
keeps growing at the same pace it has been in the past, we will 
have this shortfall that we have been discussing, yes.
    Mr. Coble. I thank you.
    Ms. Trottenberg, is the impending insolvency of the Highway 
Trust Fund already having an impact on our Federal partners', 
States', transit agencies', and local entities' ability to plan 
and move forward with projects?
    Ms. Trottenberg. I think we are just potentially starting 
to see a little sign of that. I don't want to overstate it, 
because I think, so far, the States and the transit agencies 
are somewhat optimistic that we are going to find a solution.
    But as we draw closer to the end of the life of MAP-21 and 
it looks like the balances in the Highway and Transit Trust 
Funds are going down, I think clearly our State and local 
partners are going to start to perhaps pull some things off the 
list of projects that they were planning to go forward with.
    Mr. Coble. I thank you both for being with us.
    Mr. Chairman, I would like to yield back.
    Mr. Petri. Thank you.
    Representative Eddie Bernice Johnson, any questions? No.
    Mr. Sires?
    Mr. Sires. Good morning.
    Thank you very much for testifying.
    You know, there are many gaps in what we fund, and one of 
the gaps in the Federal funding I am finding in our freight 
transportation network.
    I was wondering if you think that we could specifically 
have a tax and just dedicate it to freight transportation and 
just not have the--not have it put in with the highway 
transportation fund. How do you think that would work, since we 
are heading for all this shortfall? Do you think that would be 
something that we could consider, and just dedicate it to 
freight movement?
    I come from a district where I have two ports, New York. 
Freight movement is extremely important. And I am concerned 
that we are not funding it sufficiently. So I am trying to look 
for a way to--Mr. Cawley, you don't seem too enthused about it.
    Mr. Cawley. I think I am just trying to follow you. It 
sounds like a new proposal. And it is not clear to me if you 
mean freight movements, multimodal or just highway-type freight 
movements. But, certainly, additional revenues directed to the 
Highway Trust Funds, whether in another special account or not, 
could certainly increase the amount of resources available for 
roads.
    Ms. Trottenberg. I will say a couple things on that 
question, Congressman.
    First of all, I would say the Department has now run four 
rounds of the TIGER grant program, and one thing we noticed 
is--and it was an open competition of all modes of 
transportation, and freight projects did extremely well. Out of 
the $3.1 billion that Congress gave us for TIGER, the 
Department wound up awarding almost a billion of it to freight 
projects. They scored very well in terms of economic benefits 
and social benefits. So I think there is clearly a large 
inventory of important freight projects that are worthy of 
public investment.
    At the same time, as you all know, in MAP-21, you have 
charged the Department with doing a lot of new work on freight. 
I think the goal of our implementation of the MAP-21 freight 
provisions is to give you all here on Capitol Hill a good sense 
of what are the freight needs around the country, what are the 
different ways we might address them, and what new types of 
programs might we need.
    I am hoping that our MAP-21 implementation work will help 
provide an answer to some of the questions I know a lot of you 
Members who are concerned about freight have been asking.
    Mr. Sires. All right. Thank you very much.
    Mr. Petri. Thank you.
    Mr. Crawford?
    Mr. Crawford. Thank you, Mr. Chairman. I appreciate you 
calling this important hearing today.
    I thank the witnesses for being here, as well.
    This is probably the most important issue that we will face 
in this committee as we begin consideration of the highway bill 
reauthorization next year.
    And I understand the important role Federal funding plays 
in our Nation's highways. In my home State of Arkansas, Federal 
highway funds account for over 50 percent of the State's 
highway program funding each year due to the size of Arkansas's 
highway system and relatively small tax base.
    It is critical that we find solutions for the long-term 
solvency of the Highway Trust Fund, and this hearing is an 
important step in that process. And, as has been pointed out 
earlier today, Arkansas passed a tax that would help in funding 
highway projects.
    What advice would you have--I will start with you, 
Secretary Trottenberg. What advice would you have for small 
States, like Arkansas and others, as we anticipate a further 
tightening of Federal funds geared toward investing in our 
highways?
    Ms. Trottenberg. Yeah, it is a good question. You are 
certainly right, Congressman; there is a wide variation for 
States in terms of how much they rely on Federal funds to make 
up their transportation program. Typically, smaller States and 
more rural States that, as you point out, might have a very 
large highway network, relative to a small population base, 
typically rely more heavily on Federal funds. That is, in a 
sense, the way we designed the Interstate Highway System and 
why we have been funding it, in part, at the Federal level.
    I would say, increasingly, among States large and small, 
there is an effort to, in addition to, as some States are 
doing, looking at new revenue measures to also try and engage 
in more innovative financing, to look to the private sector to 
help where they can.
    Although, I think, as this committee knows, to the extent 
that you are using innovative financing, it is usually money 
that is being borrowed, and it does have to be paid back with 
some sort of a revenue source. That can often be a challenge 
for more rural States.
    Mr. Crawford. Talk about a possibly scaled-down State 
version of TIFIA. I know that some States actually have that in 
place. Is that a viable option for States to implement?
    Ms. Trottenberg. It is certainly a viable option, and a lot 
of States have been looking at it. Again, you do need a revenue 
source to repay the loan. TIFIA provides a financing mechanism, 
and one that is increasingly very popular because it enables 
project sponsors to access very low-interest loans and pay them 
back over a very long timetable.
    But you do have to pay them back. And, typically, at the 
Federal level, that is meant through some kind of a toll, a 
sales tax, or what is called an availability payment, which is 
just a stream of revenues from the State or local government.
    Mr. Crawford. Mr. Cawley, your thoughts on either of those 
questions?
    Mr. Cawley. I guess I would just observe that States have 
for a long time had safe drinking water funds and wastewater 
treatment, water revolving funds, which are along the lines of 
what you are talking about for transportation. But there, 
obviously, there is a dedicated revenue source available for 
the treatment of sewage and supply of drinking water, so 
transportation is a little bit different for that model.
    Mr. Crawford. Thank you. I appreciate it.
    Yield back.
    Mr. Petri. Representative Hahn?
    Ms. Hahn. Thank you, Mr. Chairman.
    I am from California, from Los Angeles, where we have done 
very well, I think, in passing our own increased tax measures 
to help fund transportation projects. So I am really always 
proud of the voters in particularly L.A. County, who always 
seem to agree to tax themselves to fund transportation 
programs.
    You know, we talk a lot about the gas tax, and that seems 
to be sort of the common theme about raising the gas tax, 
finding some index that automatically does that. So I am one of 
two Members of Congress that drive an electric vehicle, so I am 
proud of that. And we, too, drive the roads and the highways, 
not as far as we would like to, depending on the charging 
stations.
    But what is your thinking on--you know, we are more and 
more encouraging carpool lanes, which means people are leaving 
their cars at home, which means they are buying less gas. We 
are encouraging the use of alternative-fuel cars, electric 
vehicles. I haven't been to a gas station in 2 years.
    So what are we thinking? What are some user fees? What is a 
different way to think about a revenue stream besides just a 
gas tax? Because I think more and more Americans are looking to 
avoid the gas station. So what is a concept that we might start 
really looking at and analyzing to achieve revenue from those 
of us who certainly use the roads but aren't buying gas?
    Mr. Cawley. I think a lot of folks have talked about some 
kind of technologies to charge people based on the amount they 
use the roads, a vehicle-miles-traveled type of charge. And I 
believe Oregon is looking into an experiment to try that type 
of charge on users.
    Mr. Nolan. Could you say that again?
    Mr. Cawley. I believe that Oregon is investigating how this 
might work. I think it requires a lot of technology to track 
vehicles, where they actually go and how they use the roads. 
But that has been discussed quite a bit as an alternative to a 
fuels tax.
    Ms. Trottenberg. I would take a step back and say, there is 
a larger question that I think we are potentially still 
grappling with, which is, there are three approaches on the 
table or some combination of mixing and matching. There is the 
current approach, which is we are using general funds to plug 
up the trust fund. We could also let expenditures out of the 
Highway Trust Fund match revenues, which would obviously, I 
think, have big impacts on transportation across the Nation. 
And then there are potential other revenue sources. I am not 
sure we have gotten to number three yet, let alone getting into 
the details of what we would specifically choose.
    Ms. Hahn. Well, I appreciate that. I certainly think we 
ought to be looking at something other than just a gas tax. I 
always feel like raising the gas tax is also inappropriate--you 
know, affects low-income folks, and would like to really find a 
way that it could be more fair on who is using our highways. 
And just because you are buying more gas doesn't necessarily 
mean you are using the highways more than someone who is not.
    So, you know, the technology exists. We really ought to 
look at that. I know in Los Angeles we track--we have some fast 
lanes that folks buy the little tracker they put in their 
windshields, and it is very easy to track. And we are charged 
every time we drive in a certain lane on the freeway in Los 
Angeles. It is not that difficult then to charge the person in 
that way.
    So I think that is--we really ought to, I think, be looking 
outside of the gas-tax box as we go forward.
    Thank you.
    Mr. Petri. Mr. Hanna?
    Mr. Hanna. Thank you.
    Along Ms. Edwards and Ms. Hahn's point, it seems to me the 
general paradigm of funding highways through the gas tax or the 
notion of a highway use tax have relevance and have had 
relevance but that, in many ways, they are both becoming 
somewhat arcane; that, in fact, young people between the ages 
of 16 and 34 have driven 23 percent less, from something around 
10,000 miles a year to 7,300 miles a year.
    And mass transit and urbanization and the fact that we are 
not funding mass transit the way, frankly, I think we should 
is, in fact, the case to consider the general fund as a way to 
allow everyone to pay in a system, that even if you don't own a 
car and you drive a bike, you would use a road. If you order 
through Amazon.com, you use the road to get things to you. The 
notion of not going to the general fund for this money for 
something is maybe fundamentally flawed.
    And I don't say that as a criticism, just a general 
observation that, increasingly, roads haven't lost their 
relevance or importance, but the people who enjoy the benefits 
of those roads are, frankly, not paying a fair share. And I 
worry that all the conversation around highway use taxes, 
distance-mile taxes, may already be becoming irrelevant. Ms. 
Hahn here escapes taxation.
    I don't know how you do it.
    I want to know what you think about that. Thank you.
    Ms. Trottenberg. I think, Congressman, we certainly are 
seeing and thinking about the trends you are talking about, 
which have a lot of different implications. Implication number 
one, with young people and retiring baby boomers increasingly 
driving less, obviously it is having an effect on the bottom 
line of the trust fund.
    It also has an effect on the transportation policy side. If 
the demand for alternative forms of transportation--transit, 
biking, walking, et cetera--is rising at the same time that 
revenues to the trust fund are going down, then that is a real 
challenge, because there is a big demand for other forms of 
transportation.
    Mr. Hanna. Well, I am concerned, too, that going to the gas 
tax--and, you know, frankly, the elephant in the room is that 
somebody's taxes are going up if we are going to do what we 
need to do someplace--going to the gas tax may be avoiding an 
opportunity that we have to talk about this in a much broader 
way.
    And, either of you, I am just interested in your opinions.
    Ms. Trottenberg. Well, in some ways, we are already there. 
By the end of fiscal year 2014, we will have transferred $54 
billion in general funds to use for transportation. And in the 
transit program, a portion of that program has always been 
funded through general funds.
    So, even maybe without coming out and saying it, we have 
been doing a little bit of that now for about the past 6 years.
    Mr. Hanna. But the point is, we have stopped doing that. 
And it is a tough conversation.
    Ms. Trottenberg. Well, no, in MAP-21, we have transferred 
$21 billion of general funds for these 2 years. So it has been 
ongoing since 2008.
    Mr. Hanna. Except that, my point is that the conversation 
is a particularly difficult one in this Congress. And the 
question isn't, what do we do for MAP-21? It is, what we do 
beyond MAP-21 when we, as you pointed out, bankrupt the fund?
    So my time has expired. I apologize. Thank you.
    Mr. Petri. Representative Kirkpatrick?
    Mrs. Kirkpatrick. Thank you, Mr. Chairman.
    Under Secretary, we are talking about vehicle miles 
traveled. And I represent a very large rural district in 
Arizona where people drive lots and lots of miles. Have you 
done a comparison on the impact of raising the gas tax versus 
going to VMT on rural America?
    Ms. Trottenberg. We have not, but I think, as Mr. Cawley 
mentioned, there is an experiment underway in Oregon where they 
are going to be looking at some of those very issues. So they 
may provide some pretty interesting data, some folks will be 
doing VMT, some folks will be paying the regular gas tax, and 
they can compare the results.
    Mrs. Kirkpatrick. Well, I think it is very important in 
coming to a solution here that we don't have unintended 
consequences and that we don't harm the rural areas of the 
country, where they really don't have transportation choices. I 
mean, it is clear as a Nation, yes, our transportation 
preferences are changing, but that is more in the urban 
centers.
    But I just want us to keep in mind, Mr. Chairman, as we 
talk about this, and Ranking Member Rahall, that we have rural 
areas in this country where people use the roads, they travel 
lots of miles, they consume a lot of gasoline, but they are not 
getting back those tax dollars in terms of investment to make 
their roads better. And I think it is very important that we 
continue to keep that in mind as we try to come up with a 
structure that is going to be fair.
    Do you have any comments, Mr. Cawley, about that?
    Mr. Cawley. It is not something that CBO has specifically 
tried to look into yet. But, certainly, we should be thinking 
about it.
    Mrs. Kirkpatrick. Yeah, would you keep that in mind?
    And I just have another question for you. In your report, 
in the CBO report, you say that we have to come up with a 10-
cent-per-gallon gasoline tax increase if we are actually going 
to put the Highway Trust Fund on a fiscally sustainable path.
    Do you mean that on gasoline and diesel? It wasn't clear in 
your statement.
    Mr. Cawley. All motor fuels, right.
    Mrs. Kirkpatrick. All motor fuels, 10 cents.
    And in 1956, when we first enacted the tax, it was 3 cents 
per gallon. Have you done a percentage of what that was per 
gallon of gasoline at the time? I mean, are we within the same 
range that we were in 1956 when we were taxing 3 cents per 
gallon?
    Mr. Cawley. I haven't done that particular calculation, and 
I am not sure I can do it in my head.
    Mrs. Kirkpatrick. OK. Well, maybe I can have my staff do 
that. I was just curious about that.
    Thank you, Mr. Chairman. I yield back.
    Mr. Petri. Mr. Ribble?
    Mr. Ribble. Thank you, Mr. Chairman.
    I want to thank you both. I am over here to your left. Very 
good. I know it is kind of hard to find. You have the sound 
coming out of the air here.
    Ms. Trottenberg, I am curious about your testimony today in 
one respect. In your written testimony, on page 7, you have a 
section entitled ``Administration Proposed Funding Solutions.'' 
However, in the three paragraphs that are contained in that 
section, there are no proposed funding solutions.
    Does the administration have solutions for us?
    Ms. Trottenberg. Congressman, as I mentioned before, in the 
President's fiscal year 2014 budget, we have proposed taking a 
portion of the funds that were previously going for our 
military engagements in Iraq and Afghanistan and using that to 
invest in infrastructure here at home.
    We are also increasingly looking at ways that we can get 
more private-sector investment into our transportation system.
    But I think we also acknowledge, for a long-term 
sustainable solution, we are going to need to work with you all 
here on the Hill and with stakeholders around the country to 
look for some additional solutions.
    Mr. Ribble. Yeah, because none of those solutions really--
they are very unstable. I mean, another war could pop up 
tomorrow, and then that whole idea disappears. And we really 
need to have some type of long-term solution. And conversations 
like this, while helpful to identify the problem--and I think 
the American people need to be brought aware of the problem--
are, like many hearings I am at, high on identifying problems, 
low on identifying solutions. And what we really need do is 
find that.
    Mr. Cawley, I am curious, has CBO done any almost 
macroeconomic evaluations on the impact of motor fuel taxes on 
the trucking industry?
    When I look at it, diesel fuel is taxed at about a 25-
percent premium, which is paid pretty much by them. There is a 
12-percent excise tax not only on new truck purchases, which is 
sometimes better for the environment, we also charge a 12-
percent excise tax on improvements to those vehicles. For 
example, if you want to convert from diesel fuel to CNG, for 
example, not only is that an expensive conversion, we charge 
even more for that. Then there is an additional tax on the tire 
weight ability, which goes heavily to the trucking industry. 
Then we also have a heavy vehicle use tax, which is paid for by 
the trucking industry. And then after the trucking industry 
pays for all of those things, if they happen to go on a road 
that has a toll, they pay that as well.
    And it seems like it is a very simple thing for Congress to 
just kind of make them pay the tax because there are fewer 
voters associated with that. However, when I look at the 
industry, it is not just the trucking companies, it is the 
people who build those trucks, it is the people who maintain 
those trucks, it is the people who load those trucks, it is the 
people who unload those trucks, it is the people who grow and 
make the products and build the products that go in those 
trucks that are all affected by the higher costs.
    And I am curious if we are not just shooting ourselves in 
the foot. We are almost treating this as if it is a sin tax, 
and typically you use sin taxes when you want less of 
something, not more of it.
    What are your thoughts on that?
    Mr. Cawley. I don't believe CBO has prepared any particular 
studies that look at the impacts on the trucking industry by 
itself.
    Mr. Ribble. Would you concur with my assessment?
    Mr. Cawley. That we are increasingly putting charges onto 
the trucking industry? It is not clear to me that under current 
law there are going to be any increases in any of these 
particular taxes.
    Mr. Ribble. I am speaking more directly to the impact of 
taxation on a particular taxpayer in relation to how they make 
economic decisions based on taxation.
    Mr. Cawley. I don't really have a conclusion for you on 
that.
    Mr. Ribble. All right. I appreciate that.
    Ms. Trottenberg, regarding the reduction of the Highway 
Trust Fund, particularly in revenue, between 2007 and 2010, we 
do know that there was less diesel fuel used. Do you attribute 
that to a reduction in miles driven due to the great recession, 
or do you think this is a long-term trend?
    Ms. Trottenberg. I think, as we were discussing at the 
beginning of the hearing, although overall fuel usage is going 
down, actually diesel fuel usage has been going up, with some 
ups and downs in terms of fuel prices and economic conditions. 
The trucking sector is a growing one.
    Mr. Ribble. It is.
    Ms. Trottenberg. I think, in terms of long-term trends, I 
haven't looked at long-term projections over many years, but I 
think for the foreseeable future there is some growth in that 
sector.
    Growth in the passenger side of fuel use is pretty flat. 
And so what you see in terms of revenues to the trust fund is 
it only goes up a little tiny bit if you look at the next 6 
years' worth of revenue projections. Now, that is always 
subject to change depending on economic conditions, et cetera.
    Mr. Ribble. All right. Thank you very much.
    And, Mr. Chairman, I yield back.
    Mr. Petri. Representative Frankel?
    Ms. Frankel. Thank you, Mr. Chair.
    I want to follow up on Mr. Hanna's comments, which I 
thought were well taken. Just first with a story. I remember 
visiting another country several years ago; I won't name the 
country. But what struck me was the condition of the roads. I 
mean, this was a beautiful country, but you basically had to 
inch to wherever you wanted to go. There were so many potholes, 
it would take--I am from Florida, so what would take me maybe, 
you know, 15 minutes in Florida literally could take 2 hours in 
this other country.
    Which leads me to my next question, which is--or my first 
question, which is whether there has been an economic analysis 
of the impact of not investing in our infrastructure, our 
highway infrastructure, for example, the cost to the American 
economy, to tourism, to individuals having to repair their 
cars. Is there any type of analysis that you have?
    Mr. Cawley. I am not aware of anything like that from CBO.
    Ms. Frankel. You are kidding.
    Mr. Cawley. No.
    Ms. Trottenberg. I would say that there is a fair number of 
reports and analysis looking at questions like how much does 
congestion cost in terms of time spent in traffic and looking, 
I think, at some of the economic impacts of those delays, which 
are often very hinged on road condition and condition of 
transit systems.
    Ms. Frankel. Uh-huh.
    Ms. Trottenberg. There is, I think, a fair amount of 
literature. The Texas Transportation Institute does the report 
that is most well-known, where they analyze every year 
essentially what the costs are to the economy of time spent in 
congestion. And it is tens of billions of dollars.
    Ms. Frankel. The reason I asked that question is because I 
am really, as I said, following up on Mr. Hanna's comments, is 
that it is more than just someone who drives a vehicle that is 
using the roads. I mean, I come from Florida. We have, you 
know, thousands and thousands of tourists on the roads, and if 
our roads were not smooth, then, listen, they would go--I mean, 
the tourism industry is competitive. They would go maybe to 
another State or another country. We have a lot of people 
coming in from other countries.
    So the point I am trying to make is that our analysis--just 
to look at the user fee, you know, like a gas tax or whatever, 
may not be the fairest way to go about this, because our roads 
really--transportation drives our economy. Other than anything 
that goes on the Internet, I mean, if you want to move 
products, you want to have tourism, you want to get to work, 
most people go on the road.
    Do you want to respond?
    Mr. Cawley. Well, I certainly agree with you, 
transportation is very, very important. I am not aware of an 
economic analysis that CBO has prepared that tries to 
quantify----
    Ms. Frankel. I guess----
    Mr. Cawley [continuing]. All these benefits that you have 
been talking about.
    Ms. Frankel. Well, how about thinking outside of just maybe 
a gas tax? What I am saying is, we have a lot more users than 
someone driving a vehicle or just even a truck driver driving a 
vehicle. I mean, what about the supermarket that is waiting for 
the food to come in? I mean, doesn't that supermarket depend 
upon food getting delivered on time?
    Mr. Cawley. Right. I mean, I think the point was made 
earlier that ultimately there are just two sources of money for 
roads----
    Ms. Frankel. Right.
    Mr. Cawley [continuing]. The general taxpayers or the road 
users.
    Ms. Frankel. Right.
    Mr. Cawley. And you are making an argument that the general 
taxpayers benefit, too.
    Ms. Frankel. All right. Thank you very much.
    I waive the rest of my time, Mr. Chairman.
    Mr. Petri. Representative Rice?
    Mr. Rice. Good morning, and thank you for being here.
    Certainly, you know, we have to invest in infrastructure. 
Our infrastructure is not keeping pace with the rest of the 
world, and it makes us less competitive. Competitiveness is 
something that I am really concerned about, keeping American 
jobs here and bringing some of those jobs that have already 
gone overseas back.
    But we are sitting here talking about a fuel tax increase. 
We just had a tax increase on January 1st with the fiscal cliff 
deal. We are going to have another tax increase on January 1st 
with the new healthcare rules. So, tax increases make us less 
competitive.
    I don't think that the average American knows what the fuel 
tax is. I think that is not what they are concerned about. I 
think what they are concerned about is the price they see at 
the pump. And as late as 2009, the price they saw at the pump 
was less than $2 a gallon, and now it is $3.50 a gallon. So if 
there was a way that perhaps we could bring the fuel cost down, 
it might not be as much of a hardship to raise the gas tax a 
few pennies.
    Because, you know, these people are suffering. The economy 
is still in the dumps, dragging along. Unemployment is far too 
high. And taxing them any more in any aspect is not a good 
thing.
    You know, we have all these proposals out here to bring the 
cost of fuel down. We have this Keystone Pipeline proposal. We 
have all these options for drilling on Federal property, ways 
that we can use our domestic resources to keep from sending 
money overseas and bring our fuel costs down. And the 
administration doesn't want to have any part of that, but they 
want more money for the highways.
    You know, if we could employ some of these things and make 
a meaningful drop in the fuel cost, then if you are saying you 
need a 9-cent fuel tax rise, if that happened, then I don't 
think 90 percent of the people would even know. But adding to 
it on top of everything we have already put on them is just 
almost unconscionable at this point.
    So, you know, in terms of competitiveness, I think we need 
infrastructure investment. In terms of competitiveness, I think 
we need low fuel costs. I think taxes are generally 
anticompetitive.
    So, you know, the idea of adding another 10 cents a gallon 
on people who are already stretched to the limit right now--you 
know, the administration came out last week, said that they 
were going to increase their emissions standards. War on coal, 
shut down coal plants. That is not going to do anything but 
drive everybody's utility costs up. It is going to make our 
businesses less competitive. Everybody's home heating bill is 
going to be higher.
    And now we are sitting here talking about raising fuel 
taxes at a time when people are just living paycheck to 
paycheck and barely making it. If we would use the tools we 
have and the resources God has given us, it wouldn't be so 
hard.
    Thank you. I give up the rest of my time.
    Mr. Petri. Mr. Carson?
    Mr. Carson. Thank you, Mr. Chairman.
    Mr. Cawley, Madam Trottenberg.
    I am interested in working on issues related to intelligent 
transportation systems. I want us to build on the limited 
language included in MAP-21 and see a better utilization of 
smart technologies with our existing infrastructure and really 
begin to implement new technologies. I think that the 
utilization of intelligent transportation technology can 
improve safety, lower highway fatalities, reduce congestion, 
and help make our transportation system smarter and more 
sustainable.
    I am curious if either one of you see a role for new 
technologies to help fix the funding deficit for the Highway 
Trust Fund. Are there ways to improve highway funding through 
new technologies at all? Are there any promising pilot 
programs, perhaps, in the States that should be considered at 
the Federal level?
    Ms. Trottenberg. I would say a couple things on that, 
Congressman Carson.
    Thank you for your support of intelligent technologies. We 
think that is a tremendously important, growing area in 
transportation in two ways.
    One, it offers the possibility of a lot of proven and low-
cost ways to improve the efficiency of the existing system. As 
we are hearing, this is a very difficult question about how and 
if we are going to come up with more revenues, but we have a 
lot of intelligent transportation systems that can help use the 
system better that we have right now--even the most basic 
things like signalization, ramp metering. There are a bunch of 
very low-cost technologies that I think States and transit 
agencies can make use of that will get much more utilization 
out of existing capacity. And that obviously will make our 
whole system more cost-effective.
    There are also, and I think Congresswoman Hahn mentioned, 
increasingly a lot of technologies out there--E-ZPass, all 
kinds of things--that, to the extent that at the State and 
local level you are looking at different tolling mechanisms, et 
cetera, there are technologies that can make it a lot less 
intrusive and potentially, also a lot more cost-effective.
    So that is an area of tremendous potential and one I can 
tell you at DOT that we are doing a lot of research on and we 
are very enthusiastic about.
    Mr. Cawley. It is not a subject I know very much about, but 
it sounds interesting, but I am sure it will be also expensive, 
as well.
    Mr. Carson. All right. Thank you both. Thank you for your 
honesty.
    I yield back, Mr. Chairman.
    Mr. Petri. Mr. Mullin?
    Mr. Mullin. Thank you for being here today. Thank you for 
the opportunity to, well, just ask some questions. It seems 
like there is a lot more unknown than there is known in this 
room.
    A lot of suggestions, but, you know, really, we run into a 
situation that I don't know if we are looking far enough ahead. 
Does either one of you have a projection of 20 years down the 
road where we are going to be?
    Because what I keep hearing from Mr. Cawley and Mrs. 
Trottenberg is that we are just looking to put a Band-Aid on 
something.
    Does either one have an idea of where we are going to be in 
20 years, the shortfalls we are going to have or the 
infrastructure needs that we are going to be facing?
    Mr. Cawley. I don't have a projection going out 20 years. 
But I think, in our testimony, we measure----
    Mr. Mullin. Well, if we----
    Mr. Cawley [continuing]. The size of the shortfall in 10 
years is enormous.
    Mr. Mullin. Well, as slow as we move in the Government, if 
we go just 10 years out, we are just going to be starting on 
today's problems. And I don't mean that as a joke, but I am 
being serious. Before we can get a project--we have to plan 
today before we can get a project. It is 3 to 5 years before we 
can get to see the dirt start moving.
    Mr. Cawley. It is a difficult problem.
    Ms. Trottenberg. I think it is a very fair question. And as 
my colleague mentioned, I have seen 10-year projections. 
Essentially, as we have mentioned, the revenues to the Highway 
Trust Fund will flatten out around $36 billion, going up a tiny 
bit.
    And, there have been a bunch of different analyses out 
there over what the needs are. I mean, the trend lines diverge, 
and they continue to diverge in the long run. I think the 
picture is even a little more dire 20 years out if we don't do 
some interventions.
    Mr. Mullin. Sir, you had mentioned a 10-cents tax on 
gasoline and diesel. Have we thought about our natural gas 
vehicles, which are just on the rise--they are going to 
continue to rise--and our electric vehicles, how we are going 
to plan on making sure that they pay to drive the highways too?
    Mr. Cawley. CBO can't make any proposals about additional 
taxes that you all might want to impose on different kinds of 
alternative-fuel vehicles. But when I look at the----
    Mr. Mullin. Well, it is not so much as wanting to propose. 
It is just, if everybody is going to--you know, what we 
continue to hear from this administration is pay their fair 
share, if we are going to continue to go down that road, then 
those that are using the infrastructure--which is every 
American, every individual, every person that comes and visits 
this country gets to enjoy the benefits of our infrastructure 
that we have. So how are we going to pass it on to everybody, 
other than just the individuals that are driving gas and diesel 
vehicles?
    Mr. Cawley. Presumably through a fuels-type tax for those 
alternative kinds of fuels or some sort of vehicle-miles-
traveled charge for the use of the roads.
    I don't know of any proposals out there to do those kinds 
of things at the moment, but when I look at the projections 
that Department of Energy has about the vehicle miles traveled 
or anticipated to be traveled by these alternative-fuel 
vehicles, they are not huge.
    Mr. Mullin. Well, the trend that we are seeing with natural 
gas and with electric vehicles, they are fueling at home, not 
at the pump. And so, if we don't figure out a way to actually 
capture that, then we are literally just doing what Government 
continues to do and we just put a Band-Aid on it when we really 
need stitches.
    Ma'am, you had talked about this administration, the Obama 
administration, wanting to use the revenues, or lack of 
revenues, from our drawdown in our two wars that we have been 
fighting. But this administration--and I believe you will even 
admit that that is dead on arrival. There is no way that is 
actually going to go anywhere. I mean, we are going to take 
more money out of DOD when they are already struggling with the 
cuts that we have already proposed to them, and we are going to 
propose more cuts?
    So does this administration actually have a true plan, or 
are they just going to continue to throw out suggestions, what 
we continue to see?
    Ms. Trottenberg. I would note that that set of savings is 
one that has been talked about a lot on Capitol Hill, actually 
on both sides of the aisle, and I think people have different 
opinions about what is really going to happen with it.
    But, again, I would repeat what I said earlier, which is: I 
think, clearly, the difficulty of this problem is going to 
require Congress and the administration, House and Senate, 
Republicans and Democrats, to work together. I don't think----
    Mr. Mullin. I agree----
    Ms. Trottenberg [continuing]. There is going to be a magic 
solution that is going to just----
    Mr. Mullin. And I do agree with what you are saying, but 
the thing is, being a leader and being--you know, I have been 
in the private industry or the private sector my whole life. 
When you are at the head, which this President is, you have to 
make tough decisions, not just suggestions. You have to come up 
with real solutions to propose something, not just throw 
something out and see if it sticks on the wall. And we continue 
to see that lack of interest and that lack of suggestion and 
that lack of leadership from this administration.
    And I think what Congress is saying is, look, we are 
wanting to work, you can tell, both sides. This isn't just a 
Republican issue or a Democrat issue, but both sides are 
willing to work together. But, at the same time, that is what 
this country has continued to have done over and over again is 
look to our President for some type of leadership, and we have 
yet to actually see that.
    I yield back.
    Mr. Petri. Mr. Nolan?
    Mr. Nolan. Mr. Chairman, members of the committee, a couple 
of things.
    One, Mr. Cawley, I have seen numerous studies over the 
years on the significance and the importance of transportation 
to the overall general economic development of a particular 
region or constituency, as well as examples of individual costs 
to people for the lack of good transportation. I strongly 
suggest maybe have one of your summer interns do a little 
research, get you up to date on that. Because that kind of 
information would be very helpful to our committee.
    And in response to Ms. Frankel, I can tell you, you know, 
the Old Bridge Road in Mission Township, up where the Little 
Pine and the Big Pine come together in northern Minnesota, 
before we paved that road I went through two front ends on my 
Ford F-150, but we got that road paved and I haven't had a 
problem since. So that is going to save me several thousand 
dollars in the future, going forward, and is a good specific 
example of how good roads can make a dramatic difference.
    I applaud the other members of the committee here who have 
talked about the need to find other sources of revenue other 
than just user fees. The shortfalls you have talked about are 
obvious. The consequences are not good. And our roads are 
getting congested, and our mass transit is nowhere near 
adequate for what we need.
    And there have been several mentions of, what is the 
administration proposing? Well, they have been supportive of 
the transfers from the general revenue fund, under the argument 
that those are peace dividends.
    We need to remind ourselves around here that, as we work on 
transportation and infrastructure, that is just one part of our 
overall budget requirements. And we have spent trillions, 
literally trillions, in Iraq and Afghanistan and other places. 
And as the President has extricated us from Iraq and moving 
toward getting us out of Afghanistan, there are some peace 
dividends there. And other Members have made a good case for 
drawing down from our general revenue funds to help support our 
transportation system.
    I would remind the members of the committee that recently 
there was an inspector general's report on the money that was 
spent in Iraq. And they identified $60 billion that ended up 
not going anywhere: projects that were blown up before they 
were completed, projects where the money disappeared before 
they got a chance to go to work on them. You know, and that was 
just, you know, just a little tiny share of the trillions that 
have been spent there.
    So I want to remind the other members of this committee and 
the administration that we appreciate, number one, that the 
President is drawing down on that so-called nation-building 
abroad. And hopefully that will continue to produce peace 
dividends that we can use for rebuilding America's 
infrastructure, our roads, our bridges. We don't need to remind 
ourselves, our bridges are falling down.
    So I, for one, applaud the administration and I applaud the 
other members of this committee who say, let's take a look at 
some other sources of revenue, including general revenues.
    So I thank you for your testimony and remind the other 
members of this committee that we need to be as bold as some of 
these other committees are in asking for money and for 
revenues. When we see what China and other countries around the 
world are doing, it is somewhat embarrassing to see the fact 
that we are pulling back and drawing back. Our infrastructure, 
our transportation system has been the foundation of our 
economic greatness in this country, and we need to step up and 
demand that we find a way to continue to finance it and advance 
it and take care of the transportation needs we have in this 
country. So, be bold.
    Thank you. I yield the balance of my time.
    Mr. Petri. Mr. Davis?
    Mr. Davis. Thank you, Mr. Chairman.
    It is always great to be a part of such a committee like 
the Transportation and Infrastructure Committee because we 
always see the differences in the geography that we each 
represent. And I was taken by my colleague from California's 
testimony earlier about her electric vehicle and the high-
occupancy vehicle lanes. And I look to my district, which, you 
know, our lanes are right and left. I mean, much of my district 
is a two-lane highway. We don't have the same issues that one 
in an urban area does. And it is up to us as policymakers to 
begin the discussions and the debate on how to craft a bill 
that is going to work in every single part of America.
    Like my colleague from Minnesota, I drive a Ford F-150. 
Thankfully, I have not had the same problems he has had hitting 
trees in Minnesota. But we do pay, in rural districts, a lot 
toward the gas tax. And, unlike my colleague from California, I 
feel like I have been at a--I haven't visited a gas station in 
2 minutes, let alone 2 years. But those are the issues we deal 
with, and those are the issues that my constituents deal with.
    And I agree with you, Ms. Trottenberg, that--you know, I am 
a realist, too--that, in this economic climate, the VMT might 
not be the only answer. Raising revenue through an increase in 
the gas tax may not be the only answer. You know, we need to 
look at a diversified portfolio.
    And, with that, I have some specific questions about the 
VMT in particular. Because in my district, my single mother who 
goes to work to make a living to feed her family drives 30 
miles to get there. Similarly, under a VMT in an urban area, 
that single mother may drive 3 miles. It may take her 30 
minutes to get there. But under a VMT, my rural area, some of 
the more poor areas in Illinois, where I serve, it seems like 
they would be subsidizing projects in more urban areas.
    So, with the VMT, who--does anybody have any idea who is 
going to administer a VMT? Would it be up to the States, 
Federal Government, what?
    Ms. Trottenberg. I will take a crack at that. And, 
Congressman, just to be clear, I am not proposing a VMT.
    Mr. Davis. I know that.
    Ms. Trottenberg. Far from it.
    Again, I think the one State that is worth everyone taking 
a look at is Oregon, because they are going to be going ahead 
with an experiment. And just so you know, one of the ways I 
think they are seeking to address the very issue you raise, 
which is fairness for people in rural areas who drive long 
distances, is potentially to give people a choice, which is you 
would pay by the mile or you could pay a flat fee. So it 
potentially attempts to at least, for people in rural areas or 
people who drive long distances, cap what they pay.
    But I think that is a pretty difficult issue. I think 
Oregon is the only place that is really taking a look at it. So 
how it would be administered in other parts of the country or 
what might happen, there is no information on that yet. I think 
we have one State that is going to be looking at it in earnest, 
and, potentially, everyone can get a chance to look at their 
experience and take whatever lessons they want from it.
    Mr. Davis. And my question on that is, if Oregon is the 
test case, I mean, how do we do a national VMT then? I mean, 
are we going to have 50 different collections? That is what 
concerns me about the discussion of a VMT. How are we going to 
do this in a national plan?
    So I have concerns about that. I also have concerns, is the 
VMT the only option to bring revenue in from those who drive 
electric and CNG vehicles, or are there any other options that 
are out there?
    Ms. Trottenberg. Yeah, just for the record, I don't see 
there is any movement for a national VMT. So I think Oregon 
seems about the only place that is really giving it a serious 
look.
    Mr. Davis. Well, we hear about the national VMT a lot from 
different organizations that talk to us.
    Ms. Trottenberg. I think here in Washington there doesn't 
appear to be any appetite for it whatsoever.
    I know that a couple of the States--I think Virginia is one 
that has looked potentially for electric vehicles--vehicles 
that don't use gasoline--to potentially come up with some other 
fee structure. I think there are other ideas like that on the 
table that the States are looking at.
    Again, as Mr. Cawley says, I don't think there is anything 
at the national level that is seriously being proposed or 
looked at yet.
    Mr. Davis. OK.
    And, Ms. Trottenberg, I have one more issue. You know, I 
agree, our roads and bridges are a priority. Very disappointed 
that the stimulus bill that was passed before I came to 
Congress only had about 8 percent of funds going to 
infrastructure.
    But on the Recovery Web site and in media reports, it seems 
that there is still $5 billion in unspent funds. Are those in 
infrastructure projects, or are those in other portions of the 
stimulus bill that didn't have to do with infrastructure? Or 
what is being done with those funds? Are they obligated?
    Ms. Trottenberg. That is a good question. That is one I 
would like to get back to you on.
    And thank you for saying you wish more of it had been spent 
on infrastructure. I think we feel the same way. We are pretty 
proud of what we did at the Department of Transportation. We 
got a lot of great projects built around the country.
    I haven't looked at the Recovery Act Web site in a while, 
so let me go back and make sure I get you the right 
information.
    Mr. Davis. No, I appreciate that, and I look forward to 
your response. And thank you for your testimony today.
    Ms. Trottenberg. Thank you.
    Mr. Davis. I yield back.
    Mr. Petri. Representative Titus?
    Ms. Titus. Thank you, Mr. Chairman.
    Madam Secretary, we have heard a lot this morning about how 
to deal with the revenue problems, whether it is the miles 
traveled or indexed gas tax or raising the gas tax or the 
general fund. I would like to shift to the other side of the 
equation; we haven't talked very much about that. And sometimes 
an ounce of prevention is worth a pound of cure. If we could do 
things that would make the need for additional investment less, 
I think that would be a good thing to focus on. And maybe 
Congress can be helpful with that.
    Las Vegas, of course, depends a lot on tourism, like 
Florida, like where Little Pine meets Big Pine. We need 
tourists. So we have adopted a Complete Streets program, kind 
of a holistic approach that reduces the need for a lot of 
costly paving in some instances, also the need for additional 
retrofits. That is bringing down the cost.
    I know that some other States have done similar kind of 
things. Washington State has a Complete Streets planning 
project. They have estimated that it is going to save about an 
average of $9 million, or 30 percent, on each project. Maryland 
has got something similar going on. They are looking at 
commuter programs for the disabled and have found savings of 
about $32,000 for the service for each individual.
    Could we talk a little bit more about what Congress can do 
to encourage States to develop Complete Streets programs to 
help bring down the costs?
    And, at the same time, another one that distresses me that 
I think also served kind of this same function were the TIGER 
grants. TIGER grants help to provide more efficient, safer, 
better transportation projects. I know in my district we did a 
12-mile bus rapid transit down Sahara Boulevard. But now I see 
that, in the fiscal year 2014 budget, you are not just reducing 
funding, you are not just eliminating future funding, you are 
rescinding past funding, and TIGER grants are going to be gone. 
So aren't we being pennywise and pound-foolish, to use another 
old adage?
    Could you talk about those kind of programs?
    Ms. Trottenberg. Sure. Thank you for those questions.
    And I certainly think--you mentioned Complete Streets. It 
is a great example. There are a lot of ways that we could 
reduce costs in the way we build and maintain and operate our 
transportation system. And there is no question that the 
Complete Streets movement is one, particularly in a lot of 
urban areas, where we have been building a lot of roads to 
interstate standards and we have really been overbuilding the 
roads. In fact, there are much less expensive alternatives. 
Certainly, there are Complete Streets--a lot of the States have 
adopted Complete Street policies, as have a lot of local 
communities.
    The one challenge has been, once the State or the local 
community adopts that policy, how you see that it really gets 
infused into the transportation planning as it is done at the 
State and the MPO and the local level, because it is a real 
culture change. But, certainly, States and localities that have 
adopted Complete Street policies have often seen the dimensions 
and the costs of the type of projects they need to build go 
way, way down.
    There are a whole host of other things that we could be 
doing to lower the cost of our transportation system. We have a 
procurement model which, compared to what some of our economic 
competitors in Europe and Asia do, is a pretty expensive way to 
do things. We design a lot of requirements upfront in the 
procurement model instead of sometimes letting the private 
sector come up with cheaper ways to do things.
    So I think, increasingly, we in DOT are trying to work with 
States and transit agencies to find those economies, and I 
think it would be terrific to have Congress continue to 
encourage us to do that.
    And I am glad you mentioned TIGER grants. We are very proud 
of the fact that, because the TIGER grant program was a 
competitive program, one of the competitive dimensions we 
looked at was how much the application was bringing non-Federal 
dollars to the table and what kinds of efficiencies were they 
using. And the TIGER dollars actually leveraged, even when they 
were grants, in the case of grants, but TIFIA loans as well, 
leveraged a lot of non-Federal and private dollars. So it has 
proved a very good model.
    And I think you all probably saw, the Office of Management 
and Budget put out a statement last night about the House's 
bill. Obviously, we really protest not continuing the TIGER 
program. We think it has been tremendously important. 
Rescinding those existing balances will potentially take money 
away from grantees that are expecting to get those TIGER 
grants. So we are very concerned about that.
    Ms. Titus. Well, will you provide me some information so 
you can help me to make the argument that we shouldn't lose 
that program?
    Ms. Trottenberg. We would be happy to do so.
    Ms. Titus. Thank you.
    Mr. Petri. Representative Williams?
    Mr. Williams. Well, thank you both very much for being 
here. I appreciate your testimony.
    I am going to give you an idea that will work. I am a 
small-business owner, and I am from Texas, and I also have been 
in the automobile business for 42 years.
    Now, Secretary Trottenberg, in your statement, you say 
this, referring to CAFE standards: ``Improvements in fuel 
efficiency contribute to a reduction in the trust fund 
resources and our ability to continue improvement of the 
Nation's transportation system.''
    Now, my question to you is, if we were to eliminate the 
EPA's CAFE and DOT requirements and let auto manufacturers 
build cars and trucks that the consumers really wanted, would 
we have more revenue for the Highway Trust Fund?
    Ms. Trottenberg. I think I would have to unpack that 
question a little bit, because I think we have--and I am sure 
we are probably not going to agree with this--that, actually, 
CAFE standards have proved very, very popular, and they have 
saved consumers money at the pump. So I think, in that regard, 
again, I think this administration is proud of what we have 
done on CAFE standards.
    There is no question, though, that for better or for worse, 
one of the things that has resulted in that is less money going 
into the trust fund. It is a tough balance. But I think, from 
the Obama administration's point of view, we would rather have 
a more fuel-efficient auto fleet, and that has been a priority 
for us.
    Mr. Williams. Well, that is in the Obama administration's 
viewpoint, and I can tell you that is not from the consumers' 
viewpoint.
    Let me tell you about CAFE standards and what they do, OK? 
If we go to where this administration wants us to go, we are 
going to raise the average price of a new car by $3,000--
today's dollars. New cars priced under $15,000, which right now 
are basically an entry-level-type vehicle, they will no longer 
exist and force an estimated 7 million consumers--7 million 
people will be out of the new car market. They won't be able to 
buy a car. And no telling how many jobs that will cost in 
America. And we get back to job creation again.
    Now, it also forces auto manufacturers to downsize 
vehicles. It makes them lighter and less safe, directly 
affecting auto fatalities. The insurance companies will tell 
you that.
    So, despite CAFE standards and the DOT standards, the U.S. 
continues to import an ever-increasing amount of foreign oil.
    So, for both of your information, I have introduced a bill, 
and I think you should read it. It is H.R. 2445. It is a bill 
that would repeal the CAFE and DOT standards and would let the 
auto manufacturers supply vehicles that the consumers want and 
that consumers demand.
    And, like you noted--you and I agree with this--like you 
noted in your testimony, it will increase revenue for our 
Highway Trust Fund and allow us to better improve our Nation's 
transportation system. We will put more money in, we will 
create more people, and let the open markets and let the 
consumer get what they want and the auto manufacturers make 
what people want.
    So I would like for you to read that bill.
    Thank you for being here, and I yield back.
    Mr. Petri. The gentleman yields back.
    Representative Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman.
    And thank you both for staying and listening to all of our 
questions and everything else and the comments. I think most of 
the questions that I had had been addressed earlier. And I did 
get here a little late, and I apologize.
    But, you know, the issue of the States getting a fair share 
of their taxes, the funds that go into your user tax--your 
department oversees the maritime transportation. And I would 
like to know how you feel, whether it is fair or unfair, that 
maritime users at the ports of Los Angeles and Long Beach pay 
$220 million a year to the Harbor Maintenance User Fee, which 
is generally a tax, and receive $260,000 back in maintenance. 
And we do support a gas tax that returned 0.1 to the State that 
it collected it in. And is it fair that the industry has 
disparity?
    Ms. Trottenberg. Thanks, Congresswoman, for the question. I 
know from you and your other colleagues who represent the west 
coast ports, and, look, it is a frustration we hear from ports 
all over the country, about the Harbor Maintenance Tax and what 
ports are getting back in terms of what they pay in.
    Look, I think rather like we are discussing today with the 
gas tax, it is another area where there are a lot of difficult 
questions on the table, and I am afraid I don't think we are 
probably going to solve them here today. But this 
administration, again, I think we understand the frustration 
the ports have on this, and we would love to work with you all 
to see if we can have some solutions. We have been big 
supporters of the ports. And at least through the TIGER grant 
program, we have particularly tried to do what we can to 
provide support to all the California ports.
    Mrs. Napolitano. And I understand that. But the disparity 
there, we need to be able to ensure that whatever taxes are 
collected are used fairly. So if you are talking about 
disbursing the gasoline tax equitably, then we should look at 
other fees also. That is my point.
    The second question I have, Secretary Trottenberg, is you 
mentioned the negative impacts of Highway Trust Fund solvency 
problems on transit providers in small and rural communities. I 
would like to hear specifically about the impacts on transit 
systems that rely on Federal funds for operations.
    While slowing down payments to grantees is very potentially 
detrimental, not only inconvenient, to a system who was 
planning to buy a new bus, a system that relies on Federal 
funds for operations will be forced to cut routes or lay off 
workers due to slowed payments.
    I would like to know what you think DOT or Congress can do. 
How much notice will FTA provide to small and rural grantees 
prior to slowing the payments, one? What flexibility does FTA 
to select how and in what order those funds will be rationed? 
And, thirdly, does FTA have the ability or authority to avoid 
slow payments to systems that use funds for operations?
    Ms. Trottenberg. That is a good question. I had mentioned 
at the beginning of the hearing that, as you point out, if we 
find ourselves in a situation where our cash balances are 
starting to go down in the transit account, we are going to try 
and give transit systems as much notice as we can, so they can 
start to think about how they would plan for potential 
shortfalls.
    There is no question that smaller transit systems will feel 
the pinch sooner and harder than larger transit systems, 
although ultimately, all transit systems rely to some degree on 
Federal dollars.
    But I think in my testimony I mentioned there are some 
small transit systems around the country where close to 60 
percent of their revenues are Federal. So it is not going to be 
long before they are going to need to start, as you mentioned, 
curtailing routes or slowing down on bus purchases.
    Mrs. Napolitano. So what is the plan?
    Ms. Trottenberg. Well, I think we want to be careful 
because it is hard to know now what the circumstances might be, 
and I think we want to make sure we keep our options open and 
be working with Congress. If we found ourselves drawing close 
to a time when we didn't have revenues to provide all the funds 
that we would customarily provide to transit systems----
    Mrs. Napolitano. But are you looking at a plan? Are you 
looking at a solution to help them?
    Ms. Trottenberg. Oh, absolutely.
    Mrs. Napolitano. OK.
    Ms. Trottenberg. I would say, back in 2008, when the 
Highway Trust Fund was close to being insolvent, we basically 
formed a task force within the Department and we worked with 
Treasury to keep forecasting a lot of different scenarios and 
think hard about how we would minimize the impact----
    Mrs. Napolitano. And are you getting input from these small 
urban areas?
    Ms. Trottenberg. Oh, yes, we are in pretty perpetual 
communication with our transit grantees and State DOTs. But 
there is no question if, as the balances in the Highway Trust 
Fund start to go down, at some point there will be real impacts 
on the ground, and there will be only so much we can do to 
potentially mitigate them.
    Mrs. Napolitano. Thank you.
    And the last comment I would like to know is whether or not 
you are making any inroads on being able to cut fraud and 
abuse.
    Ms. Trottenberg. Well, we have a particularly talented 
inspector general at DOT, and that is one of the things that he 
spends a lot of time on. I am proud to say he is a pretty 
rigorous analyst of a lot of our programs, as, by the way, 
GAO----
    Mrs. Napolitano. But is he funded properly to be able do 
his job, or their job?
    Ms. Trottenberg. I would say, actually, that the IG is very 
well-funded. As you all may recall, in the Recovery Act I think 
he was given $25 million and was able to really staff up. I 
would say, also, with Hurricane Sandy, he was just given I 
think it was another $6 million. So, I am sure he testifies in 
front of this committee from time to time, and you can ask him.
    I would also say that we at the Department also spend a lot 
of time making sure that we are running our programs 
efficiently. We don't just wait for the IG. We try ourselves to 
constantly scrub our grant programs and our enforcement 
programs and make sure that we are operating as efficiently as 
we possibly can and that there is no wrongdoing and that we are 
getting good value for taxpayer dollars.
    Mrs. Napolitano. Well, appreciate your answers. And thank 
you for your help in the our latest California saga.
    Thank you both.
    Thank you, Mr. Chairman.
    Mr. Petri. Representative Hahn requests a second round, and 
I recognize her.
    Ms. Hahn. Thank you for hanging around for my last 
comment--two comments.
    One, I do continue to think that we need to look outside of 
the gas-tax box, as we go forward, to fund the Highway Trust 
Fund. I know my colleague from Texas thinks consumers, you 
know, want to buy the biggest and most gas-guzzling vehicles 
out there. There is an article in the Wall Street Journal today 
that talks about incentivizing consumers for electric vehicles 
by maybe offering them at no cost to get Americans to try out 
electric vehicles.
    So I think there is a move out there to incentivize. I know 
in Los Angeles we allowed electric vehicles to park for free. 
We have also--in California, we are allowed to be in the 
carpool lanes with an all-electric vehicle. So I think that is 
a trend that is picking up out there.
    I just wanted to back up what my Congress colleague from 
California talked about, the Harbor Maintenance Tax. And you 
know that is an issue that I am really all about. I think we 
ought to fully fund it. I think there ought to be some equity 
and some minimum guarantee to go back to the ports that collect 
those taxes.
    But I am also advocating for a possible use of the Harbor 
Maintenance Tax to fund transportation projects in our port 
communities, sort of that last mile. I think as we are coming 
up with a national freight policy, I think we are really going 
to be looking at, how do we move goods in this country? And I 
think one of those is to really--one of the policies hopefully 
we look at is, how do we fund projects that really enhance 
goods movement in this country?
    So I think if a port has been fully dredged to its 
authorized level, which is the first use of the Harbor 
Maintenance Tax, I think there ought to be some allowable usage 
for that last mile for transportation projects around our 
Nation's ports.
    How important, Madam Secretary, do you think that tool 
could be for funding transportation projects in and around our 
port communities?
    Ms. Trottenberg. I mean, again, I think, obviously--and I 
know you are a leader on the House PORTS Caucus, and we have 
gotten to talk to you about this. And you have some colleagues 
from California, Assemblywoman Bonnie Lowenthal and others, who 
are part of our National Freight Advisory Committee.
    Clearly, these are not easy issues because you are 
balancing infrastructure needs that the country clearly has 
with the difficult budget challenges that we face and the 
administration and you face here in Congress.
    I think the good news is, clearly, there is a lot of 
interest now in freight and in ports. I think we are really 
going to have a chance to grapple with some of these issues and 
try and figure out, what do we do? How can we make sure that we 
are making the critical investments we need to ensure that our 
country is economically competitive?
    Ms. Hahn. It is great that the President will be going to 
Port of Jacksonville on Thursday. It is his second speech at a 
port. I am always happy to see him highlight the importance of 
our Nation's seaports, as it certainly does, I think, really 
impact our economy and jobs and our competitiveness in this 
country.
    Thank you. I yield back my time.
    Mr. Petri. Thank you.
    I would ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing, and unanimous consent that the record remain open 
for 15 days for additional comments and information submitted 
by Members or witnesses to be included in the record of today's 
hearing.
    Without objection, so ordered.
    Mr. Petri. And, with that, I thank the witnesses for their 
testimony, and this hearing is adjourned.
    [Whereupon, at 11:46 a.m., the subcommittee was adjourned.]


                       


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