[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
         
         
         
         
         
         
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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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waysandmeans.house.gov, select ``Hearings.'' Select the hearing for 
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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maintained in the Committee files for review and use by the Committee.
      
    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.
      
    2. All submissions must include a list of all clients, persons and/
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company, address, telephone, and fax numbers of each witness must be 
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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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materials in alternative formats) may be directed to the Committee as 
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:]
    
    
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    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:]
    
    
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    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:]
    
    
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    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:]
    
    
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    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:]
    
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    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:]
    
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    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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