    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                           LONG-TERM FINANCING OF THE
                               HIGHWAY TRUST FUND

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

                                    HEARING

                                   before the

                          COMMITTEE ON WAYS AND MEANS
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 17, 2015

                                   __________

                              Serial No. 114-FC06

                                   __________

             Printed for the use of the Committee on Ways and Means

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    U.S. GOVERNMENT PUBLISHING OFFICE

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                          COMMITTEE ON WAYS AND MEANS

                         PAUL RYAN, Wisconsin, Chairman

    SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
    KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
    DEVIN NUNES, California              JIM MCDERMOTT, Washington
    PATRICK J. TIBERI, Ohio              JOHN LEWIS, Georgia
    DAVID G. REICHERT, Washington        RICHARD E. NEAL, Massachusetts
    CHARLES W. BOUSTANY, JR., Louisiana  XAVIER BECERRA, California
    PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
    TOM PRICE, Georgia                   MIKE THOMPSON, California
    VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut
    ADRIAN SMITH, Nebraska               EARL BLUMENAUER, Oregon
    LYNN JENKINS, Kansas                 RON KIND, Wisconsin
    ERIK PAULSEN, Minnesota              BILL PASCRELL, JR., New Jersey
    KENNY MARCHANT, Texas                JOSEPH CROWLEY, New York
    DIANE BLACK, Tennessee               DANNY DAVIS, Illinois
    TOM REED, New York                   LINDA SANCHEZ, California
    TODD YOUNG, Indiana
    MIKE KELLY, Pennsylvania
    JIM RENACCI, Ohio
    PAT MEEHAN, Pennsylvania
    KRISTI NOEM, South Dakota
    GEORGE HOLDING, North Carolina
    JASON SMITH, Missouri
    ROBERT J. DOLD, Illinois

                           Joyce Myer, Staff Director

                      Janice Mays, Minority Chief Counsel

                                C O N T E N T S

                                   __________

                                                                       Page

    Advisory of June 17, 2015 announcing the hearing.................     2

                                   WITNESSES

    Bill Graves, President and Chief Executive Officer, American
      Trucking Associations, Arlington, Virginia.....................    40
    Robert W. Poole, Jr., Director of Transportation Policy and
      Searle Freedom Trust Transportation Fellow, Reason Foundation,
      Los Angeles, California........................................    30
    Chad Shirley, Deputy Assistant Director for Microeconomic
      Studies, Congressional Budget Office, Washington, DC...........     5

                            QUESTIONS FOR THE RECORD

    Questions from The Honorable John Larson, a Representative in
      Congress from the State of Connecticut, to Bill Graves,
      President and Chief Executive Officer, American Trucking
      Associations...................................................   148
    Questions from The Honorable Linda Sanchez, a Representative in
      Congress from the State of California, to Bill Graves,
      President and Chief Executive Officer, American Trucking
      Associations...................................................   149

                           SUBMISSIONS FOR THE RECORD

    Alan Lowenthal, a Representative in Congress from the State of
      California.....................................................   150
    American Association of Port Authorities (AAPA)..................   154
    American Association of State Highway and Transportation
      Officials (AASHTO).............................................   170
    American Council of Engineering Companies (ACEC).................   179
    American Highway Users Alliance (The HwyUsers)...................   181
    American Public Transportation Association (APTA)................   183
    American Public Works Association (APWA).........................   189
    American Truck Dealers Division (ATD) of the National Automobile
      Dealers Association (NADA).....................................   194
    Andrew Wells.....................................................   197
    Associated General Contractors of America (AGC)..................   205
    Association of Equipment Manufacturers (AEM).....................   207
    California Transportation Commission.............................   209
    Coalition for America's Gateways and Trade Corridors (CAGTC).....   211
    Concrete Reinforcing Steel Institute (CRSI)......................   213
    Dean Fry.........................................................   215
    Great Lakes Metro Chambers Coalition.............................   219
    Highway Materials Group..........................................   222
    Innovation NewsBriefs............................................   225
    International Brotherhood of Teamsters (IBT).....................   229
    Institute on Taxation and Economic Policy (ITEP).................   233
    Los Angeles County Metropolitan Transportation Authority (Metro).   239
    National Association of Manufacturers............................   241
    National Conference of State Legislatures........................   243
    National Stone, Sand & Gravel Association (NSSGA)................   248
    Pedestrian Advocate..............................................   256
    PublicCitizen....................................................   258
    Rick Nolan, a Representative in Congress from the State of
      Minnesota......................................................   261
    South West Transit Association...................................   264
    The Real Estate Roundtable.......................................   268
    Tire Industry Association........................................   272
    Transportation Transformation Group..............................   277
    WageWorks........................................................   279

                           LONG-TERM FINANCING OF THE

                               HIGHWAY TRUST FUND

                                  ----------

                            WEDNESDAY, JUNE 17, 2015

                         U.S. House of Representatives,
                                   Committee on Ways and Means,
                                                        Washington, DC.

        The Committee met, pursuant to notice, at 10:00 a.m., in
    Room 1100, Longworth House Office Building, Hon. Paul Ryan
    [Chairman of the Committee] presiding.

        [The advisory announcing the hearing follows:]

    ADVISORY

    FROM THE
    COMMITTEE
     ON WAYS
    AND
    MEANS

                                                    CONTACT: (202) 225-3625
    FOR IMMEDIATE RELEASE
    Wednesday, June 10, 2015
    No. FC-06

                       Chairman Ryan Announces Hearing on

                 Long-Term Financing of the Highway Trust Fund

        House Committee on Ways and Means Chairman Paul Ryan (R-WI) today
    announced that the Committee will hold a hearing on Long-Term Financing
    of the Highway Trust Fund. It will explore the feasibility of various
    ideas to provide a sustainable long-term solution to the highway trust
    fund shortfall. The hearing will take place Wednesday, June 17, 2015,
    at 10:00 a.m. in Room 1100 of the Longworth House Office Building.

        Oral testimony at this hearing will be from the invited witnesses
    only. However, any individual or organization may submit a written
    statement for consideration by the Committee and for inclusion in the
    printed record of the hearing.

    DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

        Please Note: Any person(s) and/or organization(s) wishing to submit
    written comments for the hearing record must follow the appropriate
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    which you would like to make a submission, and click on the link
    entitled, ``Click here to provide a submission for the record.'' Once
    you have followed the online instructions, submit all requested
    information. ATTACH your submission as a Word document, in compliance
    with the formatting requirements listed below, by the close of business
    on Wednesday, July 1, 2015. For questions, or if you encounter
    technical problems, please call (202) 225-3625 or (202) 225-2610.

    FORMATTING REQUIREMENTS:

        The Committee relies on electronic submissions for printing the
    official hearing record. As always, submissions will be included in the
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        1. All submissions and supplementary materials must be submitted in
    a single document via email, provided in Word format and must not
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    the Committee relies on electronic submissions for printing the
    official hearing record.

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    identifiable information in the attached submission.

        3. Failure to follow the formatting requirements may result in the
    exclusion of a submission. All submissions for the record are final.

        The Committee seeks to make its facilities accessible to persons
    with disabilities. If you are in need of special accommodations, please
    call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four
    business days notice is requested). Questions with regard to special
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    noted above.

        Note: All Committee advisories and news releases are available
    online at
    http://www.waysandmeans.house.gov/.

        Chairman RYAN. All right. I would like to have everybody
    take their seats, if they would. The Committee will come to
    order.
        First, I want to thank Chairman Reichert of the
    Subcommittee on Select Revenue Measures. He has done a lot of
    hard work on this topic, and he is one of our team leaders on
    this. And he is going to continue working on this issue through
    the Subcommittee.
        I also want to thank our witnesses: Chad Shirley, from CBO;
    my old friend, Bob Poole, from the Reason Foundation; and
    former Governor of the great State of Kansas, Bill Graves, from
    the American Trucking Associations. Everybody here holds all
    three of you in high regard. I am looking forward to an
    informative discussion on a very important issue that--Members
    on both sides of the aisle have requested that we dig into this
    issue, and I am glad we are doing this here today, because we
    need your ideas.
        The roads, the bridges, and the highways in this country
    are in a sorry state. And the Highway Trust Fund that pays for
    them, well, it is broke. But, instead of fixing the problem, we
    have dodged it--on a bipartisan basis. Five times we have come
    up with temporary solutions, and transferred money from the
    general fund into the trust fund, which, in English, means we
    have patched a pothole and not fixed the problem. We are
    talking over $63 billion, in total.
        And, according to the latest projections, we are looking at
    a $168 billion shortfall over the next 10 years. So things are
    only getting worse. We need to find a real, long-term solution,
    and that is one of the things we would like to investigate in
    this hearing today.
        Now, ever since we built the interstate highway system, we
    have had a simple principle: The user pays. The people who use
    the highways should pay for the highways. So far, that has been
    done mostly through the gas tax. Problem is, the current user
    pay system doesn't pay enough. Ever since 2008, the trust fund
    has spent more than it took in. And the reason? Well, the
    reason is pretty simple: People have been using less gas. They
    are driving more fuel-efficient cars. It is a good problem to
    have. You get a lot more miles to the gallon than you used to.
    And so, gas just doesn't track use as well as it used to. We
    just can't chase fuel efficiency with much higher taxes.
        So I want to make something very clear. We are not going to
    raise the gas tax. There is not much happening in this economy
    to help it grow but lower gas prices, that is one thing that is
    happening that is good for consumers. Working families have
    been struggling for years to get by. They have looked high and
    low for good-paying jobs. Their paychecks have not grown much
    at all. And now they are finally catching a break at the pump.
    It would be downright unfair to take that away from them. So we
    are not going to raise gas taxes, plain and simple.
        But we are confronted with a big problem, and there is no
    easy solution. By the end of July, the Highway Trust Fund will
    begin running out of money again. I was hoping last month that
    we could have extended the Highway Trust Fund to the end of the
    year, to give us the required and appropriate time to come up
    with a longer-term solution. But that ran into last-minute
    opposition. It is going to be difficult to reach consensus on a
    permanent solution, but there are a lot of ideas out there.
    That is why we are here today, that is why we are having this
    hearing--to hear more about these ideas.
        There is talk about handing more authority over to the
    States, making greater use of tolls, creating more public-
    private partnerships, and repatriation as a middle solution.
    There are a lot of ideas worth considering. But, either way, we
    need to find a real solution, a permanent solution.
        So, again, I want to thank our witnesses. We appreciate
    your taking time to speak with us today, and I look forward to
    hearing your testimony.
        And all I can say is we are all ears, and we are looking
    forward to your testimony.
        And, with that, I would like to turn it over to the Ranking
    Member for any opening statements he might like to make.
        Mr. LEVIN. Thank you very much, and welcome. Mr. Chairman,
    we need to be all ears, but we need action. And we have been
    sending letters to you. We Democrats really are determined that
    there be action. The key words are ``long term,'' because, just
    short--six short weeks from now, as we know, the spending
    authority expires and the balance runs out. Short-term
    extensions, there have been 24 to date.
        And the facts really are startling: The American Society of
    Civil Engineers gave our national infrastructure a D-plus
    grade, and when it came to my home State, they even took the
    plus off. It is a straight D. Bridges are in terrible
    condition: 145,000 of them in every State. And a quarter of
    them are more than 60 years old. And two-thirds of our highways
    are in poor or mediocre condition. Two-thirds.
        So, if safety weren't enough of a factor, economics is. A
    major 2014 economic report from Standard & Poor's Rating Agency
    notes, ``Each dollar of infrastructure spending, if allocated
    wisely, translates into much more than that, in terms of
    economic growth.'' And here is what the report finds, a $1.3
    billion investment in 2015 would likely add 29,000 jobs to the
    construction sector, and even more to infrastructure-related
    industries. That investment would also likely add $2 billion--
    $2 billion--to real economic growth, and reduce the Federal
    deficit by $200 million for that year.
        So, inaction is not an option, and this cannot be done on a
    partisan basis. A long-term infrastructure bill must be a
    product of our coming together, Mr. Chairman, you and I and all
    of us on this Committee of jurisdiction.
        And I close with this: All options should be on the table,
    except doing nothing. I yield back.
        Chairman RYAN. Thank you. Mr. Shirley, why don't we start
    with you?
        I want to just mention to all witnesses, your full written
    testimony will be inserted in the record. And if you can try to
    confine your remarks to 5 minutes so that we can entertain all
    of the Members' questions, we would be much appreciative.
        Mr. Shirley, we will start with you. Please turn your
    microphone on.

       STATEMENT OF CHAD SHIRLEY, DEPUTY ASSISTANT DIRECTOR FOR
    MICROECONOMIC STUDIES, CONGRESSIONAL BUDGET OFFICE, WASHINGTON,
                                  D.C.

        Mr. SHIRLEY. Thank you very much. Chairman Ryan,
    Congressman Levin, Members of the Committee, I appreciate the
    opportunity to be here today to talk with you about the status
    of the Highway Trust Fund, and options for financing highway
    construction.
        In 2014, Federal, State, and local governments spent about
    $165 billion on highways, another $65 billion on transit. About
    three-quarters of that spending came from State and local
    governments, and about a quarter from the Federal Government.
    Most of the Federal spending comes from money in the Highway
    Trust Fund.
        For decades, the trust fund's balances were stable or
    growing. More recently, however, the amount of money collected
    from taxes on gasoline, diesel fuel, and other transportation-
    related items, has been less than spending. To address that
    shortfall, lawmakers have transferred $65 billion from the
    general fund to the Treasury to the trust fund since 2008.
        The Highway Trust Fund's current sources of revenue cannot
    support spending at the current rate. By the end of this fiscal
    year, CBO estimates that the balance on the highway account of
    the trust fund will fall to about $2 billion, and the balance
    in the transit account will fall to about $1 billion. Because
    of those declining balances, the Department of Transportation
    would probably need to delay payments to States before the end
    of the fiscal year. Beyond that, if nothing changes, the
    shortfall in the trust fund would steadily accumulate in
    subsequent years.
        Lawmakers have three broad options to address the projected
    shortfalls in the trust fund: Reduce spending from the trust
    fund, increase revenues credited to the fund, and continue to
    transfer money from the Treasury's general fund. One option
    would be to reduce Federal spending on highways and transit
    projects. If lawmakers choose to address the shortfall entirely
    by cutting spending, all of the receipts credited to the fund
    during the next year would be needed to meet obligations made
    during or before 2015. Beyond that, the authority to obligate
    funds from the highway account would decrease by about a third
    over the next decade. Similarly, the authority to obligate
    funds from the transit account would decrease by about two-
    thirds, compared to CBO's baseline.
        A second option would be to increase the revenues credited
    to the fund. That could be done in several ways. For instance,
    one way would be to increase the existing taxes on gasoline and
    diesel fuel. The staff of the JCT estimated that a one-cent
    increase in those taxes would raise $1.7 billion per year. That
    amount would decline to about $1.5 billion per year by 2025.
    Increasing those taxes by roughly $.10 per gallon would
    eliminate the projected shortfall. Another way to increase
    revenues would be to impose new taxes on using the highway
    system, such as one based on vehicle miles traveled. Still
    another way would be to impose taxes on activities unrelated to
    transportation.
        A third option for addressing the shortfall would be to
    continue to transfer money from the general fund to the Highway
    Trust Fund. Unless spending were cut, or revenues were
    increased, that would require a transfer of $3 billion before
    the end of Fiscal Year 2015. After that, the amounts needed
    each year would start at $11 billion in 2016 and grow to $22
    billion by 2025. The projected shortfall in the trust fund has
    generated interest in greater use of borrowing by State and
    local governments or private companies to pay for highways. The
    Federal Government encourages borrowing through tax preferences
    that provide a subsidy for highway financing projects.
        In addition, the Federal Government offers loans and loan
    guarantees to assist with highway financing. Through both of
    those channels, though, the Federal Government bears some of
    the cost of such financing. Despite some prominent examples,
    the experience with private financing in the United States is
    very limited.
        In particular, highway projects that have used private
    financing have accounted for less than 1 percent of all
    spending for highways over the past 25 years. Some of those
    projects have failed financially because the revenues for the
    projects were over-estimated. Perhaps because of that
    experience, projects that are now under construction rely less
    on tolls as a revenue source. More commonly, private partners
    are compensated from a State's general fund, thus limiting the
    risk to the private partner that it will not be repaid. As a
    result, the risk of lower-than-expected revenues stays with the
    public sector.
        Ultimately, borrowing is only a mechanism for making future
    tax revenues or future user fees available to pay for
    transportation projects today. It is not a new source of
    revenues. Borrowing can augment the funds readily available for
    highway projects today, but revenues that are committed to
    repaying borrowed funds will be unavailable for new
    transportation projects or other government priorities in the
    future. Thank you very much for your time, and I would be happy
    to answer any questions that you have.
        [The prepared statement of Mr. Shirley follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman RYAN. Thank you.
        Mr. Poole.

     STATEMENT OF ROBERT W. POOLE, JR., DIRECTOR OF TRANSPORTATION
     POLICY AND SEARLE FREEDOM TRUST TRANSPORTATION FELLOW, REASON
                  FOUNDATION, LOS ANGELES, CALIFORNIA

        Mr. POOLE. Chairman Ryan, Ranking Member Levin, and
    Members, thanks very much for inviting me to testify. In 2005,
    I served on a TRB special committee on the long-term viability
    of fuel taxes for transportation funding, 10 years ago. We
    concluded that, in coming decades, per-gallon fuel taxes should
    be replaced by per-mile charges. Three years later, the
    Infrastructure Financing Commission agreed with that
    recommendation. I have written extensively on the problems with
    today's trust fund, and today offer four recommendations for
    your consideration.
        My first recommendation is do no harm. In fixing the trust
    fund's problem, the emphasis should be on strengthening the
    core principle of users pay, users benefit. The best protection
    for needed transportation investment comes from dedicated user
    fees funding that is immune to the constraints of the budget
    process. This is how nearly all other infrastructure is
    financed. Airports, electricity, railroads, telephones, water
    supply, they don't have problems like fights--perennial fights
    over tax increases.
        Reliable user-fee revenue streams enable long-term revenue
    bonds to finance major projects, rather than funding them
    piecemeal out of annual appropriations. Any uses of general
    fund revenues to bail out the trust fund undercut the user
    pays/user benefit principle, and make the program less
    reliable, going forward, since the Federal Government will have
    less and less general revenues in coming decades.
        My second recommendation is to set real priorities for
    trust fund spending. If it is politically untenable to increase
    fuel tax rates, then spending must be trimmed to the level of
    user tax revenues. You should ask which aspects of the trust
    fund spending are truly Federal in nature, versus State and
    local in nature. Government agencies across the country are
    having to review their budgets and separate core programs from
    many things that are nice to have, but are not really core.
    Congress has an opportunity now to do this, or start doing
    this, regarding the trust fund.
        A couple of examples on this. Federal programs' top
    priority, in my view, should be reconstructing and modernizing
    the interstate highway system, our most important asset, which
    will need an estimated $1 trillion over the next two decades to
    do. Yet, according to a recent GAO analysis in my written
    testimony, only half of the $50 billion trust fund spending
    goes to highways and bridge projects at all, and only $3
    billion is spent on major projects of the kind that would be
    involved in reconstructing and modernizing NHS and interstate
    highways.
        Also, why should just highway user taxes support the two
    highway safety agencies, NHTSA and FMCSA? Nearly all other
    Federal safety regulatory agencies are funded out of the
    general fund, not out of user taxes. That's just a point.
        My third recommendation is that Congress should encourage
    the eventual transition from per-gallon fuel taxes to per-mile
    user fees. It is clear that State DoTs are taking the lead on
    this with pioneers like California, Minnesota, and Oregon.
    There are many unanswered questions, though, about which
    mechanism will be most feasible for collecting the fees, while
    protecting privacy and ensuring that they actually replace,
    rather than add to fuel tax revenues, which is the premise.
        Congress could further these efforts right now by focusing
    more of FHWA's research dollars on pilot projects in a larger
    number of States. Another useful step would be to encourage
    increased use of per-mile electronic tolling for major
    highways. Congress could expand the existing three-State pilot
    program for toll-financed interstate reconstruction. More
    States should have this option, and existing States should not
    be able to sit on their slots indefinitely without using them.
        The revamped pilot program also needs much stronger
    protections for highway users to ensure that the new tolls
    would be pure user fees, not a cash cow to bail out State DoT
    budgets. Highway user groups will certainly oppose expanding
    the pilot program without much stronger safeguards along these
    lines.
        My final recommendation is that Congress should give States
    increased tools to make their transportation dollars go
    further, and long-term public-private partnerships, P3s, are an
    important way to do this, and well-suited to major highway and
    bridge projects like interstate highway
    reconstruction. Tolls provide a bondable rev- enue stream so
    that major projects could be financed now, rather than years or
    decades in the future. And P3s shift many of the risks of mega-
    projects to the P3 company, rather than taxpayers.
        The Federal Government assists in these kinds of projects
    in two ways: By enabling the issuance of tax-exempt private
    activity bonds, and providing subordinated loans via the TIFIA
    program. The current PABs law only allows $15 billion worth of
    tax-exempt bonds. Two-thirds have already been used up. So the
    reauthorization needs to include, we suggest, a doubling of the
    $15 billion cap to keep that pipeline flowing.
        Finally, TIFIA was expanded in MAP-21, and doesn't need a
    bigger expansion. But the money would go further if Congress
    were to make one important change. The MAP-21 law increased the
    maximum TIFIA loan from 33 percent of a project budget to 49
    percent. It really should go back to 33 percent, consistent
    with TIFIA being GAAP financing, and enabling more--the
    existing amount of money would go a lot further if it were only
    funding up to 33 percent, rather than 49 percent.
        That concludes my testimony. I am happy to answer questions
    at the appropriate time.
        [The prepared statement of Mr. Poole follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman RYAN. Thank you very much.
        Governor Graves.

        STATEMENT OF BILL GRAVES, PRESIDENT AND CHIEF EXECUTIVE
      OFFICER, AMERICAN TRUCKING ASSOCIATIONS, ARLINGTON, VIRGINIA

        Mr. GRAVES. Chairman Ryan, Ranking Member Levin, Members of
    the Committee, I appreciate this opportunity to appear before
    you to comment on an issue of great national importance: A
    long-term and sustainable funding source for building our roads
    and bridges. I am particularly appreciative of Congressman
    Renacci and Congressman Blumenauer for their passionate
    advocacy on this issue.
        While representing ATA, I am proud to be speaking on behalf
    of many organizations whose members are daily users of our
    transportation system. The consequences of failing to act are
    great, and we stand ready to support you in making the tough
    choice that lies ahead. While I will speak to ATA's preferred
    option for sustainable funding, let me say at the outset that
    almost any policy you adopt that supports a multiple-year
    program and can be relied upon in the future, we will support.
    The consequences of inaction are just too great.
        As we all know, Americans cherish their freedom of mobility
    to travel in pursuit of economic opportunity, educational
    training, medical care, or recreational enjoyment. People and
    products have been moving freely since our Nation was founded.
    That mobility has served as one of the pillars in constructing
    the interstate highway system, along with the need to
    efficiently and quickly mobilize our military resources.
        President Eisenhower got it right when he envisioned this
    interstate transportation network and all it would do for this
    Nation.
    In my lifetime, beginning with President Eisenhower, Presidents
    Reagan, Bush, and Clinton all found a way to successfully enact
    an increase in the Federal fuel tax. But since 1993, Congress
    and subsequent Administrations have been predicting the demise
    of the fuel tax without ever identifying and successfully
    advocating for an alternative funding source that would be
    long-term and sustainable.
        Today's conversation has been taking place for 22 years.
    And I believe it is time for Congress to acknowledge, in the
    near term, that the fuel tax continues to be the lesser of all
    the infrastructure funding evils. I believe it is the only
    funding option that actually makes sense. But over that 22-year
    period, what has made this challenge even greater is that
    Americans have been promised over and over again that a fuel
    tax isn't necessary. Yet rarely is an alternative proposed that
    has a chance of being adopted. And, if it were, it would likely
    fall short of what the fuel tax has provided for over 50 years:
    Long-term and sustainable funding.
        Roads and bridges aren't free, and they are certainly not
    cheap. Yet Congress has been operating under the assumption
    that pennies might fall from heaven. For years, while
    personally advocating a fuel tax increase, I have been
    instructed that it wasn't going to happen, that I needed to be
    thinking outside the box. I have been told to come up with
    creative financing options to embrace private-sector
    investment, or agree to make this problem go away by passing it
    down to State and local governments.
        So, after 22 years of thinking outside the box, we are here
    discussing the fuel tax, spending general fund dollars, passing
    off all or greater responsibility to the States, or simply
    erecting toll roads across the country. We know the fuel tax
    works. It is easy to administer, Americans are familiar with
    it, and, with some modifications to account for the emerging
    class of non-fuel vehicles, it would continue to be viable for
    years, if the rate were raised.
        General funds: With all the fiscal challenges the Federal
    Government faces, adding one more large mouth to feed makes no
    sense. Once we start down the path of paying for roads and
    bridges without user fees, you will have a very hard time ever
    going back. Some have suggested that devolution is simply a
    realignment of Federal and State responsibilities.
        As a former Governor, I can tell you that a large number of
    States don't seek to assume this financial responsibility, nor
    do they have the financial capability to do so, not to mention
    the incredibly unwise notion that we should leave the condition
    and capacity of our interstate network of roads to the
    discretion of 50 State legislatures and Governors. This idea is
    a ruse to dodge the tough responsibility of finding adequate
    funding for road and bridge construction.
        And the other oft-heard suggestion is to simply toll our
    interstate roads. Toll systems certainly have a limited place
    in this country. But they are a more expensive option than the
    fuel tax we currently enjoy. How could Congress or an
    Administration ask citizens to pay more than they otherwise
    would need to pay, in order to get the same system that they
    could get for less?
        My father found opportunity in digging his way out of the
    Depression by starting a trucking company in 1935. He honed his
    transportation skills serving in World War II, hauling supplies
    in Europe. After the war, he built a company that provided
    economic opportunity for over 2,500 men and women. I am not
    just sitting before you as a spokesperson for ATA. I am the son
    and grandson of truckers, representing men and women who work
    each day on this Nation's highways.
        Trucks will keep moving America forward, but only if we
    have a network of roads and bridges for them to travel. And to
    do that, Congress must find the courage to admit what I believe
    it already knows.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Graves follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman RYAN. Thank you. Let me ask all of you a quick
    question right now, and let me start with you, Mr. Shirley.
        We have had patches for a long time. I am looking at a list
    here. We had a patch in 2008, which was an $8 billion general
    fund transfer. We had one, two, three, four patches in 2009: 7
    billion was the first one, the three subsequent ones were not
    offset. Then we had three patches in 2010 from the general
    fund, totaling $19.5 billion in just 3 patches there. So,
    having these temporary patches, obviously, is no way to run a
    railroad--no pun intended--but it is something that we are not
    unfamiliar with.
        There has been a suggestion that we look for a user pay
    solution to the trust fund shortfall that can be enacted by the
    time the next expiration occurs in July. But from all of your
    testimony, what I am hearing is that there are several
    promising options that may realistically require several years
    to develop and implement in a best-case scenario.
        The point I am trying to get at is, first, it seems to me a
    general fund transfer this summer is unavoidable. Do any of you
    think we can enact and Treasury could implement and collect
    sufficient funds by the end of July to avoid a general fund
    transfer? Let's start with you, Mr. Shirley, and just go.
        Mr. SHIRLEY. Thank you. I see--I am not clear exactly on
    the timeframe of the spend-out that the Treasury--I am sorry,
    that the Department of Transportation is facing on the trust
    fund, other than we do understand that there would be a need
    for additional funds in order to prevent delays in payment some
    time before the end of the fiscal year.
        Some of the alternatives that have been proposed to the
    fuel tax, such as a vehicle miles traveled tax, and there are
    experiments that are in place in some other States, could
    certainly take some time to put together.
        Chairman RYAN. If we want to keep the fund full and level-
    financed, level-funded, is there any other way than a general
    fund transfer to do that in the timeframe we are talking about,
    with the expiration--or the insolvency occurring at the end of
    July?
        Mr. SHIRLEY. General fund transfer certainly would take
    care of it.
        Chairman RYAN. Bob.
        Mr. POOLE. I don't see any way to do that. I mean you have
    a very short-term problem, and I think that is probably the
    only realistic short-term solution.
        Mr. GRAVES. I am certainly not going to disagree with CBO
    and Bob. I think that there is no doubt we are going to see
    another transfer.
        Chairman RYAN. Yes. So the question is, for us here, we
    don't like transfers any more than anybody else does. We think
    it is bad for planning, bad for certainty, bad for our
    transportation strategies. So what we are trying to figure out
    is, how do we come up with a longer-term solution? We like
    doing 6-year highway bills. That is the tradition here, that is
    what our goal and aspiration is.
        But the other solutions that are out there to replace gas
    taxes--Bob, you mentioned three or four of them--those aren't
    really ready for prime time yet, are they? I mean give me a--
    Bob, this is for you. Those aren't ready for prime time. How
    long would it realistically take to take one of these
    innovative ideas and solutions and get it actually occurring in
    a law?
        Mr. POOLE. Well, on the mileage-based user fees, I think
    you really are looking at probably close to a decade of pilot
    projects and experiments at the State level, possibly some
    implementation on a large scale at the State level to figure
    out, really, how to do this in a way that is economical to
    collect--which I think is possible--that protects privacy, and
    gives users a real choice of method.
        But we are nowhere near there, and I think, if Congress
    tried to do--to impose a Federal one in the next year or two,
    you would risk a huge fiasco and a tremendous backlash from the
    motoring public. And I don't think any of us want to go there.
        Chairman RYAN. So I----
        Mr. POOLE. The one thing you could--this reauthorization
    could easily do the expansion of the interstate toll financed
    reconstruction program with stronger safeguards. And we will
    have to have lots of discussions with ATA about that. But I
    think that is something that is a near-term possibility, and--
    including the use-it-or-lose-it provision for the States that--
    the three States that are sitting on their slots and not yet
    using them. You need to give them a push to actually figure out
    how to get to yes on this at the State level.
        But that could start the ball rolling on some major
    projects. That, plus increasing the cap on private activity
    bonds. I mean those things would keep the P3 pilot programs--
    the P3 programs going. Twenty-eight billion dollars have been
    financed in the last decade through major P3 projects in the
    highway and bridge sector. And a lot more of that is possible
    if we don't run out of financing ability.
        Chairman RYAN. Okay. So to continue this thought a little
    further with you, Bob, we know that the current financing
    mechanism isn't really working, and I want to ask you a
    question about why that is. We know that a long-term solution
    isn't actionable right now. So we have to find an interim
    measure. That is pretty much what this Committee does--the
    Transportation Committee, they are the authorizers, they are
    the ones who determine the things you just discussed. This
    Committee does the financing in between. So we have to figure
    out what the bridge is, the financing bridge.
        But, to the point about why the current revenue system
    isn't working, let me ask you this. We have Federal regulatory
    policies like CAFE, you know, the Corporate Average Fuel
    Economy standards. They mandate more fuel-efficient cars. So,
    on the one hand, we have these laws and regulations that
    mandate more fuel-efficient cars. On the other hand, we have
    fuel taxes that are measured on a per-gallon basis. So the
    farther those gallons can take a car, the less money per mile
    the taxes raise. So, we have this contradictory Federal
    policy----
        Mr. POOLE. Exactly. They are going at cross purposes.
        Chairman RYAN. Exactly. So, you know, also, people who
    drive electric vehicles don't pay gas taxes. In fact, this
    Committee, I remember, I think 2005, 2006, we had a tax
    incentive for people to buy gas--I mean electric cars.
        So, we are at cross purposes here. Even if we decided to
    raise gas taxes, it is just another temporary solution to a
    long-term problem that doesn't solve the problem. Am I not
    correct in that?
        Mr. POOLE. I agree. That is my assessment, certainly, and
    that was the assessment of the TRB committee 10 years ago, that
    we were going to be in this situation by about now. And it is
    going to get worse and worse. That was before the CAFE
    standards were increased----
        Chairman RYAN. Right.
        Mr. POOLE [continuing]. Dramatically a few years ago. And
    that is--they are going to devastate the State and Federal
    transportation budgets over the next couple decades, as they
    fully work their ways out to----
        Chairman RYAN. So we have Federal policy colliding with
    each other. And the casualty is our roads and our bridges. So
    we are going to have to figure out what is the interim
    financing bridge to get to this better world of a more
    accurate, consistent system that doesn't have this
    contradictory Federal policy.
        There are lots of ideas out there. I don't want to take up
    all of the time, because I want to give other Members the
    opportunity. But I thank you very much for your indulgence.
        Mr. Levin.
        Mr. LEVIN. Thank you. Thank you for your testimony. Mr.
    Chairman, as I hear the back-and-forth in answer to your
    questions, I think the problem is a bridge to what. And we keep
    on building a short bridge because we don't face up to the
    what.
        And to simply focus on the interim, the interim has been
    used as a reason not to do the long-term. And, you know, I wish
    we really had a video today. Your testimony has been graphic,
    but nothing would be like having videos as to the conditions of
    roads and bridges in this country.
        I was in Nepal last year, before the tragic earthquakes.
    And then I came back here to Washington and to Michigan, and I
    thought some of the roads were as bad as I had seen in Nepal.
    And so, I really think the time has come for us to make a basic
    decision, and that is whether we are going to make one.
        And my concern about the focus on finding an interim, and
    arguing about how long, is that it becomes a reason for us not
    to face up to what needs to be done, long-term. And that is why
    my suggestion is that we just should not take--begin to take
    ideas off the table, because that becomes, essentially, a
    stalemating of action.
        So, in my few minutes left, just the three of you, just
    have a little discussion--or, if you want, a debate--about the
    premise user-pay/user-benefit. The three of you just argue.
    Talk.
        [Laughter.]
        You have 2, 2\1/2\ minutes.
        Mr. SHIRLEY. I will briefly start off. The idea of the user
    pay is that it provides incentives for the users of the highway
    or the infrastructure to use it more efficiently if they have
    to pay for the infrastructure. And alternatives that would not
    be user pay wouldn't contain those incentives.
        Mr. POOLE. I think another key lesson comes from Europe,
    where they have gas taxes, but the gas taxes are a general
    revenue source. And if you compare the amount that comes in in
    gas taxes in Europe, in most countries, with the amount they
    actually spend on surface transportation, they typically take
    in two or three times as much in fuel taxes as they actually
    invest in the infrastructure.
        So, I mean, making a direct connection between the users
    and having the money be dedicated to transportation is
    critically important. If we lose that, I think we may go the
    way of Europe, and have higher and higher payments and less and
    less actual investment because of losing that tie.
        Mr. GRAVES. Congressman, it just feels to me like, you
    know, for 50 years this is what our Nation has known, that
    users pay. I mean people do get that concept. Now, they expect
    you to deliver, programmatically, what they are paying for. And
    I think we have, you know, room to go in that regard.
        But I think we make a terrible mistake to move away from
    that concept. And I would also argue that, as Chairman Ryan
    just mentioned, even, you know, with another extension, we end
    up once again reassuring the American public that we don't need
    to find new sources of revenue, we are just going to go find--
    you know, clean out the sofa for dimes and nickels and come up
    with some sort of general fund solution, and everybody is
    reassured that they are never going to have to increase their--
    you know, the user fee.
        I just think we need to have a more honest discussion with
    the American public about what is necessary to upgrade and
    improve this road system.
        Mr. LEVIN. Okay, close. You know there is talk about
    electrification, and how that doesn't quite fit with user fees.
    It is often raised by people who don't support the effort for
    more electric vehicles. And private activity bonds, I think,
    need to be looked at. And often, it is raised by people who
    sometimes would propose their elimination.
        So, I think all that shows we have to face up to this, and
    we need an interim, as long as it is not another excuse for the
    failure to act long-term. And 24 times, is it? That is exactly
    what has been happening in this country by this Congress, by
    Congresses. And we need to do much better. Thank you.
        Mr. REICHERT [presiding]. Thank you. The gentleman's time
    has expired.
        Mr. Johnson, you are recognized.
        Mr. JOHNSON. Thank you, Mr. Chairman. You know, according
    to the Wall Street Journal, ``simply using the taxes that are
    supposed to pay for highways to pay for highways makes the
    Highway Trust Fund 98 percent solvent for the next decade.'' I
    would like to ask to have this inserted in the record.
        [No response.]
        Mr. REICHERT. Without objection.
        [The submission of The Honorable Sam Johnson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. JOHNSON. Thank you. Mr. Chairman, I would just note
    that I have recently introduced legislation by the name of
    Right of Way for American Drivers Act that would begin to do
    just that: Pay for it.
        Speaking of the gas tax, some in Washington are calling for
    a higher gas tax. Mr. Shirley, for the record, isn't it true
    that a majority of the tax burden of a gas tax increase would
    fall on hardworking, low-income Americans? Yes or no?
        Mr. SHIRLEY. A higher relative burden of the gas tax does
    fall on lower-income households, compared to higher-income
    households.
        Mr. JOHNSON. Okay, I appreciate that.
        And, Mr. Poole, I see you are a big fan of tolls. I have to
    tell you, folks back home in Texas would most likely drive you
    off the road because my constituents have had it up to here
    with tolls. In fact, you can't get out of Plano, Texas, without
    getting on a toll road. North Texas is said to have the largest
    toll network in the country. So you know I have actually put
    out legislation to stop the Federal authorization for tolling.
        Wouldn't you agree that tolling is like a double tax? I
    mean folks have already paid for the road with their gas tax
    dollars, and now they have to pay a toll. Don't you think that
    is a double tax?
        Mr. POOLE. I agree. I am opposed to double payment. And we
    have supported at Reason Foundation rebates--all electronic
    tolling makes it possible to give--to calculate how many miles
    people have driven, paying tolls. And you know the vehicle, so
    you know the fuel economy. You can figure out how much gasoline
    or diesel they used, and give rebates based off that. And that
    is an integral part of the planning in Oregon, for example, for
    mileage-based user fees, that it would be--that people would
    get rebates for the fuel taxes they paid, and wouldn't be
    paying both the user fee and the gas tax.
        Mr. JOHNSON. That is interesting. Okay, Mr. Chairman, I
    yield back the balance of my time.
        Mr. REICHERT. Mr. Lewis, you are recognized.
        Mr. LEWIS. Thank you very much, Mr. Chairman. Let me thank
    all of the witnesses for being here.
        Governor Graves, thank you for your leadership, and thank
    you for your statement. When I first came to Congress almost 30
    years ago, I served on the old Public Works and Transportation
    Committee. And we tried to do something to authorize our
    transportation needs. Democrats and Republicans came together.
    We never thought that our roads and our bridges were partisan,
    we just did it. And there is a need today to come together.
        You know, I represent a city, the City of Atlanta. And we
    have three major interstates coming through the heart of the
    city: I-75, I-85, and I-20. We have a lot of trucks, and we
    need to do something. I want you to tell the Committee, I want
    you to dramatize it, to make it plain, to make it clear. If we
    fail to act, if we fail to do something, what is--what would
    happen?
        Mr. GRAVES. Well, Congressman, it is happening already. I
    think the cost to this Nation in terms of congestion, what we
    are wasting every day in terms of burning fuel and emitting
    into the atmosphere, what we are wasting in terms of missing
    our commercial delivery schedules, not to mention just every
    individual who is late for this, that, or the other, or doesn't
    get to a job interview or a medical appointment, or whatever.
        I mean our trouble just getting here this morning, and the
    condition of the roads in this city, you know, we are having a
    hard time with a driver shortage, because most drivers get paid
    by the mile, or in some form or fashion based on meeting a
    delivery schedule. And it is a hard living to make. And,
    therefore, we have a lot of people who are turning away from
    our industry, just because the conditions out on the Nation's
    highways are such that they just don't want to do that.
        So, it is having a tremendous impact. And, you know, we are
    not benevolent. We have to absorb the cost associated with the
    safety concerns, the maintenance concerns on vehicles, the
    delays that we have to endure. We build those into shipping
    rates, and those get passed on, and Americans all pay more than
    they otherwise need to for their products. So it is a very real
    problem, and it exists today. And when we look at the numbers,
    they are staggering.
        We can't cut our investment in the Nation's infrastructure.
    We need to increase, on an annual basis, somewhere in the
    neighborhood of $25 to $50 billion. We are going to lose our
    competitive edge as a country, vis a vis the rest of the world,
    if we don't figure this one out.
        Mr. LEWIS. Could you tell the Committee what the impact is
    of short-term fixes and emergency action, rather than being
    bold and preparing for the long haul?
        Mr. GRAVES. Well, it would be my opinion the problem with
    all the short-term fixes is that it always messes up State
    governments and their ability to adequately predict what
    revenue is going to be available and what projects they can do.
    Some of your States have very, very short construction seasons,
    and we end up essentially delaying. We end up with whatever
    inflationary factor it is that kicks a project a year down the
    road. It is one more year that a road is less safe. It is one
    more year that we have the same kind of congestion that is
    detrimental to our economy.
        So, I mean, delay just leaves us, again, right where we are
    and, again, having the same conversation that started 22 years
    ago.
        Mr. LEWIS. Thank you very much.
        Mr. Chairman, I yield back.
        Mr. REICHERT. Mr. Brady.
        Mr. BRADY. Chairman, thank you for holding this hearing.
    This is long overdue.
        A couple of observations, then I want your advice on
    something. Governor, I agree. We ought to have a real serious
    discussion about moving away from user pay in our
    transportation infrastructure. I think that is a critical part
    of how we fund, and we ought to have a long discussion about
    moving even farther away from that.
        Secondly, our transportation system, how we fund and
    operate it, you know, reminds me of a leaky bucket. We have
    diversion into non-highway and transportation issues, you know,
    you have very long permitting processes that drive up the cost
    and delay them. We have issues like Davis-Bacon--very
    sensitive, but have an impact on all that. And so, I think one
    of the keys to pouring more money into this system is to fix
    the bucket. Before or as we do that, I think it draws more
    support to this.
        I am skeptical that tax reform on the international side is
    the solution. The two are unrelated. I am sort of old-school. I
    think changes in the Tax Code should accrue to make us more
    competitive and create a stronger tax growth for growth, which
    will help to generate revenues, generally, for the country.
        So here is my question. There doesn't seem to be one single
    solution to this problem. It will be--require a series of them.
    What I have noticed is, you know, around the world, other
    countries draw much more private investment to infrastructure
    than America. Dramatically more. Countries we wouldn't even
    expect it in. I think in France, 70 percent of the water and
    sewage systems are created by private investment. We already
    know long-term expressways are privately funded. Airports, the
    100 largest airports in the world by revenue, 36 are created by
    private investment. Yet that trend toward investment in
    America, in modern, efficient infrastructure, has grown a bit,
    but still is largely missing.
        I think part of that could be because of these very
    capital-intensive projects. I think tax exemption on municipal
    bonds is part of the problem. I am not saying end that at all,
    but if you start off with a 40 percent disadvantage in the cost
    of capital, you are not likely investing in infrastructure. I
    am not suggesting that.
        But my point is I don't think a minor lifting of the
    private activity bond solves the problem. How do we draw--as
    part of the solution, how do we draw more private investment
    into infrastructure in the United States? It seems to me we do
    have a lot of capital. These are needs. I think they can be
    structured the right way. As part of the solution, what do we
    do?
        Mr. POOLE. If I may, since I have done a lot of work on
    that subject, I find it is truly ironic that Congress is
    perennially grappling with ``there is not enough funding, there
    is not enough funding,'' and yet the global infrastructure
    investment funds have raised hundreds of billions of dollars
    for sound infrastructure, and large-scale projects, many of
    them in Europe, in Latin America, in Australia. And so far,
    only $27 billion in this country.
        We could do a lot more if--Federal Highway Administration
    is doing some good work on developing, basically, prototypes
    for the kinds of long-term agreements that States who don't
    have the experience with this could adapt. We really need a
    bigger effort to--this is not the whole solution, by any
    means----
        Mr. BRADY. No, no, I get that.
        Mr. POOLE. But it is a piece that could go a lot further.
    And U.S. public employee pension funds, like CalPERS and
    CalSTRS are starting to invest in these kinds of infrastructure
    projects. They see the long-term--you know, a project that
    generates revenues in a long, steady, increasing fashion is a
    very good match for pension fund liabilities. So--and insurance
    companies have the same kind of long-term--we need to figure
    out how to mobilize more of that capital, and get it into the
    investment cycle for----
        Mr. BRADY. Yes. You know, we are doing that in some of the
    States, not on the private side, but on the public side. You
    know, States are advancing--or local communities are advancing
    dollars for projects. States are reimbursing on a per-mile and
    per-use basis--so you are already laying out sort of the cost
    benefit of these projects, it is just happening on the
    government side of the equation. My question is, why can't we
    be doing more of that, not as the full solution, but could that
    not be helpful in filling that gap on the private-sector side?
        Mr. POOLE. It would be very helpful. We have major bridges
    that need to be replaced. We have aging interstates, like I-70
    in Missouri, that still has some of the original pavement from
    the highway that I-70 was built on top of that is falling
    apart. So, mega-projects of that sort are really good fits for
    the long-term P3s. And that, again, is part of the solution. It
    is not the whole thing, but it would help a lot if we did more
    of that.
        Mr. BRADY. Okay. Thank you all very much.
        Mr. REICHERT. Mr. Neal, you are recognized.
        Mr. NEAL. Thank you very much, Mr. Chairman.
        I want to thank our panelists, as well, and note that
    Congress has not been very good at doing the seminar side of
    things. Mr. Tiberi and I, in our respective positions on the
    Select Revenue Committee some years ago, along with Mr.
    Blumenauer, we addressed this issue head on with the American
    Trucking Associations and with the American Chamber of
    Commerce. We brought in witnesses. And here we are, 8 years
    later, in stalemate over the same issue.
        And Governor, one of the things that you noted correctly
    was that President Eisenhower had the vision to move forward,
    but also to connect another very important element, and that
    was he had Lyndon Johnson as the Majority leader in the Senate,
    and Sam Rayburn as Speaker of the House. We saw this as an act
    of national purpose. We saw it as an act of national will. Not
    the divisiveness that currently confronts this Congress on
    every single issue that comes along. One bad story, let's get
    rid of earmarking.
        We have watched Congress be reticent about the challenges
    that we face every day, when we have had this opportunity to go
    forward. And I really hope Chairman Ryan is going to lay out
    his ideas as we go forward on this issue. That is what the
    Chairman does. And it is important for all of us to ask
    questions. But at some point, 8 years later--after we began
    these hearings--we have to have some action.
        Now, let me call attention to something specific, Governor.
    The Port of Boston is now being dredged for the purpose of
    accommodating the tankers that will come through the new Panama
    Canal expansion, the double tankers. Those are going to be
    union jobs, $350 million of dredging, more longshoreman. And I
    supported the FTA with Panama, because of that very purpose.
        So, could you address the issue of what is happening with
    congestion at our major ports, including Logan Airport in
    Boston, as well as one of the great ports on the East Coast,
    the Boston Port?
        Mr. GRAVES. Well, I think you all know that one of the
    problems we face in this country is that so many of our ports,
    airports, major infrastructure projects, were built so many
    years ago, that no one anticipated the kind of expansion and
    activity that would ultimately take place. So we have land-
    locked ports that don't have any way to expand. And therefore,
    there is congestion, just inherent with where they are located.
        You start bringing in thousands and thousands of trucks
    every day to move containers. I think there is great potential
    in some of the inland intermodal facilities that we are
    starting to see spring up, but they are not inexpensive. We
    have had--I hope you all know the number-one customer of our
    class-one railroads are trucking companies. We are putting more
    and more freight on intermodal movement than we ever have
    before. But, to tell you the truth, it barely scratches the
    surface, in terms of the tonnage that, overall, gets moved in
    this Nation.
        And, as I often say to people, we--you know, in 2006, for
    the first time, we had 300 million people in this country. In
    2042, we are going to have 400 million people in this country.
    That is just a lot of stuff, a lot of mobility, a lot of
    demand. And yet we are basically, you know, treading water on
    our infrastructure investment.
        Mr. NEAL. In addition--I am glad somebody mentioned the
    private activity bond cap. That is something that ought to be
    able to apply here. We ought to be talking about something I
    worked very, very hard on, the Build America Bonds effort,
    which was extraordinarily successful. Massachusetts alone
    issued $5 billion in Build America Bonds, municipal bonds.
        There used to be a can-do attitude about infrastructure in
    America. And I am delighted that Sam Johnson said his
    constituents have about had it with toll roads. This is a
    public responsibility and we have to increase efficiency and
    productivity.
        And, Mr. Shirley and Mr. Poole, would you speak about those
    three bonding opportunities that we have that I just addressed?
        Mr. POOLE. Well, I think bonding is critically important.
    We really need to be financing, through long-term kinds of
    vehicles, more of the needed infrastructure than we have. We
    are way behind, as several people have mentioned, in what we
    should be building. And so, if you continue funding almost all
    of these big infrastructure projects out of annual
    appropriations, it is a losing game. To catch up, to have a
    chance of catching up, you have to go to more long-term
    financing through revenue bonds. And all the vehicles that
    would do that deserve serious consideration, in my view.
        Mr. NEAL. We need to embrace here, Mr. Chairman, pro-growth
    economics. This economy has grown at 2.1 percent and even less
    in previous years. For 15 years, with downward pressure on
    wages and very little growth in the economy, and we can't find
    a common path forward in infrastructure? This used to be the
    easiest thing to do in Congress. Members would rush to the well
    in an opportunity to put their cards into the polling place so
    that they might vote, based upon requests from local government
    for hospitals and colleges and airports and roadways and
    bridges. And, for all of us, this stalemate has ill-served the
    American people.
        Mr. REICHERT. Mr. Neal, thank you.
        Mr. Tiberi.
        Mr. TIBERI. Thank you, Mr. Chairman. Thank you for your
    leadership. And I want to associate myself with the Irish-
    American from Massachusetts over there, my friend, Mr. Neal. I
    have been using the same argument on trade, by the way. That is
    a discussion for another time.
        [Laughter.]
        I will talk to you about it, too, Bill.
        Mr. NEAL. Will the gentleman yield?
        Mr. TIBERI. Sure.
        Mr. NEAL. I did cite the example of the Panamanian FTA.
        Mr. TIBERI. I know you did.
        [Laughter.]
        Thank you. Let me take--and I am serious about his
    comments. I do associate myself with him.
        I will take a little bit different tack. Mr. Poole, as we
    have done today, and as we have done over the last 8 years,
    much of the focus has been spent on revenue, and I understand
    that. Much of the focus has been spent on the solvency of the
    trust fund, and I understand that. But there is another aspect
    of this that I found in your testimony to be quite interesting,
    and I want to take it a little bit farther, because I think
    Governor Graves is right, that this is a crisis, and this is a
    conversation that we need to have with the American people in a
    broad way.
        And that is the struggle that we all have here. If I am at
    an event, talking to a group of people, and a gas tax comes up,
    and the wealthiest person there drives a Tesla, he is not as
    invested as the person who drives a Chevy Cruze.
        So, the question I have, though, is I had a county engineer
    in my district who has complained for a long time about Federal
    regulations. And to prove the point that he was complaining
    about, he did a road construction project with State and local
    funds and a very similar project in the county with Federal
    funds, same distance, same basic type of project. As you can
    expect, the one with Federal funds cost twice as much and took
    twice as long.
        We never seem to have the discussion here in the context of
    making the fund solvent. I understand revenue component is
    extremely important. Mr. Neal is right. But, from a taxpayer
    component, that is extremely important, too. What can we do to
    ensure that we provide our constituents, our taxpayers, the
    users of the highway, the greatest bang for their buck when
    Federal dollars are involved in a construction project? What
    can we do that will actually make that dollar go farther, by
    the way, so you can build more----
        Mr. POOLE. Right. Congressman, you have really hit the nail
    on the head, that Federal projects, because of all of the
    regulations that go along with them--well-intentioned things,
    Davis-Bacon, the Buy America, and a whole lot of others, and
    all the different regulatory oversights, if the project is
    Federalized, really do--double may be an exaggeration, but
    certainly 30 or 40 percent more is pretty routine. And I know
    some State DoTs that try hard to figure out projects that they
    can do without a dollar of Federal money in them, in order to
    have the cost savings. So that clearly--regulatory reform would
    be one key to making the dollars go further.
        Another, of course, as I said in my testimony, is to look
    really hard at what the scope of the Highway Trust Fund is. I
    mean there are all kinds of things in there that are nice to
    have, but aren't necessarily core Federal concerns. There are
    things that, over time, have migrated from being solely State
    and local responsibilities to now shared Federal, State, and
    local responsibilities.
        I know this is not really this Committee's jurisdiction.
    But on the other hand, if you cannot come up with a medium-term
    revenue fix----
        Mr. TIBERI. All right.
        Mr. POOLE [continuing]. I suppose you could go back to the
    authorizers and say, ``Look, you guys haven't done your job of
    figuring out a scope of the program that is actually
    fundable.''
        Mr. TIBERI. Let me just add one more thing. In my home
    State of Ohio, the Ohio Department of Transportation has looked
    inward because of a lack of a reauthorization bill. And they
    have actually implemented cost-efficient reforms that have
    redirected some $600 million from their operating budget into
    capital projects in our State. So they are leading. Ohio has
    streamlined project delivery for more innovative methods, such
    as design-build.
        I sat on the conference committee of MAP-21, and it was
    supposed to reduce red tape. Not as much as I wanted to, but it
    was supposed to reduce red tape, streamline programs. But many
    of the reforms that were in MAP-21 have yet to take place.
        So, looking long-term, I ask the three of you--and you
    don't have to answer--if you can just help put pressure on us
    and the administrators of this highway fund, to do what not
    only we have said for them to do, but do more to make
    taxpayers' dollars go further.
        Thank you, I yield back.
        Mr. REICHERT. Thank you, Mr. Tiberi. Mr. Becerra, you are
    recognized.
        Mr. BECERRA. Mr. Chairman, thank you very much. Gentlemen,
    thank you for your testimony.
        In California, we are told by our State transportation
    agency that there are about 6,800 bridges that are structurally
    deficient. That is one in every four bridges in the State of
    California.
        There is also a letter that was recently issued by
    Caltrans, our State transportation department, that said the
    following: ``Caltrans may be forced to shut down ongoing
    construction, due to an inability to absorb the Federal
    shortfalls with State cash, in the event that the Federal
    Government doesn't move forward with financing the Highway
    Trust Fund.''
        Governor Graves, let me ask you a question. I have to
    believe--and let me add one other thing. LA County's metro
    agency, which deals with a large sector of all transportation
    within Southern California, also said the following: ``In order
    to avoid massive cost increases associated with construction
    stoppage or delay as a result of any shortfall in Federal
    funding for these projects, LA Metro would refrain from
    beginning any new project construction all together, as well as
    stop any construction bid notices for projects that are in the
    pipeline, because of the uncertainty of Federal funds.''
        What, Governor, does that do to a State, a State
    government, when it comes to planning its long-term projects,
    not just in a metro area, but in the entire State, if you have
    a Federal Government for the last several years doing 2-month
    extensions of funding when you have long-term, multi-year
    projects to have to worry about?
        Mr. GRAVES. Well, it is, obviously, incredibly disruptive.
        I mean, I will tell you that in my 8-year experience, I
    thought I had the best State DoT that there was. They were
    great professionals, they understood what the needs of our
    State were. I thought their planning efforts were just, you
    know, outstanding. But it involved that partnership with the
    Federal Government.
        Were we frustrated from time to time with some of the
    regulatory burden? Yes, we were. But we eventually worked
    through that. And it was the--and I know we need to think
    programmatically, because, at the end of the day, it is the
    delivery that matters, that we got something built and done.
        But the States have to know that you are going to be there
    for them in that funding partnership. And every time there is a
    bit of uncertainty, it sends shock waves through the various
    States, who are in various stages of planning. I mean not every
    State is on the same schedule, in terms of a 5-year plan or a
    10-year plan, or whatever it might be. We happen to have done a
    10-year plan in our State while I was in office.
        But they count on you, they expect this partnership to be--
    to work both ways. They will adhere to whatever requirements
    the Federal Government sends their way. But they expect the
    money and, clearly, that is where our problem is today.
        Mr. BECERRA. I think you said the operative words, ``They
    count on us.'' And I think--actually, I compliment all three of
    you for saying pretty clearly that there are pretty
    straightforward ways of doing this. And I think I have heard a
    lot about user fees. And I tend to agree with you. You are
    going to use it, you should pay for it. And we should step to
    the plate.
        I think you all have been saying this--folks on the
    outside, in State government, local government have been saying
    this for quite some time. In fact, in Los Angeles--not just
    city, but county--we have stepped up to the plate. We have
    actually passed user-fee proposals, ordinances, that provide a
    pot of money that we can come to the Federal Government with
    and say, ``Look, we are willing to impose a user fee on
    ourselves through bonds to show you how serious we are about
    completing these projects,'' so it is not just going to be
    Federal money that helps pay for California's projects. Our
    local dollars are being invested, and we are ready to fork it
    over, put it on the table to show you how serious we are about
    these projects.
        I believe that any delay is just an excuse. We have every
    opportunity to move with proposals that are clearly before us.
    I think I would agree with you gentlemen, that user fees are
    clearly the way to go. And the sooner we get to it, the better,
    because we are just deceiving the American public by making
    them believe that we can fund all that we need without coming
    to the table.
        And so, you are right. Folks have a belief, and they have a
    right to believe that we are going to be at the table coming up
    with solutions. I hope you will continue to weigh in, give us
    your thoughts, because we should not be doing these piecemeal,
    itty bitty baby-step extensions of funding for projects that
    don't get done in 2 months. No contractor, general contractor,
    who is going to build a highway buys cement or asphalt or
    lumber for 2 months. You buy it ahead of time. And if there is
    any place where the adage ``time is money'' applies, it is in
    construction.
        So, thank you all for your testimony. Hopefully we will get
    there and solve it, and people can count on us.
        I yield back.
        Mr. REICHERT. I thank the gentleman. I will yield myself 5
    minutes for questions.
        And I first want to thank the three witnesses for being
    here. And I think you have heard at least one voice today
    saying that we need to do something. All of us here believe
    that. There is frustration for not accomplishing some progress
    here. And, of course, frustration in trying to find a solution
    which we know would include more than one aspect of all of the
    things that are being talked about here today.
        So, we know it is difficult, and recognize there is a
    problem. When you start to look at some of the options that you
    have all talked about--the Federal gas tax and tolling and
    public-private partnerships and vehicle miles traveled, and the
    Transportation Infrastructure Finance and Innovation Act, which
    is a program that provides credit assistance, the mass transit
    account has even been--people have talked about phasing that
    account out to help--reducing the Federal burdens, which we
    have talked about, some of the Davis-Bacon issues which I
    support, and some other regulatory issues. And then also
    streamlining the National Environmental Policy Act, NEPA,
    requirements is another issue that has been talked about.
        So, in trying to find a solution here, we have to go
    through an awful lot of gymnastics to get agreement, not only
    amongst the panel here that you have before you today, but in
    the House of Representatives, on to the Senate, and then the
    White House. Right? So we need your help.
        I come from the State of Washington. We have had our issues
    with bridge collapses, as you know. On the Skagit River Bridge,
    three vehicles plunged into the river as a result of the bridge
    failing after a collision. We have had some other bridges
    collapsing in Washington State. This is not a story that is new
    to, I think, Americans. In every State we have had similar
    experiences.
        I would like to revisit the P3s. I think Mr. Brady focused
    on that somewhat. And Mr. Shirley, Mr. Poole, you both
    highlighted the current role of public-private partnerships in
    financing. The first--could you discuss specific benefits that
    you have seen?
        And, Mr. Graves, you may also have some opinion on the
    private partnerships.
        And, second, if there are benefits that you have seen, what
    obstacles, current obstacles, do you see that would prevent us
    from getting to those?
        And then, lastly, what, if any, impact would greater access
    to public-private partnerships--what kind of benefit would that
    provide to us?
        So, a three-part question. I hope you got it. I can repeat
    it, if you didn't. But I would like to hear from all three of
    you. You have 2 minutes.
        Mr. POOLE. I think there is an important set of benefits
    from the long-term P3s. One of the biggest ones is--these are
    really a best fit for mega-projects, $500 million to several
    billion dollar-scale projects, bridge replacements, and so
    forth. And risk transfer is a very important benefit.
        Mega-projects are notorious, worldwide, for cost overruns,
    late completion, and over-optimistic traffic forecasts. Most of
    those risks can be transferred to the P3 entity, which has skin
    in the game, by making an equity investment in the project and
    then taking on those risks. And it means the taxpayers aren't
    burdened with them. That, to my mind, is the most important
    benefit of the P3s.
        Another, of course, is that it means you are financing the
    project, instead of building it out of operating cashflow,
    annual appropriations. We need to do a lot more long-term
    financing of the major projects. And so P3s are a mechanism to
    do that.
        Mr. SHIRLEY. The risk transfer that takes place will depend
    on the nature of the particular structure of the deal for a P3.
        I would also point out that, in some instances with private
    financing, there can be incentives to move the project along a
    little bit more quickly. We have seen some evidence that some
    projects come to fruition a little faster with private
    financing.
        Mr. REICHERT. Mr. Graves.
        Mr. GRAVES. I think, Congressman, it is important to note
    that P3 generally means a toll project, whether it is a bridge
    or a road. And since it is a private investment, there is an
    expectation that there is going to be a return on investment.
    So, inherent in that, you at least potentially have some
    additional costs that otherwise wouldn't be there if the
    government were doing it on its own.
        We think P3s have a place in this dialogue. We think,
    certainly, there is a lot of bridge projects that they match up
    nicely on. The experience in this country with a lot of tolled
    road, private investment in roads, is mixed. Some have not done
    and fared nearly as well as some anticipated. And a lot of that
    has to do with the amount of diversion, where people just
    simply are not going to pay, or can't pay the cost to use that
    facility. And, therefore, they start to run, in our case,
    commercial vehicles off onto routes that they otherwise
    shouldn't be on. So there can be a safety issue, from our
    perspective, as well.
        Mr. REICHERT. Thank you. I appreciate your comments and
    would just quickly mention that I look forward to continuing
    this discussion next week. We will have a hearing in our
    Subcommittee to delve deeper into some of the solutions. And we
    will see where this investigation takes us.
        So, Mr. Doggett, you are recognized.
        Mr. DOGGETT. Thank you. Thank you very much, and thanks to
    each of our witnesses for your testimony. It has been a long
    time coming. We asked for this hearing at the beginning of this
    Congress. And now, I don't know, 17, 18 months later, we
    finally have you here. And I think your testimony has been very
    helpful.
        Certainly, Governor Graves, I agree with you that this
    affects our competitiveness in so many areas of our economy.
    Our foreign competitors see the tremendous advances that we are
    making in technology, not just on highways, but--and
    transportation--but in other areas. And then they take that
    technology and adapt it, copy it at home, and gain a
    competitive edge over us. And I think that is a real problem.
    It cannot help but cause significant harm to our
    competitiveness if we are not meeting the needs of a 21st
    century transportation system.
        I think it is also a security issue. When President
    Eisenhower developed our interstate system, he recognized the
    importance of tying the country together, and the importance,
    from a security standpoint, of having adequate transportation.
        It seems to me what is missing from our transportation
    policy that you have addressed very well is, of course, first
    and foremost, money, revenue. We cannot build these highways
    with fairy dust. It takes dollars. And those dollars have not
    been forthcoming.
        But a very equally important factor is certainty. It is
    amazing that, during the first 6 or 7 months, when we were
    trying to get the hearing that we finally have today, the lead
    proposal from some of our Republican colleagues was to finance
    our highways by eliminating Saturday mail delivery. That and
    other ludicrous proposals were offered as a way to address
    needs that are urgent and that our planners need to be able to
    know that the funding is not there, just for the next 3 or 6
    months or even a year, but that it will be there as these
    significant projects need to be developed.
        I really live on Interstate 35, between San Antonio and
    Austin, back and forth. And it is one of the biggest
    bottlenecks. I think the bridge over the Colorado River in
    Austin has been listed as number one, but it has plenty of
    competition around the country as being a major bottleneck,
    with a steady stream of 18-wheelers both ways. It is clearly
    not just Willie Nelson who is on the road again, but many of my
    neighbors that are out there.
        And there is great uncertainty there, because you never
    know when that traffic is just going to completely stop, you
    can't get to your work, you can't get to pick up the kids, or,
    in my case, simply move from one office to another to meet with
    constituents.
        I do agree with my colleague, Mr. Johnson, on one factor,
    and that is there is a bit of a problem in tolling roadways
    that have already been financed originally by taxpayers. Our
    former colleague, Senator Kay Bailey Hutchison, included a
    provision in the Transportation Act once about that. And we are
    headed to a situation in Texas where it will be impossible to
    get to any of our major cities--Austin, San Antonio, Dallas,
    Houston--unless you are willing to pay a toll or stop every few
    blocks on the access road.
        The other revenue source that I have some concern about--
    and, Mr. Poole, you have addressed this in an article that you
    wrote back in February, and perhaps at other times--is the
    notion that, speaking of fairy dust, that there is some magic
    way we can handle this through repatriation. And you looked, I
    believe, at all of the proposals: The one from the
    Administration, which you described as the most foolhardy; the
    one from Mr. Delaney; the one from Boxer and Paul. And, in
    February, said that you could not support any of them. Is that
    still correct?
        Mr. POOLE. That is still my position for the reasons I
    stated, that it would be another big departure from the user
    pays principle, which I think is crucially important, to
    strengthen, rather than continue weakening.
        Mr. DOGGETT. And that a one-time fix, whether it is
    repatriation or Saturday mail delivery, or some other gimmick,
    would not provide the certainty----
        Mr. POOLE. Exactly.
        Mr. DOGGETT [continuing]. That is important, along with the
    funding.
        Mr. POOLE. Yes.
        Mr. DOGGETT. And I was pleased to see that our colleague,
    Dr. Boustany, was quoted earlier this month in Politico as
    saying that this is--``It is not a real way to fix the problem
    of finding the cash for the chronically under-funded highway
    program.''
        There is a tendency to believe, because we have some carpet
    tax dodgers that have hidden money they earned here in the
    United States in the Caymans or some other tax haven, and they
    are just dying to bring it back at a nickel or a dime a dollar,
    which is a--anyone would love to pay on all of their Federal
    taxes, but only these folks, that haven't paid anything in many
    cases, want to bring it back. It is so tempting, even though
    the cost, when you actually go out and score it, of most of
    these repatriation proposals--well, as the President told me at
    one meeting here a year, year-and-a-half ago in a presentation,
    he has looked at it and the math just doesn't work. And I don't
    think it works either for certainty, in terms of tax fairness,
    or any other way, to be a funding source here.
        I hope we can come together. I think there are many people
    here that are willing to cast some tough votes, to provide the
    revenues needed to fund our transportation system, but it has
    to be done in a bipartisan way, rather than just setting up an
    argument to attack someone as being for more revenue for an
    essential public service.
        And your testimony here today, all three of you, is
    helpful, I hope, in advancing that. And, hopefully, we can get
    an answer sooner than we got this hearing, and----
        Chairman RYAN [presiding]. The time for the gentleman has
    expired.
        Mr. DOGGETT. Thank you.
        Chairman RYAN. Thank you. Mr. Boustany is recognized.
        Mr. BOUSTANY. Thank you, Mr. Chairman. I am really glad we
    are holding this hearing. This is really an important topic.
        In my home State of Louisiana, we have two key
    infrastructure projects that have been on hold. One is
    completion of Interstate 49 south. This is a project that has
    been on the books for two-and-a-half decades.
        Now, why is it important? This is the energy corridor for
    the country. I mean it links key ports and key energy
    infrastructure that supplies this country. It is also an
    important hurricane evacuation route, which is important more
    locally. And then, third, we have a number of fatalities, a
    rising number of fatalities each year. This is a project that
    has been on the books, it is authorized. The limitation is
    funding. We have to fix the problem with funding and financing
    of infrastructure.
        Secondly, I have a key bridge on Interstate 10 in a
    location that is seeing $65 billion in new investment coming in
    related to energy and trade. This piece of infrastructure is a
    limitation. The bridge is increasingly dangerous. The
    maintenance schedule has escalated. We have to fix this. So, I
    mean, these are local cases in point for the necessity.
        Now, why is it important? The infrastructure is key to
    addressing the issues that my friend, Mr. Neal, talked about,
    and that is 2 percent growth is just unacceptable in this
    country. And infrastructure basically serves the key elements
    of growth, whether it is the energy sector or the international
    trade and exports.
        I firmly believe we need to get to a user fee system that
    works, is broad-based, and sustainable. And I have some
    concerns about one source of funding that has actually been
    vetted about, and that is it has been talked about perhaps
    replacing or supplanting or augmenting the gasoline tax, or a
    motor fuel tax system, with a per-barrel fee on crude oil.
        I don't think that is a very good idea, for a number of
    reasons. One, I think it adds additional complexity in how do
    you--you know, in terms of separating out the user fee piece
    versus consumers of other types of crude-based products that
    have nothing to do with the highway system. That is a problem.
    I think it would also cause serious competitive harm. We are
    now seeing our refineries, for the first time in many decades,
    being competitive, not only more profitable domestically, but
    very competitive internationally. I think we would harm that.
    Finally, I think the per-barrel increase that would have to be
    put in place, in terms of a fee like this, is somewhere on the
    order of $10. I don't think that would be very popular, either,
    at a time when, you know, we are just starting to see lower oil
    prices.
        So, I have a concern about that particular method of
    payment or financing, but I would be curious to get your input.
    I don't think it fits the classification of being a broad-based
    user fee that is sustainable.
        Mr. GRAVES. Congressman, that option is on our list. We
    actually--because we know how difficult your challenge is,
    collectively, we tried to sit down, as an industry, and come up
    with a whole lot of things that we could support, if it wasn't
    just a--if it wasn't a fuel tax, if it wasn't indexing, I mean,
    if it wasn't some sort of freight fee, I mean, we just--and the
    barrel tax is on the list.
        I will tell you we discussed at length the concern you
    addressed, which is there are people who derive benefit off of
    a barrel of oil who have nothing to do with running cars or
    trucks on the Nation's highways. It is--at least in our
    conversation, it was there simply because we acknowledge that
    there has to be a path forward somewhere, and we didn't want to
    be at the table, being prepared to support whatever you all
    might, you know, grasp as the best path forward. But I
    recognize the concern on the users of the barrel of oil.
        Mr. BOUSTANY. Thank you, Governor. Mr. Poole, do you want
    to comment on that?
        Mr. POOLE. I agree exactly with your objections. I think it
    is--it would have all kinds of unintended negative consequences
    on other parts of the economy, and is another departure from
    the user--the real user-pays principle.
        Mr. BOUSTANY. Are there any thoughts on how we capture
    electric vehicles, vehicles fueled by electrical--or batteries
    and so forth? I mean this is a growing area, and it is
    currently outside of the scope of the motor fuel tax.
        Mr. POOLE. A number of States, a small number--I think
    maybe less than a dozen--have started putting in an annual fee
    tied to the vehicle registration fee as a way of recovering
    something from users of electric and some other types of
    alternate fuel vehicles. That is a good start, at least. They
    certainly should pay for using the highways.
        Mr. BOUSTANY. Does anybody else want to comment on that?
    Governor.
        Mr. GRAVES. Well, I would only say that I would imagine, in
    most instances, the person that is driving the vehicle was
    previously driving something that burned gasoline or diesel,
    and so the concept of paying something for the use of the
    roads, again, is not something they are not familiar with, and
    I don't think there is going to be a huge outcry to support the
    roads of this country through some sort of a registration fee
    on non-fuel vehicles.
        Mr. BOUSTANY. Thank you.
        Chairman RYAN. Thank you. Mr. Thompson.
        Mr. THOMPSON. Thank you, Mr. Chairman, and thank you for
    holding the hearing. And thanks to all the witnesses for being
    here. You have all done a great job. I think there is one thing
    that we can all agree on, and that is that Congress is failing
    the American people in our responsibility to help ensure that
    we have safe and efficient infrastructure upon which to travel
    and to move our goods, and that is something that is totally
    unacceptable. We do need to step up. We do need to address
    this. And we need to do it sooner, rather than later.
        A number of my colleagues referenced the fact that the cost
    of dealing with this problem somehow falls disproportionately
    on hard-working people. And I guess it is hard for me to
    understand why the same concerns aren't voiced when you look at
    the costs that fall disproportionately on those same hard-
    working people when it comes to repairing their automobiles.
        I know in California, my home State, 34 percent of our
    major roads are in poor condition. And I am told by my State
    folks that it costs the motoring public $17 billion a year to
    drive on these roads that are in such bad shape, about $703 per
    motorist. So, who do you think pays that cost? The same hard-
    working folks, the same trucking companies that are trying to
    move goods across the country and across the States.
        Also, in California we have two of the top three most
    congested urban areas: Los Angeles and the San Francisco open
    area. I am told that costs--that congestion costs billions of
    dollars a year, and can be translated to--costs about $1,000
    per commuter in lost wages and time spent on the road in their
    cars and in their trucks. It disrupts the amount of time it
    takes to deliver goods from either manufacturing to a point of
    distribution or whatever else your truck drivers, Governor, are
    doing. And that is just totally unacceptable. And we need to
    fix this now. We can't wait any longer.
        The construction costs, I am told, for building
    infrastructure are down 20 percent since before 2007, and they
    have been flat since 2011. And, at the same time, bonds are at
    an historic low. It seems to me that this is the time to lock
    these construction projects in place, and to set it up so every
    State, States with short construction windows, States with long
    construction windows, can get to work and make these repairs
    and improvements that are so much needed.
        And I would like to ask all three witnesses, is this the
    time to fund these projects? Should we lock this in now, and
    get going?
        Mr. GRAVES. Well, I will start and say, you know, the time
    is now, next week, next year, 5 years, 10 years from--I mean,
    again, we are starting to lag so far behind, in terms of the
    investment we have made--and, as I said, the blessing we have
    is our economy is expanding, and will continue to expand. And,
    therefore, the demand and pressure on all our infrastructure
    will continue to grow.
        So it is--in some way it is not an option, you all have to
    address this, it is just getting around to finding the will to
    do it.
        Mr. THOMPSON. Governor, let me just ask you. I got a memo
    today from a constituent, and it says that our transportation
    system is in an historically unique state of decline and, if
    not addressed soon, will make even strong investment
    potentially incapable of meeting the level of structural decay.
    Do you agree with that?
        Mr. GRAVES. I do. I think any of you that have driven in
    your own communities, your own States, or certainly, if you
    travel much around this country, are seeing the same problems
    everywhere.
        The States are doing a great job making an effort to sort
    of fill that void. And you have seen a number of them take
    action as of late. But it is a drop in the bucket, compared to
    what the overall demand for investment is.
        Mr. THOMPSON. And I can tell you I am from a State that has
    taken action. Many of my counties in my congressional district
    are what we call self-help counties. They have taken action.
    They have taxed themselves in order to step up and help
    contribute to fixing the infrastructure problems that are
    hampering all of us. And the only holdback, the only dark spot
    in all this is the Federal Government's participation.
        I know my constituents want this addressed now. They are
    ready to go. And they see us as failing in our job----
        Chairman RYAN. Thank you. The time of the gentleman has
    expired.
        Mr. Smith.
        Mr. SMITH OF NEBRASKA. Thank you, Mr. Chairman. Thank you
    to our witnesses, as well. Obviously, these topics are very
    important, this topic of transportation and the Highway Trust
    Fund. And it is interesting how I think the general public
    certainly wants solutions. They want their taxpayer dollars to
    end up where they are intended to end up. And yet there seems
    to be frustration, in terms of bureaucracy.
        I mean the President himself kind of looked back on the
    stimulus and the so-called shovel-ready projects as not so
    shovel-ready, or I--in discussion with my constituents, I mean,
    there were small communities who had a project ready to go, and
    when they pursued the dollars from the stimulus, it actually
    delayed the project further. And so, that creates frustration.
        I know many folks are frustrated with Highway Trust Fund
    dollars going to non-highway projects. And I was just
    wondering, Governor, if you could touch on, you know, the use
    of these dollars--obviously, there is a shortage of dollars--
    and how they might by used on non-highway projects.
        Mr. GRAVES. Well, I would first of all say that, you know,
    one of the--you all did such a fine job on stimulus that people
    did come away with a notion there was going to be a massive
    infusion of dollars into infrastructure programs, and it really
    didn't turn out that way. And I think that left everyone a bit
    disillusioned. And I think we missed an opportunity there, to
    some extent. But we won't, you know, relive that history.
        You know, we obviously have a frustration with where some
    of the dollars we pay into the Highway Trust Fund go. But we
    also have come to appreciate that there is a big diverse
    transportation community in this Nation. As I mentioned, you
    know, if we had our druthers, would we want, you know, the
    money that goes to public transit to come out of the Highway
    Trust Fund? No. But the reality is, as a Nation that is now
    approaching, as I said, 400 million people in a few years,
    there are more and more communities and States that,
    essentially, must have public transit options available to
    them. So it is a partnership, it is a deal we have made, maybe
    in our perspective, with the devil, but it is one we are
    willing to live with and continue to work on.
        Mr. SMITH OF NEBRASKA. Okay. Do any other witnesses wish to
    comment?
        Mr. POOLE. Well, I think I address this point at greater
    length in my written testimony, which I hope you will have a
    chance to read. I think there is a huge scope for rethinking
    the wide breadth of the Highway Trust Fund programs. Again,
    this is not this Committee's job, per se. But, from Congress'
    overall standpoint, it is really time to start saying, well,
    the Federal Government can't do everything in transportation,
    it really needs to focus more on the core problems that are
    uniquely the Federal Government's responsibility.
        Mr. SMITH OF NEBRASKA. Mr. Shirley.
        Mr. SHIRLEY. Let me just briefly acknowledge that, you
    know, highway projects typically do take some amount of time
    for the money to spend out, and they take time to build and put
    together.
        Mr. SMITH OF NEBRASKA. And another concern that has been
    brought to me is the concern that it takes as long to build a
    highway today, perhaps, as it did 50 years ago. I mean I would
    hope that we would have more to show for new technology and new
    methods than that. And so that creates a frustration that, as
    we heard earlier, you know, we have a diminishing source of
    revenue, and yet an increasing need for the dollars. And so it
    kind of--you know, chasing those, as was stated earlier,
    chasing projects with reduced gas mileage--or increased gas
    mileage and efficiency, it is just, I think, a troublesome
    combination.
        So, with that, Mr. Chairman, I yield back.
        Chairman RYAN. Thank you.
        Mr. Blumenauer.
        Mr. BLUMENAUER. Thank you, Mr. Chairman. And I deeply
    appreciate the fact that we are having this hearing today.
        Mr. Chairman, I agreed with much of your opening statement.
    I have one slight exception that I will reference in a moment.
    But Mr. Thompson pointed out that the American public is right
    now paying the price. They are paying hundreds of dollars a
    year in damage to vehicles or being stuck in traffic. Mr.
    Graves' teams of drivers are losing money, and wasting fuel.
    The American--there are people in this room, if we were able to
    have real hearings on this, who could dive in and give you
    details about what those problems are, what the solutions are,
    and how to refine them. And I hope that we will be able to have
    those hearings.
        The Committee has a bill. I have had legislation to extend
    the road user charge experiment that Oregon has been doing for
    the last 10 years to extend it to other States to refine it.
    That is part of a long-term solution everybody agrees with. I
    think the Committee ought to look at it after a year-and-a-
    half.
        I am hopeful, however, that we don't somehow believe that
    there is nothing we can do.
        Chairman RYAN. Will the gentleman yield just real quickly?
    Some of these are not in our jurisdiction, as you well know.
        Mr. BLUMENAUER. It has been referred to this Committee.
        Chairman RYAN. Oh, okay.
        Mr. BLUMENAUER. House Bill 679 is here. It is a dual
    referral.
        The notion that somehow we can't do anything over the next
    6 weeks, I would respectfully suggest, is not the case. The gas
    tax is legislation that is well known, it is not hard, it is
    simple. Six Republican States have raised it already this year.
    This is something that, if the Committee wanted to, we could
    have hearings on next week. We could have Members go back over
    the Fourth of July recess and talk to people at home, their
    Chambers of Commerce, their unions, their contractors, their
    truckers. The vast coalition that is ready for us to step up
    and take action we could hear from during that period. And we
    could come back in July, in the course of a week, finish the
    hearings, and get a bill out, and it could be enacted. It is
    all about will. This is not complex. It has been done by
    Republican and Democratic Presidents alike. So I just
    respectfully suggest that we could do better.
        But I want to go to the Chairman's point, that he doesn't
    think it is a good idea to raise the gas tax because it is
    problematic for the people out there. I would ask unanimous
    consent to enter into the record testimony that would have been
    given by the road builders about the tax and political
    implications and costs on fuel after these States have raised
    the gas tax.
        Chairman RYAN. Without objection.
        [The submission of The Honorable Earl Blumenauer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. BLUMENAUER. Thank you.
        Governor, I would like to turn to you, if I could, maybe in
    a different hat. Because I recall when you were Governor of
    Kansas, you had to face this question about funding your own
    issues. Do you have some thoughts about what calculation you
    went through in Kansas, what difference it made, what you did?
        Mr. GRAVES. Well, obviously, you know, we are a large,
    rural State. And roads and bridges--you know, mobility is very,
    very important, both to our economy and to individuals. What we
    did was essentially do a road show throughout the State. We
    assessed what the needs were, we came up with a list of the
    projects that we felt, you know, met the criteria for action,
    told people what the cost was going to be, created the program,
    and went out and just sold the fuel tax to the State
    legislature. And it was actually, I will confess, a little
    easier than I thought it would be.
        But--and it had tremendous benefit. We did a $13 billion
    program over the course of 10 years, and it was of great
    importance to our State. And Congresswoman Jenkins was part of
    that, so she remembers.
        And I mean it is hard. There is no doubt about it. We don't
    think that, you know, for one instant that what we are asking
    of you isn't hard. But, again, as I said in my remarks, I still
    believe the fuel tax is the lesser of all the funding evils you
    will confront.
        Mr. BLUMENAUER. And it didn't destroy your political
    career? You were----
        Mr. GRAVES. Well, I was term-limited out, which is a
    wonderful thing.
        [Laughter.]
        Mr. BLUMENAUER. Yes. Some of us are starting to look at it
    favorably ourselves. Thank you very much.
        Chairman RYAN. Yes, thank you.
        Mr. BLUMENAUER. Thank you, Mr. Chairman.
        Chairman RYAN. Ms. Jenkins from Kansas.
        Ms. JENKINS. Thank you, Mr. Chairman. And thank you all for
    being here. A special thanks to my fellow native Kansan,
    Governor Graves.
        It was a pleasure to work with you in the State's capital,
    and it has been equally pleasurable to work with you in the
    Nation's capital.
        We have talked some already this morning about the public-
    private partnerships. But I have a more specific question. So,
    for Mr. Shirley, studies have shown that for every dollar that
    government spends on P3s it is likely to attract several
    dollars of private capital, provided there is sufficient market
    for the type of project being financed. In your testimony you
    state that the scoring of P3s depends on where control of a
    given project resides. Historically, CBO has not scored private
    capital raised by P3s as reducing spending obligations.
        So, my question is, what could be done to change that? If
    detailed instructions were specified as conditions for
    accepting government financing of a P3, would the resulting
    project be scored as reducing spending obligations? So, if you
    would comment, please.
        Mr. SHIRLEY. So, one comment, certainly at one level the
    rules that are established for scoring legislation could be
    changed by lawmakers. Another comment would be spending by
    private parties is not something that is scored. So whatever
    sort of private capital happens to be spent on highways or
    infrastructure is not something that the CBO would score.
        Ms. JENKINS. So if we gave you specific instructions, then
    you would include that in scoring. We would get credit for
    that. Is that what you are telling me?
        Mr. SHIRLEY. Ultimately, I would discuss and--with some of
    my colleagues, their understanding of the scorekeeping
    requirements. But, yes, my understanding is that the Congress
    has the ability to alter scorekeeping rules if it so desires.
        Ms. JENKINS. Okay. Obviously, Kansas roads and bridges are
    important to the good people of Kansas. We have a strong
    commitment to that. But sometimes the scoring in this town gets
    in the way of making good decisions. And so we would be happy
    to work with you on that and, again, I appreciate your time.
        I yield back.
        Chairman RYAN. Thank you. Now we are in the two-to-one
    cycle, so we will go to Mr. Paulsen.
        Mr. PAULSEN. Thank you, Mr. Chairman. And I know we have
    kind of exhausted, I think, the topic of the hearing, some of
    the focus on the long-term financing connection to the Highway
    Trust Fund, but--and there are other options that are outside
    of our jurisdiction, as was just mentioned a little while ago.
        And one that I think is worth mentioning--Congressman Tim
    Murphy and Congressman Tim Walz, in a bipartisan effort, I have
    been a part of the effort in past years, as well--focuses on
    more Outer Continental Shelf exploration for energy resources,
    and then dedicating those royalties and those monies to
    transportation. In fact, I think the score was something like
    the largest investment in U.S. infrastructure funding in the
    history of the country. So I think that is absolutely something
    we do need to look at that hasn't had as much attention. I
    think those are probably conservative estimates. And that also
    looks at locks and dams and bridges and a whole source of our
    transportation infrastructure.
        But I want to get into one other point and follow up on
    what Congressman Tiberi had mentioned earlier. And, you know,
    we have had a lot of conversation today that has been centered
    around the trust fund, obviously, and that is rightly so. But
    the important other piece of the equation is the regulatory
    aspect, right? Making sure we have reforms that are in place
    that are actually channeling the resources in the most
    efficient and appropriate manner possible, reducing red tape to
    ensure we are spending money wisely.
        And a lot of folks recall the tragedy we had in Minneapolis
    back in 2007, when the I-35 bridge collapsed. And had they
    rebuilt that bridge using the normal regulatory process and
    timeline--that was a major artery into the Twin Cities, and it
    would take, like, 3 to 5 years to complete. Instead, we were
    able to cut through a lot of the red tape. We streamlined the
    regulatory process, all without sacrificing any safety, any
    quality issues. And the new bridge opened in September of
    2008--so, essentially, 1 year from the starting point of when
    the collapse happened. Furthermore, the cost of the bridge was
    projected to be something like $350 million, but the final
    price tag came in at about $234 million. So you saved more than
    $100 million.
        And, Mr. Poole, I will start with you, just because you
    kind of were having a conversation with Mr. Tiberi before. What
    lessons can we learn from that rebuilding effort in Minnesota
    that could be applied to similar projects across the country?
    And what does streamlining the regulatory process mean for
    individual project costs, as well as the greater balance of the
    Highway Trust Fund in general? Mr. Poole, go ahead.
        Mr. POOLE. This is not an area that I have really studied
    and researched, but there are other examples. When the
    Northridge earthquake happened in Southern California, which I
    lived through as a resident, a bridge on I-10, the Santa Monica
    Freeway, collapsed. And it was rebuilt in something like 4
    months with 24/7, round-the-clock activity and significant
    incentive payments for the contractor to get it done
    expeditiously, because it was such a crucial artery.
        I don't know how the regulatory barriers were gotten around
    in that case, but that is another good example, along with your
    I-35 case, that, if the barriers are not there, we can do
    tremendous amounts of speedy construction of needed things. So
    it suggests that this Congress--maybe not this Committee, per
    se, but this Congress--really needs to do a much better job of
    environmental and other kinds of regulatory streamlining for
    the--in the interest of better highway projects.
        Mr. PAULSEN. Mr. Graves, I mean, for your members--and I
    talked to the general contractors and others that just say,
    ``Yes, that should be a model we should be using, actually, in
    terms of future projects.'' Do you ever have those
    conversations with your members?
        Mr. GRAVES. Well, from conversations with Chairman Shuster
    I know that, while everyone is proud of the reforms that were
    in MAP-21, the Chairman would love to take that to the next
    level, and all the more reason why getting a bill done is, I
    think, so critically important.
        Mr. PAULSEN. Mr. Poole, let me ask one other question,
    because you mentioned earlier the trust fund and were
    identifying what the Federal priorities are, what the State
    priorities are, the core focus of what the program should be,
    the nice-to-haves, et cetera. Because the trust fund has been
    diluted, right? It has been diluted over time, and is now going
    into all these other different areas. Do you have any sort of
    sense of what percentage of the trust fund now is not going to
    highways, bridges, et cetera, as it was originally set up to
    do? And just to kind of paint a picture a little bit, every
    penny, every dollar.
        Mr. POOLE. Well, there is a GAO analysis that is referenced
    in my written testimony that says about half of the trust fund
    is not actually being spent on highway and bridge projects. It
    is being spent on planning and CMAC and all kinds of other
    things that, you know, you really need to be--somebody should
    really be taking a look at to see is that really the purpose of
    the program, to do huge numbers of things, even paying for the
    safety regulatory agency out of the user fee revenues, rather
    than out of the general fund revenues?
        So half is the--you know, half of the $50 billion is not
    being spent directly on highway and bridge projects. And when
    you look at the major projects, it is really only about 6
    percent of the total $50 billion that is actually going to
    build or rebuild major highway and bridge projects around the
    country. I mean, I think that is complete distortion of what
    the program was set up to be, and it is way overdue to be
    rethought, from first principles.
        Mr. PAULSEN. Thank you, Mr. Chairman.
        Chairman RYAN. Mr. Pascrell.
        Mr. PASCRELL. Mr. Chairman, we have had a very civil and
    reasonable discussion up until now. One could almost be lulled
    into some sense of fantasy. I think, Mr. Chairman, with all due
    respect, that I don't sense--maybe you do--a sense of urgency
    about funding transportation, because--I am glad Governor
    Graves is here today. We are missing Governors that stand up
    nowadays. Because I am going to ask him a question afterward
    about devolution because there is a movement, as you know,
    afoot to move all of these responsibilities--graduated, of
    course--to the States.
        Now, when we look at the States and their trust funds, it
    is also very interesting. In fact, there are three States--
    Montana, Tennessee, and Arkansas--who just delayed projects
    this summer due to Federal uncertainty. Well, if they come and
    listen to this discussion today, they would say, ``No kidding.
    No kidding.''
        So, I see a lot of familiar faces here today, great faces,
    good people among the guests. I see advocates for--from the
    construction industry, from engineering, Chambers of Commerce,
    transportation advocates, and our highway users like Governor
    Graves. There are the truckers, our transit users, engineers,
    and our highly-skilled construction labor force. Of course, we
    are talking about jobs here. And this is not make-work. This
    has to be done.
        They bring their members into our offices time and time
    again. They track us down the hallways. They tell us how our
    roads are crumbling, our bridges--you know, we travel these
    roads, we go over these bridges ourselves. Instead of heeding
    the call, we are lurching from crisis to crisis. It is almost
    as if the folks that are holding up our infrastructure
    investments must have watched too many episodes--and we
    mentioned this before--of The Jetsons. We wouldn't need roads,
    because we would be traveling in flying cars.
        However, due to neglect, our roads and bridges are
    something that Fred Flintstone would be more familiar with. It
    is our job to find solutions. So, ensuring the solvency and the
    sustainability of our Highway Trust Fund is a key component.
    And we have done this in the past.
        Up until 2010, we were always able, as a Congress--and even
    our Presidents, it didn't matter which side of the aisle that
    we were on, it didn't matter whether they were awake or asleep,
    we were always able to come to a conclusion and resolution of
    this. So, I wouldn't look at that very lightly. We have passed
    a dozen extensions since SAFETEA expired. We have made eight
    infusions of general fund dollars. That's dangerous. That's
    very dangerous, as you have pointed out.
        My colleague, Jim Renacci, and I have presented a
    bipartisan plan to fund the Federal Highway Trust Fund in a
    sustainable way, from the Chambers of Commerce to the unions,
    collective bargaining, they have all agreed that this is the
    way to go. There are two things: A short-term solution indexing
    the gas tax for inflation, which would probably mean about
    half-a-cent per gallon. Let's talk--why are we afraid to touch
    the live wire here? Why are we afraid to do this, when it must
    be done, or come up with another solution?
        So, for the long term, Mr. Renacci and I have suggested we
    put a bicameral, bipartisan commission together to work for 16
    months on a plan or plans that would come before the Congress,
    and we would have a long-term plan.
        Now that, indexing the gas tax, gets us about $27.5 billion
    over 10 years. And we would have at least the beginning--at
    least we have done something tangible instead of talking the
    damn thing to death. Once that funding runs out, Congress has a
    choice. We could either adopt the commission's plans to fund
    the highway bill, or come up with our own plan.
        Now, I have to ask you one question. I only have a few
    seconds left. Let it hang in the air. What do you think about
    devolution, Mr. Graves?
        Mr. GRAVES. I think devolution is a huge mistake, and I
    don't think the States are ready for it. They couldn't accept
    it anyway.
        Chairman RYAN. Thank you.
        Mr. PASCRELL. You know there is legislation----
        Chairman RYAN. The time for the gentleman has expired.
        Mr. Marchant.
        Mr. PASCRELL. Thank you, Mr. Chairman.
        Chairman RYAN. Thank you.
        Mr. MARCHANT. Thank you, Mr. Chairman. In Texas we use
    private activity bonds on--mainly on our very largest projects.
    So, in talking to our highway commissioners, their question is
    what is the future of private activity bonds, what is the
    prospect of raising the amount, and is it going to be a long-
    term part of our solution, or is this just something that was
    used to stimulate some temporary growth? I will let----
        Mr. POOLE. There is certainly a lot of support among the P3
    community, the road-building community for example, for a big
    increase in the current $15 billion cap on private activity
    bonds and, essentially, making it a permanent part of the
    overall program, because it has proven to be very effective in
    helping put the financing packages together for these P3--
    large-scale P3 projects.
        Mr. MARCHANT. Governor Graves.
        Mr. GRAVES. I agree, yes, absolutely. And they were a big
    part of our efforts in our State during the program that we put
    together. I think they are one of those critical elements. And
    I want to use this opportunity to say, whether it is tolling,
    whether it is P3s, the private activity bonds, there are--there
    is a place in what we need in the way of infrastructure for all
    these items. It is just that the underlying basis, in my
    opinion, still has to rely on the fuel tax.
        Mr. MARCHANT. Does Kansas use--or is anyone on the panel
    aware of the use of revenue anticipation bonds? Are revenue
    anticipation bonds a key part of--was it a key part of your
    road program in Kansas, Governor?
        Mr. GRAVES. I believe it was, yes. We had some certainty at
    the time of what the Federal funding stream was going to be,
    and I believe that was what underscored our effort to raise the
    State fuel tax in order to have the money to meet those--the--
    match up with the Federal money. And the anticipation bonding
    is a big part of our program.
        Mr. MARCHANT. So you would contractually set aside your
    Federal funds that were coming in?
        Mr. GRAVES. Yes.
        Mr. MARCHANT. They couldn't be touched to plan for. So
    States generally don't have a problem with that concept, do
    they?
        Mr. GRAVES. Not that I am aware of.
        Mr. MARCHANT. So if you were trying to stimulate long-term
    capital growth, not repairing potholes, not repairing, but
    going in and putting in relatively new, long-term systems, if
    you raised the gas tax and then required that the raised amount
    of that gas tax--say a penny or two pennies--had to be
    dedicated to only revenue anticipation bonds, where you would
    get an immediate flush of new bonding and new activity, that
    would make, I think, a significant district across--difference
    across the country.
        Have you ever given any thought to what--how your State
    would have responded to that?
        Mr. GRAVES. Well, I think that, in terms of the
    attractiveness of the bond program, that is clearly something
    that the--you know, would make people more inclined to want to
    make that investment. And I think, again, if you are--you know,
    we try to pay for things as we go, if you will, or at least
    make commitments that we will pay for them as we go. So it
    makes perfect sense.
        Mr. MARCHANT. Thank you.
        Thank you, Mr. Chairman.
        Chairman RYAN. Thank you.
        Mr. Pascrell, is there a motion you want to make?
        Mr. PASCRELL. Yes, Mr. Chairman. I motion--seek unanimous
    consent to introduce a report by the American Road and
    Transportation Builders Association on the looming Highway
    Trust Fund crisis.
        [No response.]
        Chairman RYAN. Without objection.
        [The submission of The Honorable Bill Pascrell follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. PASCRELL. Thank you very much.
        Chairman RYAN. Mr. Reed.
        Mr. REED. Thank you, Mr. Chairman. Thank you to our
    witnesses today on this important topic. I am very much
    interested in this, as a former Mayor of a small city up in
    Western New York. I can tell you we look at this issue very
    closely.
        And not to echo everything that has already been said, I
    want to kind of move away from that and maybe get into a more
    creative way of looking at this, because one of the things,
    coming to Washington, that I have tried to commit myself to is
    not maintaining the status quo, but disrupting this place, and
    seeing if there are new ways to skin the cat, so to speak. I
    understand, and I have concluded, that this is going to be a
    multitude of solutions type of process that we are going to
    have to put together here. One solution is not going to be the
    panacea for the issue before us.
        So, Mr. Poole, you spent a tremendous amount of time--from
    the testimony I see you have been at this issue for quite some
    time. I have been looking at some international models as
    alternative sources. For example, I have been looking at the
    Hong Kong model, in particular, for mass transit. And I believe
    they have utilized their under-utilized development rights
    above their mass transit facilities to fund their mass transit
    structures.
        That is intriguing to me, because that seems to be a
    creative way to try to look at this in a way that--look at our
    Federal assets, potentially, that are under-utilized, and
    maximize them with new revenue lines that could come in. Do you
    agree that the Hong Kong model could be an issue, could be a
    way to address the mass transit issue, in particular?
        Mr. POOLE. Well, the Hong Kong mass transit railway is just
    about the only urban rail system that is financially self-
    supporting. It is a government corporation that runs as a
    business. And a key to that is exactly what you mentioned, it
    is the real estate ownership that system has. And it is a good
    model, if you are starting from scratch.
        The problem is, in places like Washington, D.C., New York
    City or Chicago, the mass transit system doesn't own the real
    estate surrounding its stations. So you have to try to come up
    with imposing, after the fact, some kind of value-captured tax
    on the real estate that is privately owned adjacent to those
    facilities. And that is a lot harder to do than if you are
    starting with a clean sheet of paper and building a system from
    scratch with the transit agency owning a lot of that real
    estate.
        Mr. REED. So, again, being that this is going to be a
    piecemeal type of solution that we patch together, potentially
    long term, would not the expansion of mass transit be a
    possibility, the expansion of the system----
        Mr. POOLE. Yes, yes. I mean--and the Washington Metro did a
    little bit of that with--I think it is the New York Avenue
    Station, the Gallaudet University. They have some degree of
    value capture in that new station that was added to the system.
    So that is a place where the idea could be used.
        Mr. REED. Okay.
        Mr. POOLE. Yes.
        Mr. REED. So, going further, do you have any other examples
    of creative new lines of financing that we should take a hard
    look at? And, if not, do you know of anybody who is really
    taking a leadership role, nationally or internationally,
    looking at America's infrastructure needs on this issue that
    you could direct me to?
        Mr. POOLE. Well, I would suggest reading some work that
    Professor David Levinson at the University of Minnesota has
    done on rethinking how we organize and pay for an urban transit
    system. David is a very respected academic who----
        Mr. REED. Do you know of any ideas that he could offer that
    you could give me?
        Mr. POOLE. Well, one of his ideas was increased reliance on
    value capture. Another was on--that transit systems should be
    charging something closer to market-level fares, except for
    low-income people who would get----
        Mr. REED. How about things like--even thinking outside the
    box and kind of spitballing here a little bit--things like
    looking at our international--our national right-of-ways in
    regards to advertising space, advertising royalty payments,
    those types of things. Do you see any legitimacy there to
    explore further?
        Mr. POOLE. It is worth looking at any and all of those
    ideas----
        Mr. REED. How about looking at the technologies of tomorrow
    as we get into driverless cars, and things like that?
    Obviously, there is going to be some spectrum space that is
    going to have to be necessary in order to operate those
    vehicles. Do you see any value in that under-utilized or
    untapped resource today?
        Mr. POOLE. Well, the Federal Government owns a huge amount
    of spectrum that is not very efficiently used. The DoD, the DoT
    for the FAA radars that are big spectrum hogs. Newer technology
    could free up a lot of that spectrum, and could be, then, used
    to more productive uses in other infrastructure and other parts
    of the----
        Mr. REED. Again, those are long-term potential ideas that
    need to be--get ready for prime time, as Chairman Ryan
    indicates, or--a lot of these proposals are.
        The other one that is interesting to me is looking at the
    different alternative. And I have the AASHTO report here. It is
    a report of the oil, gas, and minerals receipts for the Federal
    Government. There is a score here, I think, of $14.2 billion
    from 2015 to 2020. Are any of you familiar with that revenue
    line, as a potential source? And I want to know if that
    resource, Mr. Chairman--to the witnesses, if that score----
        Chairman RYAN. Thank you.
        Mr. REED [continuing]. Is based on present analysis of our
    oil and gas reserves that are located in America, or old
    reserves?
        Chairman RYAN. Thank you.
        Mr. REED. Thank you. I yield back.
        Chairman RYAN. If anybody has a quick answer. CBO.
        Mr. SHIRLEY. I am sorry, that one in particular is not one
    I am particularly familiar with. But I will certainly have
    somebody get back to you.
        Chairman RYAN. All right, thank you.
        Mr. Young.
        Mr. YOUNG. Thank you, Mr. Chairman. I thank all of our
    witnesses for your time here today. This is a really important
    hearing, pursuant to what is a broader competitiveness agenda.
    I really feel like the United States--it has been discussed
    here--is falling behind with respect to infrastructure
    financing, development, and so forth.
        I think part of the answer is, indeed, P3s, public-private
    partnerships. For the uninitiated, that is essentially
    allowing, say, local governments to contract longer term with
    private entities for the financing, for the design, building,
    operating, ultimately maintaining of pieces of infrastructure.
    Indiana, my home State, has been a leader in this area, along
    with Texas and some other States. But the United States more
    generally, we lag the world.
        And, Mr. Poole, you spoke to this. Let me put some numbers
    to the extent to which we lag the world. Between 1985 and 2011,
    there were nearly 2000 projects funded worldwide. But the
    United States accounted for only 377. Now, there are a variety
    of reasons for this, including certain States not having
    authorizing legislation for P3s, but that is changing,
    increasingly. And there are now 33 States that have legislation
    for such projects; 39 have some form of P3 legislation.
        But one thing I hear again and again from industry and
    local government--and this relates to the Federal Government--
    is that P3s are difficult to get approved locally, because of
    competition with tax-exempt municipal bonds. That is why I
    agree with testimony today, again, offered by you, Mr. Poole.
    We need to raise the cap on private activity bonds for
    highways, and we are working on legislation to make that
    happen, along with some of our colleagues. We need to allow a
    very limited amount of P3s, I think, in the public building
    space to utilize tax-exempt financing.
        And I also think we should remove restrictions to allow
    more of what is known as infrastructure recycling. And without
    getting into the details of that, I would just offer into the
    record an article from the Wall Street Journal that explains
    this concept. I ask for unanimous consent.
        [No response.]
        Chairman RYAN. Without objection.
        [The submission of The Honorable Todd Young follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. YOUNG. Now, I understand, as does everyone here, that
    P3s aren't a panacea. They are not going to take care of all of
    our infrastructure financing needs. And, ultimately, those
    bonds need to be paid off, whether that is a prescriptive model
    driven from Washington, D.C. or, instead, left up to the
    States, or some combination thereof.
        But with all of that laid out there, and with 2 minutes
    remaining, I want to ask Mr. Poole this. I often hear from some
    of my colleagues that PABs, or public activity bonds, are
    suboptimal, because they allow the creation of infrastructure
    that doesn't serve a public purpose.
        Now, it is my understanding that there have been some
    special programs in response to, say, natural disasters, where
    the impetus was to get money out the door. But beyond those
    sorts of in extremis situations, are you aware of any instances
    where infrastructure has been created under PABs that don't
    serve a public purpose in recent years?
        Mr. POOLE. Not that I am aware of, certainly, in the PABs
    that were authorized for surface transportation projects. Those
    have to meet a strict criteria, and they are all--can only be
    authorized for a State to issue on behalf of P3 projects if the
    USDoT's credit council approves them as meeting the
    requirements of the statute that says that for serving the
    public interest--I think 90 percent of the users have to be
    benefiting members of the public. And they are all doing that,
    as far as I can tell.
        Mr. YOUNG. Thank you. Beyond that misunderstanding--which I
    also sense is a misunderstanding--do you agree with concerns
    that I have heard from numerous local governments in Indiana
    and even from some folks outside my own State, that one of the
    main inhibitors to the use of P3 models, delivering oftentimes
    below cost, ahead of projected schedule, and delivering
    important services with private capital at a time of
    constrained resources, is one of the main concerns with
    competition with munis, which don't allow private sector
    engagement?
        Mr. POOLE. Well, there has been some tension in a few
    States between government toll authorities
    and the private sector, whereas the government toll authorities
    believe--this is true particularly in Texas--they should have
    first pick of projects, and not let the private sector come in
    and take them. That is the only kind of problem of that sort
    that I have noticed. And that--it has only been, really, in
    Texas that that has been a problem. In Florida and Virginia it
    has not come up.
        Mr. YOUNG. But this dynamic is a real one.
        Mr. POOLE. It is a real one.
        Mr. YOUNG. Munis, and then--which also do not allow
    private-sector----
        Chairman RYAN. Thank you.
        Mr. YOUNG [continuing]. Engagements. Thank you, sir.
        Chairman RYAN. Thank you. Mr. Kelly.
        Mr. KELLY. Thank you, Chairman, and thank you to all our
    witnesses.
        Now, I know we talk about this, we don't want to make it
    political. But, as everything in this town is, everything is
    political. Just to set the record straight and not to get into
    any type of an argument, it is interesting that when the
    Minority was in the Majority, they actually extended this, I
    think, in that short time period--when you were in the
    Majority, the short-term extensions, I think, took place eight
    times. And so, when it comes to--what, do you want to use the
    term ``kicking the can down the road,'' or putting something
    off until a better time? I just don't want to make it too
    disingenuous about what is going on.
        And I agree with what you say, Governor, it takes a really
    strong government to raise gas taxes. Our former Governor
    Corbett in Pennsylvania did that. He is no longer Governor.
    Pennsylvania has the highest State tax when it comes to gas.
    And when I am back home, everybody I talk to there says, ``I
    want better roads, I want better bridges, I want better
    railroads, I want better waterways, I want everything to be
    much better,'' and I say, ``That is fine, who do you think
    should pay for it,'' and they say, ``The government.'' And I
    say, ``Fine. You know where the government gets its money,''
    and they will say, ``They have all kinds of it.'' I say, ``Yes,
    but they get it from you.''
        So then it becomes a matter of--Mr. Poole, I really liked
    your analysis, talking about how we would get to that. And I
    think your term is ``users'' and ``beneficiaries.'' But the
    truth of the matter is payers and users--the end game for all
    of this is the consumer. I don't care what it is, I don't care
    what we talk about in this town. When it comes to who is going
    to pay for everything, make no mistake. Whether it is a good or
    a service, it is the final consumer who pays for it. And that
    is where the money comes from.
        I liked your idea on the--I think Mr. Neal had talked about
    the bonds, because I think you get more of the private sector
    engaging in something where there is a positive ROI, and it is
    an upscale. Everybody wins under that situation.
        Listen. I don't think there is any lack of recognition of
    where we are on this. But it really is--as much as we would
    like to say it shouldn't be partisan and it shouldn't be
    political, it is totally partisan, it is totally political, and
    it is totally the end to your career here if you choose to
    raise taxes, though well intended. If you use the phrase for
    the general public's welfare, the interpretation will be that
    you are a tax-and-spend guy or girl who just wants to keep
    raising taxes so the government can keep paying for it.
        I know in my home State of Pennsylvania, as--I am going to
    repeat it--I mean everybody wants better roads, better river--
    bridges, rivers, everything else.
        [Laughter.]
        We deal not only with the Highway Trust Fund, but also with
    the Harbor Maintenance Trust Fund. Everybody who puts into that
    says, ``You know what? I don't mind putting in more, if the
    funds would stay dedicated to the reason I put it in.'' And I
    think, until we learn to do that here, it is going to be very
    difficult.
        You know, we have college education--we set money aside for
    our kids for college, and then we have a hot summer and we
    decide to put a pool in, and we get the money from the kids'
    college education fund. Then, when it is time for them to go to
    school, we say, ``Gosh darn it, you know, I hope you had fun in
    the pool, because you are not going to school.''
        Mr. Poole, what else could we do? And break it down for me,
    because you said--and if I understood you correctly, and I read
    your testimony--in the Highway Trust Funds we use funds out of
    that for a lot of other programs, to fund them, that--this is
    the only fund that does that. Is that correct?
        Mr. POOLE. I have not studied the other transportation
    trust funds to a significant degree. But I think the diversion
    to not building highways and bridges and transit systems of
    half of the trust fund money strikes me as extreme, and I don't
    see that happening with the aviation trust fund that I do know
    a lot about.
        So I think it is really time for Congress to take a hard
    look at that. And so, part of the answer--I mean, obviously, we
    need to invest more in this country in transportation. But part
    of the answer is to spend wisely and spend it on the core
    priorities, and not try to be all things to all people.
        The Federal Government--Federal fuel taxes are not very
    credible to people. They don't believe they are getting value,
    they would get value if they went up. Most of the States are
    able to--State DoTs and Governors are able to come up with a
    credible package and persuade the voters that they will really
    get something out of it.
        Mr. KELLY. But that is the key. I think the Governors----
        Mr. POOLE. That is really the key.
        Mr. KELLY [continuing]. Around his State proving to people
    this is a good investment----
        Mr. POOLE. Absolutely.
        Mr. KELLY [continuing]. A great return on this investment.
    That is the gap that we face, really. I don't think there is a
    person on this panel or in this country that doesn't agree that
    we need to do it. It is how you get it to a point where people
    out there who are paying for it accept it, and also understand
    the fact that, you know, necessarily, prices are going to rise
    if we are going to continue to build our infrastructure. That
    is just the way it is.
        So, I think what you did was marvelous, but it really does
    take a really strong will and ability to get out and get people
    to listen to what you are doing, with the end result being an
    uptick for the American people, and not just a drain down,
    because certainly their cost of living, especially for middle-
    income people and lower-income people, they are getting killed
    right across the board with this.
        So I appreciate you all being here today, and this is
    something we are going to--I guess we will continue to talk to,
    but there has to be a positive end. Thank you.
        Chairman RYAN. Thank you.
        Mr. Renacci.
        Mr. RENACCI. Thank you, Mr. Chairman, and again, I thank
    the witnesses for being here. I really appreciate it.
        Ten months ago I sat in this hearing room and said that I
    would never vote for another short-term solution. I said that
    to the Chairman. But I did vote for that one. I told him I
    would vote one more time. So when you say no around here, you
    better have an answer. And I spent the last 10 months trying to
    come up with an answer. And, sure enough, I have talked to
    think tanks, and I have talked to individuals.
        But the most important people I talked to are my
    constituents. And my constituents, when they really realize
    that paying for something is important, user fees are
    important, they agree with it, and they are okay with it. They
    just want to make sure that what they are paying for they are
    getting.
        And it is interesting, because the one thing we have never
    talked about--I was also a Mayor in my community--we had a
    project back in 2002, it was $18.1 million. It was an
    interstate project. I was the Mayor and I had to come up with
    $1.8 million to put our 10 percent in. That money is now still
    sitting there, 12 years later. And that project, today, is over
    $30 million. And that is the number we never talk about, the
    delay and the delay and the delay and the upward cost. And that
    is why these short-term fixes are not the answer.
        We have to make sure that we look at what is going on in
    the real world. So I also talked to my constituents, brought it
    to my Tea Party people. And everybody is afraid of the Tea
    Party. I brought them all in. I said, ``Well, I have a bill.
    That bill indexes the user fee. Are you for it or against it?''
    First they were against it too, and I explained it to them.
        You know, then, what they said to me? ``Quit going to the
    general fund. Quit going in there and taking dollars, because
    what you are doing is you are passing it on to our children and
    grandchildren. And what I would be willing to do is pay a user
    fee, as long as I get my roads and bridges fixed.'' Amazing.
        One person said to me, ``I just busted a rim. It cost me
    $400. And it would only cost me a couple pennies a year so I
    don't bust my tire?'' It costs the average driver $200-some per
    year in repairs. Truck drivers, I am sure, it costs them. So we
    have to come up with a long-term solution. We just can't
    continue to go down this path.
        And when I hear people talk about, you know, electric cars,
    they only represent .71 percent. We have to start--when I hear
    people saying we have more miles per gallon, absolutely. We
    have more drivers, 23 percent more drivers since 1980. So if
    you start using statistics here, we just have to come up with
    an answer. Because statistics, I have learned a long time ago,
    can be used in your favor or against you.
        Now, what I heard from all three of you--and I hope you
    will answer this--you all agree that user fees are the answer.
    Correct? Every one of you?
        Mr. SHIRLEY. User fees provide, certainly, good incentives.
        Mr. RENACCI. All right. In fact, Mr.----
        Mr. SHIRLEY. Or economic----
        Mr. RENACCI [continuing]. Poole, you say using general fund
    and other non-transportation revenues to bail out the Highway
    Trust Fund undercuts integrity of the user-pay/user-benefit
    principle.
        Mr. POOLE. Yes, and I firmly believe that. And I think
    there is--in the written testimony there is a lot of
    amplification of the reasons why user-pays/user-benefits is the
    best approach. And I think we are probably all in agreement on
    that.
        Mr. RENACCI. Right. And that is what I thought I heard.
        And I also heard you all say--and I agree with you--that we
    don't--we are not going to have an answer by July 1st, a user-
    fee answer. Correct? You would all agree with that? So, we have
    to come up with a long-term solution.
        Now, Mr. Pascrell mentioned a bill that he and I have. And,
    quite frankly, it does give us 18 months by indexing the user
    fee. But what a lot of people don't realize in that bill is
    that the bipartisan bicameral committee can eliminate that
    index. If they think there is another answer, they can go and--
    so it is not really an increase, it is a short-term solution.
        Now, Mr. Poole, you also mentioned--and I heard it in your
    oral testimony--that we should stay with a user-based system,
    but we should modify it in order to get to what you believe is
    a vehicles miles-driven tax. Correct?
        Mr. POOLE. That is correct, yes.
        Mr. RENACCI. So some modification of the current user fee
    would get us there. Correct?
        Mr. POOLE. Well, we need to get about 10 years before you
    could really have something at the Federal level, a mileage-
    based user fee that would really be politically and
    economically feasible.
        Mr. RENACCI. Well, I am glad you said that. Because the
    other thing I did for the last 6, 10 months, is go around to my
    colleagues and ask them for answers. And I have had people say,
    ``I am not voting for anything but a vehicle mileage tax,'' and
    I say to them, ``That is 10 years down the road.''
        Mr. POOLE. And you are right.
        Mr. RENACCI. You just confirmed that.
        Mr. POOLE. You are right.
        Mr. RENACCI. But I think what I am hearing out of this--and
    I really do appreciate the Chairman willing to have this
    discussion--is we need to have a user-fee-based program, and we
    need to do something long-term. And that is why, if you know
    the text of my bill, it gives us 18 months, it sets up a
    bipartisan, bicameral committee. Any thoughts on the bill from
    any of you that are aware of it?
        Mr. GRAVES. My only comment, Congressman, that, based on
    what I saw in the last day or two from CBO about the--again,
    the challenges with debt, with the need for this Congress, this
    country, to wisely use its general fund revenues, I think the
    near-term solution is something that is user-based, and the
    long-term solution is, well, whatever the long-term solution
    might be.
        Chairman RYAN. Thank you.
        Mr. RENACCI. Thank you. I yield back.
        Chairman RYAN. Thank you.
        Mr. Meehan.
        Mr. MEEHAN. Thank you, Mr. Chairman. And I thank you for
    holding this important hearing. I have a couple of questions
    that I would like to get some feelings on.
        One--and, Mr. Poole, you have identified a couple of times
    that there have been ideas of prioritizing and moving away from
    support of other kinds of transit. But I represent an area that
    is a suburban/urban area, with 36.7 million trips last year
    that were taken on that. And, in fact, the regional rail, which
    has not been invested in other regions--part of the problem in
    California, the lack of this regional rail--that which exists
    has increased by 50 percent over the last 10 years. And so, the
    utilization rates are up.
        If they are left to not get the kind of support--what does
    that do to create flow back into already crowded places where--
    these kinds of Federal investments in highways, it is
    increasingly expensive to do the kinds of construction in urban
    areas.
        Mr. POOLE. Well, in my testimony I did not call for
    eliminating transit from the trust fund. Although, in
    principle, it is a local issue that eventually I think ought to
    become, again, a local responsibility, like it once was. But
    there are a lot of other things that could be done----
        Mr. MEEHAN. Can you do that, if you have 36.7 million
    people? Can you make that a local----
        Mr. POOLE. Well, I think so, if you look at more cost-
    effective approaches. And a combination of an improved design
    of a bus system, outsourcing competitively to bus operators and
    a big push for bus rapid transit, which is a lot more cost-
    effective in most cases than passenger rail, could
    significantly reduce the cost, while increasing the service
    that----
        Mr. MEEHAN. If you take passenger rail and you are coming
    from--you could get into town in 22 minutes. The same bus ride
    is an hour and 25 minutes.
        Mr. POOLE. Well, there are ways--if your freeways have
    express lanes, express bus service----
        Mr. MEEHAN. Where do you put an express lane? Have you
    driven in New York lately?
        Mr. POOLE. I have not driven--I try not to drive when I am
    in New York----
        Mr. MEEHAN. Let me ask a question, just one other thing.
    And I appreciate that. I have questions about vehicle miles
    traveled. And I think it is a fascinating concept. But I also
    bring a history in some other areas, working on matters
    associated with privacy and other kinds of issues, with cyber.
    How does this work?
        And those of you who have spent time, will Americans buy
    into the idea of having the government track everywhere they
    are driving?
        Mr. POOLE. No, they won't. And that is why that is not the
    solution. There--Oregon, I think, is doing the most important
    pioneering work, and I give some examples in the written
    testimony. There is a whole array of options, including an all-
    you-can-drive option, where, when you pay your annual vehicle
    registration fee, you pay a fee that is your mileage charge for
    the year. Another simple one is you have your odometer read. If
    your State has an annual vehicle inspection or a smog check
    inspection, they read your odometer then, and you pay a fee, a
    per-mile fee, based on how many miles you have driven.
        There are low-tech options that use cell phone towers to
    tell the general area you are in if you are at a State border,
    where you need to know how many miles to go to New Jersey and
    how many to New York, a cell phone tower can--without tracking
    exactly where you drive, but just which side of the border you
    are on.
        So there are a lot of options, and that is why we need
    pilot programs, we need a lot more research to figure out how
    to do this in ways that are cost effective and privacy
    protected. We are in a learning stage right now.
        Mr. MEEHAN. Governor, Mr. Shirley, in my remaining minute,
    do you have any insights on----
        Mr. GRAVES. Well, I just--on that point, I would refer back
    to my submitted testimony in that the--you know, the estimates,
    however, are that we have to figure out how to collect from
    about 250 million moving vehicles, 250 million. And this will
    be a government program, for the most part. Maybe we can
    privatize it.
        But my concern would be--is that today we collect fuel tax
    from about 1,000 payers, and now we want to transition to 250
    million. So let's just--again, I agree with a 10-year
    assessment. It is not ready for prime time, and might not be
    for quite some time.
        Mr. MEEHAN. Thank you for your insights.
        I yield back.
        Chairman RYAN. Thank you. Mr. Davis, do you want to go? The
    gentleman is recognized.
        Mr. DAVIS. Thank you very much, Mr. Chairman. This has been
    a very interesting hearing. And I want to thank the witnesses
    for all of their testimony.
        You know, we have heard a great deal, in terms of options,
    in terms of possibilities, alternatives, approaches that might
    be used. I noticed that many people are totally averse to the
    notion of taxation, that we try to avoid it as much as we
    possibly can. And when we get down to the bottom line, the
    ultimate is that the consumer, or the people, will always be
    the ones that pay, will always be the ones that pay.
        I am thinking it was Justice Oliver Wendell Holmes who
    suggested that taxation is the price that we pay for a
    civilized society, meaning that there is no way around it.
    Another one of my favorite philosophers, a guy named Frederick
    Douglass, used to say that he understood one thing if he didn't
    understand anything else, and that is in this world we may not
    get everything that we pay for, but we most certainly will pay
    for everything that we get, and that if we didn't pay one way,
    we would pay another way. Another truism is that we go all the
    way back to the Bible, and the prophet Isaiah suggested that we
    had to come and reason together, otherwise we would ultimately
    be destroyed by the edge of the sword.
        And so, as I think of all these philosophical--Lyndon
    Johnson was fond of saying there is no gain without some pain,
    that there is just no way around it. I think that the general
    public is pretty reasonable when they understand. We are not
    talking about any kind of entitlements. We are not talking
    about any safety nets. We are not talking about any kind of
    giveaways. We are talking about how do we maintain, an absolute
    need, our infrastructure that we can't do without, that there
    is just no way to do without it.
        Governor, I find you to be quite refreshing, in terms of
    your approach that is kind of direct, saying you have to bite
    the bullet, you have to do what you have to do in order to
    accomplish what it is that you want to accomplish. How do you
    feel the general public might react? I mean we have seen
    gasoline prices fluctuate. We have seen them go way up, where
    you don't want to go to the service station. We have seen them
    come down. How do you think the general public might respond to
    a modest gasoline tax increase like Mr. Renacci may have been
    talking about, or Mr. Pascrell may have been talking--how do
    you think the general public, the guy who has to pull up to the
    pump, might respond to that?
        Mr. GRAVES. Well, Congressman, I think it depends a lot on
    the program that you all would sell to the public. And you have
    to--you know, again, you have to tell them, ``This is what you
    are going to get in exchange for what we are asking from you.''
        I think my concern in this entire discussion is that, if we
    are worried about what it costs people, I am still one who
    believes that almost every option we have discussed has a price
    point that is greater than what the price point would be if we
    funded it through the fuel tax. And I--you know, tolls, if we
    are worried about people's mobility, toll is an impediment for
    a lot of Americans to enjoy the mobility that they enjoy today.
    PPPs, as I said, there is an ROI expectation, that people are
    going to make money off of operating that system.
        So, I am just--you know, as you can tell, I am a fan of the
    system we have, it is the one we know. But I am not averse to
    discussing what a future would look like that might be
    different than that.
        Mr. DAVIS. I thank our witnesses, Mr. Chairman, I thank
    you, and I yield back.
        Chairman RYAN. Thank you.
        Mrs. Noem.
        Mrs. NOEM. Thank you, Mr. Chairman. I come from a part of
    the country that a lot of folks refer to as flyover country. I
    call it home. And I love it there. But the fact is it is one of
    the areas where we need roads and bridges to move commerce and
    move people. No matter where you drive or where you go, it is a
    long ways to get there.
        In fact, you know, families have to drive tens of miles to
    go to the doctor, to get groceries, to go to work, to go to
    school. Every morning at my house, four vehicles leave the
    yard, and by the time they come back they have traveled
    hundreds of miles. And that is just an everyday occurrence that
    happens in South Dakota.
        And so, I am very concerned about transportation funding,
    because it is necessary to have good roads and bridges all the
    way across the country to move commerce, and for that to happen
    efficiently in America. But also, we need to make sure that we
    aren't disproportionately putting a burden upon people in rural
    America. We do not want to hollow out the center of this
    country by forcing high costs on people that can't afford it.
        I had one woman I visited with in a grocery store one
    winter that came to me, crying, with her hands full of coupons,
    because she couldn't pay her electricity bills because they
    were so high because of the cold weather. She had ridden into
    town with a friend to go to work, but therefore had missed
    taking her son to the doctor and had missed her daughter's
    basketball game, because she was waiting for her friend to get
    off work so she could ride back home with her.
        And that is the concerns that I have when we talk about a
    VMT tax or adding some kind of miles traveled tax. And I know,
    Mr. Poole, this is something you have put forward as a
    solution. But tell me. Is there some kind of an assessment that
    we are going to take into account the high burden that we will
    be putting on people in rural America with that kind of a
    system?
        Mr. POOLE. The researchers that are working on this are
    very aware of that concern and that problem. And a couple
    things--you know, this is longer than we have time to discuss.
    But, number one, there is good statistical evidence that, on
    average, rural people drive fewer miles per year than urban
    people.
        Now, that is going to vary in different cases, but that is
    important to keep in mind, to the extent that that is
    legitimate, and a verified fact. Number two is that a VMT
    system doesn't necessarily charge the same rate for every kind
    of road. It may end up charging higher rates for premium roads,
    like interstates, and lower rates for, you know, two-lane farm-
    to-market roads, and this kind of thing, because those roads
    actually, you know, do cost less to build and maintain.
        Mrs. NOEM. Yes.
        Mr. POOLE. So this is what I mean. We need more research on
    this. A lot of research is going on. We don't have all the
    answers yet to how a system like that would work.
        Mrs. NOEM. Okay. Governor, could you speak to this issue,
    as well? Because you may have some experience. I know that one
    of the proposals being put forward by your association is to
    have an increase of the user fees. But while in your industry
    it can be passed on to customers, that is not available to
    people that maybe are incurring that increased burden
    themselves and upon their family budgets.
        So I am concerned about that, especially being from a part
    of the country where we just don't have public transportation
    as an option. There are no buses, there is no rail, there is no
    other way for them to get anywhere, except through their own
    vehicles that they have the cost of maintaining and running,
    but also paying the gas to fill them up every day. Could you
    speak to this issue, as well?
        Mr. GRAVES. Well, I think that, if I understand, you know,
    as I said earlier in my comments, we are not benevolent. We are
    going to figure out, as commercial operators, how to embed
    within our freight rate cost whatever it is, whether it is an
    increase in the fuel tax, whether it is toll, whether--you
    know, whatever it might be.
        And I just--you know, I could be proven wrong here, and Bob
    probably will at some point, but I still believe that, at the
    end of the day, the least expensive option of raising the money
    we need for infrastructure is the fuel tax. It is basically in
    the neighborhood of 1 or 2 cents on every dollar raised,
    compared to anything else you might use.
        Mrs. NOEM. Okay. Mr. Shirley, could you speak to CBO and
    how you look at geographical locations and take into account
    some of the challenges that we have been discussing, the
    variation between rural and urban areas of the country, and if
    that is accounted for in the analysis?
        Mr. SHIRLEY. Certainly. That is something that, you know,
    we see as being a difference out there between different
    geographical areas.
        In terms of a potential VMT tax system, you know, there
    would be trade-offs between sort of how perhaps complex this
    system would be to administer, and what the cost might be for
    that. A trade-off between that and the ability to allow for
    different fees or taxes to be charged in different areas. That
    would be one factor to take into consideration.
        Mrs. NOEM. Well, I just want to, as we have the discussion,
    have a complete discussion, and talk about the challenges that
    we face in certain parts of our country. In urban areas we have
    seen investments by the Federal Government, and many more
    dollars poured in to provide other transportation options that
    simply doesn't happen in rural America. And so I think we do
    need to take into account that we are placing a higher burden
    on the individuals in certain parts of the country when we look
    at user fees, just because of their lifestyles and the area and
    the geographical location in which they are located.
        Chairman RYAN. Thank you. Thank you.
        Mr. Larson.
        Mr. LARSON. Thank you, Mr. Chairman. And thank you again
    for holding this hearing. And I think I want to thank the
    witnesses for their patience and persistence.
        And I would also remark, Mr. Chairman, that the--I saw the
    lines of people waiting to get in here. And the number of
    people who have stayed here to listen to Members of Congress
    and to listen to our key witnesses, I think underscores the
    importance of this meeting.
        I want to associate myself with the remarks of Mr. Pascrell
    and Mr. Renacci. I want to commend them for their legislation.
    And it is my sincere hope that we can take this up. I think
    that is an important step forward. And it is not kicking the
    can down the road. And I respect what my good friend, Mr.
    Kelly, had to say, but this is about us. This is about the
    Congress now, and our opportunity to do what we were elected to
    do: Vote.
        I would quickly ask all the panelists--I am sure I know
    your answer to this--do you think we should kick the can down
    the road beyond July 31st? Yes or no.
        Mr. GRAVES. I prefer that you not.
        Mr. LARSON. Prefer that we not? Prefer that we not?
        Mr. POOLE. I prefer that you not, but I don't think you
    have any choice.
        Mr. LARSON. You would prefer that we--or you can't answer,
    Mr. Shirley, actually, probably.
        Mr. SHIRLEY. CBO does not make policy recommendations.
        Mr. LARSON. I understand that, and so should the audience,
    you know, that that is not your position.
        So let's--so this is what we have here. I mean this is all
    going to be determined. And for people out there in the viewing
    audience, it pains me to say this, because I believe that we
    should step up and take our responsibility head on, and I
    believe that is what the American people expect out of us. And
    it especially pains us, because we know that the only jobs bill
    that is before the United States Congress is, in fact, this
    bill. This is the only opportunity people are going to have to
    vote on jobs, and we are going to kick that can down the road,
    which further destroys people's credibility in Congress.
        I do think that there will be a solution. I do think,
    unfortunately, that solution will come by way of an omnibus
    bill.
        Now, for those of you--and many in this audience are
    familiar with omnibus bills--but Congress either does a
    continuing resolution or an omnibus bill. We don't do anything
    in regular order, which means we don't take up good proposals
    like this. We wait until the last minute because we can't do
    the fundamental thing that we were sent here to do, which is to
    vote on difficult subjects.
        If we did, irrespective of the outcome of the vote, we
    would be moving the agenda forward and the--so that is really
    why these public hearings are important, that we need the
    opportunity to vote.
        I think a number of you have mentioned, with respect to
    private activity bonds, that you support them. Am I correct in
    saying that? And at least, Mr. Shirley, you acknowledge the
    benefits that they would provide, as well, in terms of the
    testimony that we have heard. We--however, that has been
    eliminated. Private activity bonds have been eliminated in a
    draft of the tax reform bill put together by our colleagues. I
    think we have to revisit these things, as well. But,
    fundamentally, we have to vote.
        Mr. Tiberi, who is a dear friend of mine, said, ``Look, you
    have to''--in some of his comments talking about how he agreed,
    as I do, with what Mr. Neal had to say about private activity
    bonds and Buy America bonds, and what we have to do. And he
    said--and then acknowledged, ``Keep the pressure on us.''
        Well, we were elected to vote. And that is our fundamental
    responsibility. And it may be, as Mr. Poole suggested, we get
    to the 31st and you see no other alternative. Let us hope--and
    our Chairman is very resourceful--let us hope, as they come up
    with a bridge, that it is not a bridge to nowhere, that, once
    again, everyone in America doesn't see us kicking this down the
    road again to come up with another piecemeal solution.
        Mr. Renacci and Mr. Pascrell have put forward a bill that
    at least can provide us with that opportunity to do all the
    studies that we need. Personally, I would agree with Mr.
    Graves. I would be for whatever it takes. If it is a gas tax,
    it is a gas tax. If it is a carbon tax, it is a carbon tax.
    But, for God's sake, put America back to work. That is what
    Roosevelt would have done, that is what Eisenhower did. When
    are we going to step up to the plate, as Americans, not
    Democrats or Republicans, but as Americans, and do the right
    thing for the citizens we represent?
        I yield back my time.
        Chairman RYAN. The gentleman is done with his question.
        [Laughter.]
        Mr. LARSON. Mr.----
        I did have a couple.
        Chairman RYAN. Mr. Dold.
        Mr. DOLD. Thank you, Mr. Chairman. And I just want to say
    to my good friend, Mr. Larson, I don't disagree. I think, as we
    look at a long-term surface transportation bill, this is
    absolutely critical. This isn't a Republican or a Democrat
    issue. We all use the roads. And, frankly, as we look at how do
    we grow our economy, people are looking. When they are saying,
    ``Where am I going to place my business,'' one of the things
    that they look at is they look at our infrastructure. ``How am
    I going to get my raw materials in? How are we going to get our
    finished product out?'' And, certainly in the Chicago terminal,
    my home area, how do we move people around?
        I mean this is absolutely critical. In talking to
    stakeholders back in the Chicago area, they are looking for
    that long-term certainty. How do we buy rail cars? Do we buy
    them one at a time, or do we buy them ten at a time? I can get
    a much better price if I am buying them ten at a time. The same
    thing is true if we are looking at how we are going to be able
    to fund our roadways.
        And so, frankly, this is an issue that has been kicked down
    the road. The can has been kicked by multiple different
    Administrations. We need a long-term surface transportation
    bill, and that is one of the things that I do believe unites
    us. And, frankly, we need to look at creative ways on how we
    are going to be able to fund this, because we have been
    operating, obviously, at a deficit for a period of time,
    roughly about $13 billion on an annual basis is kind of what
    the shortfall is. That is some pretty real dollars.
        And so, you know, when I look at certainly the Chicago
    terminal, and I look at Chicago and mass transit and highways--
    because, again, there are some that want to talk just about the
    roads, and I want to make sure that people understand that mass
    transit--and I know some of you on the panel aren't necessarily
    big fans of mass transit--but when we look at congestion--
    Governor, can you talk to me for a second about how congestion
    impacts trucking and impacts just overall productivity?
        Mr. GRAVES. Well, again, I think the submitted testimony
    reflects the Texas Transportation Institute's assessment of the
    billions of dollars that directly impacts our industry, just
    sitting idle. And, obviously, we have the hours of service
    issue, where, you know, a worker might be out trying to move a
    load, and if they somehow get caught in congestion, and then
    the hours run out, then you can't finish the delivery, which
    disrupts the supply chain.
        And, of course, to Americans in totality, I believe the
    number is well over $100 billion of--$120 billion--of impact on
    our economy each year.
        Mr. DOLD. That is a lot of money. I know UPS did a study
    that said for every 5 minutes of idling time it cost the
    company about $100 million. Now, when you expand that off--that
    is enormous.
        But I want to highlight just another issue that is--okay,
    that is a business perspective, but I am talking about a real-
    life perspective. So we have switches, you know, that date back
    generations in the Chicago terminal. And, frankly, that could
    add as much as 15 minutes a day to somebody's commute on a
    train, 15 minutes each way. That is 10\1/2\ hours a month, if
    you are a regular commuter. That is time that you could spend
    with your family. That is time that could be spent doing a lot
    of other things. That is a quality of life issue.
        And so, as we look at these types of things, Mr. Shirley,
    can you elaborate on the connection between the highway account
    and the mass transit account within the Highway Trust Fund?
    Specifically, do drivers on the roads and highways benefit from
    a robust mass transit network?
        Mr. SHIRLEY. So, drivers may face congested urban areas.
    Mass transit may make some contributions to reducing some of
    that congestion.
        Mr. DOLD. It is a ``may.'' You think it may reduce? Could
    you definitely say it absolutely does?
        Mr. SHIRLEY. Yes, mass transit systems----
        Mr. DOLD. Absolutely do? I can tell you that in--certainly
    in the Chicago area, if we got rid of our mass transit system,
    we would see an increased congestion of 50 percent on our
    roadways. Talking to some of the folks over at Metra, they tell
    me we need an additional 29 lanes of traffic. So, I mean,
    again, that is a lot of traffic.
        And so, again, I just want to make sure that, as we look at
    our surface transportation, as we look at this issue, it is
    going to be enormously important for us to work in a bipartisan
    fashion to come up with solutions. And, frankly, we have to
    start thinking outside of the box, because this is something
    that is not going away. And if we want to grow our economy, if
    we want to make sure that we are making people productive, this
    is one of the ways that we can do it.
        Governor, can you talk to me just a little bit about the
    importance of freight in the Chicago area?
        Mr. GRAVES. Well, there is--as I said, as our economy
    grows, and the number of people in this country grow, we have a
    ever-increasing demand for freight movement. And the supply
    chain has become very, very precise, in terms of what their
    expectations are.
        The combination of the congestion, the road conditions, has
    made it very difficult for us to continue to meet some of those
    expectations, and it is having a very real impact on, you know,
    the economic competitiveness of this country, vis a vis the
    rest of the world. No doubt about it.
        Mr. DOLD. Governor, thank you.
        Mr. Chairman, my time has expired.
        Chairman RYAN. Thank you.
        Mrs. Black.
        Mrs. BLACK. Thank you, Mr. Chairman. And I am going to wrap
    this up. I think I am the last one to ask a question today. The
    discussion has been excellent. This has been a great hearing. I
    appreciate all the panelists' written materials that you have
    given to us. I am going to keep them and reread them, because
    there is so much good material here.
        I really appreciated, Mr. Poole, that you gave us a little
    bit of history there in the--1919 is when the gas tax was
    originally put in by States. And then in 1959 is when the
    Highway Trust Fund was begun by the Federal Government. Those
    are two little facts that I was not aware of.
        But as we look at all of the challenges that have been
    talked about by my colleagues here, we know that regulations
    are increasing costs. I think we have to make sure that, as we
    talk about this, it is not a panacea to say the only solution
    here is to raise a tax. Because some of the folks in my
    community will say to me, ``Well, if you just raise that tax on
    fuel, then it will take care of the problem.''
        But we know regulations are a part of increasing the costs
    in building a road when it takes--when I originally got into
    the public sector some 14 years ago, it took about 3 to 5 years
    in our community to build a road. Now it takes anywhere from 7
    to 10 years. And the cost of those regulations are continuing
    to increase, and that's money that comes out of our trust fund.
    That's robbing the trust fund for other kinds of things.
    Certainly I like walking paths, and I like those kinds of
    things, but that doesn't take care of a pothole that is in the
    road, nor does it build another road to decrease the
    congestion.
        The cost of building materials is certainly going up. The
    cost of steel and concrete. So to just have that panacea, to
    say, ``Oh, all we have to do is just raise the gas tax''
    certainly is not the answer to this. There are a whole lot of
    other things that we need to look at.
        So I want to go to the user pays, the user benefits. And
    that is certainly how we ought to think about anything that we
    do, is that when I use something I have to pay for that. I know
    that the VMT has some promise to it.
        I know, Mr. Poole, you talk about it is going to take a
    while before we can actually get there. Can you give me an idea
    of any State that has been using--doing a pilot project where
    you have seen things that have come out of that that we could
    maybe start with now, rather than waiting for 10 years to
    initiate?
        Mr. POOLE. Well, I think everybody agrees that Oregon is
    ahead of most of the other States. They have a 5,000-person
    pilot program that is going to get underway July 1st. They are
    using private-sector vendors to be the interface for people so
    that it is a private sector company that is going to be getting
    the mileage totals and arranging with the State to get the
    rebates for the fuel taxes that people are paying, their per-
    mile charge, instead of the fuel tax.
        They are also giving people a set of choices of how they
    want to pay. And that is a little more detailed in my written
    remarks. But that is--I think they have learned a couple of
    things. One is that it is really important that there be
    choices. Number two, we need a lot more trying out of different
    methods to see which ones people like and which ones they
    don't, which ones cost too much and which ones are economical.
        There is also going to be--to go to Governor Graves'
    comments about the cost of collecting, on very large-scale
    volumes, at the scale of Oregon, they are looking at maybe 3 to
    4 percent of the revenue needing to be cost of collection once
    it were rolled out to the entire State population. Now, that is
    more than the 1 or 1\1/2\ percent fuel tax. But it is not like
    the old tolling that was 20 to 30 percent of the revenue that
    was needed for manual cash toll collection.
        So, there is potential there for this thing--these things
    to be economically doable. But we really don't know enough yet
    to do anything at--certainly at the Federal level in the next
    year or two, for sure. Maybe sooner than 10 years, but that
    depends on how much is learned on pilot projects in the next
    maybe 3 or 4 years.
        Mrs. BLACK. What is the length of their pilot projects when
    they expect to be able to get some good information that could
    be shared----
        Mr. POOLE. You know, I am not absolutely sure. It is at
    least a year in Oregon. And California is designing theirs,
    which is probably going to be a model on the Oregon one. But it
    will be at least a year, possibly two.
        Mrs. BLACK. And I know my time is running out, but I think
    there is also some discussion that could be had on more toll
    roads. When you consider the amount of congestion that takes
    place on the roads that, obviously, are very busy roads, that--
    there has to be an alternative. Because sitting there for that
    amount of time I know----
        Mr. POOLE. Right.
        Mrs. BLACK [continuing]. Mr. Graves, you talked about how
    that costs the trucker that sits in that traffic. If there were
    an alternative, would the cost of that alternative be better
    than them sitting for that amount of time, and not delivering
    their product, interrupting the supply chain, and then also the
    cost of the driver sitting there, when he could be on the
    clock, actually delivering the product?
        Thank you, Mr. Chairman. This was a great hearing.
        Chairman RYAN. Thank you. Thank you, gentlelady.
        The gentleman from Connecticut, did you have--I see that
    you wanted to make----
        Mr. BLUMENAUER. Yes. Thank you, Mr. Chairman. Thank you for
    the opportunity to--for unanimous consent.
        I would like the witnesses--I am sure you are probably
    familiar with the Hamilton Project, and a number of the
    recommendations that they have put forward. I would like to
    submit their summary to you and ask if you could respond to
    that. I know we don't have the time today. If you could respond
    with your--to their various notions that they have put forward.
    Thank you so much.
        Chairman RYAN. Yes, thank you. This concludes the hearing.
    I want to thank the three of you, known experts in your field.
    This is very informative. You can tell that Members on both
    sides of the aisle have a lot of passion for this issue. We are
    in search of solutions.
        I want to thank you for spending such a good amount of your
    time with us today. This concludes our hearing.
        [Whereupon, at 12:45 p.m., the Committee was adjourned.]
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